Exhibit 99.1
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| Contact: | | Ravi Ganti Investor Relations 312-394-2348 Paul Adams Corporate Communications 410-470-4167 | | FOR IMMEDIATE RELEASE |
EXELON ANNOUNCES FIRST QUARTER 2014 RESULTS
CHICAGO (Apr. 30, 2014) —Exelon Corporation (NYSE: EXC) announced first quarter 2014 consolidated earnings as follows:
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| | | First Quarter | |
| | | 2014 | | | 2013 | |
Adjusted (non-GAAP) Operating Results: | | | | | | | | |
Net Income ($ millions) | | $ | 530 | | | $ | 602 | |
Diluted Earnings per Share | | $ | 0.62 | | | $ | 0.70 | |
GAAP Results: | | | | | | | | |
Net Income (Loss) ($ millions) | | $ | 90 | | | $ | (4 | ) |
Diluted Earnings (Loss) per Share | | $ | 0.10 | | | $ | (0.01 | ) |
“Exelon delivered quarterly earnings within our guidance range despite extreme weather that caused significant challenges to operations across the business,” said Exelon President and CEO Christopher M. Crane. “Our nuclear assets in particular contributed to grid reliability during the polar vortex, while our strategy of matching generation to load allowed us to capitalize on the increasing volatility in power markets.”
First Quarter Operating Results
As shown in the table above, Exelon’s adjusted (non-GAAP) operating earnings decreased to $0.62 per share in the first quarter of 2014 from $0.70 per share in the first quarter of 2013. Earnings in the first quarter of 2014 primarily reflected the following negative factors:
| | • | | Lower realized energy prices and higher procurement costs for replacement power; |
| | • | | Increased storm costs, primarily at PECO resulting from the February 5, 2014 ice storm; and |
| | • | | Decreased nuclear and fossil output during 2014 primarily due to outage days. |
These factors were offset by:
| | • | | Increased capacity prices related to the Reliability Pricing Model (RPM) for the PJM Interconnection, LLC market (PJM); |
| | • | | Increased distribution revenue at BGE, due to the rate case orders for electric and natural gas, and at ComEd due to increased investment and allowed ROE; and |
| | • | | Favorable weather at PECO and ComEd related to colder than average weather. |
Adjusted (non-GAAP) Operating Earnings for the first quarter of 2014 do not include the following items (after tax) that were included in reported GAAP earnings:
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| | | (in millions) | | | (per diluted share) | |
Exelon Adjusted (non-GAAP) Operating Earnings | | $ | 530 | | | $ | 0.62 | |
Mark-to-Market Impact of Economic Hedging Activities | | | (443 | ) | | | (0.52 | ) |
Net Unrealized Gains Related to Nuclear Decommissioning Trust (NDT) Fund Investments | | | 8 | | | | 0.01 | |
Merger and Integration Costs | | | (9 | ) | | | (0.01 | ) |
Tax Settlements | | | 35 | | | | 0.04 | |
Amortization of Commodity Contract Intangibles | | | (31 | ) | | | (0.04 | ) |
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Exelon GAAP Net Income | | $ | 90 | | | $ | 0.10 | |
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Adjusted (non-GAAP) Operating Earnings for the first quarter of 2013 do not include the following items (after tax) that were included in reported GAAP earnings:
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| | | (in millions) | | | (per diluted share) | |
Exelon Adjusted (non-GAAP) Operating Earnings | | $ | 602 | | | $ | 0.70 | |
Mark-to-Market Impact of Economic Hedging Activities | | | (235 | ) | | | (0.27 | ) |
Net Unrealized Gains Related to NDT Fund Investments | | | 35 | | | | 0.04 | |
Plant Retirements and Divestitures | | | 13 | | | | 0.02 | |
Merger and Integration Costs | | | (27 | ) | | | (0.03 | ) |
Amortization of Commodity Contract Intangibles | | | (117 | ) | | | (0.14 | ) |
Amortization of the Fair Value of Certain Debt | | | 3 | | | | — | |
Re-measurement of Like-Kind Exchange Tax Position | | | (265 | ) | | | (0.31 | ) |
Nuclear Uprate Project Cancellation | | | (13 | ) | | | (0.02 | ) |
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Exelon GAAP Net Income | | $ | (4 | ) | | $ | (0.01 | ) |
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First Quarter and Recent Highlights
| | • | | Nuclear Operations: Generation’s nuclear fleet, including its owned output from the Salem Generating Station, produced 35,261 gigawatt-hours (GWh) in the first quarter of 2014, compared with 36,031 GWh in the first quarter of 2013. The output data excludes the units owned by Constellation Energy Nuclear Group LLC (CENG). Excluding Salem and the units owned by CENG, the Exelon-operated nuclear plants achieved a 94.1 percent capacity factor for the first quarter of 2014, compared with 96.4 percent for the |
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| | first quarter of 2013. The number of planned refueling outage days totaled 52 in the first quarter of 2014, compared with 49 in the first quarter of 2013. There were 20 non-refueling outage days in the first quarter of 2014, compared with six days in the first quarter of 2013. |
| | • | | Fossil and Renewables Operations: The Dispatch Match rate for Generation’s gas/hydro fleet was 92.9 percent in the first quarter of 2014, compared with 98.7 percent in the first quarter of 2013. The performance in 2014 was impacted by equipment issues in January during periods of very high power prices. Energy capture for the wind/solar fleet was 94.7 percent in the first quarter of 2014, compared with 94.9 percent in the first quarter of 2013. |
| | • | | Renewables Projects: The 50.4 MW Beebe 1B project in Gratiot, Michigan and the 40.0 MW Fourmile Ridge project in Garrett County, Maryland are both expected to begin construction in the second quarter of 2014, with commercial operation expected by the fourth quarter. The remaining two blocks of the 230 MW Antelope Valley Solar Ranch project in California, Block 1 (28 MW) and Block 2 (20 MW) are expected to begin commercial operation in the second quarter of 2014. |
| | • | | Utility Operations: During the first quarter, two arctic cold fronts (the Polar Vortex) and some of the coldest temperatures on record impacted each of Exelon’s three utilities. As a result of the extreme temperatures, all three utilities set new winter electric peaks in the first quarter. Back to back storms on February 3rd and February 5th impacted the PECO service territory. PECO was able to restore service to all customers impacted by the storms in six days, approximately two days quicker than the hurricane Sandy response time. |
| | • | | ComEd Distribution Formula Rate Case: On April 16, 2014, ComEd filed its 2014 annual distribution formula rate update, which establishes the net revenue requirement used to set rates that will take effect in January 2015 after review by the Illinois Commerce Commission. The revenue requirement requested in the filing is based on 2013 actual costs and projected 2014 capital additions, as well as an annual reconciliation of the revenue requirement in effect in 2013 to the actual costs incurred for that year. ComEd requested a total increase to the net revenue requirement of $275 million, reflecting an increase of $177 million for the initial revenue requirement for 2014 and an increase of $98 million for the annual reconciliation for 2013. |
| | • | | On January 10, 2014, ComEd issued $300 million aggregate principal amount of its First Mortgage 2.15 percent Bonds, Series 115, due January 15, 2019, and $350 million aggregate principal amount of its First Mortgage 4.70 percent Bonds, Series 116, due January 15, 2044. |
| | • | | On February 6, 2014, Exelon Generation Renewables, LLC issued $300 million aggregate principal amount of three month LIBOR plus 4.25 percent non-recourse senior secured notes, due February 6, 2021. |
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| | • | | Hedging Update: Exelon’s hedging program involves the hedging of commodity risk for Exelon’s expected generation, typically on a ratable basis over a three-year period. Expected generation represents the amount of energy estimated to be generated or purchased through owned or contracted-for capacity. The proportion of expected generation hedged as of March 31, 2014, was 91 percent to 94 percent for 2014, 64 percent to 67 percent for 2015, and 37 percent to 40 percent for 2016. The primary objective of Exelon’s hedging program is to manage market risks and protect the value of its generation and its investment-grade balance sheet, while preserving its ability to participate in improving long-term market fundamentals. |
Operating Company Results
Generation consists of owned and contracted electric generating facilities and wholesale and retail customer supply of electric and natural gas products and services, including renewable energy products, risk management services and natural gas exploration and production activities.
The first quarter 2014 GAAP net loss was $185 million, compared with a net loss of $18 million in the first quarter of 2013. Adjusted (non-GAAP) operating earnings for the first quarter of 2014 and 2013 do not include various items (after tax) that were included in reported GAAP earnings. A reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Net Loss is in the table below:
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($ millions) | | 1Q14 | | | 1Q13 | |
Generation Adjusted (non-GAAP) Operating Earnings | | $ | 258 | | | $ | 336 | |
Mark-to-Market Impact of Economic Hedging Activities | | | (446 | ) | | | (246 | ) |
Net Unrealized Gains Related to NDT Fund Investments | | | 8 | | | | 35 | |
Plant Retirements and Divestitures | | | — | | | | 13 | |
Merger and Integration Costs | | | (9 | ) | | | (29 | ) |
Amortization of Commodity Contract Intangibles | | | (31 | ) | | | (117 | ) |
Amortization of Fair Value of Certain Debt | | | — | | | | 3 | |
Nuclear Uprate Project Cancellation | | | — | | | | (13 | ) |
Tax Settlements | | | 35 | | | | — | |
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Generation GAAP Net Loss | | $ | (185 | ) | | $ | (18 | ) |
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Generation’s Adjusted (non-GAAP) Operating Earnings in the first quarter of 2014 decreased $78 million compared with the same quarter in 2013. This decrease primarily reflected:
| | • | | Lower realized energy prices and higher procurement costs for replacement power; and |
| | • | | Decreased nuclear and fossil output during 2014, primarily due to outage days. |
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These items were partially offset by favorable capacity pricing related to RPM for the PJM market.
ComEd consists of electricity transmission and distribution operations in northern Illinois. ComEd recorded GAAP net income of $98 million in the first quarter of 2014, compared with net losses of $(81) million in the first quarter of 2013. Adjusted (non-GAAP) operating earnings for the first quarter of 2013 do not include various items (after tax) that were included in reported GAAP earnings. A reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Net Income is in the table below:
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($ millions) | | 1Q14 | | | 1Q13 | |
ComEd Adjusted (non-GAAP) Operating Earnings | | $ | 98 | | | $ | 89 | |
Remeasurement of Like-Kind Exchange Tax Position | | | — | | | | (170 | ) |
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ComEd GAAP Net Income (Loss) | | $ | 98 | | | $ | (81 | ) |
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ComEd’s Adjusted (non-GAAP) Operating Earnings in the first quarter of 2014 were up $9 million from the same quarter in 2013, primarily due to favorable weather and higher distribution revenue due to increased investment and allowed ROE, partially offset by favorable tax settlement related interest recognized in first quarter 2013.
For the first quarter of 2014, heating degree-days in the ComEd service territory were up 18.9 percent relative to the same period in 2013 and were 22.4 percent above normal. Total retail electric deliveries increased 5.8 percent in first quarter of 2014 compared with first quarter of 2013.
Weather-normalized retail electric deliveries increased 1.8 percent in the first quarter of 2014 relative to 2013, primarily reflecting growth in the residential sector.
For ComEd, weather had a favorable after-tax effect of $9 million on first quarter 2014 earnings relative to 2013 and a favorable after-tax effect of $10 million relative to normal weather.
PECO consists of electricity transmission and distribution operations and retail natural gas distribution operations in southeastern Pennsylvania.
PECO’s GAAP net income in the first quarter of 2014 was $89 million, compared with $121 million in the first quarter of 2013. Adjusted (non-GAAP) Operating Earnings for the first quarter of 2013 do not include various items (after tax) that were included in reported GAAP earnings. A reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Net Income is in the table below:
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($ millions) | | 1Q14 | | | 1Q13 | |
PECO Adjusted (non-GAAP) Operating Earnings | | $ | 89 | | | $ | 123 | |
Merger and Integration Costs | | | — | | | | (2 | ) |
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PECO GAAP Net Income | | $ | 89 | | | $ | 121 | |
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PECO’s Adjusted (non-GAAP) Operating Earnings in the first quarter of 2014 decreased $34 million from the same quarter in 2013, primarily due to increased storm costs related to the February 5, 2014 ice storm. This was partially offset by favorable weather.
For the first quarter of 2014, heating degree-days in the PECO service territory were up 16.6 percent relative to the same period in 2013 and were 14.9 percent above normal. Total retail electric deliveries were up 6.0 percent compared with the first quarter of 2013. Natural gas deliveries (including both retail and transportation segments) in the first quarter of 2014 were up 11.3 percent compared with the first quarter of 2013.
Weather-normalized retail electric deliveries increased 1.3 percent in the first quarter of 2014 relative to 2013, driven primarily by economic and customer growth (mainly in the large C&I and residential classes), partially offset by energy efficiency. Total weather-normalized gas deliveries (including both retail and transportation segments) were down 2.7 percent in the first quarter of 2014, primarily driven by weather-related interruptions and school closings as well as high gas prices in the transportation segment.
For PECO, weather had a favorable after-tax effect of $20 million on first quarter 2014 earnings relative to 2013 and a favorable after-tax effect of $18 million relative to normal weather.
BGE consists of electricity transmission and distribution operations and retail natural gas distribution operations in central Maryland.
BGE’s GAAP net income in the first quarter of 2014 was $85 million, compared with $77 million in the first quarter of 2013. Adjusted (non-GAAP) Operating Earnings for the first quarter of 2013 do not include various items (after tax) that were included in reported GAAP earnings. A reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Net Income is in the table below:
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($ millions) | | 1Q14 | | | 1Q13 | |
BGE Adjusted (non-GAAP) Operating Earnings | | $ | 85 | | | $ | 74 | |
Merger and Integration Costs | | | — | | | | 3 | |
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BGE GAAP Net Income | | $ | 85 | | | $ | 77 | |
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BGE’s Adjusted (non-GAAP) Operating Earnings in the first quarter of 2014 increased $11 million from the same quarter in 2013, primarily due to higher electric and gas distribution rates partially offset by storm costs. Due to revenue decoupling, BGE is not affected by weather variations, with the exception of major storms.
Adjusted (non-GAAP) Operating Earnings
Adjusted (non-GAAP) operating earnings, which generally exclude significant one-time charges or credits that are not normally associated with ongoing operations, mark-to-market adjustments from economic hedging activities and unrealized gains and losses from NDT fund investments, are provided as a supplement to results reported in accordance with
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GAAP. Management uses such adjusted (non-GAAP) operating earnings measures internally to evaluate the company’s performance and manage its operations. Reconciliation of GAAP to adjusted (non-GAAP) operating earnings for historical periods is attached. Additional earnings release attachments, which include the reconciliation on page 8 are posted on Exelon’s Web site:www.exeloncorp.com and have been furnished to the Securities and Exchange Commission on Form 8-K on April 30, 2014.
Cautionary Statements Regarding Forward-Looking Information
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that are subject to risks and uncertainties. The factors that could cause actual results to differ materially from the forward-looking statements made by Exelon Corporation, Commonwealth Edison Company, PECO Energy Company, Baltimore Gas and Electric Company and Exelon Generation Company, LLC (Registrants) include those factors discussed herein, as well as the items discussed in (1) Exelon’s 2013 Annual Report on Form 10-K in (a) ITEM 1A. Risk Factors, (b) ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) ITEM 8. Financial Statements and Supplementary Data: Note 22; (2) Exelon’s First Quarter 2014 Quarterly Report on Form 10-Q (to be filed on April 30, 2014) in (a) Part II, Other Information, ITEM 1A. Risk Factors; (b) Part 1, Financial Information, ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) Part I, Financial Information, ITEM 1. Financial Statements: Note 15; and (3) other factors discussed in filings with the SEC by the Registrants. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this press release. None of the Registrants undertakes any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this press release.
# # #
Exelon Corporation (NYSE: EXC) is the nation’s leading competitive energy provider, with 2013 revenues of approximately $24.9 billion. Headquartered in Chicago, Exelon has operations and business activities in 47 states, the District of Columbia and Canada. Exelon is one of the largest competitive U.S. power generators, with more than 35,000 megawatts of owned capacity comprising one of the nation’s cleanest and lowest-cost power generation fleets. The company’s Constellation business unit provides energy products and services to approximately 100,000 business and public sector customers and approximately 1 million residential customers. Exelon’s utilities deliver electricity and natural gas to more than 6.6 million customers in central Maryland (BGE), northern Illinois (ComEd) and southeastern Pennsylvania (PECO).
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Earnings Release Attachments
Table of Contents
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Consolidating Statements of Operations - Three Months Ended March 31, 2014 and 2013 | | | 1 | |
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Business Segment Comparative Statements of Operations - Generation and ComEd - Three Months Ended March 31, 2014 and 2013 | | | 2 | |
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Business Segment Comparative Statements of Operations - PECO and BGE - Three Months Ended March 31, 2014 and 2013 | | | 3 | |
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Business Segment Comparative Statements of Operations - Other - Three Months Ended March 31, 2014 and 2013 | | | 4 | |
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Consolidated Balance Sheets - March 31, 2014 and December 31, 2013 | | | 5 | |
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Consolidated Statements of Cash Flows - Three Months Ended March 31, 2014 and 2013 | | | 6 | |
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Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations - Exelon - Three Months Ended March 31, 2014 and 2013 | | | 7 | |
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Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Earnings By Business Segment - Three Months Ended March 31, 2014 and 2013 | | | 8 | |
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Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations - Generation - Three Months Ended March 31, 2014 and 2013 | | | 9 | |
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Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations - ComEd - Three Months Ended March 31, 2014 and 2013 | | | 10 | |
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Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations - PECO - Three Months Ended March 31, 2014 and 2013 | | | 11 | |
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Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations - BGE - Three Months Ended March 31, 2014 and 2013 | | | 12 | |
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Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations - Other - Three Months Ended March 31, 2014 and 2013 | | | 13 | |
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Exelon Generation Statistics - Three Months Ended March 31, 2014, December 31, 2013, September 30, 2013, June 30, 2013 and March 31, 2013 | | | 14 | |
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ComEd Statistics - Three Months Ended March 31, 2014 and 2013 | | | 15 | |
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PECO Statistics - Three Months Ended March 31, 2014 and 2013 | | | 16 | |
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BGE Statistics - Three Months Ended March 31, 2014 and 2013 | | | 17 | |
EXELON CORPORATION
Consolidating Statements of Operations
(unaudited)
(in millions)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended March 31, 2014 | |
| | | Generation | | | ComEd | | | PECO | | | BGE | | | Other (a) | | | Exelon
Consolidated | |
Operating revenues | | $ | 4,390 | | | $ | 1,134 | | | $ | 993 | | | $ | 1,054 | | | $ | (334 | ) | | $ | 7,237 | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | |
Purchased power and fuel | | | 3,357 | | | | 320 | | | | 464 | | | | 529 | | | | (330 | ) | | | 4,340 | |
Operating and maintenance | | | 1,087 | | | | 326 | | | | 280 | | | | 188 | | | | (23 | ) | | | 1,858 | |
Depreciation and amortization | | | 211 | | | | 173 | | | | 58 | | | | 108 | | | | 14 | | | | 564 | |
Taxes other than income | | | 105 | | | | 77 | | | | 42 | | | | 60 | | | | 9 | | | | 293 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total operating expenses | | | 4,760 | | | | 896 | | | | 844 | | | | 885 | | | | (330 | ) | | | 7,055 | |
Equity in earnings of unconsolidated affiliates | | | (19 | ) | | | — | | | | — | | | | — | | | | — | | | | (19 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Operating income (loss) | | | (389 | ) | | | 238 | | | | 149 | | | | 169 | | | | (4 | ) | | | 163 | |
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Other income and (deductions) | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense | | | (85 | ) | | | (80 | ) | | | (28 | ) | | | (27 | ) | | | (7 | ) | | | (227 | ) |
Other, net | | | 90 | | | | 5 | | | | 2 | | | | 4 | | | | 2 | | | | 103 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total other income and (deductions) | | | 5 | | | | (75 | ) | | | (26 | ) | | | (23 | ) | | | (5 | ) | | | (124 | ) |
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Income (loss) before income taxes | | | (384 | ) | | | 163 | | | | 123 | | | | 146 | | | | (9 | ) | | | 39 | |
Income taxes | | | (199 | ) | | | 65 | | | | 34 | | | | 58 | | | | (12 | ) | | | (54 | ) |
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Net income (loss) | | | (185 | ) | | | 98 | | | | 89 | | | | 88 | | | | 3 | | | | 93 | |
Net income attributable to noncontrolling interests and preference stock dividends | | | — | | | | — | | | | — | | | | 3 | | | | — | | | | 3 | |
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Net income (loss) attributable to common shareholders | | $ | (185 | ) | | $ | 98 | | | $ | 89 | | | $ | 85 | | | $ | 3 | | | $ | 90 | |
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| | | Three Months Ended March 31, 2013 | |
| | | Generation | | | ComEd | | | PECO | | | BGE | | | Other (a) | | | Exelon
Consolidated | |
Operating revenues | | $ | 3,533 | | | $ | 1,160 | | | $ | 895 | | | $ | 880 | | | $ | (386 | ) | | $ | 6,082 | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | |
Purchased power and fuel | | | 2,169 | | | | 382 | | | | 406 | | | | 426 | | | | (402 | ) | | | 2,981 | |
Operating and maintenance | | | 1,112 | | | | 328 | | | | 188 | | | | 143 | | | | (7 | ) | | | 1,764 | |
Depreciation and amortization | | | 214 | | | | 167 | | | | 57 | | | | 93 | | | | 12 | | | | 543 | |
Taxes other than income | | | 93 | | | | 74 | | | | 41 | | | | 55 | | | | 14 | | | | 277 | |
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Total operating expenses | | | 3,588 | | | | 951 | | | | 692 | | | | 717 | | | | (383 | ) | | | 5,565 | |
Equity in losses of unconsolidated affiliates | | | (9 | ) | | | — | | | | — | | | | — | | | | — | | | | (9 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Operating income (loss) | | | (64 | ) | | | 209 | | | | 203 | | | | 163 | | | | (3 | ) | | | 508 | |
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Other income and (deductions) | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense | | | (82 | ) | | | (353 | ) | | | (29 | ) | | | (33 | ) | | | (126 | ) | | | (623 | ) |
Other, net | | | 128 | | | | 5 | | | | 3 | | | | 5 | | | | 31 | | | | 172 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total other income and (deductions) | | | 46 | | | | (348 | ) | | | (26 | ) | | | (28 | ) | | | (95 | ) | | | (451 | ) |
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Income (loss) before income taxes | | | (18 | ) | | | (139 | ) | | | 177 | | | | 135 | | | | (98 | ) | | | 57 | |
Income taxes | | | (1 | ) | | | (58 | ) | | | 55 | | | | 55 | | | | 5 | | | | 56 | |
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Net income (loss) | | | (17 | ) | | | (81 | ) | | | 122 | | | | 80 | | | | (103 | ) | | | 1 | |
Net income attributable to noncontrolling interests, preferred security dividends and preference stock dividends | | | 1 | | | | — | | | | 1 | | | | 3 | | | | — | | | | 5 | |
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Net income (loss) attributable to common shareholders | | $ | (18 | ) | | $ | (81 | ) | | $ | 121 | | | $ | 77 | | | $ | (103 | ) | | $ | (4 | ) |
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| (a) | Other primarily includes eliminating and consolidating adjustments, Exelon’s corporate operations, shared service entities and other financing and investment activities. |
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EXELON CORPORATION
Business Segment Comparative Statements of Operations
(unaudited)
(in millions)
Generation
| | | | | | | | | | | | |
| | | Three Months Ended March 31, | |
| | | 2014 | | | 2013 | | | Variance | |
Operating revenues | | $ | 4,390 | | | $ | 3,533 | | | $ | 857 | |
Operating expenses | | | | | | | | | | | | |
Purchased power and fuel | | | 3,357 | | | | 2,169 | | | | 1,188 | |
Operating and maintenance | | | 1,087 | | | | 1,112 | | | | (25 | ) |
Depreciation and amortization | | | 211 | | | | 214 | | | | (3 | ) |
Taxes other than income | | | 105 | | | | 93 | | | | 12 | |
| | | | | | | | | | | | |
Total operating expenses | | | 4,760 | | | | 3,588 | | | | 1,172 | |
Equity in losses of unconsolidated affiliates | | | (19 | ) | | | (9 | ) | | | (10 | ) |
| | | | | | | | | | | | |
Operating loss | | | (389 | ) | | | (64 | ) | | | (325 | ) |
| | | | | | | | | | | | |
Other income and (deductions) | | | | | | | | | | | | |
Interest expense | | | (85 | ) | | | (82 | ) | | | (3 | ) |
Other, net | | | 90 | | | | 128 | | | | (38 | ) |
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Total other income and (deductions) | | | 5 | | | | 46 | | | | (41 | ) |
| | | | | | | | | | | | |
Loss before income taxes | | | (384 | ) | | | (18 | ) | | | (366 | ) |
Income tax benefits | | | (199 | ) | | | (1 | ) | | | (198 | ) |
| | | | | | | | | | | | |
Net loss | | | (185 | ) | | | (17 | ) | | | (168 | ) |
Net income attributable to noncontrolling interests | | | — | | | | 1 | | | | (1 | ) |
| | | | | | | | | | | | |
Net loss attributable to membership interest | | $ | (185 | ) | | $ | (18 | ) | | $ | (167 | ) |
| | | | | | | | | | | | |
ComEd
| | | | | | | | | | | | |
| | | Three Months Ended March 31, | |
| | | 2014 | | | 2013 | | | Variance | |
Operating revenues | | $ | 1,134 | | | $ | 1,160 | | | $ | (26 | ) |
Operating expenses | | | | | | | | | | | | |
Purchased power | | | 320 | | | | 382 | | | | (62 | ) |
Operating and maintenance | | | 326 | | | | 328 | | | | (2 | ) |
Depreciation and amortization | | | 173 | | | | 167 | | | | 6 | |
Taxes other than income | | | 77 | | | | 74 | | | | 3 | |
| | | | | | | | | | | | |
Total operating expenses | | | 896 | | | | 951 | | | | (55 | ) |
| | | | | | | | | | | | |
Operating income | | | 238 | | | | 209 | | | | 29 | |
| | | | | | | | | | | | |
Other income and (deductions) | | | | | | | | | | | | |
Interest expense | | | (80 | ) | | | (353 | ) | | | 273 | |
Other, net | | | 5 | | | | 5 | | | | — | |
| | | | | | | | | | | | |
Total other income and (deductions) | | | (75 | ) | | | (348 | ) | | | 273 | |
| | | | | | | | | | | | |
Income (loss) before income taxes | | | 163 | | | | (139 | ) | | | 302 | |
Income taxes (benefit) | | | 65 | | | | (58 | ) | | | 123 | |
| | | | | | | | | | | | |
Net income (loss) | | $ | 98 | | | $ | (81 | ) | | $ | 179 | |
| | | | | | | | | | | | |
2
EXELON CORPORATION
Business Segment Comparative Statements of Operations
(unaudited)
(in millions)
PECO
| | | | | | | | | | | | |
| | | Three Months Ended March 31, | |
| | | 2014 | | | 2013 | | | Variance | |
Operating revenues | | $ | 993 | | | $ | 895 | | | $ | 98 | |
Operating expenses | | | | | | | | | | | | |
Purchased power and fuel | | | 464 | | | | 406 | | | | 58 | |
Operating and maintenance | | | 280 | | | | 188 | | | | 92 | |
Depreciation and amortization | | | 58 | | | | 57 | | | | 1 | |
Taxes other than income | | | 42 | | | | 41 | | | | 1 | |
| | | | | | | | | | | | |
Total operating expenses | | | 844 | | | | 692 | | | | 152 | |
| | | | | | | | | | | | |
Operating income | | | 149 | | | | 203 | | | | (54 | ) |
| | | | | | | | | | | | |
Other income and (deductions) | | | | | | | | | | | | |
Interest expense | | | (28 | ) | | | (29 | ) | | | 1 | |
Other, net | | | 2 | | | | 3 | | | | (1 | ) |
| | | | | | | | | | | | |
Total other income and (deductions) | | �� | (26 | ) | | | (26 | ) | | | — | |
| | | | | | | | | | | | |
Income before income taxes | | | 123 | | | | 177 | | | | (54 | ) |
Income taxes | | | 34 | | | | 55 | | | | (21 | ) |
| | | | | | | | | | | | |
Net income | | | 89 | | | | 122 | | | | (33 | ) |
Preferred security dividends and redemption | | | — | | | | 1 | | | | (1 | ) |
| | | | | | | | | | | | |
Net income attributable to common shareholder | | $ | 89 | | | $ | 121 | | | $ | (32 | ) |
| | | | | | | | | | | | |
BGE
| | | | | | | | | | | | |
| | | Three Months Ended March 31, | |
| | | 2014 | | | 2013 | | | Variance | |
Operating revenues | | $ | 1,054 | | | $ | 880 | | | $ | 174 | |
Operating expenses | | | | | | | | | | | | |
Purchased power and fuel | | | 529 | | | | 426 | | | | 103 | |
Operating and maintenance | | | 188 | | | | 143 | | | | 45 | |
Depreciation and amortization | | | 108 | | | | 93 | | | | 15 | |
Taxes other than income | | | 60 | | | | 55 | | | | 5 | |
| | | | | | | | | | | | |
Total operating expenses | | | 885 | | | | 717 | | | | 168 | |
| | | | | | | | | | | | |
Operating income | | | 169 | | | | 163 | | | | 6 | |
| | | | | | | | | | | | |
Other income and (deductions) | | | | | | | | | | | | |
Interest expense | | | (27 | ) | | | (33 | ) | | | 6 | |
Other, net | | | 4 | | | | 5 | | | | (1 | ) |
| | | | | | | | | | | | |
Total other income and (deductions) | | | (23 | ) | | | (28 | ) | | | 5 | |
| | | | | | | | | | | | |
Income before income taxes | | | 146 | | | | 135 | | | | 11 | |
Income taxes | | | 58 | | | | 55 | | | | 3 | |
| | | | | | | | | | | | |
Net income | | | 88 | | | | 80 | | | | 8 | |
Preference stock dividends | | | 3 | | | | 3 | | | | — | |
| | | | | | | | | | | | |
Net income attributable to common shareholders | | $ | 85 | | | $ | 77 | | | $ | 8 | |
| | | | | | | | | | | | |
3
EXELON CORPORATION
Business Segment Comparative Statements of Operations
(unaudited)
(in millions)
Other (a)
| | | | | | | | | | | | |
| | | Three Months Ended March 31, | |
| | | 2014 | | | 2013 | | | Variance | |
Operating revenues | | $ | (334 | ) | | $ | (386 | ) | | $ | 52 | |
| | | |
Operating expenses | | | | | | | | | | | | |
Purchased power and fuel | | | (330 | ) | | | (402 | ) | | | 72 | |
Operating and maintenance | | | (23 | ) | | | (7 | ) | | | (16 | ) |
Depreciation and amortization | | | 14 | | | | 12 | | | | 2 | |
Taxes other than income | | | 9 | | | | 14 | | | | (5 | ) |
| | | | | | | | | | | | |
| | | |
Total operating expenses | | | (330 | ) | | | (383 | ) | | | 53 | |
| | | | | | | | | | | | |
| | | |
Operating loss | | | (4 | ) | | | (3 | ) | | | (1 | ) |
| | | | | | | | | | | | |
| | | |
Other income and (deductions) | | | | | | | | | | | | |
Interest expense | | | (7 | ) | | | (126 | ) | | | 119 | |
Other, net | | | 2 | | | | 31 | | | | (29 | ) |
| | | | | | | | | | | | |
| | | |
Total other income and (deductions) | | | (5 | ) | | | (95 | ) | | | 90 | |
| | | | | | | | | | | | |
| | | |
Loss before income taxes | | | (9 | ) | | | (98 | ) | | | 89 | |
| | | |
Income (benefit) taxes | | | (12 | ) | | | 5 | | | | (17 | ) |
| | | | | | | | | | | | |
| | | |
Net income (loss) | | $ | 3 | | | $ | (103 | ) | | $ | 106 | |
| | | | | | | | | | | | |
| (a) | Other primarily includes eliminating and consolidating adjustments, Exelon’s corporate operations, shared service entities and other financing and investment activities. |
4
EXELON CORPORATION
Consolidated Balance Sheets
(in millions)
| | | | | | | | |
| | | March 31, 2014 | | | December 31, 2013 | |
| | | (unaudited) | | | | |
ASSETS | | | | | | | | |
Current assets | | | | | | | | |
Cash and cash equivalents | | $ | 791 | | | $ | 1,547 | |
Cash and cash equivalents of variable interest entities | | | 123 | | | | 62 | |
Restricted cash and investments | | | 111 | | | | 87 | |
Restricted cash and investments of variable interest entities | | | 96 | | | | 80 | |
Accounts receivable, net | | | | | | | | |
Customer | | | 2,997 | | | | 2,721 | |
Other | | | 871 | | | | 1,175 | |
Accounts receivable, net, variable interest entities | | | 458 | | | | 260 | |
Mark-to-market derivative assets | | | 756 | | | | 727 | |
Unamortized energy contract assets | | | 326 | | | | 374 | |
Inventories, net | | | | | | | | |
Fossil fuel | | | 180 | | | | 276 | |
Materials and supplies | | | 843 | | | | 829 | |
Deferred income taxes | | | 454 | | | | 573 | |
Regulatory assets | | | 768 | | | | 760 | |
Other | | | 901 | | | | 666 | |
| | | | | | | | |
Total current assets | | | 9,675 | | | | 10,137 | |
| | | | | | | | |
Property, plant and equipment, net | | | 47,742 | | | | 47,330 | |
Deferred debits and other assets | | | | | | | | |
Regulatory assets | | | 5,863 | | | | 5,910 | |
Nuclear decommissioning trust funds | | | 8,215 | | | | 8,071 | |
Investments | | | 825 | | | | 1,165 | |
Investments in affiliates | | | 22 | | | | 22 | |
Investment in CENG | | | 1,910 | | | | 1,925 | |
Goodwill | | | 2,625 | | | | 2,625 | |
Mark-to-market derivative assets | | | 571 | | | | 607 | |
Unamortized energy contracts assets | | | 657 | | | | 710 | |
Pledged assets for Zion Station decommissioning | | | 429 | | | | 458 | |
Other | | | 934 | | | | 964 | |
| | | | | | | | |
Total deferred debits and other assets | | | 22,051 | | | | 22,457 | |
| | | | | | | | |
Total assets | | $ | 79,468 | | | $ | 79,924 | |
| | | | | | | | |
Liabilities and shareholders’ equity | | | | | | | | |
Current liabilities | | | | | | | | |
Short-term borrowings | | $ | 980 | | | $ | 341 | |
Long-term debt due within one year | | | 292 | | | | 1,424 | |
Long-term debt due within one year of variable interest entities | | | 81 | | | | 85 | |
Accounts payable | | | 2,475 | | | | 2,314 | |
Accounts payable of variable interest entities | | | 286 | | | | 170 | |
Accrued expenses | | | 1,364 | | | | 1,633 | |
Payables to affiliates | | | 94 | | | | 116 | |
Deferred income taxes | | | 22 | | | | 40 | |
Regulatory liabilities | | | 336 | | | | 327 | |
Mark-to-market derivative liabilities | | | 251 | | | | 159 | |
Unamortized energy contract liabilities | | | 238 | | | | 261 | |
Other | | | 932 | | | | 858 | |
| | | | | | | | |
Total current liabilities | | | 7,351 | | | | 7,728 | |
| | | | | | | | |
Long-term debt | | | 18,247 | | | | 17,325 | |
Long-term debt to financing trusts | | | 648 | | | | 648 | |
Long-term debt of variable interest entities | | | 300 | | | | 298 | |
Deferred credits and other liabilities | | | | | | | | |
Deferred income taxes and unamortized investment tax credits | | | 12,810 | | | | 12,905 | |
Asset retirement obligations | | | 5,261 | | | | 5,194 | |
Pension obligations | | | 1,661 | | | | 1,876 | |
Non-pension postretirement benefit obligations | | | 2,042 | | | | 2,190 | |
Spent nuclear fuel obligation | | | 1,021 | | | | 1,021 | |
Regulatory liabilities | | | 4,458 | | | | 4,388 | |
Mark-to-market derivative liabilities | | | 287 | | | | 300 | |
Unamortized energy contract liabilities | | | 230 | | | | 266 | |
Payable for Zion Station decommissioning | | | 281 | | | | 305 | |
Other | | | 2,093 | | | | 2,540 | |
| | | | | | | | |
Total deferred credits and other liabilities | | | 30,144 | | | | 30,985 | |
| | | | | | | | |
Total liabilities | | | 56,690 | | | | 56,984 | |
| | | | | | | | |
Commitments and contingencies | | | | | | | | |
Shareholders’ equity | | | | | | | | |
Common stock | | | 16,751 | | | | 16,741 | |
Treasury stock, at cost | | | (2,327 | ) | | | (2,327 | ) |
Retained earnings | | | 10,180 | | | | 10,358 | |
Accumulated other comprehensive loss, net | | | (2,036 | ) | | | (2,040 | ) |
| | | | | | | | |
Total shareholders’ equity | | | 22,568 | | | | 22,732 | |
BGE preference stock not subject to mandatory redemption | | | 193 | | | | 193 | |
Noncontrolling interest | | | 17 | | | | 15 | |
| | | | | | | | |
Total equity | | | 22,778 | | | | 22,940 | |
| | | | | | | | |
Total liabilities and shareholders’ equity | | $ | 79,468 | | | $ | 79,924 | |
| | | | | | | | |
5
EXELON CORPORATION
Consolidated Statements of Cash Flows
(unaudited)
(in millions)
| | | | | | | | |
| | | Three Months Ended
March 31, | |
| | | 2014 | | | 2013 | |
Cash flows from operating activities | | | | | | | | |
Net income | | $ | 93 | | | $ | 1 | |
Adjustments to reconcile net income to net cash flows provided by operating activities: | | | | | | | | |
Depreciation, amortization, depletion and accretion, including nuclear fuel and energy contract amortization | | | 908 | | | | 1,017 | |
Deferred income taxes and amortization of investment tax credits | | | (48 | ) | | | (610 | ) |
Net fair value changes related to derivatives | | | 730 | | | | 388 | |
Net realized and unrealized gains on nuclear decommissioning trust fund investments | | | (26 | ) | | | (66 | ) |
Other non-cash operating activities | | | 272 | | | | 231 | |
Changes in assets and liabilities: | | | | | | | | |
Accounts receivable | | | (606 | ) | | | (70 | ) |
Inventories | | | 80 | | | | 101 | |
Accounts payable, accrued expenses and other current liabilities | | | 157 | | | | (542 | ) |
Option premiums received (paid), net | | | 15 | | | | (3 | ) |
Counterparty collateral posted, net | | | (677 | ) | | | (186 | ) |
Income taxes | | | 17 | | | | 632 | |
Pension and non-pension postretirement benefit contributions | | | (472 | ) | | | (267 | ) |
Other assets and liabilities | | | (278 | ) | | | 233 | |
| | | | | | | | |
Net cash flows provided by operating activities | | | 165 | | | | 859 | |
| | | | | | | | |
| | |
Cash flows from investing activities | | | | | | | | |
Capital expenditures | | | (1,217 | ) | | | (1,447 | ) |
Proceeds from termination of direct financing lease investment | | | 335 | | | | — | |
Proceeds from nuclear decommissioning trust fund sales | | | 1,825 | | | | 677 | |
Investment in nuclear decommissioning trust funds | | | (1,878 | ) | | | (729 | ) |
Proceeds from sale of long-lived assets | | | 18 | | | | — | |
Change in restricted cash | | | (40 | ) | | | (12 | ) |
Other investing activities | | | (54 | ) | | | 40 | |
| | | | | | | | |
Net cash flows used in investing activities | | | (1,011 | ) | | | (1,471 | ) |
| | | | | | | | |
Cash flows from financing activities | | | | | | | | |
Changes in short-term borrowings | | | 638 | | | | 233 | |
Issuance of long-term debt | | | 950 | | | | 149 | |
Retirement of long-term debt | | | (1,150 | ) | | | (1 | ) |
Dividends paid on common stock | | | (266 | ) | | | (450 | ) |
Proceeds from employee stock plans | | | 7 | | | | 12 | |
Other financing activities | | | (28 | ) | | | (45 | ) |
| | | | | | | | |
Net cash flows provided by (used in) financing activities | | | 151 | | | | (102 | ) |
| | | | | | | | |
Decrease in cash and cash equivalents | | | (695 | ) | | | (714 | ) |
Cash and cash equivalents at beginning of period | | | 1,609 | | | | 1,486 | |
| | | | | | | | |
Cash and cash equivalents at end of period | | $ | 914 | | | $ | 772 | |
| | | | | | | | |
6
EXELON CORPORATION
Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations
(unaudited)
(in millions, except per share data)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended March 31, 2014 | | | Three Months Ended March 31, 2013 | |
| | | GAAP (a) | | | Adjustments | | | Adjusted
Non-GAAP | | | GAAP (a) | | | Adjustments | | | Adjusted
Non-GAAP | |
Operating revenues | | $ | 7,237 | | | $ | 850 | (b),(c),(d) | | $ | 8,087 | | | $ | 6,082 | | | $ | 812 | (b),(c) | | $ | 6,894 | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | |
Purchased power and fuel | | | 4,340 | | | | 81 | (b),(c) | | | 4,421 | | | | 2,981 | | | | 253 | (b),(c) | | | 3,234 | |
Operating and maintenance | | | 1,858 | | | | (14 | ) (d) | | | 1,844 | | | | 1,764 | | | | (38 | ) (d),(g),(h) | | | 1,726 | |
Depreciation and amortization | | | 564 | | | | — | | | | 564 | | | | 543 | | | | (1 | ) (d) | | | 542 | |
Taxes other than income | | | 293 | | | | — | | | | 293 | | | | 277 | | | | — | | | | 277 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total operating expenses | | | 7,055 | | | | 67 | | | | 7,122 | | | | 5,565 | | | | 214 | | | | 5,779 | |
| | | | | | |
Equity in earnings of unconsolidated affiliates | | | (19 | ) | | | 12 | (c),(d) | | | (7 | ) | | | (9 | ) | | | 18 | (c) | | | 9 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Operating income | | | 163 | | | | 795 | | | | 958 | | | | 508 | | | | 616 | | | | 1,124 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Other income and (deductions) | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense | | | (227 | ) | | | — | | | | (227 | ) | | | (623 | ) | | | 285 | (d),(h),(i),(j) | | | (338 | ) |
Other, net | | | 103 | | | | (42 | ) (e),(f) | | | 61 | | | | 172 | | | | (30 | ) (d),(e),(g),(i) | | | 142 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total other income and (deductions) | | | (124 | ) | | | (42 | ) | | | (166 | ) | | | (451 | ) | | | 255 | | | | (196 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income before income taxes | | | 39 | | | | 753 | | | | 792 | | | | 57 | | | | 871 | | | | 928 | |
| | | | | | |
Income (benefit) taxes | | | (54 | ) | | | 313 | (b),(c),(d),(e),(f) | | | 259 | | | | 56 | | | | 265 | (b),(c),(d),(e),(g),(h),(i),(j) | | | 321 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net income | | | 93 | | | | 440 | | | | 533 | | | | 1 | | | | 606 | | | | 607 | |
Net income attributable to noncontrolling interests and preference stock dividends | | | 3 | | | | — | | | | 3 | | | | 5 | | | | — | | | | 5 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) attributable to common shareholders | | $ | 90 | | | $ | 440 | | | $ | 530 | | | $ | (4 | ) | | $ | 606 | | | $ | 602 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Effective tax rate | | | -138.5 | % | | | | | | | 32.7 | % | | | 98.2 | % | | | | | | | 34.6 | % |
Earnings per average common share | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | $ | 0.10 | | | $ | 0.52 | | | $ | 0.62 | | | $ | (0.01 | ) | | $ | 0.71 | | | $ | 0.70 | |
Diluted | | $ | 0.10 | | | $ | 0.52 | | | $ | 0.62 | | | $ | (0.01 | ) | | $ | 0.71 | | | $ | 0.70 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Average common shares outstanding | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | | 858 | | | | | | | | 858 | | | | 855 | | | | | | | | 855 | |
Diluted | | | 861 | | | | | | | | 861 | | | | 855 | | | | | | | | 855 | |
Effect of adjustments on earnings per average diluted common share recorded in accordance with GAAP:
| | | | | | | | |
Mark-to-market impact of economic hedging activities (b) | | $ | 0.52 | | | $ | 0.27 | |
Amortization of commodity contract intangibles (c) | | | 0.04 | | | | 0.14 | |
Merger and integration costs (d) | | | 0.01 | | | | 0.03 | |
Unrealized gains related to NDT fund investments (e) | | | (0.01 | ) | | | (0.04 | ) |
Tax settlements (f) | | | (0.04 | ) | | | — | |
Plant retirements and divestitures (g) | | | — | | | | (0.02 | ) |
Nuclear uprate project cancellation (h) | | | — | | | | 0.02 | |
Remeasurement of like-kind exchange tax position (i) | | | — | | | | 0.31 | |
| | | | | | | | |
Total adjustments | | $ | 0.52 | | | $ | 0.71 | |
| | | | | | | | |
| (a) | Results reported in accordance with accounting principles generally accepted in the United States (GAAP). |
| (b) | Adjustment to exclude the mark-to-market impact of Exelon’s economic hedging activities, net of intercompany eliminations. |
| (c) | Adjustment to exclude the non-cash amortization of intangible assets, net, related to commodity contracts recorded at fair value at the merger date. |
| (d) | Adjustment to exclude certain costs incurred associated with the Constellation merger and at Generation the Constellation Nuclear Energy Group, LLC (CENG) transaction, including employee-related expenses (e.g. severance, retirement, relocation and retention bonuses), integration initiatives, and certain pre-acquisition contingencies. |
| (e) | Adjustment to exclude the unrealized gains on NDT fund investments to the extent not offset by contractual accounting as described in the notes to the consolidated financial statements. |
| (f) | Adjustment to exclude the benefit related to the favorable settlement in 2014 of certain income tax positions on Constellation’s 2009-2012 tax returns. |
| (g) | Adjustment to exclude the impacts associated with the sale or retirement of generating stations. |
| (h) | Adjustment to exclude a 2013 charge to earnings related to Generation’s cancellation of previously capitalized nuclear uprate projects. |
| (i) | Adjustment to exclude a non-cash charge to earnings resulting from the first quarter 2013 remeasurement of a like-kind exchange tax position taken on ComEd’s 1999 sale of fossil generating assets. |
| (j) | Adjustment to exclude the non-cash amortization of certain debt recorded at fair value at the merger date, which was retired in the second quarter of 2013. |
7
EXELON CORPORATION
Reconciliation of Adjusted (non-GAAP) Operating
Earnings to GAAP Earnings (in millions)
Three Months Ended March 31, 2014 and 2013
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Exelon
Earnings per
Diluted
Share | | | Generation | | | ComEd | | | PECO | | | BGE | | | Other (a) | | | Exelon | |
| | | | | | | |
2013 GAAP Earnings (Loss) | | $ | (0.01 | ) | | $ | (18 | ) | | $ | (81 | ) | | $ | 121 | | | $ | 77 | | | $ | (103 | ) | | $ | (4 | ) |
| | | | | |
2013 Adjusted (non-GAAP) Operating Earnings (Loss) | | | | | | | | | | | | | | | | | | | | |
Adjustments: | | | | | | | | | | | | | | | | | | | | |
Mark-to-Market Impact of Economic Hedging Activities | | | 0.27 | | | | 246 | | | | — | | | | — | | | | — | | | | (11 | ) | | | 235 | |
Unrealized Gains Related to NDT Fund Investments (1) | | | (0.04 | ) | | | (35 | ) | | | — | | | | — | | | | — | | | | — | | | | (35 | ) |
Plant Retirements and Divestitures (2) | | | (0.02 | ) | | | (13 | ) | | | — | | | | — | | | | — | | | | — | | | | (13 | ) |
Merger and Integration Costs (3) | | | 0.03 | | | | 29 | | | | — | | | | 2 | | | | (3 | ) | | | (1 | ) | | | 27 | |
Amortization of Commodity Contract Intangibles (4) | | | 0.14 | | | | 117 | | | | — | | | | — | | | | — | | | | — | | | | 117 | |
Amortization of the Fair Value of Certain Debt (5) | | | — | | | | (3 | ) | | | — | | | | — | | | | — | | | | — | | | | (3 | ) |
Remeasurement of Like-Kind Exchange Tax Position (6) | | | 0.31 | | | | — | | | | 170 | | | | — | | | | — | | | | 95 | | | | 265 | |
Nuclear Uprate Project Cancellation (7) | | | 0.02 | | | | 13 | | | | — | | | | — | | | | — | | | | — | | | | 13 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
2013 Adjusted (non-GAAP) Operating Earnings (Loss) | | | 0.70 | | | | 336 | | | | 89 | | | | 123 | | | | 74 | | | | (20 | ) | | | 602 | |
| | | | | |
Year Over Year Effects on Earnings: | | | | | | | | | | | | | | | | | | | | |
Generation Energy Margins, Excluding Mark-to-Market: | | | | | | | | | | | | | | | | | | | | |
Volume Impacts for Generation Revenue (9) | | | (0.05 | ) | | | (41 | ) | | | — | | | | — | | | | — | | | | — | | | | (41 | ) |
Fuel Cost Impacts for Generation (10) | | | (0.04 | ) | | | (36 | ) | | | — | | | | — | | | | — | | | | — | | | | (36 | ) |
Capacity Pricing (11) | | | 0.08 | | | | 70 | | | | — | | | | — | | | | — | | | | — | | | | 70 | |
Market and Portfolio Conditions (12) | | | (0.09 | ) | | | (79 | ) | | | — | | | | — | | | | — | | | | — | | | | (79 | ) |
ComEd, PECO and BGE Margins: | | | | | | | | | | | | | | | | | | | | |
Weather | | | 0.04 | | | | — | | | | 9 | | | | 20 | | | | — | (b) | | | — | | | | 29 | |
Load | | | 0.01 | | | | — | | | | 4 | | | | 4 | | | | — | (b) | | | — | | | | 8 | |
Other Energy Delivery (13) | | | 0.06 | | | | — | | | | 10 | | | | (1 | ) | | | 42 | | | | — | | | | 51 | |
Operating and Maintenance Expense: | | | | | | | | | | | | | | | | | | | | |
Labor, Contracting and Materials (14) | | | (0.01 | ) | | | 2 | | | | (4 | ) | | | — | | | | (9 | ) | | | — | | | | (11 | ) |
Planned Nuclear Refueling Outages | | | (0.01 | ) | | | (7 | ) | | | — | | | | — | | | | — | | | | — | | | | (7 | ) |
Pension and Non-Pension Postretirement Benefits (15) | | | 0.01 | | | | 4 | | | | 6 | | | | (1 | ) | | | — | | | | 2 | | | | 11 | |
Other Operating and Maintenance (16) | | | (0.07 | ) | | | 1 | | | | (1 | ) | | | (53 | ) | | | (14 | ) | | | 7 | | | | (60 | ) |
Depreciation and Amortization Expense (17) | | | (0.01 | ) | | | 1 | | | | (4 | ) | | | (1 | ) | | | (8 | ) | | | — | | | | (12 | ) |
Equity in Losses of Unconsolidated Affiliates (18) | | | (0.01 | ) | | | (9 | ) | | | — | | | | — | | | | — | | | | — | | | | (9 | ) |
Income Taxes (19) | | | 0.01 | | | | 8 | | | | (1 | ) | | | (2 | ) | | | (1 | ) | | | 4 | | | | 8 | |
Interest Expense, Net (20) | | | 0.01 | | | | 8 | | | | (8 | ) | | | — | | | | 4 | | | | 8 | | | | 12 | |
Other | | | (0.01 | ) | | | — | | | | (2 | ) | | | — | | | | (3 | ) | | | (1 | ) | | | (6 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
2014 Adjusted (non-GAAP) Operating Earnings | | | 0.62 | | | | 258 | | | | 98 | | | | 89 | | | | 85 | | | | — | | | | 530 | |
| | | | | |
2014 Adjusted (non-GAAP) Operating Earnings (Loss) | | | | | | | | | | | | | | | | | | | | |
Adjustments: | | | | | | | | | | | | | | | | | | | | |
Mark-to-Market Impact of Economic Hedging Activities | | | (0.52 | ) | | | (446 | ) | | | — | | | | — | | | | — | | | | 3 | | | | (443 | ) |
Unrealized Gains Related to NDT Fund Investments (1) | | | 0.01 | | | | 8 | | | | — | | | | — | | | | — | | | | — | | | | 8 | |
Merger and Integration Costs (3) | | | (0.01 | ) | | | (9 | ) | | | — | | | | — | | | | — | | | | — | | | | (9 | ) |
Amortization of Commodity Contract Intangibles (4) | | | (0.04 | ) | | | (31 | ) | | | — | | | | — | | | | — | | | | — | | | | (31 | ) |
Tax Settlements (8) | | | 0.04 | | | | 35 | | | | — | | | | — | | | | — | | | | — | | | | 35 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
2014 GAAP Earnings (Loss) | | $ | 0.10 | | | $ | (185 | ) | | $ | 98 | | | $ | 89 | | | $ | 85 | | | $ | 3 | | | $ | 90 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Notes:
| | • | | For the three months ended March 31, 2014 and 2013, the financial results represent equivalent reporting periods for the first time since the date the Constellation merger was completed. Therefore, the results of operations from 2014 and 2013 are comparable for Generation, BGE, Other and Exelon. |
| | • | | Effective in the fourth quarter of 2013 Exelon switched from applying a blended tax rate to applying a marginal tax rate to the drivers and exclusions presented above, resulting in minor changes when comparing to historical earnings release filings. |
| | • | | Effective in the first quarter of 2014, ‘Nuclear Volume’ and ‘Nuclear Fuel Costs’ were changed to ‘Volume Impacts for Generation Revenue’ and ‘Fuel Cost Impacts for Generation,’ respectively, reflecting a full Generation perspective. |
| (a) | Other primarily includes eliminating and consolidating adjustments, Exelon’s corporate operations, shared service entities and other financing and investment activities. |
| (b) | As approved by the Maryland PSC, BGE records a monthly adjustment to rates for residential and the majority of its commercial and industrial customers to eliminate the effect of abnormal weather and usage patterns per customer on distribution volumes. |
| (1) | Reflects the impact of unrealized gains on NDT fund investments to the extent not offset by contractual accounting as described in the notes to the consolidated financial statements. |
| (2) | Reflects the impacts associated with the sale or retirement of generating stations. |
| (3) | Reflects certain costs incurred associated with the Constellation merger and at Generation the Constellation Energy Nuclear Group, LLC (CENG) transaction, including employee-related expenses (e.g. severance, retirement, relocation and retention bonuses), integration initiatives and certain pre-acquisition contingencies. |
| (4) | Represents the non-cash amortization of intangible assets, net, related to commodity contracts recorded at fair value at the Constellation merger date. |
| (5) | Represents the non-cash amortization of certain debt recorded at fair value at the Constellation merger date, which was retired in the second quarter of 2013. |
| (6) | Represents a non-cash charge to earnings resulting from the first quarter 2013 remeasurement of a like-kind exchange tax position taken on ComEd’s 1999 sale of fossil generating stations. |
| (7) | Reflects a 2013 charge to earnings related to Generation’s cancellation of previously capitalized nuclear uprate projects. |
| (8) | Reflects a benefit related to the favorable settlement in 2014 of certain income tax positions on Constellation’s 2009-2012 tax returns. |
| (9) | Primarily reflects a reduction in revenue given increased nuclear and fossil generating outage days in 2014, including Salem but excluding CENG, and decreased fossil generation in New England and South as a result of optimizing favorable commodity pricing which is offset within market and portfolio conditions. |
| (10) | Primarily reflects the impact of higher nuclear fuel amortization, excluding CENG, and an increase in fossil fuel costs due to the extreme cold weather during the first quarter of 2014. |
| (11) | Primarily reflects the impact of increased capacity prices related to the Reliability Pricing Model (RPM) for the PJM Interconnection, LLC (PJM) market. |
| (12) | Primarily reflects the impact of lower realized energy prices and higher procurement costs for replacement power, partially offset by optimizing favorable commodity pricing in New England and South. |
| (13) | For ComEd, primarily reflects increased distribution revenue due to recovery of increased costs and capital investments and higher allowed ROE pursuant to ComEd’s performance-based rate formula. For BGE, includes increased distribution revenue pursuant to electric and natural gas distribution rate case orders issued by the Maryland PSC and increased cost recovery for energy efficiency and demand response programs (primarily offset in depreciation and amortization expense). |
| (14) | Primarily reflects inflation across all operating companies and an increase in maintenance related activities at BGE due to extreme cold temperatures, partially offset at Generation by synergies realized in 2014. |
| (15) | Primarily reflects the favorable impact of higher actuarially assumed discount rates for 2014. |
| (16) | Primarily reflects increased storm costs in the PECO and BGE service territories, including the February 5, 2014 ice storm. |
| (17) | Primarily reflects increased depreciation expense across the operating companies for ongoing capital expenditures, partially offset by a decrease in Generation’s asset retirement cost amortization. At BGE, reflects increased regulatory asset amortization related to higher energy efficiency and demand response program expenditures (primarily offset in other energy delivery revenue). |
| (18) | Primarily reflects equity in losses in CENG. |
| (19) | At Generation, primarily reflects the favorable settlement of certain income tax positions on Constellation’s 2009-2012 tax returns and an increase in domestic production activities deduction, partially offset by a reduction in investment tax credit benefits. |
| (20) | For Generation, primarily reflects a benefit recorded in 2014 related to the favorable settlement of certain income tax positions on Constellation’s 2009-2012 tax returns. For ComEd, primarily reflects a favorable adjustment recorded in the first quarter of 2013 related to the 1999-2001 IRS settlement. For Corporate, includes the impacts of a 2013 unfavorable franchise tax case settlement. |
8
EXELON CORPORATION
Reconciliation of Adjusted (non-GAAP) Operating Earnings to
GAAP Consolidated Statements of Operations
(unaudited)
(in millions)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Generation | |
| | | Three Months Ended March 31, 2014 | | | Three Months Ended March 31, 2013 | |
| | | GAAP (a) | | | Adjustments | | | Adjusted
Non-GAAP | | | GAAP (a) | | | Adjustments | | | Adjusted
Non-GAAP | |
Operating revenues | | $ | 4,390 | | | $ | 850 | (b),(c),(d) | | $ | 5,240 | | | $ | 3,533 | | | $ | 830 | (b),(c) | | $ | 4,363 | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | |
Purchased power and fuel | | | 3,357 | | | | 81 | (b),(c) | | | 3,438 | | | | 2,169 | | | | 253 | (b),(c) | | | 2,422 | |
Operating and maintenance | | | 1,087 | | | | (14 | ) (d) | | | 1,073 | | | | 1,112 | | | | (40 | ) (d),(g),(h) | | | 1,072 | |
Depreciation and amortization | | | 211 | | | | — | | | | 211 | | | | 214 | | | | (1 | ) (d) | | | 213 | |
Taxes other than income | | | 105 | | | | — | | | | 105 | | | | 93 | | | | — | | | | 93 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total operating expenses | | | 4,760 | | | | 67 | | | | 4,827 | | | | 3,588 | | | | 212 | | | | 3,800 | |
Equity in (losses) earnings of unconsolidated affiliates | | | (19 | ) | | | 12 | (c),(d) | | | (7 | ) | | | (9 | ) | | | 18 | (c) | | | 9 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Operating income (loss) | | | (389 | ) | | | 795 | | | | 406 | | | | (64 | ) | | | 636 | | | | 572 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Other income and (deductions) | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense | | | (85 | ) | | | — | | | | (85 | ) | | | (82 | ) | | | (2 | ) (d),(h),(i) | | | (84 | ) |
Other, net | | | 90 | | | | (42 | ) (e),(f) | | | 48 | | | | 128 | | | | (111 | ) (d),(e),(g) | | | 17 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total other income and (deductions) | | | 5 | | | | (42 | ) | | | (37 | ) | | | 46 | | | | (113 | ) | | | (67 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) before income taxes | | | (384 | ) | | | 753 | | | | 369 | | | | (18 | ) | | | 523 | | | | 505 | |
| | | | | | |
Income (benefit) taxes | | | (199 | ) | | | 310 | (b),(c),(d)(e),(f) | | | 111 | | | | (1 | ) | | | 169 | (b),(c),(d),(e)(g),(h),(i) | | | 168 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | | (185 | ) | | | 443 | | | | 258 | | | | (17 | ) | | | 354 | | | | 337 | |
Net loss attributable to noncontrolling interests | | | — | | | | — | | | | — | | | | 1 | | | | — | | | | 1 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) attributable to membership interest | | $ | (185 | ) | | $ | 443 | | | $ | 258 | | | $ | (18 | ) | | $ | 354 | | | $ | 336 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Results reported in accordance with GAAP. |
| (b) | Adjustment to exclude the mark-to-market impact of Generation’s economic hedging activities. |
| (c) | Adjustment to exclude the non-cash amortization of intangible assets, net, related to commodity contracts recorded at fair value at the merger date. |
| (d) | Adjustment to exclude certain costs incurred associated with the Constellation merger and Constellation Energy Nuclear Group, LLC (CENG) transaction, including employee-related expenses (e.g. severance, retirement, relocation and retention bonuses), integration initiatives, and certain pre-acquisition contingencies. |
| (e) | Adjustment to exclude the unrealized gains on NDT fund investments to the extent not offset by contractual accounting as described in the notes to the consolidated financial statements. |
| (f) | Adjustment to exclude a benefit related to the favorable settlement in 2014 of certain income tax positions on Constellation’s 2009-2012 tax returns. |
| (g) | Adjustment to exclude the impacts associated with the sale or retirement of generating stations. |
| (h) | Adjustment to exclude a 2013 charge to earnings related to Generation’s cancellation of previously capitalized nuclear uprate projects. |
| (i) | Adjustment to exclude the non-cash amortization of certain debt recorded at fair value at the merger date which was retired in the second quarter of 2013. |
9
EXELON CORPORATION
Reconciliation of Adjusted (non-GAAP) Operating Earnings to
GAAP Consolidated Statements of Operations
(unaudited)
(in millions)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | ComEd | |
| | | Three Months Ended March 31, 2014 | | | Three Months Ended March 31, 2013 | |
| | | GAAP (a) | | | Adjustments | | | Adjusted Non-
GAAP | | | GAAP (a) | | | Adjustments | | | Adjusted Non-
GAAP | |
Operating revenues | | $ | 1,134 | | | $ | — | | | $ | 1,134 | | | $ | 1,160 | | | $ | — | | | $ | 1,160 | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | |
Purchased power | | | 320 | | | | — | | | | 320 | | | | 382 | | | | — | | | | 382 | |
Operating and maintenance | | | 326 | | | | — | | | | 326 | | | | 328 | | | | — | | | | 328 | |
Depreciation and amortization | | | 173 | | | | — | | | | 173 | | | | 167 | | | | — | | | | 167 | |
Taxes other than income | | | 77 | | | | — | | | | 77 | | | | 74 | | | | — | | | | 74 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total operating expenses | | | 896 | | | | — | | | | 896 | | | | 951 | | | | — | | | | 951 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Operating income | | | 238 | | | | — | | | | 238 | | | | 209 | | | | — | | | | 209 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Other income and (deductions) | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense | | | (80 | ) | | | — | | | | (80 | ) | | | (353 | ) | | | 287 | (b) | | | (66 | ) |
Other, net | | | 5 | | | | — | | | | 5 | | | | 5 | | | | — | | | | 5 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total other income and (deductions) | | | (75 | ) | | | — | | | | (75 | ) | | | (348 | ) | | | 287 | | | | (61 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) before income taxes | | | 163 | | | | — | | | | 163 | | | | (139 | ) | | | 287 | | | | 148 | |
Income (benefit) taxes | | | 65 | | | | — | | | | 65 | | | | (58 | ) | | | 117 | (b) | | | 59 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 98 | | | $ | — | | | $ | 98 | | | $ | (81 | ) | | $ | 170 | | | $ | 89 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Results reported in accordance with GAAP. |
| (b) | Adjustment to exclude a non-cash charge to earnings resulting from the first quarter 2013 remeasurement of a like-kind exchange tax position taken on ComEd’s 1999 sale of fossil generating assets. |
10
EXELON CORPORATION
Reconciliation of Adjusted (non-GAAP) Operating Earnings to
GAAP Consolidated Statements of Operations
(unaudited)
(in millions)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | PECO | |
| | | Three Months Ended March 31, 2014 | | | Three Months Ended March 31, 2013 | |
| | | GAAP (a) | | | Adjustments | | | Adjusted Non-
GAAP | | | GAAP (a) | | | Adjustments | | | Adjusted Non-
GAAP | |
Operating revenues | | $ | 993 | | | $ | — | | | $ | 993 | | | $ | 895 | | | $ | — | | | $ | 895 | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | |
Purchased power and fuel | | | 464 | | | | — | | | | 464 | | | | 406 | | | | — | | | | 406 | |
Operating and maintenance | | | 280 | | | | — | | | | 280 | | | | 188 | | | | (2 | ) (b) | | | 186 | |
Depreciation and amortization | | | 58 | | | | — | | | | 58 | | | | 57 | | | | — | | | | 57 | |
Taxes other than income | | | 42 | | | | — | | | | 42 | | | | 41 | | | | — | | | | 41 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total operating expenses | | | 844 | | | | — | | | | 844 | | | | 692 | | | | (2 | ) | | | 690 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Operating income | | | 149 | | | | — | | | | 149 | | | | 203 | | | | 2 | | | | 205 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Other income and (deductions) | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense | | | (28 | ) | | | — | | | | (28 | ) | | | (29 | ) | | | — | | | | (29 | ) |
Other, net | | | 2 | | | | — | | | | 2 | | | | 3 | | | | — | | | | 3 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total other income and (deductions) | | | (26 | ) | | | — | | | | (26 | ) | | | (26 | ) | | | — | | | | (26 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income before income taxes | | | 123 | | | | — | | | | 123 | | | | 177 | | | | 2 | | | | 179 | |
Income taxes | | | 34 | | | | — | | | | 34 | | | | 55 | | | | — | (b) | | | 55 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net income | | | 89 | | | | — | | | | 89 | | | | 122 | | | | 2 | | | | 124 | |
Preferred security dividends | | | — | | | | — | | | | — | | | | 1 | | | | — | | | | 1 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net income attributable to common shareholder | | $ | 89 | | | $ | — | | | $ | 89 | | | $ | 121 | | | $ | 2 | | | $ | 123 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Results reported in accordance with GAAP. |
| (b) | Adjustment to exclude certain costs incurred associated with the Constellation merger, including employee-related expenses (e.g. severance, retirement, relocation and retention bonuses) and integration initiatives. |
11
EXELON CORPORATION
Reconciliation of Adjusted (non-GAAP) Operating Earnings to
GAAP Consolidated Statements of Operations
(unaudited)
(in millions)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | BGE | |
| | | Three Months Ended March 31, 2014 | | | Three Months Ended March 31, 2013 | |
| | | GAAP (a) | | | Adjustments | | | Adjusted
Non-GAAP | | | GAAP (a) | | | Adjustments | | | Adjusted
Non-GAAP | |
Operating revenues | | $ | 1,054 | | | $ | — | | | $ | 1,054 | | | $ | 880 | | | $ | — | | | $ | 880 | |
| | | | | | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | |
Purchased power and fuel | | | 529 | | | | — | | | | 529 | | | | 426 | | | | — | | | | 426 | |
Operating and maintenance | | | 188 | | | | — | | | | 188 | | | | 143 | | | | 5 | (b) | | | 148 | |
Depreciation and amortization | | | 108 | | | | — | | | | 108 | | | | 93 | | | | — | | | | 93 | |
Taxes other than income | | | 60 | | | | — | | | | 60 | | | | 55 | | | | — | | | | 55 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total operating expenses | | | 885 | | | | — | | | | 885 | | | | 717 | | | | 5 | | | | 722 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Operating income | | | 169 | | | | — | | | | 169 | | | | 163 | | | | (5 | ) | | | 158 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Other income and (deductions) | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense | | | (27 | ) | | | — | | | | (27 | ) | | | (33 | ) | | | — | | | | (33 | ) |
Other, net | | | 4 | | | | — | | | | 4 | | | | 5 | | | | — | | | | 5 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Total other income and (deductions) | | | (23 | ) | | | — | | | | (23 | ) | | | (28 | ) | | | — | | | | (28 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Income before income taxes | | | 146 | | | | — | | | | 146 | | | | 135 | | | | (5 | ) | | | 130 | |
| | | | | | |
Income taxes | | | 58 | | | | — | | | | 58 | | | | 55 | | | | (2 | ) (b) | | | 53 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net income | | | 88 | | | | — | | | | 88 | | | | 80 | | | | (3 | ) | | | 77 | |
| | | | | | |
Preference stock dividends | | | 3 | | | | — | | | | 3 | | | | 3 | | | | — | | | | 3 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net income attributable to common shareholders | | $ | 85 | | | $ | — | | | $ | 85 | | | $ | 77 | | | $ | (3 | ) | | $ | 74 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Results reported in accordance with GAAP. |
| (b) | Adjustment to exclude certain costs incurred associated with the Constellation merger, including transaction costs, employee-related expenses (e.g severance, retirement, relocation, and retention bonuses) and integration initiatives. |
12
EXELON CORPORATION
Reconciliation of Adjusted (non-GAAP) Operating Earnings to
GAAP Consolidated Statements of Operations
(unaudited)
(in millions)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Other (a) | |
| | | Three Months Ended March 31, 2014 | | | Three Months Ended March 31, 2013 | |
| | | GAAP (b) | | | Adjustments | | | Adjusted Non-
GAAP | | | GAAP (b) | | | Adjustments | | | Adjusted Non-
GAAP | |
Operating revenues | | $ | (334 | ) | | $ | — | | | $ | (334 | ) | | $ | (386 | ) | | $ | (18 | ) (d) | | $ | (404 | ) |
| | | | | | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | |
Purchased power and fuel | | | (330 | ) | | | — | | | | (330 | ) | | | (402 | ) | | | — | | | | (402 | ) |
Operating and maintenance | | | (23 | ) | | | — | | | | (23 | ) | | | (7 | ) | | | (1 | ) (e) | | | (8 | ) |
Depreciation and amortization | | | 14 | | | | — | | | | 14 | | | | 12 | | | | — | | | | 12 | |
Taxes other than income | | | 9 | | | | — | | | | 9 | | | | 14 | | | | — | | | | 14 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Total operating expenses | | | (330 | ) | | | — | | | | (330 | ) | | | (383 | ) | | | (1 | ) | | | (384 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating loss | | | (4 | ) | | | — | | | | (4 | ) | | | (3 | ) | | | (17 | ) | | | (20 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Other income and (deductions) | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense | | | (7 | ) | | | — | | | | (7 | ) | | | (126 | ) | | | — | | | | (126 | ) |
Other, net | | | 2 | | | | — | | | | 2 | | | | 31 | | | | 81 | (f) | | | 112 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Total other income and (deductions) | | | (5 | ) | | | — | | | | (5 | ) | | | (95 | ) | | | 81 | | | | (14 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Loss before income taxes | | | (9 | ) | | | — | | | | (9 | ) | | | (98 | ) | | | 64 | | | | (34 | ) |
| | | | | | |
Income (benefit) taxes | | | (12 | ) | | | 3 | (c) | | | (9 | ) | | | 5 | | | | (19 | ) (d),(e),(f) | | | (14 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net income (loss) | | $ | 3 | | | $ | (3 | ) | | $ | — | | | $ | (103 | ) | | $ | 83 | | | $ | (20 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | Other primarily includes eliminating and consolidating adjustments, Exelon’s corporate operations, shared service entities and other financing and investment activities. |
| (b) | Results reported in accordance with GAAP. |
| (c) | Adjustment to exclude the unitary tax impact of Generation’s economic hedging activities. |
| (d) | Adjustment to exclude the intercompany mark-to-market impact of Exelon’s economic hedging activities. |
| (e) | Adjustment to exclude certain costs incurred associated with the Constellation merger, including employee-related expenses (e.g. severance, retirement, relocation and retention bonuses), integration initiatives, and certain pre-acquisition contingencies. |
| (f) | Adjustment to exclude a non-cash charge to earnings resulting from the first quarter 2013 remeasurement of a like-kind exchange tax position taken on ComEd’s 1999 sale of fossil generating assets. |
13
EXELON CORPORATION
Exelon Generation Statistics
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | |
| | | Mar. 31, 2014 | | | Dec. 31, 2013 | | | Sep. 30, 2013 | | | Jun. 30, 2013 | | | Mar. 31, 2013 | |
Supply (in GWhs) | | | | | | | | | | | | | | | | | | | | |
Nuclear Generation (a) | | | | | | | | | | | | | | | | | | | | |
Mid-Atlantic | | | 12,136 | | | | 11,900 | | | | 12,424 | | | | 11,794 | | | | 12,762 | |
Midwest | | | 23,125 | | | | 23,429 | | | | 23,741 | | | | 22,807 | | | | 23,269 | |
| | | | | | | | | | | | | | | | | | | | |
Total Nuclear Generation | | | 35,261 | | | | 35,329 | | | | 36,165 | | | | 34,601 | | | | 36,031 | |
Fossil and Renewables (a) | | | | | | | | | | | | | | | | | | | | |
Mid-Atlantic | | | 3,207 | | | | 2,951 | | | | 2,808 | | | | 2,796 | | | | 3,160 | |
Midwest | | | 417 | | | | 363 | | | | 217 | | | | 318 | | | | 581 | |
New England | | | 1,734 | | | | 1,763 | | | | 3,609 | | | | 3,132 | | | | 2,392 | |
New York | | | 1 | | | | — | | | | — | | | | — | | | | — | |
ERCOT | | | 1,656 | | | | 1,582 | | | | 2,522 | | | | 1,617 | | | | 733 | |
Other (c) | | | 1,630 | | | | 1,064 | | | | 1,913 | | | | 1,431 | | | | 2,254 | |
| | | | | | | | | | | | | | | | | | | | |
Total Fossil and Renewables | | | 8,645 | | | | 7,723 | | | | 11,069 | | | | 9,294 | | | | 9,120 | |
Purchased Power | | | | | | | | | | | | | | | | | | | | |
Mid-Atlantic (b) | | | 3,233 | | | | 3,955 | | | | 4,289 | | | | 2,616 | | | | 3,233 | |
Midwest | | | 711 | | | | 498 | | | | 707 | | | | 1,503 | | | | 1,700 | |
New England | | | 2,070 | | | | 2,605 | | | | 2,178 | | | | 1,365 | | | | 1,507 | |
New York (b) | | | 2,857 | | | | 3,493 | | | | 3,565 | | | | 3,073 | | | | 3,511 | |
ERCOT | | | 3,440 | | | | 2,792 | | | | 3,803 | | | | 4,269 | | | | 4,199 | |
Other (c) | | | 3,355 | | | | 2,986 | | | | 3,244 | | | | 4,998 | | | | 3,703 | |
| | | | | | | | | | | | | | | | | | | | |
Total Purchased Power | | | 15,666 | | | | 16,329 | | | | 17,786 | | | | 17,824 | | | | 17,853 | |
Total Supply/Sales by Region (e) | | | | | | | | | | | | | | | | | | | | |
Mid-Atlantic (d) | | | 18,576 | | | | 18,806 | | | | 19,521 | | | | 17,206 | | | | 19,155 | |
Midwest (d) | | | 24,253 | | | | 24,290 | | | | 24,665 | | | | 24,628 | | | | 25,550 | |
New England | | | 3,804 | | | | 4,368 | | | | 5,787 | | | | 4,497 | | | | 3,899 | |
New York | | | 2,858 | | | | 3,493 | | | | 3,565 | | | | 3,073 | | | | 3,511 | |
ERCOT | | | 5,096 | | | | 4,374 | | | | 6,325 | | | | 5,886 | | | | 4,932 | |
Other (c) | | | 4,985 | | | | 4,050 | | | | 5,157 | | | | 6,429 | | | | 5,957 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Total Supply/Sales by Region | | | 59,572 | | | | 59,381 | | | | 65,020 | | | | 61,719 | | | | 63,004 | |
| | | | | | | | | | | | | | | | | | | | |
| |
| | | Three Months Ended | |
| | | Mar. 31, 2014 | | | Dec. 31, 2013 | | | Sep. 30, 2013 | | | Jun. 30, 2013 | | | Mar. 31, 2013 | |
Outage Days (f) | | | | | | | | | | | | | | | | | | | | |
Refueling | | | 52 | | | | 94 | | | | 43 | | | | 47 | | | | 49 | |
Non-refueling | | | 20 | | | | 33 | | | | 5 | | | | 31 | | | | 6 | |
| | | | | | | | | | | | | | | | | | | | |
Total Outage Days | | | 72 | | | | 127 | | | | 48 | | | | 78 | | | | 55 | |
| | | | | | | | | | | | | | | | | | | | |
| (a) | Includes the proportionate share of output where Generation has an undivided ownership interest in jointly-owned generating plants and does not include ownership through equity method investments (e.g. CENG). |
| (b) | Purchased power includes physical volumes of 2,489 GWhs, 3,226 GWhs, 3,138 GWhs, 3,114 GWhs, and 2,588 GWhs in the Mid-Atlantic and 2,857 GWhs, 3,051 GWhs, 3,147 GWhs, 2,655 GWhs, and 3,213 GWhs in New York as a result of the PPA with CENG for the three months ended March 31, 2014, December 31, 2013, September 30, 2013, June 30, 2013, and March 31, 2013 respectively. |
| (c) | Other Regions includes South, West and Canada, which are not considered individually significant. |
| (d) | Includes affiliate sales to PECO and BGE in the Mid-Atlantic region and affiliate sales to ComEd in the Midwest region. |
| (e) | Total sales do not include physical trading volumes of 2,494 GWhs, 2,696 GWhs, 2,499 GWhs, 1,995 GWhs, and 1,572 GWhs, for the three months ended March 31, 2014, December 31, 2013, September 30, 2013, June 30, 2013, and March 31, 2013 respectively. |
| (f) | Outage days exclude Salem and CENG. |
14
EXELON CORPORATION
ComEd Statistics
Three Months Ended March 31, 2014 and 2013
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Electric Deliveries (in GWhs) | | | Revenue (in millions) | |
| | | 2014 | | | 2013 | | | % Change | | | Weather-
Normal
% Change | | | 2014 | | | 2013 | | | % Change | |
Retail Deliveries and Sales (a) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | | 7,411 | | | | 6,876 | | | | 7.8 | % | | | 1.8 | % | | $ | 508 | | | $ | 584 | | | | (13.0 | )% |
Small Commercial & Industrial | | | 8,331 | | | | 7,873 | | | | 5.8 | % | | | 2.2 | % | | | 344 | | | | 308 | | | | 11.7 | % |
Large Commercial & Industrial | | | 7,095 | | | | 6,840 | | | | 3.7 | % | | | 1.2 | % | | | 115 | | | | 102 | | | | 12.7 | % |
Public Authorities & Electric Railroads | | | 397 | | | | 373 | | | | 6.4 | % | | | 2.6 | % | | | 13 | | | | 12 | | | | 8.3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Retail | | | 23,234 | | | | 21,962 | | | | 5.8 | % | | | 1.8 | % | | | 980 | | | | 1,006 | | | | (2.6 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other Revenue (b) | | | | | | | | | | | | | | | | | | | 154 | | | | 154 | | | | 0.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Electric Revenue | | | | | | | | | | | | | | | | | | $ | 1,134 | | | $ | 1,160 | | | | (2.2 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Purchased Power | | | | | | | | | | | | | | | | | | $ | 320 | | | $ | 382 | | | | (16.2 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | % Change | |
Heating and Cooling Degree-Days | | 2014 | | | 2013 | | | Normal | | | From 2013 | | | From Normal | |
Heating Degree-Days | | | 3,874 | | | | 3,259 | | | | 3,164 | | | | 18.9 | % | | | 22.4 | % |
| | | | | | | | |
Number of Electric Customers | | 2014 | | | 2013 | |
Residential | | | 3,488,204 | | | | 3,470,659 | |
Small Commercial & Industrial | | | 367,282 | | | | 366,284 | |
Large Commercial & Industrial | | | 2,028 | | | | 2,001 | |
Public Authorities & Electric Railroads | | | 4,852 | | | | 4,802 | |
| | | | | | | | |
Total | | | 3,862,366 | | | | 3,843,746 | |
| | | | | | | | |
| (a) | Reflects delivery volumes and revenues from customers purchasing electricity directly from ComEd and customers purchasing electricity from a competitive electric generation supplier, as all customers are assessed delivery charges. For customers purchasing electricity from ComEd, revenue also reflects the cost of energy and transmission. |
| (b) | Other revenue primarily includes transmission revenue from PJM. Other items include rental revenues, revenues related to late payment charges, revenues from other utilities for mutual assistance programs and recoveries of environmental costs associated with MGP sites. |
15
EXELON CORPORATION
PECO Statistics
Three Months Ended March 31, 2014 and 2013
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Electric and Gas Deliveries | | | Revenue (in millions) | |
| | | 2014 | | | 2013 | | | % Change | | | Weather-
Normal
% Change | | | 2014 | | | 2013 | | | % Change | |
Electric (in GWhs) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Retail Deliveries and Sales (a) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | | 3,848 | | | | 3,465 | | | | 11.1 | % | | | 1.4 | % | | $ | 444 | | | $ | 395 | | | | 12.4 | % |
Small Commercial & Industrial | | | 2,055 | | | | 2,009 | | | | 2.3 | % | | | (0.5 | )% | | | 111 | | | | 106 | | | | 4.7 | % |
Large Commercial & Industrial | | | 3,777 | | | | 3,646 | | | | 3.6 | % | | | 2.1 | % | | | 63 | | | | 58 | | | | 8.6 | % |
Public Authorities & Electric Railroads | | | 259 | | | | 255 | | | | 1.7 | % | | | 1.7 | % | | | 8 | | | | 8 | | | | 0.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Retail | | | 9,939 | | | | 9,375 | | | | 6.0 | % | | | 1.3 | % | | | 626 | | | | 567 | | | | 10.4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other Revenue (b) | | | | | | | | | | | | | | | | | | | 52 | | | | 56 | | | | (7.1 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Electric Revenue | | | | | | | | | | | | | | | | | | | 678 | | | | 623 | | | | 8.8 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Gas (in mmcfs) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Retail Deliveries and Sales | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Retail Sales (c) | | | 33,170 | | | | 28,438 | | | | 16.6 | % | | | 0.7 | % | | | 302 | | | | 260 | | | | 16.2 | % |
Transportation and Other | | | 8,369 | | | | 8,883 | | | | (5.8 | )% | | | (7.0 | )% | | | 13 | | | | 12 | | | | 8.3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Gas | | | 41,539 | | | | 37,321 | | | | 11.3 | % | | | (2.7 | )% | | | 315 | | | | 272 | | | | 15.8 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Electric and Gas Revenues | | | | | | | | | | | | | | | | | | $ | 993 | | | $ | 895 | | | | 10.9 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Purchased Power and Fuel | | | | | | | | | | | | | | | | | | $ | 464 | | | $ | 406 | | | | 14.3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | % Change | |
Heating and Cooling Degree-Days | | 2014 | | | 2013 | | | Normal | | | From 2013 | | | From Normal | |
Heating Degree-Days | | | 2,844 | | | | 2,440 | | | | 2,476 | | | | 16.6 | % | | | 14.9 | % |
| (a) | Reflects delivery volumes and revenues from customers purchasing electricity directly from PECO and customers purchasing electricity from a competitive electric generation supplier as all customers are assessed distribution charges. For customers purchasing electricity from PECO, revenue also reflects the cost of energy and transmission. |
| (b) | Other revenue includes transmission revenue from PJM and wholesale electric revenues. |
| (c) | Reflects delivery volumes and revenues from customers purchasing natural gas directly from PECO and customers purchasing natural gas from a competitive natural gas supplier as all customers are assessed distribution charges. For customers purchasing natural gas from PECO, revenue also reflects the cost of natural gas. |
16
EXELON CORPORATION
BGE Statistics
Three Months Ended March 31, 2014 and 2013
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Electric and Gas Deliveries | | | Revenue (in millions) | |
| | | 2014 | | | 2013 | | | % Change | | | 2014 | | | 2013 | | | % Change | |
Electric (in GWhs) | | | | | | | | | | | | | | | | | | | | | | | | |
Retail Deliveries and Sales (a) | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | | 4,092 | | | | 3,536 | | | | 15.7 | % | | $ | 436 | | | $ | 365 | | | | 19.5 | % |
Small Commercial & Industrial | | | 834 | | | | 776 | | | | 7.5 | % | | | 71 | | | | 64 | | | | 10.9 | % |
Large Commercial & Industrial | | | 3,470 | | | | 3,554 | | | | (2.4 | )% | | | 123 | | | | 105 | | | | 17.1 | % |
Public Authorities & Electric Railroads | | | 78 | | | | 82 | | | | (4.9 | )% | | | 8 | | | | 8 | | | | 0.8 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Retail | | | 8,474 | | | | 7,948 | | | | 6.6 | % | | | 638 | | | | 542 | | | | 17.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Other Revenue (b) | | | | | | | | | | | | | | | 71 | | | | 63 | | | | 12.7 | % |
Total Electric Revenue | | | | | | | | | | | | | | | 709 | | | | 605 | | | | 17.2 | % |
Gas (in mmcfs) | | | | | | | | | | | | | | | | | | | | | | | | |
Retail Deliveries and Sales (c) | | | | | | | | | | | | | | | | | | | | | | | | |
Retail Sales | | | 46,388 | | | | 40,261 | | | | 15.2 | % | | | 285 | | | | 246 | | | | 15.9 | % |
Transportation and Other (d) | | | 6,330 | | | | 5,651 | | | | 12.0 | % | | | 60 | | | | 29 | | | | 107.0 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Gas | | | 52,718 | | | | 45,912 | | | | 14.8 | % | | | 345 | | | | 275 | | | | 25.5 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Electric and Gas Revenues | | | | | | | | | | | | | | $ | 1,054 | | | $ | 880 | | | | 19.8 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Purchased Power and Fuel | | | | | | | | | | | | | | $ | 529 | | | $ | 426 | | | | 24.2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | % Change | |
Heating and Cooling Degree-Days | | 2014 | | | 2013 | | | Normal | | | From 2013 | | | From Normal | |
Heating Degree-Days | | | 2,861 | | | | 2,451 | | | | 2,387 | | | | 16.7 | % | | | 19.9 | % |
Cooling Degree-Days | | | — | | | | 1 | | | | — | | | | (100.0 | )% | | | n.m. | |
| | | | | | | | | | | | | | | | | | |
Number of Electric Customers | | 2014 | | | 2013 | | | Number of Gas Customers | | 2014 | | | 2013 | |
Residential | | | 1,124,174 | | | | 1,118,824 | | | Residential | | | 613,469 | | | | 612,065 | |
Small Commercial & Industrial | | | 112,623 | | | | 113,051 | | | Commercial & Industrial | | | 44,266 | | | | 44,308 | |
| | | | | | | | | | | | | | | | | | |
Large Commercial & Industrial | | | 11,661 | | | | 11,589 | | | Total Retail | | | 657,735 | | | | 656,373 | |
Public Authorities & Electric Railroads | | | 292 | | | | 318 | | | Transportation | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | |
Total | | | 1,248,750 | | | | 1,243,782 | | | Total | | | 657,735 | | | | 656,373 | |
| | | | | | | | | | | | | | | | | | |
| (a) | Reflects delivery volumes and revenues from customers purchasing electricity directly from BGE and customers purchasing electricity from a competitive electric generation supplier as all customers are assessed distribution charges. For customers purchasing electricity from BGE, revenue also reflects the cost of energy and transmission. |
| (b) | Other revenue includes wholesale transmission revenue and late payment charges. |
| (c) | Reflects delivery volumes and revenues from customers purchasing natural gas directly from BGE and customers purchasing natural gas from a competitive natural gas supplier as all customers are assessed distribution charges. For customers purchasing natural gas from BGE, revenue also reflects the cost of natural gas. |
| (d) | Transportation and other gas revenue includes off-system revenue of 6,330 mmcfs ($53 million) and 5,650 mmcfs ($24 million) for the three months ended March 31, 2014 and 2013, respectively. |
17
