ComEd 2006 Annual Report Download - page 119

Operating and Maintenance Expense. The changes in operating and maintenance expense for
the 2005 compared to 2004 consisted of the following:
Increase
(decrease)
Contractors (a) ................................................................ $ 8
Storm costs .................................................................. 7
Implementation of new customer information and billing system ....................... 4
PSEG merger integration costs .................................................. 2
Severance-related expenses (b) .................................................. (14)
Injuries and damages .......................................................... (6)
Other ....................................................................... 1
Increase in operating and maintenance expense .................................... $ 2
(a) The increase was primarily due to increases in vegetation management services compared to the prior year at PECO.
(b) Consists of salary continuance severance costs, curtailment charges for pension and other post retirement benefits, and
special termination benefit charges related to other postretirement benefits. The decrease reflects reduced severance-
related activity in 2005 compared to 2004.
Depreciation and Amortization Expense. The changes in depreciation and amortization
expense for 2005 compared to 2004 consisted of the following:
Increase
(decrease)
Competitive transition charge amortization (a) ....................................... $37
Accelerated amortization of PECO billing system (b) .................................. 13
Depreciation expense(c) ........................................................ 3
Other amortization expense ..................................................... (5)
Increase in depreciation and amortization expense .................................. $48
(a) PECO’s additional amortization of the CTC is in accordance with its original settlement under the Pennsylvania Competition
Act.
(b) In January 2005, as part of a broader systems strategy at PECO associated with the proposed merger with PSEG, Exelon’s
Board of Directors approved the implementation of a new customer information and billing system at PECO. The approval of
this new system requires the accelerated amortization of PECO’s current system through 2006 and the recognition of
additional amortization expense of $13 million and $9 million in 2005 and 2006, respectively.
(c) The increase in depreciation expense is primarily due to capital additions.
Taxes Other Than Income. The changes in taxes other than income for 2005 compared to 2004
consisted of the following:
Increase
(decrease)
Reduction in capital stock tax accrual in 2005 (a) .................................... $(17)
Reduction in real estate tax accrual in 2005 (b) ...................................... (6)
Taxes on utility revenues (c) ..................................................... 24
Other ....................................................................... (6)
Decrease in taxes other than income ............................................. $ (5)
(a) Represents a reduction in 2005 of prior year capital stock tax accruals as a result of a favorable decision from the
Pennsylvania Board of Finance and Revenue.
(b) Represents the reduction of a real estate tax accrual in March 2005 following settlements between PECO and various taxing
authorities related to prior year tax assessments. See Note 18 of the Combined Notes to the Financial Statements for
additional information.
(c) As these taxes were collected from customers and remitted to the taxing authorities and included in revenues and expenses,
the increase in tax expense was offset by a corresponding increase in revenues.
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