EXHIBIT 99.2
EXELON CORPORATION
Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Income
(unaudited)
(in millions, except per share data)
| Year Ended December 31, 2003 | Year Ended December 31, 2002 | |||||||||||||||||||||||||||||||
| Adjusted | Adjusted | |||||||||||||||||||||||||||||||
| GAAP(a) | Adjustments | Non-GAAP | GAAP(a) | Adjustments | Non-GAAP | |||||||||||||||||||||||||||
Operating revenues | $ | 15,812 | $ | — | $ | 15,812 | $ | 14,955 | $ | — | $ | 14,955 | ||||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||||||||
| Purchased power | 3,841 | — | 3,841 | 3,535 | — | 3,535 | ||||||||||||||||||||||||||
| Fuel | 2,534 | — | 2,534 | 1,727 | — | 1,727 | ||||||||||||||||||||||||||
| Impairment of Boston Generating | 945 | (945 | ) | (b) | — | — | — | — | ||||||||||||||||||||||||
| Operating and maintenance | 4,587 | (350 | ) | (c),(d),(e),(f) | 4,237 | 4,345 | (10 | ) | (j) | 4,335 | ||||||||||||||||||||||
| Depreciation and amortization | 1,126 | — | 1,126 | 1,340 | — | 1,340 | ||||||||||||||||||||||||||
| Taxes other than income | 581 | 74 | (g) | 655 | 709 | — | 709 | |||||||||||||||||||||||||
Total operating expenses | 13,614 | (1,221 | ) | 12,393 | 11,656 | (10 | ) | 11,646 | ||||||||||||||||||||||||
Operating income | 2,198 | 1,221 | 3,419 | 3,299 | 10 | 3,309 | ||||||||||||||||||||||||||
Other income and deductions | ||||||||||||||||||||||||||||||||
| Interest expense | (881 | ) | — | (881 | ) | (966 | ) | — | (966 | ) | ||||||||||||||||||||||
| Distributions on preferred securities of subsidiaries | (39 | ) | — | (39 | ) | (45 | ) | — | (45 | ) | ||||||||||||||||||||||
| Equity in earnings of unconsolidated affiliates | 33 | 4 | (d) | 37 | 80 | — | 80 | |||||||||||||||||||||||||
| Other, net | (187 | ) | 276 | (c),(f),(h) | 89 | 300 | (198 | ) | (k) | 102 | ||||||||||||||||||||||
Total other income and deductions | (1,074 | ) | 280 | (794 | ) | (631 | ) | (198 | ) | (829 | ) | |||||||||||||||||||||
Income before income taxes and cumulative effect of changes in accounting principles | 1,124 | 1,501 | 2,625 | 2,668 | (188 | ) | 2,480 | |||||||||||||||||||||||||
Income taxes | 331 | 580 | 911 | 998 | (84 | ) | 914 | |||||||||||||||||||||||||
Income before cumulative effect of changes in accounting principles | 793 | 921 | 1,714 | 1,670 | (104 | ) | 1,566 | |||||||||||||||||||||||||
Cumulative effect of changes in accounting principles, net of income taxes | 112 | (112 | ) | (i) | — | (230 | ) | 230 | (l) | — | ||||||||||||||||||||||
Net income | $ | 905 | $ | 809 | $ | 1,714 | $ | 1,440 | $ | 126 | $ | 1,566 | ||||||||||||||||||||
Earnings per average common share Basic: | ||||||||||||||||||||||||||||||||
| Income before cumulative effect of changes in accounting principles | $ | 2.44 | $ | 2.82 | $ | 5.26 | $ | 5.18 | $ | (0.32 | ) | $ | 4.86 | |||||||||||||||||||
| Cumulative effect of changes in accounting principles, net of income taxes | 0.34 | (0.34 | ) | — | (0.71 | ) | 0.71 | — | ||||||||||||||||||||||||
| Net income | $ | 2.78 | $ | 2.48 | $ | 5.26 | $ | 4.47 | $ | 0.39 | $ | 4.86 | ||||||||||||||||||||
Diluted: | ||||||||||||||||||||||||||||||||
| Income before cumulative effect of changes in accounting principles | $ | 2.41 | $ | 2.81 | $ | 5.22 | $ | 5.15 | $ | (0.32 | ) | $ | 4.83 | |||||||||||||||||||
| Cumulative effect of changes in accounting principles, net of income taxes | 0.34 | (0.34 | ) | — | (0.71 | ) | 0.71 | — | ||||||||||||||||||||||||
| Net income | $ | 2.75 | $ | 2.47 | $ | 5.22 | $ | 4.44 | $ | 0.39 | $ | 4.83 | ||||||||||||||||||||
Average common shares outstanding | ||||||||||||||||||||||||||||||||
| Basic | 326 | 326 | 322 | 322 | ||||||||||||||||||||||||||||
| Diluted | 329 | 329 | 325 | 325 | ||||||||||||||||||||||||||||
Effect of adjustments on earnings per average diluted common share recorded in accordance with GAAP: | ||||||||||||||||||||||||||||||||
| Boston Generating impairment | $ | (1.74 | ) | $ | — | |||||||||||||||||||||||||||
| Charges associated with Exelon’s investment in Sithe Energies, Inc. | (0.55 | ) | — | |||||||||||||||||||||||||||||
| Severance | (0.49 | ) | — | |||||||||||||||||||||||||||||
| Cumulative effect of adopting SFAS No. 143 | 0.34 | — | ||||||||||||||||||||||||||||||
| Property tax accrual reductions | 0.14 | — | ||||||||||||||||||||||||||||||
| Enterprises’ Services goodwill impairment | (0.06 | ) | — | |||||||||||||||||||||||||||||
| Enterprises’ impairments due to anticipated sale | (0.06 | ) | — | |||||||||||||||||||||||||||||
| March 3 ComEd Settlement Agreement | (0.05 | ) | — | |||||||||||||||||||||||||||||
| Cumulative effect of adopting SFAS No. 141 and SFAS No.142 | — | (0.71 | ) | |||||||||||||||||||||||||||||
| Gain on sale of investment in AT&T Wireless | — | 0.36 | ||||||||||||||||||||||||||||||
| Employee severance costs | — | (0.04 | ) | |||||||||||||||||||||||||||||
| Total adjustments | $ | (2.47 | ) | $ | (0.39 | ) | ||||||||||||||||||||||||||
| (a) | Results reported in accordance with accounting principles generally accepted in the United States (GAAP). | |||
| (b) | Adjustment for the Boston Generating impairment recorded during the third quarter of 2003. | |||
| (c) | Adjustment for the March 3 ComEd Settlement Agreement. | |||
| (d) | Adjustment for Exelon Way severance and severance-related costs recorded during the third and fourth quarters of 2003. | |||
| (e) | Adjustment for Enterprises’ goodwill impairment charge at Exelon Services Inc. (Services) recorded during the fourth quarter of 2003. | |||
| (f) | Adjustments for Enterprises’ impairment charges due to anticipated sales recorded during 2003, including long-lived and other asset impairments at Services, impairment of assets associated with a communications investment, and an impairment of an equity method investment held by Exelon Thermal Holdings, Inc. | |||
| (g) | Adjustment for the reduction of property tax accruals at PECO and Generation recorded during the third quarter of 2003. | |||
| (h) | Adjustment for impairments and other charges recorded during 2003 associated with Generation’s investment in Sithe Energies, Inc. | |||
| (i) | Adjustment for the cumulative effect of adopting SFAS No. 143. | |||
| (j) | Adjustment for severance costs of $10 million pre-tax primarily related to executive severance. Not all of the severance expense was tax deductible. | |||
| (k) | Adjustment for the sale of investment in AT&T Wireless. | |||
| (l) | Adjustment for the cumulative effect of adopting SFAS No. 141 and SFAS No. 142 reflecting the impairment of Exelon Enterprises’ goodwill and the benefit of AmerGen’s negative goodwill. | |||
