EXC Exelon Corp

Exelon Corporation (NYSE:EXC) announced second quarter 2015 consolidated earnings as follows:

       

Second Quarter

 

 

2015

 

2014

Adjusted (non-GAAP) Operating Results:

 

Net Income ($ millions)

$508

$440

Diluted Earnings per Share

 

$0.59

 

$0.51

GAAP Results:

Net Income ($ millions)

$638

$522

Diluted Earnings per Share

 

$0.74

 

$0.60

 

“All of our businesses continue to deliver best in class operations, benefiting our customers and shareholders,” said Christopher M. Crane, Exelon’s president and CEO. “Exelon achieved earnings above our guidance range this quarter, led by strong financial performance at Constellation. Based on our results through June, we are narrowing our full-year operating earnings guidance to $2.35 to $2.55 per share.”

Second Quarter Operating Results

As shown in the table above, Exelon’s Adjusted (non-GAAP) Operating Earnings increased to $0.59 per share in the second quarter of 2015 from $0.51 per share in the second quarter of 2014. Earnings in the second quarter of 2015 primarily reflected the following favorable factors:

• Higher revenue net of purchased power and fuel at Generation as a result of a reduction in the number of nuclear outage days, favorability from portfolio management optimization activities, the Integrys acquisition and the cancellation of the Department of Energy spent nuclear fuel disposal fees;
• Higher realized NDT fund investment gains at Generation;
• Lower uncollectible accounts expense at BGE.

These factors were partially offset by:

• Higher storm costs at PECO;
• Unfavorable weather at ComEd;
• Higher interest expense due to higher outstanding debt; and
• Higher income tax expenses due to decreased domestic production activities deduction at Generation and decreased electric tax repair deductions at PECO.

Adjusted (non-GAAP) Operating Earnings for the second quarter of 2015 do not include the following items (after tax) that were included in reported GAAP Net Income:

              (in millions)  

(per diluted share)

Exelon Adjusted (non-GAAP) Operating Earnings

 

$508

 

$0.59

Mark-to-Market Impact of Economic Hedging Activities

143 0.16 Unrealized Losses Related to NDT Fund Investments (56) (0.06) Amortization of Commodity Contract Intangibles (9) (0.01) Merger and Integration Costs (18) (0.02)

Mark-to-Market Impact of PHI Merger Related Interest Rate Swaps

71 0.08 Long-Lived Asset Impairment (15) (0.02) CENG Non-Controlling Interest   14   0.02

Exelon GAAP Net Income

 

$638

 

$0.74

 

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 Net Income:

             

(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 NDT Fund Investments 76 0.09 Merger and Integration Costs (31) (0.03) Amortization of Commodity Contract Intangibles (23) (0.03) Long-Lived Asset Impairments (68) (0.08) Gain on CENG Integration 159 0.18 CENG Non-Controlling Interest   (23)   (0.03)

Exelon GAAP Net Income

 

$522

 

$0.60

 

Second Quarter and Recent Highlights

• Pepco Holdings, Inc. Merger: On May 15, 2015, the Maryland Public Service Commission (MDPSC) approved the merger after modifying a number of the conditions in the settlements, including provisions for rate credits, funding for energy efficiency programs, establishing a green sustainability fund, renewable generation development, ring-fencing, financial reporting conditions and increased penalties related to reliability commitments. On May 18, 2015, Exelon and PHI accepted and committed to fulfill the conditions. On June 2, 2015, the Delaware Public Service Commission (DPSC) issued an order approving the merger between Exelon and PHI. On June 11, 2015, the Maryland Office of People’s Counsel (OPC), the Sierra Club, and the Chesapeake Climate Action Network filed their Petitions for Judicial Review of the MDPSC’s approval of the merger with the Circuit Court for Queen Anne’s County. On July 1, 2015, Public Citizen, Inc. filed its Petition for Judicial Review with the Circuit Court for Queen Anne’s County. On July 10, 2015, Exelon and PHI filed responses to the Petitions for Review. On July 21, 2015, the OPC filed a motion to stay the MDPSC order approving the merger and to set a schedule for discovery and presentation of new evidence. Exelon and PHI intend to vigorously oppose the motion. The merger continues to be conditioned upon approval by the Public Service Commission of the District of Columbia. Exelon and PHI expect the merger to be completed in the third quarter of 2015.
• Nuclear Operations: Generation’s nuclear fleet, including its owned output from the Salem Generating Station and 100 percent of the CENG units, produced 43,805 gigawatt-hours (GWh) in the second quarter of 2015, compared with 41,397 GWh in the second quarter of 2014. Excluding Salem, the Exelon-operated nuclear plants at ownership achieved a 93.1 percent capacity factor for the second quarter of 2015, compared with 91.8 percent for the second quarter of 2014. The number of planned refueling outage days totaled 71 in the second quarter of 2015, compared with 108 in the second quarter of 2014. There were 18 non-refueling outage days in the second quarter of 2015, compared with 44 days in the second quarter of 2014.
• Fossil and Renewable Operations: The Dispatch Match rate for Generation’s gas and hydro fleet was 99.2 percent in the second quarter of 2015, compared with 99.2 percent in the second quarter of 2014. Energy Capture for the wind and solar fleet was 96.1 percent in the second quarter of 2015, compared with 94.7 percent in the second quarter of 2014. Energy Capture performance improvement was attributed to enhancing reliability, quality assurance and quality control programs.
• Financing Activities:
  • On June 1, 2015, Generation completed remarketing of $435 million in aggregate principal amount of its tax-exempt pollution control revenue bonds. The net proceeds of the sale of the bonds will be used for general corporate purposes.
  • On June 11, 2015, Exelon issued $4.2 billion in aggregate principal amount of Senior Notes, consisting of $550 million of 1.550% Notes due 2017, $900 million of 2.850% Notes due 2020, $1.25 billion of 3.950% Notes due 2025, $500 million of 4.950% Notes due 2035 and $1.0 billion of 5.100% Notes due 2045. The net proceeds of the issuance will be used to finance a portion of the pending acquisition of PHI and related costs and expenses and for general corporate purposes.
  • On July 14, 2015, Exelon completed the settlement of its June 2014 equity offering through the issuance of 57.5 million shares of Exelon common stock. Exelon received net cash proceeds of $1.87 billion, which was calculated based on a forward price of $32.48 per share as specified in the forward sale agreements. Exelon will use the net proceeds to fund the pending acquisition of PHI and related costs and expenses and for general corporate purposes.

• 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 June 30, 2015, was 98 percent to 101 percent for 2015, 77 percent to 80 percent for 2016 and 46 percent to 49 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 second quarter 2015 GAAP Net Income was $398 million, compared with net income of $340 million in the second quarter of 2014. Adjusted (non-GAAP) Operating Earnings for the second quarter of 2015 and 2014 do not include various items (after tax) that were included in reported GAAP Net Income:

          ($ millions)   2Q15   2Q14

Generation Adjusted (non-GAAP) Operating Earnings

 

$309

 

$231

Mark-to-Market Impact of Economic Hedging Activities 145 (8) Unrealized (Losses) Gains Related to NDT Fund Investments (56) 76 Amortization of Commodity Contract Intangibles (9) (23) Merger and Integration Costs (5) (19) Long-Lived Asset Impairments — (53) Gain on CENG Integration — 159 CENG Non-Controlling Interest   14   (23)

Generation GAAP Net Income

 

$398

 

$340

 

Generation’s Adjusted (non-GAAP) Operating Earnings in the second quarter of 2015 increased $78 million compared with the same quarter in 2014. This increase primarily reflected higher revenue net of purchased power and fuel as a result of a reduction in the number of nuclear outage days, favorability from portfolio management optimization activities, the Integrys acquisition and the cancellation of the DOE spent nuclear fuel disposal fee; as well as higher realized NDT fund gains. These increases were partially offset by increased interest and income tax expenses.

ComEd consists of electricity transmission and distribution operations in Northern Illinois.

ComEd's second quarter 2015 GAAP Net Income was $99 million, compared with net income of $111 million in the second quarter of 2014. Adjusted (non-GAAP) Operating Earnings for the second quarter of 2015 do not include merger and integration costs that were included in reported GAAP Net Income:

          ($ millions)  

2Q15

  2Q14

ComEd Adjusted (non-GAAP) Operating Earnings

 

$101

 

$111

Merger and Integration Costs   (2)   —

ComEd GAAP Net Income

 

$99

 

$111

 

ComEd’s Adjusted (non-GAAP) Operating Earnings in the second quarter of 2015 decreased $10 million from the same quarter in 2014 primarily as a result of unfavorable weather offset by increased electric distribution earnings, reflecting the impacts of increased capital investment, partially offset by lower allowed return on common equity due to a decrease in treasury rates.

For the second quarter of 2015, heating degree-days in the ComEd service territory were down 1.3 percent relative to the same period in 2014 and were 10.3 percent below normal. Cooling degree days were down 34.0 percent from prior year and 21.6 percent below normal. Total retail electric deliveries decreased 3.8 percent in the second quarter of 2015 compared with the same period in 2014.

Weather-normalized retail electric deliveries decreased 1.2 percent in the second 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 second quarter 2015 GAAP Net Income was $70 million, compared with net income of $84 million in the second quarter of 2014. Adjusted (non-GAAP) Operating Earnings for the second quarter of 2015 do not include merger and integration costs that were included in reported GAAP Net Income:

          ($ millions)   2Q15   2Q14

PECO Adjusted (non-GAAP) Operating Earnings

 

$71

 

$84

Merger and Integration Costs   (1)   —

PECO GAAP Net Income

 

$70

 

$84

 

PECO’s Adjusted (non-GAAP) Operating Earnings in the second quarter of 2015 decreased $13 million from the same quarter in 2014 primarily due to increased storm costs.

For the second quarter of 2015, heating degree-days in the PECO service territory were down 16.0 percent relative to the same period in 2014 and were 29.2 percent below normal. Cooling degree days were up 36.8 percent from the prior year and 47.4 percent above normal. Total retail electric deliveries were up 2.7 percent compared with the second quarter of 2014. Natural gas deliveries (including both retail and transportation segments) in the second quarter of 2015 were down 5.7 percent compared with the same period in 2014.

Weather-normalized retail electric and gas deliveries decreased 0.7 percent and increased 1.6 percent, respectively, in the second quarter of 2015 compared with the same period in 2014.

BGE consists of electricity transmission and distribution operations and retail natural gas distribution operations in Central Maryland.

BGE’s second quarter 2015 GAAP Net Income was $44 million, compared with net income of $16 million in the second quarter of 2014. Adjusted (non-GAAP) Operating Earnings for the second quarter of 2015 do not include merger and integration costs that were included in reported GAAP Net Income:

          ($ millions)   2Q15   2Q14

BGE Adjusted (non-GAAP) Operating Earnings

 

$45

 

$16

Merger and Integration Costs   (1)   —

BGE GAAP Net Income

 

$44

 

$16

 

BGE’s Adjusted (non-GAAP) Operating Earnings in the second quarter of 2015 increased $29 million from the same quarter in 2014, primarily due to decreased uncollectible accounts expense and increased distribution revenues pursuant to increased rates effective in December 2014. 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 July 29, 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 Second Quarter 2015 Quarterly Report on Form 10-Q (to be filed on July 29, 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.

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, 2015   Three Months Ended June 30, 2014 GAAP (a)   Adjustments    

AdjustedNon-GAAP

GAAP (a)   Adjustments    

AdjustedNon-GAAP

Operating revenues $ 6,514 $ (7 ) (b),(c) $ 6,507 $ 6,024 $ 170 (b),(c) $ 6,194 Operating expenses Purchased power and fuel 2,449 214 (b),(c) 2,663 2,412 108 (b),(c) 2,520 Operating and maintenance 2,042 (41 ) (d),(e) 2,001 2,166 (137 ) (d),(e) 2,029 Depreciation and amortization 602 — 602 590 — 590 Taxes other than income 294   —   294   288   —   288   Total operating expenses 5,387 173 5,560 5,456 (29 ) 5,427 Gain on sale of assets 7 — 7 13 — 13 Gain on consolidation and acquisition of businesses —   —   —   261   (261 ) (i) —   Operating income 1,134   (180 ) 954   842   (62 ) 780   Other income and (deductions) Interest expense (155 ) (104 ) (d),(f) (259 ) (238 ) 8 (d) (230 ) Other, net (17 ) 127   (g) 110   230   (162 ) (g) 68   Total other income and (deductions) (172 ) 23   (149 ) (8 ) (154 ) (162 ) Income before income taxes 962 (157 ) 805 834 (216 ) 618 Income taxes 327 (41 )

(b),(c),(d),(e),(f),(g)

286 277 (111 )

(b),(c),(d),(e),(i),(g)

166 Equity in losses of unconsolidated affiliates (2 ) —   (2 ) —   —   —   Net income 633 (116 ) 517 557 (105 ) 452 Net income (loss) attributable to noncontrolling interests and preference stock dividends (5 ) 14   (h) 9   35   (23 ) (h) 12   Net income attributable to common shareholders $ 638   $ (130 ) $ 508   $ 522   $ (82 ) $ 440   Effective tax rate 34.0 % 35.5 % 33.2 % 26.9 % Earnings per average common share Basic $ 0.74 $ (0.15 ) $ 0.59 $ 0.61 $ (0.10 ) $ 0.51 Diluted $ 0.74   $ (0.15 ) $ 0.59   $ 0.60   $ (0.09 ) $ 0.51   Average common shares outstanding Basic 863 863 860 860 Diluted 866 866 864 864 Effect of adjustments on earnings per average diluted common share recorded in accordance with GAAP:

Mark-to-market impact of economic hedging activities (b)

$

(0.16

)

$

0.01

Amortization of commodity contract intangibles (c) 0.01 0.03 Merger and integration costs (d) 0.02 0.03 Long-lived asset impairment (e) 0.02 0.08

Mark-to-market impact of PHI merger related interest rate swaps (f)

(0.08 ) — Unrealized losses (gains) related to NDT fund investments (g) 0.06 (0.09 ) CENG Non-controlling interest (h) (0.02 ) 0.03 Gain on CENG integration (i) —   (0.18 ) Total adjustments $ (0.15 ) $ (0.09 ) (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, and at Generation, 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. (f) 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. (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 in 2015, and in 2014 the impact of unrealized gains and losses on NDT fund investments, certain merger and acquisition costs, and non-cash amortization of intangible assets, net, related to commodity contracts. (i) 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.   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, 2015   Six Months Ended June 30, 2014 GAAP (a)   Adjustments    

AdjustedNon-GAAP

GAAP (a)   Adjustments    

AdjustedNon-GAAP

Operating revenues $ 15,345 $ (201 ) (b),(c) $ 15,144 $ 13,261 $ 1,020 (b),(c),(d) $ 14,281 Operating expenses Purchased power and fuel 6,919 220 (b),(c) 7,139 6,752 187 (b),(c) 6,939 Operating and maintenance 4,123 (53 ) (d),(e),(f) 4,070 4,024 (149 ) (d),(f) 3,875 Depreciation and amortization 1,212 — 1,212 1,154 — 1,154 Taxes other than income 598   —   598   580   —   580   Total operating expenses 12,852 167 13,019 12,510 38 12,548 Equity in losses of unconsolidated affiliates — — — (20 ) 12 (c),(d) (8 ) Gain on sales of assets 8 — 8 18 — 18 Gain on consolidation of CENG —   —   —   261   (261 ) (j) —   Operating income 2,501   (368 ) 2,133   1,010   733   1,743   Other income and (deductions) Interest expense, net (501 ) (15 ) (d),(g) (516 ) (465 ) 8 (d) (457 ) Other, net 64   78   (h) 142   330   (205 ) (h),(k) 125   Total other income and (deductions) (437 ) 63   (374 ) (135 ) (197 ) (332 ) Income before income taxes 2,064 (305 ) 1,759 875 536 1,411 Income taxes 690 (104 )

(b),(c),(d),(e),(f),(g),(h)

586 224 201

(b),(c),(d),(f),(h),(j),(k)

425 Equity in losses of unconsolidated affiliates (2 ) —   (2 ) —   —   —   Net income 1,372 (201 ) 1,171 651 335 986 Net income attributable to noncontrolling interests, preferred security dividends and redemption and preference stock dividends 41   7   (i) 48   39   (23 ) (i) 16   Net income attributable to common shareholders $ 1,331   $ (208 ) $ 1,123   $ 612   $ 358   $ 970   Effective tax rate 33.4 % 33.3 % 25.6 % 30.1 % Earnings per average common share Basic $ 1.54 $ (0.24 ) $ 1.30 $ 0.71 $ 0.42 $ 1.13 Diluted $ 1.54   $ (0.24 ) $ 1.30   $ 0.71   $ 0.41   $ 1.12   Average common shares outstanding Basic 862 862 860 860 Diluted 866 866 863 863 Effect of adjustments on earnings per average diluted common share recorded in accordance with GAAP: Mark-to-market impact of economic hedging activities (b) $ (0.27 ) $ 0.52 Amortization of commodity contract intangibles (c) (0.02 ) 0.06 Merger and integration costs (d) 0.04 0.04 Long-lived asset impairment (e) 0.02 0.08 Midwest Generation bankruptcy recoveries (f) (0.01 ) —

Mark-to-market impact of PHI merger related interest rate swaps (g)

(0.03 ) — Unrealized gains related to NDT fund investments (h) 0.04 (0.10 ) CENG Non-controlling interest (i) (0.01 ) 0.03 Gain on CENG integration (j) — (0.18 ) Tax settlement (k) —   (0.04 ) Total adjustments $ (0.24 ) 0.41  

Note: For the six months ended June 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, and at Generation, 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. (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 the mark-to-market impact of Exelon Corporate's forward-starting interest rate swaps related to financing for the pending PHI acquisition. (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 Generation's non-controlling interest related to CENG exclusion items, primarily related to the impact of unrealized gains and losses on NDT fund investments in 2015, and in 2014 the impact of unrealized gains and losses on NDT fund investments, certain merger and acquisition costs, and non-cash amortization of intangible assets, net, related to commodity contracts. (j) 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. (k) Adjustment to reflect a benefit related to favorable settlements in 2014 of certain income tax positions on Constellation’s 2009-2012 tax returns.  

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Exelon CorporationFrancis Idehen, 312-394-3967Investor RelationsPaul Adams, 410-470-4167Corporate Communications