ComEd 2015 Annual Report Download - page 86

Table of Contents
Depreciation and amortization expense increased by $136 million primarily as a result of the inclusion of CENG’s results on a fully
consolidated basis in 2015, increased nuclear decommissioning amortization at Generation, and increased depreciation expense across the
operating companies for ongoing capital expenditures.
Taxes other than income increased $46 million primarily due to the inclusion of CENG’s results on a fully consolidated basis in 2015 and
increased sales and use tax at Corporate.
Gain on sales of assets decreased $419 million as a result of the absence of 2014 gains recorded on the sales of ownership interest in
certain generating stations.
Gain on consolidation and acquisition of businesses decreased by $289 million due to a $261 million gain upon consolidation of CENG in
2014 resulting from the difference in fair value of CENG’s net assets as of April 1, 2014, and the equity method investment previously recorded on
Generation’s and Exelon’s books and the settlement of pre-existing transactions between Generation and CENG, and a $28 million bargain-
purchase gain in 2014 related to the Integrys acquisition.
Interest expense decreased by $32 million primarily as a result of mark-to market gains in 2015 as compared to mark-to-market losses in
2014 associated with an interest rate swap terminated in June 2015, partially offset by higher debt in 2015 related to financing activities associated
with the pending PHI merger.
Other, net decreased by $501 million primarily at Generation as a result of the change in realized and unrealized gains and losses on NDT
funds.
Exelon’s effective income tax rates for the years ended December 31, 2015 and 2014 were 32.2% and 26.8%, respectively. See Note 15—
Income Taxes of the Combined Notes to Consolidated Financial Statements for additional information regarding the components of the effective
income tax rates.
For further detail regarding the financial results for the years ended December 31, 2015 and 2014, including explanation of the non-GAAP
measure revenue net of purchased power and fuel expense, see the discussions of Results of Operations by Segment below.
Adjusted (non-GAAP) Operating Earnings
Exelon’s adjusted (non-GAAP) operating earnings for the year ended December 31, 2015 were $2,227 million, or $2.49 per diluted share,
compared with adjusted (non-GAAP) operating earnings of $2,068 million, or $2.39 per diluted share, for the same period in 2014. In addition to net
income, Exelon evaluates its operating performance using the measure of adjusted (non-GAAP) operating earnings because management believes
it represents earnings directly related to the ongoing operations of the business. Adjusted (non-GAAP) operating earnings exclude certain costs,
expenses, gains and losses and other specified items. This information is intended to enhance an investor’s overall understanding of year-to-year
operating results and provide an indication of Exelon’s baseline operating performance excluding items that are considered by management to be
not directly related to the ongoing operations of the business. In addition, this information is among the primary indicators management uses as a
basis for evaluating performance, allocating resources, setting incentive compensation targets and planning and forecasting of future periods.
Adjusted (non-GAAP) operating earnings 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.
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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