Income Taxes (All Registrants)

3 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes (All Registrants)

Income Taxes (All Registrants)

Rate Reconciliation

The effective income tax rate from continuing operations varies from the U.S. federal statutory rate principally due to the following:

	Three Months Ended March 31, 2021
	Exelon(a)	Generation(a)	ComEd(b)	PECO(b)	BGE(b),(c)	PHI(b)	Pepco(b)	DPL(b)	ACE(b)
U.S. Federal statutory rate	21.0%	21.0%	21.0%	21.0%	21.0%	21.0%	21.0%	21.0%	21.0%
Increase (decrease) due to:
State income taxes, net of Federal income tax benefit	14.6	4.4	6.8	(1.6)	(10.1)	6.1	5.5	6.4	6.9
Qualified NDT fund income	(18.4)	(5.5)	—	—	—	—	—	—	—
Amortization of investment tax credit, including deferred taxes on basis difference	2.4	0.6	(0.1)	—	(0.1)	(0.1)	—	(0.2)	(0.2)
Plant basis differences	8.8	—	(0.6)	(10.5)	(1.4)	(1.5)	(2.1)	(0.7)	(0.9)
Production tax credits and other credits	6.7	1.8	(0.2)	—	(0.4)	(0.2)	(0.2)	(0.1)	(0.3)
Noncontrolling interests	0.6	0.2	—	—	—	—	—	—	—
Excess deferred tax amortization	27.9	—	(6.9)	(3.2)	(15.5)	(19.3)	(15.1)	(18.5)	(28.7)
Other(d)	(56.9)	(3.6)	(3.5)	(0.1)	(0.1)	(0.1)	0.1	0.3	2.2
Effective income tax rate	6.7%	18.9%	16.5%	5.6%	(6.6)%	5.9%	9.2%	8.2%	—%

	Three Months Ended March 31, 2020
	Exelon(b)	Generation(e)	ComEd(b)	PECO(b)	BGE(b)	PHI(b)	Pepco(b)	DPL(b)	ACE(b)
U.S. Federal statutory rate	21.0%	21.0%	21.0%	21.0%	21.0%	21.0%	21.0%	21.0%	21.0%
Increase (decrease) due to:
State income taxes, net of Federal income tax benefit	34.0	0.7	8.3	0.1	5.7	5.8	4.7	6.6	6.7
Qualified NDT fund income	(235.8)	36.4	—	—	—	—	—	—	—
Amortization of investment tax credit, including deferred taxes on basis difference	(4.5)	0.5	(0.2)	—	(0.1)	(0.1)	—	(0.2)	(0.2)
Plant basis differences	(23.0)	—	(1.1)	(8.4)	(1.2)	(1.4)	(2.1)	(0.7)	(0.8)
Production tax credits and other credits	(9.9)	1.3	(0.2)	—	(0.2)	—	—	—	—
Noncontrolling interests	10.6	(1.6)	—	—	—	—	—	—	—
Excess deferred tax amortization	(71.7)	—	(10.5)	(3.0)	(7.3)	(15.5)	(14.2)	(12.7)	(18.8)
Tax Settlements	(79.1)	12.2	—	—	—	—	—	—	—
Other	12.5	0.6	0.3	—	0.6	(0.6)	(0.6)	(0.5)	(0.8)
Effective income tax rate	(345.9)%	71.1%	17.6%	9.7%	18.5%	9.2%	8.8%	13.5%	7.1%

__________

(a)Exelon and Generation recognized a loss before income taxes for the quarter ended March 31, 2021. As a result, positive percentages represent an income tax benefit for the period presented.

(b)Positive percentages represent income tax expense. Negative percentages represent income tax benefit.

(c)For BGE, the income tax benefit is primarily due to the Maryland multi-year plan which resulted in the acceleration of certain income tax benefits.

(d)For Exelon, "Other" is primarily driven by the consolidating income tax adjustment recorded at Exelon Corporate in the first quarter of 2021 that was required pursuant to GAAP interim reporting guidance. This incremental expense will reverse by year-end and will not have an impact on annual results.

(e)Generation recognized a loss before income taxes for the quarter ended March 31, 2020. As a result, positive percentages represent an income tax benefit for the period presented.

Unrecognized Tax Benefits

PHI and ACE have the following unrecognized tax benefits as of March 31, 2021 and December 31, 2020. Exelon's, Generation's, ComEd's, PECO's, BGE's, Pepco's, and DPL's amounts are not material.

	PHI		ACE
March 31, 2021	$	52	$	15
December 31, 2020	52		15

Reasonably possible the total amount of unrecognized tax benefits could significantly increase or decrease within 12 months after the reporting date

As of March 31, 2021, ACE has approximately $14 million of unrecognized state tax benefits that could significantly decrease within the 12 months after the reporting date based on the outcome of pending court cases involving other taxpayers. The unrecognized tax benefit, if recognized, may be included in future base rates and that portion would have no impact to the effective tax rate.