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Exelon Announces Third Quarter 2015 Results
Exelon Corporation (NYSE: EXC) announced third quarter 2015 consolidated
earnings as follows:
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Third Quarter
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2015
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2014
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Adjusted (non-GAAP) Operating Results:
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Net Income ($ millions)
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$757
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$676
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Diluted Earnings per Share
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$0.83
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$0.78
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GAAP Results:
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Net Income ($ millions)
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$629
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$993
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Diluted Earnings per Share
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$0.69
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$1.15
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“Our focus on operational performance and strategic investments to grow
our business continues to deliver results across all of our businesses,”
said Christopher M. Crane, Exelon president and CEO. “Exelon achieved
earnings above our guidance range, led by gains at Constellation due to
our generation to load matching strategy and improved results at each of
our utilities, while also delivering top quartile performance for our
customers and communities. Based on our results through September and
our outlook for the fourth quarter, we are raising our full-year
operating earnings guidance range to $2.40 to $2.60 per share.”
Third Quarter Operating Results
As shown in the table above, Exelon’s Adjusted (non-GAAP) Operating
Earnings increased to $0.83 per share in the third quarter of 2015 from
$0.78 per share in the third quarter of 2014. Earnings in the third
quarter of 2015 primarily reflected the following favorable factors:
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Higher revenue net of purchased power and fuel at Generation as a
result of lower cost-to-serve load, the benefit from the Integrys
acquisition and increased load served;
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Favorable weather at ComEd and PECO;
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Higher distribution earnings at ComEd and BGE; and
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Lower storm costs at BGE.
These factors were partially offset by:
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Higher contracting costs at Generation primarily due to growth
development projects;
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Realized NDT fund losses in 2015 as compared to gains in 2014; and
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Higher interest expense due to higher outstanding debt at Generation
and Corporate.
Adjusted (non-GAAP) Operating Earnings for the third quarter of 2015 do
not include the following items (after tax) that were included in
reported GAAP Net Income:
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(in millions)
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(per diluted share)
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Exelon Adjusted (non-GAAP) Operating Earnings
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$757
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$0.83
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Mark-to-Market Impact of Economic Hedging
Activities
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(85)
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(0.09)
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Unrealized Losses Related to NDT Fund Investments
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(133)
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(0.15)
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Amortization of Commodity Contract Intangibles
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(2)
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—
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Merger and Integration Costs
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(12)
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(0.02)
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Asset Retirement Obligation
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6
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0.01
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Tax Settlements
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52
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0.06
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CENG Non-Controlling Interest
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46
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0.05
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Exelon GAAP Net Income
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$629
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$0.69
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Adjusted (non-GAAP) Operating Earnings for the third quarter of 2014 do
not include the following items (after tax) that were included in
reported GAAP Net Income:
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(in millions)
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(per diluted share)
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Exelon Adjusted (non-GAAP) Operating Earnings
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$676
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$0.78
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Mark-to-Market Impact of Economic Hedging
Activities
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158
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0.18
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Unrealized Losses Related to NDT Fund Investments
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(22)
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(0.03)
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Amortization of Commodity Contract Intangibles
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12
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0.01
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Merger and Integration Costs
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(58)
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(0.06)
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Asset Retirement Obligation
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13
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0.02
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Tax Settlement
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66
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0.08
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Long-Lived Asset Impairments
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(30)
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(0.03)
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Plant Retirement and Divestitures
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197
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0.23
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Mark-to-Market Impact of PHI Merger Related
Interest Rate Swaps
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(6)
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(0.01)
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CENG Non-Controlling Interest
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(13)
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(0.02)
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Exelon GAAP Net Income
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$993
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$1.15
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Third Quarter and Recent Highlights
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Pepco Holdings, Inc. (PHI) Merger: On August 12, 2015, the
presiding judge in the Circuit Court of Queen Anne's County issued an
order denying the motions to stay the Maryland Public Service
Commission's order approving the merger. On August 27, 2015, the
District of Columbia Public Service Commission (DCPSC) issued an
opinion and order denying approval of the merger, asserting that the
merger was not in the public's interest. Exelon and PHI filed an
Application for Reconsideration with the DCPSC on September 28, 2015.
On October 6, 2015, Exelon, PHI, the District of Columbia Government,
the Office of People's Counsel, the District of Columbia Water and
Sewer Authority, the National Consumer Law Center, National Housing
Trust, and the Apartment and Office Building Association of
Metropolitan Washington entered into a Nonunanimous Full Settlement
Agreement and Stipulation with respect to the merger. Exelon and PHI
subsequently filed a motion of joint applicants requesting the DCPSC
to reopen the approval application to allow for consideration of the
Settlement Agreement and granting additional requested relief. On
October 28, 2015, the DCPSC at a public meeting agreed to reopen the
approval application to allow for consideration of the Settlement
Agreement and set a procedural schedule which would allow for
completion of the merger in the first quarter of 2016.
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Deferment of Early Plant Retirements: Exelon and Generation
continue to evaluate the current and expected economic value of each
of Generation's nuclear plants. On September 10, 2015, after
considering the results of the recent PJM capacity auction, Exelon and
Generation decided to defer for one year any decisions about the
future operations of its Quad Cities and Byron nuclear plants and will
offer both plants in the 2019/2020 auction in May 2016. As a result of
clearing the other PJM capacity auction in September 2015 for the
2017/2018 transitional capacity auction, Exelon and Generation will
continue to operate its Quad Cities nuclear power plant through at
least May 2018. The Byron plant is already obligated to operate
through May 2019. In addition, on October 29, 2015, Exelon and
Generation decided to defer any decision about the future operations
of its Clinton nuclear plant for one year and plan to bid the plant
into the MISO capacity auction for the 2016/2017 planning year in
March 2016. MISO's announcement on October 27, 2015 acknowledging the
need for market design changes in southern Illinois was a key factor
in Exelon's and Generation's decision to defer for an additional year,
among other factors such as positive results from the Illinois Power
Agency's capacity procurement for 2016 and the long-term impact of the
EPA's Clean Power Plan. The Clinton plant is currently obligated to
operate through May 2016. Exelon and Generation have not made any
decision regarding potential nuclear plant closures at other sites at
this time.
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PECO Electric Distribution Rate Case: On September 10, 2015,
PECO filed a Joint Petition for Settlement with the Pennsylvania
Public Utilities Commission (PAPUC). The terms of the settlement
include an increase of $127 million in annual distribution service
revenue. On October 28, 2015, the Administrative Law Judge issued a
recommended decision to the PAPUC that the joint settlement be
approved. A final ruling from the PAPUC is expected by December 2015,
and if approved, the rates will go into effect on January 1, 2016.
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Nuclear Operations: Generation’s nuclear fleet, including its
owned output from the Salem Generating Station and 100 percent of the
CENG units, produced 45,180 gigawatt-hours (GWh) in the third quarter
of 2015, compared with 45,263 GWh in the third quarter of 2014.
Excluding Salem, the Exelon-operated nuclear plants at ownership
achieved a 95.5 percent capacity factor for the third quarter of 2015,
compared with 96.5 percent for the third quarter of 2014. The number
of planned refueling outage days totaled 27 in the third quarter of
2015, compared with 18 in the third quarter of 2014. There were 11
non-refueling outage days in the third quarter of 2015, compared with
20 days in the third quarter of 2014.
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Fossil and Renewable Operations: The Dispatch Match rate for
Generation’s gas and hydro fleet was 99.0 percent in the third quarter
of 2015, compared with 98.8 percent in the third quarter of 2014.
Energy Capture for the wind and solar fleet was 94.8 percent in the
third quarter of 2015, compared with 94.9 percent in the third quarter
of 2014.
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Financing Activities: On October 5, 2015, PECO issued $350
million in aggregate principal amount of its First and Refunding
Mortgage Bonds, 3.150% Series due October 15, 2025. The net proceeds
from the sale of the bonds will be used for general corporate purposes.
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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 is the
volume of energy that best represents our commodity position in energy
markets from owned or contracted for capacity based upon a simulated
dispatch model that makes assumptions regarding future market
conditions, which are calibrated to market quotes for power, fuel,
load following products, and options. The proportion of expected
generation hedged as of September 30, 2015, was 97 percent to 100
percent for 2015, 81 percent to 84 percent for 2016, and 51 percent to
54 percent for 2017. 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 the generation, physical delivery and
marketing of power across multiple geographical regions through its
customer-facing business, Constellation, which sells electricity and
natural gas to both wholesale and retail customers. Generation also
sells renewable energy and other energy-related products and services,
and engages in natural gas and oil exploration and production activities
(Upstream).
Generation's third quarter 2015 GAAP Net Income was $377 million,
compared with net income of $771 million in the third quarter of 2014.
Adjusted (non-GAAP) Operating Earnings for the third quarter of 2015 and
2014 do not include various items (after tax) that were included in
reported GAAP Net Income:
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($ millions)
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3Q15
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3Q14
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Generation Adjusted (non-GAAP) Operating Earnings
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$499
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$433
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Mark-to-Market Impact of Economic Hedging Activities
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(85)
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161
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Unrealized (Losses) Related to NDT Fund Investments
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(133)
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(22)
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Amortization of Commodity Contract Intangibles
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(2)
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12
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Merger and Integration Costs
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(6)
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(47)
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Plant Retirement and Divestitures
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—
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198
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Long Lived Asset Impairment
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—
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(30)
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Asset Retirement Obligation
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6
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13
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Tax Settlements
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52
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66
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CENG Non-Controlling Interest
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46
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(13)
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Generation GAAP Net Income
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$377
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$771
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Generation’s Adjusted (non-GAAP) Operating Earnings in the third quarter
of 2015 increased $66 million compared with the same quarter in 2014.
This increase primarily reflected higher revenue net of purchased power
and fuel as a result of lower cost-to-serve load, and the benefit from
the Integrys acquisition. These increases were partially offset by
increased contracting expenses due to growth development opportunities
and realized NDT fund losses in 2015 as compared to gains in 2014.
ComEd consists of electricity transmission and distribution
operations in Northern Illinois.
ComEd's third quarter 2015 GAAP Net Income was $149 million, compared
with net income of $126 million in the third quarter of 2014. Adjusted
(non-GAAP) Operating Earnings for the third quarter of 2015 do not
include merger and integration costs that were included in reported GAAP
Net Income:
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($ millions)
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3Q15
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3Q14
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ComEd Adjusted (non-GAAP) Operating Earnings
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$151
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$126
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Merger and Integration Costs
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(2)
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—
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ComEd GAAP Net Income
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$149
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$126
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ComEd’s Adjusted (non-GAAP) Operating Earnings in the third quarter of
2015 increased $25 million from the same quarter in 2014 primarily as a
result of favorable weather and increased electric distribution earnings
reflecting the impacts of increased capital investment, which was offset
by lower allowed electric distribution return on common equity due to a
decrease in treasury rates.
For the third quarter of 2015, heating degree-days in the ComEd service
territory were down 50.5 percent relative to the same period in 2014 and
were 53.8 percent below normal. Cooling degree days were up 18.1 percent
from prior year and 3.4 percent above normal. Total retail electric
deliveries increased 3.4 percent in the third quarter of 2015 compared
with the same period in 2014.
Weather-normalized retail electric deliveries decreased 0.5 percent in
the third quarter of 2015 compared with the same period in 2014.
PECO consists of electricity transmission and distribution
operations and retail natural gas distribution operations in
Southeastern Pennsylvania.
PECO’s third quarter 2015 GAAP Net Income was $90 million, compared with
net income of $81 million in the third quarter of 2014. Adjusted
(non-GAAP) Operating Earnings for the third quarter of 2015 do not
include merger and integration costs that were included in reported GAAP
Net Income:
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($ millions)
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3Q15
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3Q14
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PECO Adjusted (non-GAAP) Operating Earnings
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$91
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$81
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Merger and Integration Costs
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(1)
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—
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PECO GAAP Net Income
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$90
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$81
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PECO’s Adjusted (non-GAAP) Operating Earnings in the third quarter of
2015 increased $10 million from the same quarter in 2014 primarily due
to favorable weather.
For the third quarter of 2015, there were no heating degree-days in the
PECO service territory representing a decrease of 14 days and 38 days
relative to the same period in 2014 and normal, respectively. Cooling
degree days were up 30.2 percent from the prior year and 27.7 percent
above normal. Total retail electric deliveries were up 6.4 percent
compared with the third quarter of 2014. Natural gas deliveries
(including both retail and transportation components) in the third
quarter of 2015 were up 15.1 percent compared with the same period in
2014.
Weather-normalized retail electric and gas deliveries decreased 0.5
percent and increased 9.3 percent, respectively, in the third quarter of
2015 compared with the same period in 2014. The increase in retail gas
deliveries was driven primarily by growth in the transportation
component during the third quarter of 2015.
BGE consists of electricity transmission and distribution
operations and retail natural gas distribution operations in Central
Maryland.
BGE’s third quarter 2015 GAAP Net Income was $51 million, compared with
net income of $46 million in the third quarter of 2014. Adjusted
(non-GAAP) Operating Earnings for the third quarter of 2015 do not
include merger and integration costs that were included in reported GAAP
Net Income:
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($ millions)
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3Q15
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3Q14
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BGE Adjusted (non-GAAP) Operating Earnings
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$52
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$46
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Merger and Integration Costs
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(1)
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—
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BGE GAAP Net Income
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$51
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$46
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BGE’s Adjusted (non-GAAP) Operating Earnings in the third quarter of
2015 increased $6 million from the same quarter in 2014, primarily due
to increased distribution revenues pursuant to increased rates effective
in December 2014 and decreased storm costs. Due to decoupling, BGE's
distribution revenues are not affected by actual weather.
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 GAAP. Management uses such adjusted (non-GAAP) operating
earnings measures internally to evaluate the company’s performance and
manage its operations. Reconciliation of GAAP Net Income 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 October 30, 2015.
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 2014 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 Third Quarter 2015 Quarterly Report on Form 10-Q (to be filed
on October 30, 2015) 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 19; 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 2014 revenues of approximately $27.4 billion.
Headquartered in Chicago, Exelon does business in 48 states, the
District of Columbia and Canada. Exelon is one of the largest
competitive U.S. power generators, with more than 32,000 megawatts of
owned capacity comprising one of the nation’s cleanest and lowest-cost
power generation fleets. The company’s Constellation business unit
provides energy products and services to more than 2.5 million
residential, public sector and business customers, including more than
two-thirds of the Fortune 100. Exelon’s utilities deliver electricity
and natural gas to more than 7.8 million customers in central Maryland
(BGE), northern Illinois (ComEd) and southeastern Pennsylvania (PECO).
Follow Exelon on Twitter @Exelon.
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EXELON CORPORATION
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Reconciliation of Adjusted (non-GAAP) Operating Earnings to
GAAP Consolidated Statements of Operations
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(unaudited)
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(in millions, except per share data)
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Three Months Ended September 30, 2015
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Three Months Ended September 30, 2014
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GAAP (a)
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Adjustments
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Adjusted
Non-GAAP
|
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GAAP (a)
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Adjustments
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Adjusted
Non-GAAP
|
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Operating revenues
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$
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7,401
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$
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11
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|
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(b),(c)
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$
|
7,412
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|
|
$
|
6,912
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|
|
$
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(248
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)
|
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(b),(c)
|
|
$
|
6,664
|
|
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Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Purchased power and fuel
|
|
3,291
|
|
|
(132
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)
|
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(b),(c)
|
|
3,159
|
|
|
2,648
|
|
|
33
|
|
|
(b),(c)
|
|
2,681
|
|
|
Operating and maintenance
|
|
1,996
|
|
|
(13
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)
|
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(d),(e)
|
|
1,983
|
|
|
1,982
|
|
|
(99
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)
|
|
(d),(e),(i), (j)
|
|
1,883
|
|
|
Depreciation and amortization
|
|
606
|
|
|
—
|
|
|
|
|
606
|
|
|
577
|
|
|
—
|
|
|
|
|
577
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|
|
Taxes other than income
|
|
310
|
|
|
—
|
|
|
|
|
310
|
|
|
306
|
|
|
—
|
|
|
|
|
306
|
|
|
Total operating expenses
|
|
6,203
|
|
|
(145
|
)
|
|
|
|
6,058
|
|
|
5,513
|
|
|
(66
|
)
|
|
|
|
5,447
|
|
|
Equity in earnings of unconsolidated affiliates
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
Gain on sale of assets
|
|
2
|
|
|
—
|
|
|
|
|
2
|
|
|
339
|
|
|
(329
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)
|
|
(j)
|
|
10
|
|
|
Gain on consolidation and acquisition of businesses
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
Operating income
|
|
1,200
|
|
|
156
|
|
|
|
|
1,356
|
|
|
1,738
|
|
|
(511
|
)
|
|
|
|
1,227
|
|
|
Other income and (deductions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
(253
|
)
|
|
(12
|
)
|
|
(f)
|
|
(265
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)
|
|
(258
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)
|
|
24
|
|
|
(b),(k)
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|
(234
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)
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Other, net
|
|
(244
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)
|
|
279
|
|
|
(g)
|
|
35
|
|
|
16
|
|
|
54
|
|
|
(f),(g)
|
|
70
|
|
|
Total other income and (deductions)
|
|
(497
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)
|
|
267
|
|
|
|
|
(230
|
)
|
|
(242
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)
|
|
78
|
|
|
|
|
(164
|
)
|
|
Income before income taxes
|
|
703
|
|
|
423
|
|
|
|
|
1,126
|
|
|
1,496
|
|
|
(433
|
)
|
|
|
|
1,063
|
|
|
Income taxes
|
|
115
|
|
|
249
|
|
|
(b),(c),(d), (e),(f),(g)
|
|
364
|
|
|
422
|
|
|
(103
|
)
|
|
(b),(c),(d),(e),(f),(g), (i),(j),(k)
|
|
319
|
|
|
Equity in losses of unconsolidated affiliates
|
|
(1
|
)
|
|
—
|
|
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
Net income
|
|
587
|
|
|
174
|
|
|
|
|
761
|
|
|
1,074
|
|
|
(330
|
)
|
|
|
|
744
|
|
|
Net income (loss) attributable to noncontrolling interests and
preference stock dividends
|
|
(42
|
)
|
|
46
|
|
|
(h)
|
|
4
|
|
|
81
|
|
|
(13
|
)
|
|
(h)
|
|
68
|
|
|
Net income attributable to common shareholders
|
|
$
|
629
|
|
|
$
|
128
|
|
|
|
|
$
|
757
|
|
|
$
|
993
|
|
|
$
|
(317
|
)
|
|
|
|
$
|
676
|
|
|
Effective tax rate
|
|
16.4
|
%
|
|
|
|
|
|
32.3
|
%
|
|
28.2
|
%
|
|
|
|
|
|
30.0
|
%
|
|
Earnings per average common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.69
|
|
|
$
|
0.14
|
|
|
|
|
$
|
0.83
|
|
|
$
|
1.15
|
|
|
$
|
(0.37
|
)
|
|
|
|
$
|
0.78
|
|
|
Diluted
|
|
$
|
0.69
|
|
|
$
|
0.14
|
|
|
|
|
$
|
0.83
|
|
|
$
|
1.15
|
|
|
$
|
(0.37
|
)
|
|
|
|
$
|
0.78
|
|
|
Average common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
913
|
|
|
|
|
|
|
913
|
|
|
861
|
|
|
|
|
|
|
861
|
|
|
Diluted
|
|
915
|
|
|
|
|
|
|
915
|
|
|
863
|
|
|
|
|
|
|
863
|
|
|
Effect of adjustments on earnings per average diluted common
share recorded in accordance with GAAP:
|
|
Mark-to-market impact of economic hedging activities (b)
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
$
|
(0.18
|
)
|
|
|
|
|
|
Amortization of commodity contract intangibles (c)
|
|
—
|
|
|
|
|
|
|
|
|
(0.01
|
)
|
|
|
|
|
|
Merger and integration costs (d)
|
|
0.02
|
|
|
|
|
|
|
|
|
0.06
|
|
|
|
|
|
|
Asset retirement obligation (e)
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
(0.02
|
)
|
|
|
|
|
|
Tax settlements (f)
|
|
(0.06
|
)
|
|
|
|
|
|
|
|
(0.08
|
)
|
|
|
|
|
|
Unrealized losses related to NDT fund investments (g)
|
|
0.15
|
|
|
|
|
|
|
|
|
0.03
|
|
|
|
|
|
|
CENG Non-controlling interest (h)
|
|
(0.05
|
)
|
|
|
|
|
|
|
|
0.02
|
|
|
|
|
|
|
Long-lived asset impairment (i)
|
|
—
|
|
|
|
|
|
|
|
|
0.03
|
|
|
|
|
|
|
Plant retirements and divestitures (j)
|
|
—
|
|
|
|
|
|
|
|
|
(0.23
|
)
|
|
|
|
|
Mark-to-market impact of PHI merger related interest rate
swaps
(k)
|
|
—
|
|
|
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
Total adjustments
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|
$
|
(0.37
|
)
|
|
|
|
|
|
(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,
if and when applicable, related to the Constellation merger, the
CENG integration and the Integrys acquisition.
|
|
(d)
|
|
Adjustment to exclude certain costs associated with the
Constellation merger, pending PHI acquisition, the CENG integration
and Integrys acquisition, including, if and when applicable,
professional fees, employee-related expenses, integration
activities, upfront credit facilities fees, merger commitments, and
certain pre-acquisition contingencies.
|
|
(e)
|
|
Adjustment to exclude a non-cash benefit pursuant to the annual
update of the Generation nuclear decommissioning obligation related
to the non-regulatory units.
|
|
(f)
|
|
Adjustment to exclude favorable settlements of certain income tax
positions on Constellation's pre-acquisition tax returns.
|
|
(g)
|
|
Adjustment to exclude the unrealized gains and losses on NDT fund
investments to the extent not offset by contractual accounting as
described in the notes to the consolidated financial statements.
|
|
(h)
|
|
Adjustment to account for Generation's non-controlling interest
related to CENG exclusion items, primarily related to the impact of
unrealized gains and losses on NDT fund investments and
mark-to-market activity in 2015, and in 2014 the impact of
unrealized gains and losses on NDT fund investments, certain merger
and acquisition costs, non-cash amortization of intangible assets,
net, related to commodity contracts and changes in asset retirement
obligations.
|
|
(i)
|
|
Adjustment to exclude a 2014 charge to earnings related to the
impairment of certain generating assets held for sale.
|
|
(j)
|
|
Adjustment to exclude the impacts associated with the sale of
Generation's ownership interest in generating stations, primarily
the gain from the sale of Generation's equity interest in Safe
Harbor Water Power Corporation.
|
|
(k)
|
|
Adjustment to exclude the mark-to-market impact of Exelon
Corporate's forward-starting interest rate swaps related to
financing for the pending PHI acquisition.
|
|
|
|
|
|
|
|
EXELON CORPORATION
|
|
Reconciliation of Adjusted (non-GAAP) Operating Earnings to
|
|
GAAP Consolidated Statements of Operations
|
|
(unaudited)
|
|
(in millions, except per share data)
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2015
|
|
Nine Months Ended September 30, 2014
|
|
|
|
GAAP (a)
|
|
Adjustments
|
|
|
|
Adjusted
Non-GAAP
|
|
GAAP (a)
|
|
Adjustments
|
|
|
|
Adjusted
Non-GAAP
|
|
Operating revenues
|
|
$
|
22,746
|
|
|
$
|
(190
|
)
|
|
(b),(c)
|
|
$
|
22,556
|
|
|
$
|
20,173
|
|
|
$
|
772
|
|
|
(b),(c),(d)
|
|
$
|
20,945
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased power and fuel
|
|
10,210
|
|
|
88
|
|
|
(b),(c)
|
|
10,298
|
|
|
9,399
|
|
|
220
|
|
|
(b),(c)
|
|
9,619
|
|
|
Operating and maintenance
|
|
6,119
|
|
|
(66
|
)
|
|
(d),(e),(f),(g)
|
|
6,053
|
|
|
6,005
|
|
|
(250
|
)
|
|
(d),(e),(g),(l)
|
|
5,755
|
|
|
Depreciation and amortization
|
|
1,818
|
|
|
—
|
|
|
|
|
1,818
|
|
|
1,732
|
|
|
—
|
|
|
|
|
1,732
|
|
|
Taxes other than income
|
|
908
|
|
|
—
|
|
|
|
|
908
|
|
|
887
|
|
|
—
|
|
|
|
|
887
|
|
|
Total operating expenses
|
|
19,055
|
|
|
22
|
|
|
|
|
19,077
|
|
|
18,023
|
|
|
(30
|
)
|
|
|
|
17,993
|
|
|
Equity in losses of unconsolidated affiliates
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
(20
|
)
|
|
12
|
|
|
(c),(d)
|
|
(8
|
)
|
|
Gain on sales of assets
|
|
10
|
|
|
—
|
|
|
|
|
10
|
|
|
356
|
|
|
(329
|
)
|
|
(l)
|
|
27
|
|
|
Gain on consolidation of CENG
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
261
|
|
|
(261
|
)
|
|
(m)
|
|
—
|
|
|
Operating income
|
|
3,701
|
|
|
(212
|
)
|
|
|
|
3,489
|
|
|
2,747
|
|
|
224
|
|
|
|
|
2,971
|
|
|
Other income and (deductions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
(755
|
)
|
|
(27
|
)
|
|
(h),(j)
|
|
(782
|
)
|
|
(722
|
)
|
|
32
|
|
|
(b),(h)
|
|
(690
|
)
|
|
Other, net
|
|
(179
|
)
|
|
357
|
|
|
(i)
|
|
178
|
|
|
346
|
|
|
(151
|
)
|
|
(i),(j)
|
|
195
|
|
|
Total other income and (deductions)
|
|
(934
|
)
|
|
330
|
|
|
|
|
(604
|
)
|
|
(376
|
)
|
|
(119
|
)
|
|
|
|
(495
|
)
|
|
Income before income taxes
|
|
2,767
|
|
|
118
|
|
|
|
|
2,885
|
|
|
2,371
|
|
|
105
|
|
|
|
|
2,476
|
|
|
Income taxes
|
|
805
|
|
|
145
|
|
|
(b),(c),(d), (e),(f),(g),(h), (i),(j)
|
|
950
|
|
|
646
|
|
|
99
|
|
|
(b),(c),(d), (e),(g),(h), (i),(j),(l),(m)
|
|
745
|
|
|
Equity in losses of unconsolidated affiliates
|
|
(3
|
)
|
|
—
|
|
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
Net income
|
|
1,959
|
|
|
(27
|
)
|
|
|
|
1,932
|
|
|
1,725
|
|
|
6
|
|
|
|
|
1,731
|
|
|
Net income attributable to noncontrolling interests and
preference stock dividends
|
|
—
|
|
|
52
|
|
|
(k)
|
|
52
|
|
|
121
|
|
|
(36
|
)
|
|
(k)
|
|
85
|
|
|
Net income attributable to common shareholders
|
|
$
|
1,959
|
|
|
$
|
(79
|
)
|
|
|
|
$
|
1,880
|
|
|
$
|
1,604
|
|
|
$
|
42
|
|
|
|
|
$
|
1,646
|
|
|
Effective tax rate
|
|
29.1
|
%
|
|
|
|
|
|
32.9
|
%
|
|
27.2
|
%
|
|
|
|
|
|
30.1
|
%
|
|
Earnings per average common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
2.23
|
|
|
$
|
(0.09
|
)
|
|
|
|
$
|
2.14
|
|
|
$
|
1.87
|
|
|
$
|
0.05
|
|
|
|
|
$
|
1.92
|
|
|
Diluted
|
|
$
|
2.22
|
|
|
$
|
(0.09
|
)
|
|
|
|
$
|
2.13
|
|
|
$
|
1.86
|
|
|
$
|
0.05
|
|
|
|
|
$
|
1.91
|
|
|
Average common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
879
|
|
|
|
|
|
|
879
|
|
|
860
|
|
|
|
|
|
|
860
|
|
|
Diluted
|
|
883
|
|
|
|
|
|
|
883
|
|
|
863
|
|
|
|
|
|
|
863
|
|
|
Effect of adjustments on earnings per average diluted common
share recorded in accordance with GAAP:
|
|
Mark-to-market impact of economic hedging activities (b)
|
|
$
|
(0.18
|
)
|
|
|
|
|
|
|
|
$
|
0.34
|
|
|
|
|
|
|
Amortization of commodity contract intangibles (c)
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
0.06
|
|
|
|
|
|
|
Merger and integration costs (d)
|
|
0.06
|
|
|
|
|
|
|
|
|
0.11
|
|
|
|
|
|
|
Long-lived asset impairment (e)
|
|
0.02
|
|
|
|
|
|
|
|
|
0.11
|
|
|
|
|
|
|
Midwest Generation bankruptcy recoveries (f)
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
Asset retirement obligation (g)
|
|
—
|
|
|
|
|
|
|
|
|
(0.02
|
)
|
|
|
|
|
|
Mark-to-market impact of PHI merger related interest rate
swaps (h)
|
|
(0.03
|
)
|
|
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
Unrealized gains related to NDT fund investments (i)
|
|
0.19
|
|
|
|
|
|
|
|
|
(0.07
|
)
|
|
|
|
|
|
Tax settlement (j)
|
|
(0.06
|
)
|
|
|
|
|
|
|
|
(0.12
|
)
|
|
|
|
|
|
CENG Non-controlling interest (k)
|
|
(0.06
|
)
|
|
|
|
|
|
|
|
0.04
|
|
|
|
|
|
|
Plant retirements and divestitures (l)
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
(0.23
|
)
|
|
|
|
|
|
Gain on CENG integration (m)
|
|
—
|
|
|
|
|
|
|
|
|
(0.18
|
)
|
|
|
|
|
|
Total adjustments
|
|
$
|
(0.09
|
)
|
|
|
|
|
|
|
|
$
|
0.05
|
|
|
|
|
|
|
Note: For the nine months ended September 30, 2014, includes the
results of operations of CENG beginning April 1, 2014, the date the
nuclear operating services agreement was executed.
|
|
(a)
|
|
Results reported in accordance with 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,
if and when applicable, related to the Constellation merger, the
CENG integration and the Integrys acquisition.
|
|
(d)
|
|
Adjustment to exclude certain costs associated with the
Constellation merger, pending PHI acquisition, the CENG integration
and Integrys acquisition, including, if and when applicable,
professional fees, employee-related expenses, integration
activities, upfront credit facilities fees, merger commitments, and
certain pre-acquisition contingencies.
|
|
(e)
|
|
Adjustment to exclude a 2015 and 2014 charge to earnings related to
the impairment of investments in long-term leases and a 2014 charge
to earnings related to the impairment of certain wind generating
assets and certain generating assets held for sale.
|
|
(f)
|
|
Adjustment to reflect a benefit related to the favorable settlement
of a long-term railcar lease agreement pursuant to the Midwest
Generation bankruptcy.
|
|
(g)
|
|
Adjustment to exclude a non-cash benefit pursuant to the annual
update of the Generation nuclear decommissioning obligation related
to the non-regulatory units.
|
|
(h)
|
|
Adjustment to exclude the mark-to-market impact of Exelon
Corporate's forward-starting interest rate swaps related to
financing for the pending PHI acquisition.
|
|
(i)
|
|
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.
|
|
(j)
|
|
Adjustment exclude benefits related to favorable settlements of
certain income tax positions on Constellation’s pre-acquisition tax
returns.
|
|
(k)
|
|
Adjustment to account for Generation's non-controlling interest
related to CENG exclusion items, primarily related to the impact of
unrealized gains and losses on NDT fund investments and
mark-to-market activity in 2015, and in 2014 the impact of
unrealized gains and losses on NDT fund investments, certain merger
and acquisition costs, non-cash amortization of intangible assets,
net, related to commodity contracts and changes in asset retirement
obligations.
|
|
(l)
|
|
Adjustment to exclude the impacts associated with the sale of
Generation's ownership interest in generating stations, primarily
the gain from the sale of Generation's equity interest in Safe
Harbor Water Power Corporation.
|
|
(m)
|
|
Adjustment to exclude the gain recorded upon consolidation of CENG
resulting from the difference in the fair value of CENG’s net assets
and the equity method investment previously recorded on Generation’s
and Exelon’s books and the settlement of pre-existing commitments
between Generation and CENG.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20151030005192/en/ Copyright Business Wire 2015
Source: Business Wire
(October 30, 2015 - 8:00 AM EDT)
News by QuoteMedia
www.quotemedia.com
|
