Summary
This 8-K filing from Exelon Corporation (EXC) reports a significant development regarding a legal ruling on Illinois investment tax credits. Initially, on February 20, 2009, the Illinois Supreme Court ruled in favor of Exelon, allowing the company to record approximately $42 million (after-tax) in income related to refund claims for investment tax credits and associated interest from 1995-2008. This income was recognized in the first quarter of 2009. However, on July 15, 2009, the Illinois Supreme Court changed its opinion, clarifying that the previous ruling was to be applied only prospectively from 2009. This means Exelon is no longer entitled to the previously recognized refunds. The company is now expected to record a charge in the third quarter to reverse the $42 million income. Despite this reversal, Exelon stated that this development does not affect its 2009 earnings guidance.
Key Highlights
- 1Illinois Supreme Court reversed its prior ruling on investment tax credits, impacting Exelon's recognized income.
- 2Exelon initially recorded $42 million (after-tax) in income in Q1 2009 based on the favorable ruling.
- 3The court's revised opinion dictates that the ruling applies prospectively from 2009 only.
- 4Exelon is no longer entitled to the previously claimed tax credit refunds for prior years.
- 5A charge will be recorded in Q3 2009 to reverse the previously recognized income.
- 6The company is evaluating its options regarding the court's decision.
- 7Exelon's 2009 earnings guidance remains unaffected by this development.