Exelon 2011 Annual Report Download - page 33

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31
Discussion of Financial Results – Generation
Results of Operations—Generation
(Dollars in millions) 2011 2010
Favorable
(Unfavorable)
Variance
Operating revenues $ 10,308 $ 10,025 $ 283
Purchased power and fuel expense 3,450 3,463 13
Revenue net of purchased power and fuel expense 6,858 6,562 296
Other operating expenses
Operating and maintenance 3,148 2,812 (336)
Depreciation and amortization 570 474 (96)
Taxes other than income 264 230 (34)
Total other operating expenses 3,982 3,516 (466)
Operating income 2,876 3,046 (170)
Other income and deductions
Interest expense (170) (153) (17)
Loss in equity method investments (1) — (1)
Other, net 122 257 (135)
Total other income and deductions (49) 104 (153)
Income before income taxes 2,827 3,150 (323)
Income taxes 1,056 1,178 122
Net income $ 1,771 $ 1,972 $ (201)
The decrease in Generation’s net income was primarily due to mark-to-market losses on economic hedging activities and higher operating and maintenance
expenses. Generation’s 2011 results were further affected by increased nuclear fuel costs, less favorable NDT fund performance in 2011 and higher nuclear refueling
outage costs associated with the increased number of refueling outage days in 2011. These unfavorable impacts were partially offset by higher revenues due to the
expiration of the PECO PPA on Dec. 31, 2010, and favorable market and portfolio conditions in the South and West regions.