Exelon 2014 Annual Report Download - page 276

Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
subordinated debentures, which were issued to PEC L.P. or PECO Trust IV; (2) it defaults on its guarantee of the payment of
distributions on the Series D Preferred Securities of PEC L.P. or the preferred trust securities of PECO Trust IV; or (3) an event of
default occurs under the Indenture under which the subordinated debentures are issued.
BGE pays dividends on its common stock after its board of directors declares them. However, BGE is subject to certain dividend
restrictions established by the MDPSC. First, BGE is prohibited from paying a dividend on its common shares through the end of
2014. Second, BGE is prohibited from paying a dividend on its common shares if (a) after the dividend payment, BGE’s equity ratio
would be below 48% as calculated pursuant to the MDPSC’s ratemaking precedents or (b) BGE’s senior unsecured credit rating is
rated by two of the three major credit rating agencies below investment grade. Finally, BGE must notify the MDPSC that it intends to
declare a dividend on its common shares at least 30 days before such a dividend is paid. There are no other limitations on BGE
paying common stock dividends unless: (1) BGE elects to defer interest payments on the 6.20% Deferrable Interest Subordinated
Debentures due 2043, and any deferred interest remains unpaid; or (2) any dividends (and any redemption payments) due on BGE’s
preference stock have not been paid.
Baltimore City Franchise Taxes
The City of Baltimore claims that BGE has maintained electric facilities in the City’s public right-of-ways for over one hundred years
without the proper franchise rights from the City. BGE is currently reviewing the merits of this claim. BGE has not recorded an
accrual for payment of franchise fees for past periods as a range of loss, if any, cannot be reasonably estimated at this
time. Franchise fees assessed in future periods may be material to BGE’s results of operations and cash flows.
General
The Registrants are involved in various other litigation matters that are being defended and handled in the ordinary course of
business. The assessment of whether a loss is probable or a reasonable possibility, and whether the loss or a range of loss is
estimable, often involves a series of complex judgments about future events. The Registrants maintain accruals for such losses that
are probable of being incurred and subject to reasonable estimation. Management is sometimes unable to estimate an amount or
range of reasonably possible loss, particularly where (1) the damages sought are indeterminate, (2) the proceedings are in the early
stages, or (3) the matters involve novel or unsettled legal theories. In such cases, there is considerable uncertainty regarding the
timing or ultimate resolution of such matters, including a possible eventual loss.
Income Taxes
See Note 14—Income Taxes for information regarding the Registrants’ income tax refund claims and certain tax positions, including
the 1999 sale of fossil generating assets.
23. Supplemental Financial Information
Supplemental Statement of Operations Information
The following tables provide additional information about Exelon’s Consolidated Statements of Operations and Comprehensive
Income for the years ended December 31, 2014, 2013 and 2012.
For the year ended December 31,
2014 2013 2012
Taxes other than income
Utility (a) ............................................................................ $ 456 $ 449 $ 463
Property ........................................................................... 396 302 227
Payroll ............................................................................ 200 159 131
Other ............................................................................. 102 185 198
Total taxes other than income ......................................................... $1,154 $1,095 $1,019
(a) Generation’s utility tax represents gross receipts tax related to its retail operations and ComEd’s, PECO’s and BGE’s utility taxes represent municipal and state utility
taxes and gross receipts taxes related to their operating revenues, respectively. The offsetting collection of utility taxes from customers is recorded in revenues on the
Registrants’ Consolidated Statements of Operations and Comprehensive Income.
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