Exelon Corporation (NYSE: EXC) announced second quarter 2014
consolidated earnings as follows:
Second Quarter
2014 2013 Adjusted (non-GAAP) Operating
Results: Net Income ($ millions) $440 $454 Diluted Earnings
per Share $0.51 $0.53 GAAP Results: Net Income ($
millions) $522 $490 Diluted Earnings per Share $0.60
$0.57
“Exelon achieved earnings above our guidance range this quarter,
and all of our businesses continued to deliver strong operating
performance,” said Christopher M. Crane, Exelon’s president and
CEO. “With our year to date results, we are on track to meet our
full-year financial targets and finish 2014 within our guidance
range.”
Second Quarter Operating Results
As shown in the table above, Exelon’s adjusted (non-GAAP)
operating earnings decreased to $0.51 per share in the second
quarter of 2014 from $0.53 per share in the second quarter of 2013.
Earnings in the second quarter of 2014 primarily reflected the
following negative factors:
- Lower realized energy prices;
- Decreased nuclear and fossil output
during 2014 primarily due to outage days; and
- Higher operating and maintenance
(O&M) expenses reflecting increased nuclear generating outage
days and inflation across all operating companies, offset in part
by reduced other postretirement benefit costs.
These factors were offset by:
- Increased capacity pricing related to
the Reliability Pricing Model (RPM) for the PJM Interconnection,
LLC (PJM) market;
- Increased distribution revenue at BGE,
due to the December 2013 rate case order for electric and natural
gas, and higher distribution earnings at ComEd due to increased
capital investment; and
- Decreased income tax expense as a
result of an increase in Generation’s domestic production
activities deduction and PECO’s electric tax repairs
deduction.
Adjusted (non-GAAP) Operating Earnings for
the second quarter of 2014 do not include the following items
(after tax) that were included in reported GAAP earnings:
(in millions)
(per diluted share)
Exelon Adjusted (non-GAAP) Operating
Earnings
$440
$0.51
Mark-to-Market Impact of Economic Hedging
Activities
(8)
(0.01)
Unrealized Gains Related to Nuclear
Decommissioning Trust (NDT) Fund
Investments
76
0.09
Merger and Integration Costs
(19)
(0.02)
PHI Acquisition Costs
(12)
(0.01)
Amortization of Commodity Contract
Intangibles
(23)
(0.03)
Long-Lived Asset Impairment
(68)
(0.08)
Gain on CENG Integration
159
0.18
Non-Controlling Interest
(23)
(0.03)
Exelon GAAP Net Income
$522
$0.60
Adjusted (non-GAAP) Operating Earnings for
the second quarter of 2013 do not include the following items
(after tax) that were included in reported GAAP earnings:
(in millions)
(per diluted share)
Exelon Adjusted (non-GAAP) Operating
Earnings
$454
$0.53
Mark-to-Market Impact of Economic Hedging
Activities
253
0.30
Unrealized Losses Related to NDT Fund
Investments
(22)
(0.03)
Constellation Merger and Integration
Costs
(15)
(0.02)
Amortization of Commodity Contract
Intangibles
(115)
(0.13)
Amortization of the Fair Value of Certain
Debt
4
-
Long-Lived Asset Impairment
(69)
(0.08)
Exelon GAAP Net Income
$490
$0.57
Second Quarter and Recent Highlights
- Proposed Merger with Pepco Holdings,
Inc.: On April 29, 2014, Exelon and Pepco Holdings, Inc. (PHI)
signed an agreement and plan of merger to combine the two companies
in an all-cash transaction. The transaction, which is subject to
customary closing conditions and regulatory approvals, is expected
to be completed in the second or third quarter of 2015.
- Integration of Constellation Energy
Nuclear Group, LLC: On April 1, 2014, Generation and
subsidiaries and Constellation Energy Nuclear Group, LLC (CENG)
entered into a Nuclear Operating Services Agreement (NOSA) pursuant
to which Generation will operate the CENG nuclear generation fleet
owned by CENG subsidiaries and provide corporate and administrative
services for the remaining life of the CENG nuclear plants as if
they were a part of the Generation nuclear fleet. The execution of
the NOSA requires Exelon to fully consolidate CENG into Exelon’s
financial statements. Upon consolidation, Exelon recorded a pre-tax
net gain on integration of CENG of $261 million, which is excluded
from second quarter operating earnings.
- Nuclear Operations: Generation’s
nuclear fleet, including its owned output from the Salem Generating
Station and beginning April 1, 2014, 100 percent of the CENG units,
produced 41,397 gigawatt-hours (GWh), of which 7,546 GWh were
produced by CENG, in the second quarter of 2014, compared with
34,601 GWh in the second quarter of 2013. Excluding Salem, the
Exelon-operated nuclear plants at ownership achieved a 91.8 percent
capacity factor for the second quarter of 2014, compared with 92.8
percent for the second quarter of 2013. The number of planned
refueling outage days totaled 108, including 52 CENG planned outage
days, in the second quarter of 2014, compared with 47 in the second
quarter of 2013. There were 44 non-refueling outage days, including
three CENG non-refueling outage days, in the second quarter of
2014, compared with 31 days in the second quarter of 2013.
- Fossil and Renewables
Operations: The Dispatch Match rate for Generation’s gas/hydro
fleet was 99.2 percent in the second quarter of 2014, compared with
99.1 percent in the second quarter of 2013. Energy Capture for the
wind/solar fleet was 94.7 percent in the second quarter of 2014,
compared with 92.4 percent in the second quarter of 2013. Energy
Capture in the second quarter of 2014 reflects increased turbine
availability. Construction of two 60.0 megawatt (MW) units at the
Perryman Generating station in Hartford County, Md., began on July
1, with commercial operation scheduled to begin in 2015.
- Renewables Projects: The 50.4 MW
Beebe 1B project in Gratiot, Mich., and 40.0 MW Fourmile Ridge
project in Garrett County, Md., both began 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) were officially turned over to Exelon on June 19,
2014.
- Spent Nuclear Fuel Obligation:
In May 2014, the Department of Energy notified Generation that the
spent nuclear fuel (SNF) disposal fee would be set to zero
effective May 16, 2014. Through the effective date of the fee
reduction, Generation incurred SNF disposal fees of $49 million,
which includes Generation’s share of Salem and net of co-owner
reimbursements (not including such fees incurred by CENG). Until a
new fee structure is in effect, Generation will not accrue any
further costs related to this fee.
- BGE Gas and Electric Distribution
Rate Case: On July 2, 2014, BGE filed an application with the
Maryland Public Service Commission (MDPSC) for increases of $118
million and $68 million to its electric and gas base rates,
respectively. The requested rates of return on equity in the
application were 10.65 percent for electric and 10.55 percent for
gas. The MDPSC will determine any increase in rates after a
proceeding with input from all interested parties. The new electric
and gas distribution base rates are expected to take effect in late
January 2015.
- Financing Activities:
In April 2014, concurrently and in connection with entering into
the agreement to acquire PHI, Exelon entered into a credit facility
to which the lenders committed to provide Exelon a 364-day senior
unsecured bridge credit facility of $7.2 billion to support the
contemplated transaction and provide flexibility for timing of
permanent financing. The bridge credit facility was subsequently
reduced to $4.2 billion as a result of the June 2014 equity
issuances.
On June 11, 2014, Exelon executed a $2.0 billion equity offering
of 57.5 million shares of common stock in connection with forward
sales agreements and $1.2 billion of junior subordinated notes in
the form of 23 million equity units.
- 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 June 30, 2014, was 92 percent to 95 percent for 2014,
75 percent to 78 percent for 2015, and 46 percent to 49 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. Beginning April 1,
2014, 100 percent of CENG’s operations are included in Generation’s
results in connection with the NOSA referenced in the Second
Quarter and Recent Highlights.
The second quarter 2014 GAAP net income was $340 million,
compared with a net income of $330 million in the second quarter of
2013. Adjusted (non-GAAP) operating earnings for the second quarter
of 2014 and 2013 do not include various items (after tax) that were
included in reported GAAP earnings. A reconciliation of Adjusted
(non-GAAP) Operating Earnings to GAAP Net Income is in the table
below:
($ millions) 2Q14
2Q13
Generation Adjusted (non-GAAP) Operating Earnings
$231 $273 Mark-to-Market Impact of
Economic Hedging Activities (8) 263 Net Unrealized Gains
(Losses)Related to NDT Fund Investments 76 (22) Merger and
Integration Costs (19) (12) Amortization of Commodity Contract
Intangibles (23) (115) Amortization of Fair Value of Certain Debt -
4 Long-Lived Asset Impairment (53) (61) Gain on CENG Integration
159 - Non-Controlling Interest (23) -
Generation
GAAP Net Income $340 $330
Generation’s Adjusted (non-GAAP) Operating Earnings in the
second quarter of 2014 decreased $42 million compared with the same
quarter in 2013. This decrease primarily reflected:
- Lower realized energy prices;
- Higher O&M expenses reflecting
increased nuclear generating outage days and inflation, offset in
part by reduced OPEB costs; and
- Decreased nuclear and fossil output
during 2014, primarily due to outage days.
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 $111 million in the second quarter of 2014, compared
with net income of $96 million in the second quarter of 2013.
ComEd’s Adjusted (non-GAAP) Operating Earnings in the second
quarter of 2014 were up $15 million from the same quarter in 2013,
primarily reflecting higher distribution formula rate earnings due
to increased capital investment.
For the second quarter of 2014, heating degree-days in the ComEd
service territory were down 10.7 percent relative to the same
period in 2013 and were 9.2 percent below normal. Meanwhile,
cooling degree days were up 7.9 percent relative to the same period
in 2013 and were 18.8 percent above normal. Total retail electric
deliveries increased 0.4 percent in the second quarter of 2014
compared with the same period in 2013.
Weather-normalized retail electric deliveries remained flat in
the second quarter of 2014 relative to 2013.
PECO consists of electricity transmission and
distribution operations and retail natural gas distribution
operations in Southeastern Pennsylvania.
PECO’s GAAP net income in the second quarter of 2014 was $84
million, compared with $72 million in the second quarter of 2013.
Adjusted (non-GAAP) Operating Earnings for the second quarter of
2013 do not include various items (after tax) that were included in
reported GAAP earnings. A reconciliation of Adjusted (non-GAAP)
Operating Earnings to GAAP Net Income is in the table below:
($ millions) 2Q14
2Q13
PECO Adjusted (non-GAAP) Operating Earnings
$84 $74 Merger and Integration Costs -
(2)
PECO GAAP Net Income $84
$72
PECO’s Adjusted (non-GAAP) Operating Earnings in the second
quarter of 2014 increased $10 million from the same quarter in
2013, primarily due to a decreased income tax expense as a result
of an increase in the electric tax repairs deduction.
For the second quarter of 2014, heating degree-days in the PECO
service territory were down 6.7 percent relative to the same period
in 2013 and were 15.1 percent below normal. Cooling degree-days
were down 10.3 percent from prior year, but were 7.8 percent above
normal. Total retail electric deliveries were down 1.8 percent
compared with the second quarter of 2013. Natural gas deliveries
(including both retail and transportation segments) in the second
quarter of 2014 were up 4.3 percent compared with the second
quarter of 2013.
Weather-normalized retail electric deliveries and gas deliveries
increased 0.2 percent and 1.4 percent in the second quarter of 2014
relative to 2013, respectively. The variances are driven primarily
by economic and customer growth (mainly in the residential
classes), partially offset by energy efficiency and higher gas
rates, respectively.
BGE consists of electricity transmission and distribution
operations and retail natural gas distribution operations in
Central Maryland.
BGE’s GAAP net income in the second quarter of 2014 was $16
million, compared with $22 million in the second quarter of 2013.
Adjusted (non-GAAP) Operating Earnings for the second quarter of
2013 do not include various items (after tax) that were included in
reported GAAP earnings. A reconciliation of Adjusted (non-GAAP)
Operating Earnings to GAAP Net Income is in the table below:
($ millions) 2Q14
2Q13
BGE Adjusted (non-GAAP) Operating Earnings
$16 $23 Merger and Integration Costs -
(1)
BGE GAAP Net Income $16
$22
BGE’s Adjusted (non-GAAP) Operating Earnings in the second
quarter of 2014 decreased $7 million from the same quarter in 2013,
primarily due to increased operating and maintenance expense,
partially offset by increased revenue as a result of the December
2013 electric and gas distribution rate order issued by the MDPSC.
Due to revenue decoupling, BGE is not affected by actual weather
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 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 July 31, 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
Second Quarter 2014 Quarterly Report on Form 10-Q (to be filed on
July 31, 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 18; 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
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 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
7.8 million customers in Central Maryland (BGE), Northern Illinois
(ComEd) and Southeastern Pennsylvania (PECO).
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 June 30, 2014
Three Months Ended June 30, 2013 Adjusted
Adjusted
GAAP (a)
Adjustments Non-GAAP GAAP (a)
Adjustments Non-GAAP
Operating revenues
$ 6,024 $ 170 (b), (c) $ 6,194 $ 6,141 $ (259) (b), (c) $ 5,882
Operating expenses
Purchased power and fuel 2,412 108 (b), (c) 2,520 2,419 (9) (b),
(c) 2,410 Operating and maintenance 2,166 (137) (d), (e), (f) 2,029
1,892 (133) (d), (f) 1,759 Depreciation and amortization 590 - 590
533 (1) (d) 532 Taxes other than income 288 -
288 271 - 271
Total operating expenses
5,456 (29) 5,427 5,115 (143) 4,972
Equity in losses of unconsolidated
affiliates
- - - (21) 21 (c) -
Gain on consolidation of CENG
261 (261) (g) - - - -
Operating income
829 (62) 767 1,005 (95)
910
Other income and (deductions)
Interest expense (238) 8 (e) (230) (252) 4 (i) (248) Other,
net 243 (162) (h) 81 (17) 57
(d), (h), (i) 40
Total other income and (deductions)
5 (154) (149) (269) 61
(208)
Income before income taxes
834 (216) 618 736 (34) 702
(b), (c), (d),
(b), (c), (d),
(e), (f), (g),
(f), (h), (i),
Income taxes
277 (111) (h), (j) 166 239 2
(k)
241
Net income
557 (105) 452 497 (36) 461
Net income attributable to
noncontrolling interests and preference stock dividends
35 (23) (j) 12 7 - 7
Net income attributable to common
shareholders
$ 522 $ (82) $ 440 $ 490 $ (36) $ 454
Effective tax rate
33.2% 26.9% 32.5% 34.3%
Earnings per average common
share
Basic
$ 0.61 $ (0.10) $ 0.51 $ 0.57 $ (0.04) $ 0.53 Diluted
$ 0.60 $ (0.09) $ 0.51 $ 0.57 $ (0.04) $ 0.53
Average common shares
outstanding
Basic 860 860 856 856 Diluted 864 864 860 860
Effect of adjustments on earnings per
average diluted common share recorded in accordance with
GAAP:
Mark-to-market impact of economic hedging activities (b) $ 0.01 $
(0.30) Amortization of commodity contract intangibles (c) 0.03 0.13
Merger and integration costs (d) 0.02 0.02 PHI acquisition costs
(e) 0.01 - Long-lived asset impairment (f) 0.08 0.08 Gain on CENG
integration (g) (0.18) - Unrealized gains related to NDT fund
investments (h) (0.09) 0.03 Non-controlling interest (j)
0.03 -
Total adjustments
$ (0.09) $ (0.04)
For the three months ended June 30, 2014,
includes the results of operations of Constellation Energy Nuclear
Group, LLC beginning on April 1, 2014, the date the nuclear
operating services agreement was executed.
(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 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 certain costs
incurred associated with the Pepco Holdings Inc. acquisition,
including professional fees and upfront credit facility fees.
(f) Adjustment to exclude a 2014 charge to
earnings primarily related to the impairment of certain wind
generating assets and a 2013 charge to earnings primarily related
to the cancellation of previously capitalized nuclear uprate
projects.
(g) 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.
(h) 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.
(i) Adjust to exclude 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.
(j) Adjustment to account for the CENG
interest not owned by Generation, where applicable.
(k) Adjustment to exclude the non-cash
impacts of the remeasurement of state deferred income taxes as a
result of the merger.
EXELON CORPORATION
Reconciliation of Adjusted (non-GAAP)
Operating Earnings to GAAP Consolidated Statements of
Operations
(unaudited)
(in millions, except per share data)
Six Months Ended June 30, 2014 Six Months
Ended June 30, 2013 (a) Adjusted Adjusted GAAP
(b) Adjustments Non-GAAP GAAP (b)
Adjustments Non-GAAP
Operating revenues
$ 13,261 $ 1,020 (b), (c), (d) $ 14,281 $ 12,223 $ 552 (c), (d) $
12,775
Operating expenses
Purchased power and fuel 6,752 187 (c), (d) 6,939 5,400 244 (c),
(d) 5,644 Operating and maintenance 4,024 (149) (b), (e), (f) 3,875
3,656 (170) (b), (f) 3,486 Depreciation and amortization 1,154 -
1,154 1,076 (2) (b) 1,074 Taxes other than income 580
- 580 548 - 548
Total operating
expenses 12,510 38 12,548 10,680 72 10,752
Equity in earnings (loss) of
unconsolidated affiliates
(20) 12 (b), (c) (8) (30) 39 (c) 9
Gain on consolidation of CENG
261 (261) (g) - - - -
Operating income
992 733 1,725 1,513 519
2,032
Other income and (deductions)
(b), (j), (f), Interest expense (465) 8 (e) (457) (876) 371 (k)
(505) (b), (h), (k), Other, net 348 (205) (h), (i)
143 155 (53) (l) 102
Total other
income and (deductions) (117) (197) (314)
(721) 318 (403)
Income before income taxes
875 536 1,411 792 837 1,629
(b), (c), (d),
(b), (c), (d),
(e), (f), (j),
(f), (h), (j),
Income taxes
224 201 (g), (h), (i) 425 294
267
(k), (l)
561
Net income
651 335 986 498 570 1,068
Net income attributable to
noncontrolling interests, preferred security dividends and
redemption and preference stock dividends
39 (23) (m) 16 12 - 12
Net income attributable to common
shareholders
$ 612 $ 358 $ 970 $ 486 $ 570 $ 1,056
Effective tax rate
25.6% 30.1% 37.1% 34.4%
Earnings per average common
share
Basic
$ 0.71 $ 0.42 $ 1.13 $ 0.57 $ 0.67 $ 1.23 Diluted
$ 0.71 $ 0.41 $ 1.12 $ 0.57 $ 0.66 $ 1.23
Average common shares
outstanding
Basic 860 860 856 856 Diluted 863 863 859 859
Effect of adjustments on earnings per
average diluted common share recorded in accordance with
GAAP:
Merger and integration costs (b) $ 0.03 $ 0.05 Amortization of
commodity contract intangibles (c) 0.06 0.27 Mark-to-market impact
of economic hedging activities (d) 0.52 (0.02) PHI acquisition
costs (e) 0.01 - Long-lived asset impairment (f) 0.08 0.10 Gain on
CENG integration (g) (0.18) - Unrealized gains related to NDT fund
investments (h) (0.10) (0.02) Tax settlement (i) (0.04) -
Remeasurement of like-kind exchange tax position (j) - 0.31
Amortization of the fair value of certain debt (k) - (0.01) Plant
retirements and divestitures (l) - (0.02) Non-controlling interest
(m) 0.03 - Total adjustments $ 0.41 $ 0.66 For the
six months ended June 30, 2014, includes the results of operations
of Constellation Nuclear Energy Group, LLC beginning on April 1,
2014, the date the nuclear operating services agreement was
executed.
(a) Results reported in accordance with
GAAP.
(b) Adjustment to exclude 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.
(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 the
mark-to-market impact of Exelon's economic hedging activities, net
of intercompany eliminations.
(e) Adjustment to exclude certain costs
incurred associated with the Pepco Holdings Inc. acquisition,
including professional fees and upfront credit facility fees.
(f) Adjustment to exclude a 2014 charge to
earnings primarily related to the impairment of certain wind
generating assets and a 2013 charge to earnings primarily related
to the cancellation of previously capitalized nuclear uprate
projects.
(g) 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.
(h) 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.
(i) Adjustment to account for a favorable
tax settlement in 2014 of certain income tax positions on
Constellation's 2009-2012 tax returns.
(j) Adjustment to exclude the non-cash
impacts of the remeasurement of state deferred income taxes as a
result of the merger.
(k) Adjust to exclude 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.
(l) Adjustment to exclude the impacts
associated with the sale or retirement of generating stations.
(m) Adjustments to account for the CENG
interest not owned by Generation, where applicable.
Exelon CorporationRavi Ganti, 312-394-2345Investor
RelationsorPaul Adams, 410-470-4167Corporate Communications
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