Income Taxes (Tables)

3 Months Ended

Mar. 31, 2022

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

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, 2022(a)
	Exelon		ComEd		PECO(b)		BGE(b)		PHI		Pepco(b)		DPL		ACE(b)
U.S. Federal statutory rate	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(c)	21.1		8.0		(0.1)		2.4		3.7		(4.5)		6.2		6.8
Plant basis differences	(3.6)		(0.6)		(11.3)		(0.9)		(1.6)		(2.6)		(0.7)		(1.3)
Excess deferred tax amortization	(11.5)		(6.3)		(3.2)		(17.6)		(17.7)		(17.4)		(19.4)		(22.2)
Amortization of investment tax credit, including deferred taxes on basis difference	(0.1)		(0.1)		—		(0.1)		(0.1)		—		(0.2)		(0.2)
Tax credits(d)	1.7		(0.3)		—		(0.4)		(0.4)		(0.4)		(0.3)		(0.3)
Other(e)	2.6		—		—		(0.1)		0.2		(0.6)		0.1		(0.1)
Effective income tax rate	31.2	%	21.7	%	6.4	%	4.3	%	5.1	%	(4.5)	%	6.7	%	3.7	%


	Three Months Ended March 31, 2021(a)
	Exelon		ComEd		PECO(f)		BGE(f)		PHI		Pepco		DPL		ACE(f)
U.S. Federal statutory rate	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	2.8		6.8		(1.6)		(10.1)		6.1		5.5		6.4		6.9
Plant basis differences	(3.4)		(0.6)		(10.5)		(1.4)		(1.5)		(2.1)		(0.7)		(0.9)
Excess deferred tax amortization	(12.0)		(6.9)		(3.2)		(15.5)		(19.3)		(15.1)		(18.5)		(28.7)
Amortization of investment tax credit, including deferred taxes on basis difference	(0.1)		(0.1)		—		(0.1)		(0.1)		—		(0.2)		(0.2)
Tax credits	(0.3)		(0.2)		—		(0.4)		(0.2)		(0.2)		(0.1)		(0.3)
Other	(1.1)		(3.5)		(0.1)		(0.1)		(0.1)		0.1		0.3		2.2
Effective income tax rate	6.9	%	16.5	%	5.6	%	(6.6)	%	5.9	%	9.2	%	8.2	%	—	%

__________

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

(b)For PECO, the lower effective tax rate is primarily related to plant basis differences attributable to tax repair deductions. For BGE, the lower effective tax rate is primarily due to the Maryland multi-year plan which resulted in the acceleration of certain income tax benefits. For Pepco, the income tax benefit is primarily due to the Maryland and Washington, D.C. multi-year plans which resulted in the acceleration of certain income tax benefits. For ACE, the lower effective tax rate is primarily due to the acceleration of certain income tax benefits due to distribution rate case settlements.

(c)For Exelon, the higher state income taxes, net of federal income tax benefit, is primarily due to the long-term marginal state income tax rate change of approximately $67 million and the recognition of a valuation allowance of approximately $40 million against the net deferred tax asset position for certain standalone state filing jurisdictions as a result of the separation.

(d)For Exelon, reflects the income tax expense related to the write-off of federal tax credits subject to recapture of approximately $15 million as a result of the separation.

(e)For Exelon, primarily reflects the nondeductible transaction costs of approximately $19 million arising as part of the separation.

(f)For PECO, the lower effective tax rate is primarily related to plant basis differences attributable to tax repair deductions. 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. For ACE, the lower effective tax rate is primarily due to the acceleration of certain income tax benefits due to distribution rate case settlements.

Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block]

Exelon, PHI and ACE have the following unrecognized tax benefits as of March 31, 2022 and December 31, 2021. ComEd's, PECO's, BGE's, Pepco's, and DPL's amounts are not material.


	Exelon		PHI		ACE
March 31, 2022	$	146	$	56	$	16
December 31, 2021	143		56		16

__________

(a)As of March 31, 2022, Exelon recorded a receivable of approximately $50 million in Noncurrent other assets in the Consolidated Balance Sheet for Constellation’s share of unrecognized tax benefits for periods prior to the separation.