Form 8-K EXELON CORP For: Feb 13

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

February 13, 2015

Date of Report (Date of earliest event reported)

 

 

 

Commission File Number		Exact Name of Registrant as Specified in Its Charter; State of Incorporation; Address of Principal Executive Offices; and Telephone Number		IRS Employer Identification Number
1-16169		EXELON CORPORATION (a Pennsylvania corporation) 10 South Dearborn Street P.O. Box 805379 Chicago, Illinois 60680-5379 (312) 394-7398		23-2990190
333-85496		EXELON GENERATION COMPANY, LLC (a Pennsylvania limited liability company) 300 Exelon Way Kennett Square, Pennsylvania 19348-2473 (610) 765-5959		23-3064219
1-1839		COMMONWEALTH EDISON COMPANY (an Illinois corporation) 440 South LaSalle Street Chicago, Illinois 60605-1028 (312) 394-4321		36-0938600
000-16844		PECO ENERGY COMPANY (a Pennsylvania corporation) P.O. Box 8699 2301 Market Street Philadelphia, Pennsylvania 19101-8699 (215) 841-4000		23-0970240
1-1910		BALTIMORE GAS AND ELECTRIC COMPANY (a Maryland corporation) 2 Center Plaza 110 West Fayette Street Baltimore, Maryland 21201 (410) 234-5000		52-0280210

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Section 2 – Financial Information

 

Item 2.02.

Results of Operations and Financial Condition.

Section 7 – Regulation FD

 

Item 7.01.

Regulation FD Disclosure.

On February 13, 2015, Exelon Corporation (Exelon) announced via press release its results for the fourth quarter ended December 31, 2014. A copy of the press release and related attachments is attached hereto as Exhibit 99.1. Also attached as Exhibit 99.2 to this Current Report on Form 8-K are the presentation slides to be used at the fourth quarter 2014 earnings conference call. This Form 8-K and the attached exhibits are provided under Items 2.02, 7.01 and 9.01 of Form 8-K and are furnished to, but not filed with, the Securities and Exchange Commission.

Exelon has scheduled the conference call for 11:00 AM ET (10:00 AM CT) on February 13, 2015. The call-in number in the U.S. and Canada is 800-690-3108, and the international call-in number is 973-935-8753. If requested, the conference ID number is 65713906. Media representatives are invited to participate on a listen-only basis. The call will be web-cast and archived on Exelon’s Web site: www.exeloncorp.com. (Please select the Investors page.)

Telephone replays will be available until March 27, 2015. The U.S. and Canada call-in number for replays is 855-859-2056, and the international call-in number is 404-537-3406. The conference ID number is 65713906.

Section 9 – Financial Statements and Exhibits

 

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit No.		Description
99.1		Press release and earnings release attachments
99.2		Earnings conference call presentation slides

* * * * *

This combined Form 8-K is being furnished separately by Exelon, Exelon Generation Company, LLC, Commonwealth Edison Company, PECO Energy Company, and Baltimore Gas and Electric Company (Registrants). Information contained herein relating to any individual Registrant has been furnished by such Registrant on its own behalf. No Registrant makes any representation as to information relating to any other Registrant.

This report 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 (to be filed on February 13, 2015) 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 and (2) 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 report. 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 report.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

February 13, 2015

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EXHIBIT INDEX

 

Exhibit No.		Description
99.1		Press release and earnings release attachments
99.2		Earnings conference call presentation slides

Exhibit 99.1

 

 

Contact:		Francis Idehen
		Investor Relations
		312-394-3967
		Paul Adams
		Corporate Communications
		410-470-4167

EXELON ANNOUNCES FOURTH QUARTER 2014 RESULTS,

PROVIDES 2015 EARNINGS EXPECTATION

CHICAGO (Feb. 13, 2015) — Exelon Corporation (NYSE: EXC) announced fourth quarter 2014 consolidated earnings as follows:

 

		Full Year								Fourth Quarter
		2014				2013				2014				2013
Adjusted (non-GAAP) Operating
Results:
Net Income ($ millions)		$	2,068			$	2,149			$	421			$	427
Diluted Earnings per Share		$	2.39			$	2.50			$	0.48			$	0.50
GAAP Results:
Net Income ($ millions)		$	1,623			$	1,719			$	18			$	495
Diluted Earnings per Share		$	1.88			$	2.00			$	0.02			$	0.58

“Exelon had a strong year, both operationally and financially. We delivered earnings within our guidance range, and our generation fleet and utilities continued to perform at high levels,” said Exelon President and CEO Christopher M. Crane. “We made several investments to grow the company, including the proposed merger with Pepco Holdings, Inc. and the acquisition of Integrys Energy Services, and we continue to strengthen our balance sheet for long-term growth.”

 

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Fourth Quarter Operating Results

As shown in the table above, Exelon’s adjusted (non-GAAP) operating earnings decreased to $0.48 per share in the fourth quarter of 2014 from $0.50 per share in the fourth quarter of 2013. Earnings in the fourth quarter of 2014 primarily reflected the following negative factors:

 

•

Unfavorable earnings associated with the December 2014 extension of bonus income tax depreciation impact on Generation’s domestic production activities deduction and ComEd’s distribution and transmission formula earnings, and

 

•

Unfavorable weather conditions at ComEd and PECO.

These factors were substantially offset by:

 

•

Higher revenue net of purchased power and fuel at Generation as a result of the cancellation of the Department of Energy spent nuclear fuel disposal fees and the inclusion of Integrys beginning Nov. 1, 2014, and

 

•

Cost savings from plan design changes for certain Other Post-Employment Benefits (OPEB) plans.

Adjusted (non-GAAP) Operating Earnings for the fourth 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		$	421			$	0.48
Mark-to-Market Impact of Economic Hedging Activities			(70	)			(0.08	)
Unrealized Gains Related to Nuclear Decommissioning Trust (NDT) Fund Investments			24				0.03
Plant Retirements and Divestitures			48				0.06
Merger and Integration Costs			(80	)			(0.09	)
Reassessment of State Deferred Income Taxes			27				0.03
Amortization of Commodity Contract Intangibles			(22	)			(0.03	)
Long-Lived Asset Impairments			(337	)			(0.39	)
Bargain-Purchase Gain on Integrys Acquisition			28				0.03
Tax Settlements			5				0.01
CENG Non-Controlling Interest			(26	)			(0.03	)
Exelon GAAP Net Income		$	18			$	0.02

 

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Adjusted (non-GAAP) Operating Earnings for the fourth 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		$	427			$	0.50
Mark-to-Market Impact of Economic Hedging Activities			143				0.16
Unrealized Gains Related to NDT Fund Investments			40				0.05
Plant Retirements and Divestitures			1				—
Merger and Integration Costs			(21	)			(0.02	)
Reassessment of State Deferred Income Taxes			(4	)			—
Amortization of Commodity Contract Intangibles			(75	)			(0.09	)
Asset Retirement Obligation			(1	)			—
Midwest Generation Bankruptcy Charges			(16	)			(0.02	)
Long-Lived Asset Impairments			1				—
Exelon GAAP Net Income		$	495			$	0.58

2015 Earnings Outlook

Exelon introduced a guidance range for 2015 adjusted (non-GAAP) operating earnings of $2.25 to $2.55 per share. Operating earnings guidance is based on the assumption of normal weather, which is determined based on historical average heating and cooling degree days for a 30-year period in the respective utilities’ service territories.

The outlook for 2015 adjusted (non-GAAP) operating earnings for Exelon and its subsidiaries excludes the following items:

 

•

Mark-to-market adjustments from economic hedging activities;

 

•

Unrealized gains and losses from NDT fund investments to the extent not offset by contractual accounting as described in the notes to the consolidated financial statements;

 

•

Certain costs incurred related to the PHI acquisition;

 

•

Non-cash amortization of intangible assets, net, related to commodity contracts recorded at fair value at merger dates;

 

•

Other unusual items; and

 

•

One-time impacts of adopting new accounting standards.

Fourth Quarter and Recent Highlights

 

•

Pepco Holdings, Inc. Merger: On Nov. 20, 2014, the Federal Energy Regulatory Commission (FERC) approved the proposed merger of Exelon and PHI. In addition, on Nov. 21, 2014, Exelon and PHI each certified that it had substantially complied with the Department of Justice request under the Hart-Scott-Rodino Antitrust Improvements Act of 1976

 

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(HSR Act). Accordingly, the HSR Act waiting period expired on Dec. 22, 2014, and the HSR Act no longer precludes completion of the merger. Although the DOJ allowed the HSR Act waiting period to expire without taking any action with respect to the merger, the DOJ has not advised Exelon or PHI that it has concluded its investigation. On Feb. 11, 2015, the New Jersey Board of Public Utilities (NJBPU) approved the proposed merger of Exelon and PHI. As part of the approval the NJBPU also approved a settlement agreement which was previously signed and filed by Exelon, PHI, Atlantic City Electric (ACE), NJBPU staff and the Independent Energy Producers of New Jersey. The merger continues to be conditioned upon approval by the Public Service Commissions of the District of Columbia, Delaware and Maryland. Exelon and PHI continue to expect the merger to be complete in the second or third quarter of 2015.

 

•

Asset Divestitures: Exelon closed the following generating asset sales during the quarter: Fore River (CCGT) in Massachusetts, West Valley (CT) in Utah, and Exelon’s ownership interests in Keystone and Conemaugh coal plants in Pennsylvania. The transactions resulted in cumulative pre-tax gains of approximately $83 million. Subsequent to year end, Exelon also closed the sale of Quail Run (CCGT) in Texas. To date, generating asset divestitures have yielded $1.8 billion of pre-tax cash proceeds ($1.4 billion after-tax), which are expected to be used primarily to finance a portion of the acquisition of PHI and for other corporate purposes.

 

•

Constellation: On Nov. 1, 2014, Exelon Generation acquired the competitive retail electric and natural gas business activities of Integrys Energy Group, Inc. through the purchase of all of the stock of its wholly-owned subsidiary, Integrys Energy Services, Inc. (Integrys) for a purchase price of $332 million. The generation and solar asset businesses of Integrys are excluded from the transaction. Generation recognized a $28 million after-tax bargain-purchase gain.

 

•

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 44,533 gigawatt-hours (GWh), of which 8,890 GWh were produced by CENG, in the fourth quarter of 2014, compared with 35,329 GWh in the fourth quarter of 2013. Excluding Salem, the Exelon-operated nuclear plants at ownership achieved a 94.8 percent capacity factor for the fourth quarter of 2014, compared with 92.3 percent for the fourth quarter of 2013. The number of planned refueling outage days totaled 97 in the fourth quarter of 2014, compared with 94 in the fourth quarter of 2013. There were eight non-refueling outage days in the fourth quarter of 2014, compared with 33 days in the fourth quarter of 2013.

 

•

Fossil and Renewable Operations: The dispatch match rate for Generation’s gas/hydro fleet was 99.1 percent in the fourth quarter of 2014, compared with 99.3 percent in the fourth quarter of 2013. Energy capture for the wind/solar fleet was 96.4 percent in the fourth quarter of 2014, compared with 94.5 percent in the fourth quarter of 2013. The increase in energy capture for the fourth quarter of 2014 was due to the implementation of reliability programs that resulted in increased turbine availability.

 

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•

ComEd Distribution Formula Rate Case: On Dec. 11, 2014, the Illinois Commerce Commission (ICC) issued an order approving ComEd’s 2014 annual distribution formula rate update case. The order established the net revenue requirement used to set the rates that took effect in January 2015, with an increase to ComEd’s annual delivery services revenue requirement of approximately $232 million. The electric distribution rate increase was set using an allowed return on capital of 7.06 percent (inclusive of an allowed return on common equity of 9.25 percent).

 

•

BGE Gas and Electric Distribution Rate Case: On Dec. 4, 2014, the Public Utility Law Judge issued a proposed order approving a settlement agreement reached with all parties to BGE’s 2014 distribution rate case without modification, which became a final order on Dec. 12, 2014. The final order, effective for services rendered on or after Dec. 15, 2014, established an increase of $22 million in electric base rates and an increase of $38 million in gas base rates.

 

•

Financing Activities:

 

•

On Nov. 10, 2014, ComEd issued $250 million aggregate principal amount of its First Mortgage 3.10 percent Bonds, Series 117, due Nov. 1, 2024.

 

•

On Jan. 13, 2015, Generation issued $750 million in aggregate principal amount of senior notes. The senior notes carry an annual interest rate of 2.950 percent, payable semi-annually, commencing July 15, 2015, and due Jan. 15, 2020. The proceeds of the senior notes will be used to redeem Exelon Corporate’s $550 million, 4.550 percent senior notes due June 15, 2015 on Feb. 17, 2015, 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 Dec. 31, 2014, was 93 percent to 96 percent for 2015, 61 percent to 64 percent for 2016, and 31 percent to 34 percent for 2017, which reflects the divestiture impact of Quail Run. 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.

 

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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 and natural gas exploration and production activities.

Generation’s fourth quarter 2014 GAAP net loss was $91 million, compared with net income of $269 million in the fourth quarter of 2013. Adjusted (non-GAAP) operating earnings for the fourth 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)		4Q14				4Q13
Generation Adjusted (non-GAAP) Operating Earnings		$	231			$	183
Mark-to-Market Impact of Economic Hedging Activities			(71	)			143
Unrealized Gains Related to NDT Fund Investments			24				40
Plant Retirements and Divestitures			48				1
Merger and Integration Costs			(9	)			(19	)
Reassessment of State Deferred Income Taxes			39				12
Amortization of Commodity Contract Intangibles			(22	)			(75	)
Long-Lived Asset Impairments			(338	)			1
Asset Retirement Obligation			—				(1	)
Bargain-Purchase Gain on Integrys Acquisition			28				—
Tax Settlements			5				—
CENG Non-Controlling Interest			(26	)			—
Midwest Generation Bankruptcy Charges			—				(16	)
Generation GAAP Net (Loss) Income		$	(91	)		$	269

Generation’s Adjusted (non-GAAP) Operating Earnings in the fourth quarter of 2014 increased $48 million compared with the same quarter in 2013. This increase primarily reflected higher revenue net of purchase power and fuel at Generation as a result of the cancellation of the Department of Energy spent nuclear fuel disposal fees and the inclusions of Integrys beginning Nov. 1, 2014. These items were partially offset by the impact of the December 2014 extension of bonus income tax depreciation on Generation’s domestic production activities deduction.

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

ComEd’s fourth quarter 2014 GAAP net income was $73 million, compared with net income of $109 million in the fourth quarter of 2013. Adjusted (non-GAAP) Operating Earnings for the fourth quarter of 2013 do not include merger and integration costs 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)		4Q14				4Q13
ComEd Adjusted (non-GAAP) Operating Earnings		$	75			$	109
Merger and Integration Costs			(2	)			—
ComEd GAAP Net Income		$	73			$	109

 

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ComEd’s Adjusted (non-GAAP) Operating Earnings in the fourth quarter of 2014 were down $34 million from the same quarter in 2013, primarily due to the impacts of the December 2014 extension of bonus income tax depreciation on distribution and transmission formula earnings and unfavorable weather conditions and volume in ComEd’s service territory.

For the fourth quarter of 2014, heating degree-days in the ComEd service territory were down 5.6 percent relative to the same period in 2013 and were 2.4 percent above normal. Meanwhile, cooling degree days were down 88.0 percent relative to the same period in 2013 and were 72.7 percent below normal. However, cooling degree days typically have a minimal impact to ComEd during the winter months. Total retail electric deliveries decreased 2.7 percent in the fourth quarter of 2014 compared with the same period in 2013.

Weather-normalized retail electric deliveries were down 1.2 percent in the fourth 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 fourth quarter 2014 GAAP net income was $98 million, compared with $102 million in the fourth quarter of 2013. Adjusted (non-GAAP) Operating Earnings for the fourth quarter of 2014 and 2013 do not include merger and integration costs 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)		4Q14				4Q13
PECO Adjusted (non-GAAP) Operating Earnings		$	99			$	103
Merger and Integration Costs			(1	)			(1	)
PECO GAAP Net Income		$	98			$	102

PECO’s Adjusted (non-GAAP) Operating Earnings in the fourth quarter of 2014 decreased $4 million from the same quarter in 2013, primarily due to unfavorable weather conditions in PECO’s service territory during 2014.

For the fourth quarter of 2014, heating degree-days in the PECO service territory were down 5.0 percent relative to the same period in 2013 and were 8.0 percent below normal. Cooling degree-days were down 61.5 percent from prior year, but were 31.6 percent above normal. Total retail electric deliveries were down 3.1 percent compared with the fourth quarter of 2013. Natural gas deliveries (including both retail and transportation segments) were down 2.3 percent compared with the fourth quarter of 2013.

Weather-normalized retail electric deliveries and gas deliveries decreased 1.0 percent and increased 1.9 percent in the fourth quarter of 2014 relative to 2013, respectively. The negative growth in electric sales is primarily driven by the impact of energy efficiency programs. The positive growth in gas sales is driven largely by the favorable impact of customers converting usage from oil and propane to natural gas.

 

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

BGE’s fourth quarter 2014 GAAP net income was $52 million, compared with $47 million in the fourth quarter of 2013. Adjusted (non-GAAP) Operating Earnings for the fourth quarter of 2014 and 2013 do not include merger and integration costs 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)		4Q14				4Q13
BGE Adjusted (non-GAAP) Operating Earnings		$	53			$	48
Merger and Integration Costs			(1	)			(1	)
BGE GAAP Net Income		$	52			$	47

BGE’s Adjusted (non-GAAP) Operating Earnings in the fourth quarter of 2014 increased $5 million from the same quarter in 2013, primarily due to increased revenue as a result of the December 2013 and 2014 electric and gas distribution rate orders issued by the Maryland Public Service Commission, offset by higher operating and maintenance expense. 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 pages 8 and 9 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 February 13, 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 (to be filed on February 13, 2015) 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 and (2) 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.

 

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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 approximately 32,500 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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Earnings Release Attachments

Table of Contents

 

Consolidating Statements of Operations - Three Months Ended December 31, 2014 and 2013			1
Consolidating Statements of Operations - Twelve Months Ended December 31, 2014 and 2013			2
Business Segment Comparative Statements of Operations - Generation and ComEd - Three and Twelve months ended December 31, 2014 and 2013			3
Business Segment Comparative Statements of Operations - PECO and BGE - Three and Twelve months ended December 31, 2014 and 2013			4
Business Segment Comparative Statements of Operations - Other - Three and Twelve months ended December 31, 2014 and 2013			5
Consolidated Balance Sheets - December 31, 2014 and 2013			6
Consolidated Statements of Cash Flows - Twelve Months Ended December 31, 2014 and 2013			7
Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations - Exelon - Three Months Ended December 31, 2014 and 2013			8
Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations - Exelon - Twelve Months Ended December 31, 2014 and 2013			9
Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Earnings By Business Segment - Three Months Ended December 31, 2014 and 2013			10
Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Earnings By Business Segment - Twelve Months Ended December 31, 2014 and 2013			11
Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations - Generation - Three and Twelve months ended December 31, 2014 and 2013			12
Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations - ComEd - Three and Twelve months ended December 31, 2014 and 2013			13
Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations - PECO - Three and Twelve months ended December 31, 2014 and 2013			14
Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations - BGE - Three and Twelve months ended December 31, 2014 and 2013			15
Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations - Other - Three and Twelve months ended December 31, 2014 and 2013			16
Exelon Generation Statistics - Three Months Ended December 31, 2014, September 30, 2014, June 30, 2014, March 31, 2014, and December 31, 2013			17
Exelon Generation Statistics - Twelve Months Ended December 31, 2014 and 2013			18
ComEd Statistics - Three and Twelve months ended December 31, 2014 and 2013			19
PECO Statistics - Three and Twelve months ended December 31, 2014 and 2013			20
BGE Statistics - Three and Twelve months ended December 31, 2014 and 2013			21

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EXELON CORPORATION

Consolidating Statements of Operations

(unaudited)

(in millions)

 

		Three Months Ended December 31, 2014 (a)
		Generation				ComEd				PECO				BGE				Other (b)				Exelon Consolidated
Operating revenues		$	4,802			$	1,079			$	750			$	761			$	(137	)		$	7,255
Operating expenses
Purchased power and fuel			2,853				262				301				323				(136	)			3,603
Operating and maintenance			1,801				388				198				176				—				2,563
Depreciation and amortization			248				166				59				96				13				582
Taxes other than income			115				67				36				53				(4	)			267
Total operating expenses			5,017				883				594				648				(127	)			7,015
Gain on sales of assets			82				—				—				—				(2	)			80
Gain on acquisition of businesses			28				—				—				—				—				28
Operating income (loss)			(105	)			196				156				113				(12	)			348
Other income and (deductions)
Interest expense			(96	)			(80	)			(28	)			(25	)			(114	)			(343	)
Other, net			101				4				2				4				(1	)			110
Total other income and (deductions)			5				(76	)			(26	)			(21	)			(115	)			(233	)
Income (loss) before income taxes			(100	)			120				130				92				(127	)			115
Income taxes			(83	)			47				32				37				(13	)			20
Net income (loss)			(17	)			73				98				55				(114	)			95
Net income attributable to noncontrolling interests and preference stock dividends			74				—				—				3				—				77
Net income (loss) attributable to common shareholders		$	(91	)		$	73			$	98			$	52			$	(114	)		$	18
		Three Months Ended December 31, 2013
		Generation				ComEd				PECO				BGE				Other (b)				Exelon Consolidated
Operating revenues		$	3,773			$	1,068			$	805			$	794			$	(265	)		$	6,175
Operating expenses
Purchased power and fuel			1,903				243				347				362				(262	)			2,593
Operating and maintenance			1,156				347				194				185				(3	)			1,879
Depreciation and amortization			214				168				58				95				12				547
Taxes other than income			98				74				38				51				9				270
Total operating expenses			3,371				832				637				693				(244	)			5,289
Equity in earnings of unconsolidated affiliates			3				—				—				—				—				3
Gain (loss) on sales of assets			—				—				—				—				—				—
Operating income (loss)			405				236				168				101				(21	)			889
Other income and (deductions)
Interest expense			(99	)			(76	)			(29	)			(28	)			(14	)			(246	)
Other, net			138				8				2				4				10				162
Total other income and (deductions)			39				(68	)			(27	)			(24	)			(4	)			(84	)
Income (loss) before income taxes			444				168				141				77				(25	)			805
Income taxes			179				59				39				27				7				311
Net income (loss)			265				109				102				50				(32	)			494
Net income (loss) attributable to noncontrolling interests and preference stock dividends			(4	)			—				—				3				—				(1	)
Net income (loss) attributable to common shareholders		$	269			$	109			$	102			$	47			$	(32	)		$	495

 

(a)	On April 1, 2014, Generation assumed operational control of Constellation Energy Nuclear Group’s (“CENG”) nuclear fleet. As a result, the 2014 financial results include CENG’s results of operations on a fully consolidated basis from April 1, 2014 through December 31, 2014.

(b)	Other primarily includes eliminating and consolidating adjustments, Exelon’s corporate operations, shared service entities and other financing and investment activities.

 

1

---

EXELON CORPORATION

Consolidating Statements of Operations

(unaudited)

(in millions)

 

		Twelve Months Ended December 31, 2014 (a)
		Generation				ComEd				PECO				BGE				Other (b)				Exelon Consolidated
Operating revenues		$	17,393			$	4,564			$	3,094			$	3,165			$	(787	)		$	27,429
Operating expenses
Purchased power and fuel			9,925				1,177				1,261				1,417				(777	)			13,003
Operating and maintenance			5,566				1,429				866				717				(10	)			8,568
Depreciation and amortization			967				687				236				371				53				2,314
Taxes other than income			465				293				159				221				16				1,154
Total operating expenses			16,923				3,586				2,522				2,726				(718	)			25,039
Equity in losses of unconsolidated affiliates			(20	)			—				—				—				—				(20	)
Gain on sales of assets			437				2				—				—				(2	)			437
Gain on consolidation and acquisition of businesses			289				—				—				—				—				289
Operating income (loss)			1,176				980				572				439				(71	)			3,096
Other income and (deductions)
Interest expense			(356	)			(321	)			(113	)			(106	)			(169	)			(1,065	)
Other, net			406				17				7				18				7				455
Total other income and (deductions)			50				(304	)			(106	)			(88	)			(162	)			(610	)
Income (loss) before income taxes			1,226				676				466				351				(233	)			2,486
Income taxes			207				268				114				140				(63	)			666
Net income (loss)			1,019				408				352				211				(170	)			1,820
Net income attributable to noncontrolling interests and preference stock dividends			184				—				—				13				—				197
Net income (loss) attributable to common shareholders		$	835			$	408			$	352			$	198			$	(170	)		$	1,623
		Twelve Months Ended December 31, 2013
		Generation				ComEd				PECO				BGE				Other (b)				Exelon Consolidated
Operating revenues		$	15,630			$	4,464			$	3,100			$	3,065			$	(1,371	)		$	24,888
Operating expenses
Purchased power and fuel			8,197				1,174				1,300				1,421				(1,368	)			10,724
Operating and maintenance			4,534				1,368				748				634				(14	)			7,270
Depreciation and amortization			856				669				228				348				52				2,153
Taxes other than income			389				299				158				213				36				1,095
Total operating expenses			13,976				3,510				2,434				2,616				(1,294	)			21,242
Equity in earnings of unconsolidated affiliates			10				—				—				—				—				10
Gain on sales of assets			13				—				—				—				—				13
Operating income (loss)			1,677				954				666				449				(77	)			3,669
Other income and (deductions)
Interest expense			(357	)			(579	)			(115	)			(122	)			(183	)			(1,356	)
Other, net			355				26				6				17				56				460
Total other income and (deductions)			(2	)			(553	)			(109	)			(105	)			(127	)			(896	)
Income (loss) before income taxes			1,675				401				557				344				(204	)			2,773
Income taxes			615				152				162				134				(19	)			1,044
Net income (loss)			1,060				249				395				210				(185	)			1,729
Net income (loss) attributable to noncontrolling interests, preferred security dividends and preference stock dividends			(10	)			—				7				13				—				10
Net income (loss) attributable to common shareholders		$	1,070			$	249			$	388			$	197			$	(185	)		$	1,719

 

(a)	On April 1, 2014, Generation assumed operational control of Constellation Energy Nuclear Group’s (“CENG”) nuclear fleet. As a result, the 2014 financial results include CENG’s results of operations on a fully consolidated basis from April 1, 2014 through December 31, 2014.

(b)	Other primarily includes eliminating and consolidating adjustments, Exelon’s corporate operations, shared service entities and other financing and investment activities.

 

2

---

EXELON CORPORATION

Business Segment Comparative Statements of Operations

(unaudited)

(in millions)

 

		Generation
		Three Months Ended December 31,												Twelve Months Ended December 31,
		2014 (a)				2013				Variance				2014 (a)				2013				Variance
Operating revenues		$	4,802			$	3,773			$	1,029			$	17,393			$	15,630			$	1,763
Operating expenses
Purchased power and fuel			2,853				1,903				950				9,925				8,197				1,728
Operating and maintenance			1,801				1,156				645				5,566				4,534				1,032
Depreciation and amortization			248				214				34				967				856				111
Taxes other than income			115				98				17				465				389				76
Total operating expenses			5,017				3,371				1,646				16,923				13,976				2,947
Equity in earnings (losses) of unconsolidated affiliates			—				3				(3	)			(20	)			10				(30	)
Gain on sales of assets			82				—				82				437				13				424
Gain on acquisitions of businesses			28				—				28				289				—				289
Operating income (loss)			(105	)			405				(510	)			1,176				1,677				(501	)
Other income and (deductions)
Interest expense			(96	)			(99	)			3				(356	)			(357	)			1
Other, net			101				138				(37	)			406				355				51
Total other income and (deductions)			5				39				(34	)			50				(2	)			52
Income (loss) before income taxes			(100	)			444				(544	)			1,226				1,675				(449	)
Income taxes			(83	)			179				(262	)			207				615				(408	)
Net income (loss)			(17	)			265				(282	)			1,019				1,060				(41	)
Net income (loss) attributable to noncontrolling interests			74				(4	)			78				184				(10	)			194
Net income attributable to membership interest		$	(91	)		$	269			$	(360	)		$	835			$	1,070			$	(235	)
		ComEd
		Three Months Ended December 31,												Twelve Months Ended December 31,
		2014				2013				Variance				2014				2013				Variance
Operating revenues		$	1,079			$	1,068			$	11			$	4,564			$	4,464			$	100
Operating expenses
Purchased power			262				243				19				1,177				1,174				3
Operating and maintenance			388				347				41				1,429				1,368				61
Depreciation and amortization			166				168				(2	)			687				669				18
Taxes other than income			67				74				(7	)			293				299				(6	)
Total operating expenses			883				832				51				3,586				3,510				76
Gain on sales of assets			—				—				—				2				—				2
Operating income			196				236				(40	)			980				954				26
Other income and (deductions)
Interest expense			(80	)			(76	)			(4	)			(321	)			(579	)			258
Other, net			4				8				(4	)			17				26				(9	)
Total other income and (deductions)			(76	)			(68	)			(8	)			(304	)			(553	)			249
Income before income taxes			120				168				(48	)			676				401				275
Income taxes			47				59				(12	)			268				152				116
Net income		$	73			$	109			$	(36	)		$	408			$	249			$	159

 

(a)	On April 1, 2014, Generation assumed operational control of Constellation Energy Nuclear Group’s (“CENG”) nuclear fleet. As a result, the 2014 financial results include CENG’s results of operations on a fully consolidated basis from April 1, 2014 through December 31, 2014.

 

3

---

EXELON CORPORATION

Business Segment Comparative Statements of Operations

(unaudited)

(in millions)

 

		PECO
		Three Months Ended December 31,												Twelve Months Ended December 31,
		2014				2013				Variance				2014				2013				Variance
Operating revenues		$	750			$	805			$	(55	)		$	3,094			$	3,100			$	(6	)
Operating expenses
Purchased power and fuel			301				347				(46	)			1,261				1,300				(39	)
Operating and maintenance			198				194				4				866				748				118
Depreciation and amortization			59				58				1				236				228				8
Taxes other than income			36				38				(2	)			159				158				1
Total operating expenses			594				637				(43	)			2,522				2,434				88
Operating income			156				168				(12	)			572				666				(94	)
Other income and (deductions)
Interest expense			(28	)			(29	)			1				(113	)			(115	)			2
Other, net			2				2				—				7				6				1
Total other income and (deductions)			(26	)			(27	)			1				(106	)			(109	)			3
Income before income taxes			130				141				(11	)			466				557				(91	)
Income taxes			32				39				(7	)			114				162				(48	)
Net income			98				102				(4	)			352				395				(43	)
Preferred security dividends and redemption			—				—				—				—				7				(7	)
Net income attributable to common shareholder		$	98			$	102			$	(4	)		$	352			$	388			$	(36	)
		BGE
		Three Months Ended December 31,												Twelve Months Ended December 31,
		2014				2013				Variance				2014				2013				Variance
Operating revenues		$	761			$	794			$	(33	)		$	3,165			$	3,065			$	100
Operating expenses
Purchased power and fuel			323				362				(39	)			1,417				1,421				(4	)
Operating and maintenance			176				185				(9	)			717				634				83
Depreciation and amortization			96				95				1				371				348				23
Taxes other than income			53				51				2				221				213				8
Total operating expenses			648				693				(45	)			2,726				2,616				110
Operating income			113				101				12				439				449				(10	)
Other income and (deductions)
Interest expense			(25	)			(28	)			3				(106	)			(122	)			16
Other, net			4				4				—				18				17				1
Total other income and (deductions)			(21	)			(24	)			3				(88	)			(105	)			17
Income before income taxes			92				77				15				351				344				7
Income taxes			37				27				10				140				134				6
Net income			55				50				5				211				210				1
Preference stock dividends			3				3				—				13				13				—
Net income attributable to common shareholders		$	52			$	47			$	5			$	198			$	197			$	1

 

4

---

EXELON CORPORATION

Business Segment Comparative Statements of Operations

(unaudited)

(in millions)

 

		Other (a)
		Three Months Ended December 31,												Twelve Months Ended December 31,
		2014				2013				Variance				2014				2013				Variance
Operating revenues		$	(137	)		$	(265	)		$	128			$	(787	)		$	(1,371	)		$	584
Operating expenses
Purchased power and fuel			(136	)			(262	)			126				(777	)			(1,368	)			591
Operating and maintenance			—				(3	)			3				(10	)			(14	)			4
Depreciation and amortization			13				12				1				53				52				1
Taxes other than income			(4	)			9				(13	)			16				36				(20	)
Total operating expenses			(127	)			(244	)			117				(718	)			(1,294	)			576
Gain on sales of assets			(2	)			—				(2	)			(2	)			—				(2	)
Operating loss			(12	)			(21	)			9				(71	)			(77	)			6
Other income and (deductions)
Interest expense			(114	)			(14	)			(100	)			(169	)			(183	)			14
Other, net			(1	)			10				(11	)			7				56				(49	)
Total other income and (deductions)			(115	)			(4	)			(111	)			(162	)			(127	)			(35	)
Loss before income taxes			(127	)			(25	)			(102	)			(233	)			(204	)			(29	)
Income taxes			(13	)			7				(20	)			(63	)			(19	)			(44	)
Net loss		$	(114	)		$	(32	)		$	(82	)		$	(170	)		$	(185	)		$	15

 

(a)	Other primarily includes eliminating and consolidating adjustments, Exelon’s corporate operations, shared service entities and other financing and investment activities.

 

5

---

EXELON CORPORATION

Consolidated Balance Sheets

(in millions)

 

		December 31, 2014				December 31, 2013
		(unaudited)
Assets
Current assets
Cash and cash equivalents		$	1,878			$	1,609
Restricted cash and investments			271				167
Accounts receivable, net
Customer			3,482				2,981
Other			1,227				1,175
Mark-to-market derivative assets			1,279				727
Unamortized energy contract assets			254				374
Inventories, net
Fossil fuel			579				276
Materials and supplies			1,024				829
Deferred income taxes			244				573
Regulatory assets			847				760
Assets held for sale			147				14
Other			865				652
Total current assets			12,097				10,137
Property, plant and equipment, net			52,087				47,330
Deferred debits and other assets
Regulatory assets			6,076				5,910
Nuclear decommissioning trust funds			10,537				8,071
Investments			544				1,187
Investment in CENG			—				1,925
Goodwill			2,672				2,625
Mark-to-market derivative assets			773				607
Unamortized energy contracts assets			549				710
Pledged assets for Zion Station decommissioning			319				458
Other			1,160				964
Total deferred debits and other assets			22,630				22,457
Total assets		$	86,814			$	79,924
Liabilities and shareholders’ equity
Current liabilities
Short-term borrowings		$	460			$	341
Long-term debt due within one year			1,802				1,509
Accounts payable			3,048				2,484
Accrued expenses			1,539				1,633
Payables to affiliates			8				116
Deferred income taxes			—				40
Regulatory liabilities			310				327
Mark-to-market derivative liabilities			234				159
Unamortized energy contract liabilities			238				261
Other			1,123				858
Total current liabilities			8,762				7,728
Long-term debt			19,362				17,623
Long-term debt to financing trusts			648				648
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits			13,019				12,905
Asset retirement obligations			7,295				5,194
Pension obligations			3,366				1,876
Non-pension postretirement benefit obligations			1,742				2,190
Spent nuclear fuel obligation			1,021				1,021
Regulatory liabilities			4,550				4,388
Mark-to-market derivative liabilities			403				300
Unamortized energy contract liabilities			211				266
Payable for Zion Station decommissioning			155				305
Other			2,147				2,540
Total deferred credits and other liabilities			33,909				30,985
Total liabilities			62,681				56,984
Commitments and contingencies
Shareholders’ equity
Common stock			16,709				16,741
Treasury stock, at cost			(2,327	)			(2,327	)
Retained earnings			10,910				10,358
Accumulated other comprehensive loss, net			(2,684	)			(2,040	)
Total shareholders’ equity			22,608				22,732
BGE preference stock not subject to mandatory redemption			193				193
Noncontrolling interest			1,332				15
Total equity			24,133				22,940
Total liabilities and shareholders’ equity		$	86,814			$	79,924

 

6

---

EXELON CORPORATION

Consolidated Statements of Cash Flows

(unaudited)

(in millions)

 

		Twelve Months Ended December 31,
		2014				2013
Cash flows from operating activities
Net income		$	1,820			$	1,729
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation, amortization, depletion and accretion, including nuclear fuel and energy contract amortization			3,868				3,779
Impairment of long-lived assets			687				171
Gain on consolidation and acquisition of businesses			(296	)			—
(Gain) loss on sales of assets			(437	)			(13	)
Deferred income taxes and amortization of investment tax credits			502				119
Net fair value changes related to derivatives			716				(445	)
Net realized and unrealized gains on nuclear decommissioning trust fund investments			(210	)			(170	)
Other non-cash operating activities			1,054				718
Changes in assets and liabilities:
Accounts receivable			(318	)			(97	)
Inventories			(380	)			(100	)
Accounts payable, accrued expenses and other current liabilities			209				(90	)
Option premiums received (paid), net			38				(36	)
Counterparty collateral (posted) received, net			(1,478	)			215
Income taxes			(143	)			883
Pension and non-pension postretirement benefit contributions			(617	)			(422	)
Other assets and liabilities			(558	)			102
Net cash flows provided by operating activities			4,457				6,343
Cash flows from investing activities
Capital expenditures			(6,077	)			(5,395	)
Proceeds from termination of direct financing lease investment			335				—
Proceeds from nuclear decommissioning trust fund sales			7,396				4,217
Investment in nuclear decommissioning trust funds			(7,551	)			(4,450	)
Cash and restricted cash acquired from acquisitions and consolidations			140				—
Acquisition of businesses			(386	)			—
Proceeds from sale of long-lived assets			1,719				32
Proceeds from sale of investments			7				22
Purchases of investments			(3	)			(4	)
Change in restricted cash			(104	)			(43	)
Distribution from CENG			13				115
Other investing activities			(88	)			112
Net cash flows used in investing activities			(4,599	)			(5,394	)
Cash flows from financing activities
Payment of accounts receivable agreement			—				(210	)
Changes in short-term borrowings			122				332
Issuance of long-term debt			3,463				2,055
Retirement of long-term debt			(1,545	)			(1,589	)
Redemption of preferred securities			—				(93	)
Distributions to non-controlling interest of consolidated VIE			(421	)			—
Dividends paid on common stock			(1,065	)			(1,249	)
Proceeds from employee stock plans			35				47
Other financing activities			(178	)			(119	)
Net cash flows provided by (used in) financing activities			411				(826	)
Increase in cash and cash equivalents			269				123
Cash and cash equivalents at beginning of period			1,609				1,486
Cash and cash equivalents at end of period		$	1,878			$	1,609

 

7

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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 December 31, 2014																Three Months Ended December 31, 2013
		GAAP (a)				Adjustments								Adjusted Non-GAAP				GAAP (a)				Adjustments								Adjusted Non-GAAP
Operating revenues		$	7,255			$	(311	)			(b	),(c)		$	6,944			$	6,175			$	79				(b	),(c)		$	6,254
Operating expenses
Purchased power and fuel			3,603				(471	)			(b	),(c)			3,132				2,593				208				(b	),(c)			2,801
																											(d	),(e),(f),
Operating and maintenance			2,563				(557	)			(d	),(e),(f)			2,006				1,879				(47	)			(l	),(m)			1,832
Depreciation and amortization			582				—								582				547				(2	)			(f	)			545
Taxes other than income			267				—								267				270				—								270
Total operating expenses			7,015				(1,028	)							5,987				5,289				159								5,448
Equity in losses of unconsolidated affiliates			—				—								—				3				30				(c	),(d)			33
Gain (loss) on sales of assets			80				(83	)			(f	)			(3	)			—				—								—
Gain on acquisition of businesses			28				(28	)			(g	)			—				—				—								—
Operating income			348				606								954				889				(50	)							839
Other income and (deductions)
Interest expense			(343	)			102				(d	)			(241	)			(246	)			—								(246	)
Other, net			110				(41	)			(h	),(i)			69				162				(118	)			(i	)			44
Total other income and (deductions)			(233	)			61								(172	)			(84	)			(118	)							(202	)
Income before income taxes			115				667								782				805				(168	)							637
											(b	),(c),(d),															(b	),(c),(d),
											(e	),(f),(h),															(e	),(f),(i),
Income taxes			20				291				(i	),(j)			311				311				(104	)			(j	),(l),(m)			207
Net income			95				376								471				494				(64	)							430
Net income attributable to noncontrolling interests and preference stock dividends			77				(27	)			(k	)			50				(1	)			4				(k	)			3
Net income attributable to common shareholders		$	18			$	403							$	421			$	495			$	(68	)						$	427
Effective tax rate			17.4	%											39.8	%			38.6	%											32.5	%
Earnings per average common share
Basic		$	0.02			$	0.47							$	0.49			$	0.58			$	(0.08	)						$	0.50
Diluted		$	0.02			$	0.46							$	0.48			$	0.58			$	(0.08	)						$	0.50
Average common shares outstanding
Basic			861												861				857												857
Diluted			868												868				861												861
Effect of adjustments on earnings per average diluted common share recorded in accordance with GAAP:
Mark-to-market impact of economic hedging activities (b)						$	0.08															$	(0.16	)
Amortization of commodity contract intangibles (c)							0.03																0.09
Merger and integration costs (d)							0.09																0.02
Long-lived asset impairment (e)							0.39																—
Plant retirements and divestitures (f)							(0.06	)															—
Bargain-purchase gain (g)							(0.03	)															—
Tax settlements (h)							(0.01	)															—
Unrealized gains related to NDT fund investments (i)							(0.03	)															(0.05	)
Reassessment of state deferred income taxes (j)							(0.03	)															—
Non-controlling interest (k)							0.03																—
Asset retirement obligation (l)							—																—
Midwest Generation bankruptcy charges (m)							—																0.02
Total adjustments						$	0.46															$	(0.08	)

Note: On April 1, 2014, Generation assumed operational control of Constellation Energy Nuclear Group’s (“CENG”) nuclear fleet. As a result, the 2014 financial results include CENG’s results of operations on a fully consolidated basis from April 1, 2014 through December 31, 2014.

 

(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 2012 Constellation merger date and the 2014 CENG integration date.

(d)

Adjustment to exclude certain costs associated with mergers and acquisitions, including professional fees, employee-related expenses, integration activities, upfront credit facilities, merger commitments, and certain pre-acquisition contingencies, if and when applicable, related to the Constellation merger in 2013 and the Constellation merger, CENG integration, acquisition of Integrys Energy Services, Inc. (“Integrys”) and pending Pepco Holdings Inc. (“PHI”) acquisition in 2014.

(e)	Adjustment to exclude a 2014 charge to earnings primarily related to the impairment of assets held for sale and certain upstream assets.

(f)	Adjustment to exclude the impacts associated with the sales of Generation’s ownership interests in Fore River and West Valley Generating Stations in 2014, and sale or retirement of generating stations in 2013.

(g)	Adjustment to exclude difference between the fair value of assets and liabilities acquired and the purchase price of the Integrys acquisition.

(h)	Adjustment to reflect a benefit related to favorable settlements in 2014 of certain income tax positions on Constellation’s pre-acquisition 2009-2012 tax returns.

(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 to exclude the non-cash impact of the reassessment of state deferred income taxes, primarily as a result of changes in forecasted apportionment.

(k)	Adjustments to account for the CENG interest not owned by Generation, where applicable.

(l)	Adjustment to exclude the 2014 increase in Generation’s asset retirement obligation, primarily for asbestos at retired fossil power plants.

(m)	Adjustment to reflect estimated liabilities pursuant to the Midwest Generation bankruptcy.

 

8

---

EXELON CORPORATION

Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations

(unaudited)

(in millions, except per share data)

 

		Twelve Months Ended December 31, 2014																Twelve Months Ended December 31, 2013
		GAAP (a)				Adjustments								Adjusted Non-GAAP				GAAP (a)				Adjustments								Adjusted Non-GAAP
Operating revenues		$	27,429			$	460				(b	),(c),(d)		$	27,889			$	24,888			$	541				(b	),(c)		$	25,429
Operating expenses
Purchased power and fuel			13,003				(251	)			(b	),(c)			12,752				10,724				563				(b	),(c)			11,287
Operating and maintenance			8,568				(809	)			(d	),(e),(f),(g)			7,759				7,270				(312	)			(d	),(e),(f),(g),(n)			6,958
Depreciation and amortization			2,314				—								2,314				2,153				(5	)			(d	),(g)			2,148
Taxes other than income			1,154				—								1,154				1,095				—								1,095
Total operating expenses			25,039				(1,060	)							23,979				21,242				246								21,488
Equity in earnings (loss) of unconsolidated affiliates			(20	)			12				(b	),(c)			(8	)			10				92				(c	),(d)			102
Gain on sales of assets			437				(411	)			(g	)			26				13				(9	)			(g	)			4
Gain on consolidation and acquisition of businesses			289				(289	)			(h	),(i)			—				—				—								—
Operating income			3,096				832								3,928				3,669				378								4,047
Other income and (deductions)
Interest expense			(1,065	)			134				(b	),(d)			(931	)			(1,356	)			370				(d	),(e),(o),(p)			(986	)
Other, net			455				(193	)			(j	),(k)			262				460				(226	)			(d	),(j),(o)			234
Total other income and (deductions)			(610	)			(59	)							(669	)			(896	)			144								(752	)
Income before income taxes			2,486				773								3,259				2,773				522								3,295
																											(b	),(c),(d),
											(b	),(c),(d),															(e	),(f),(g),
											(e	),(f),(g),															(j	),(l),(n),
Income taxes			666				391				(h	),(j),(k),(l)			1,057				1,044				88				(o	),(p)			1,132
Net income			1,820				382								2,202				1,729				434								2,163
Net income attributable to noncontrolling interests, preferred security dividends and redemption and preference stock dividends			197				(63	)			(m	)			134				10				4				(m	)			14
Net income attributable to common shareholders		$	1,623			$	445							$	2,068			$	1,719			$	430							$	2,149
Effective tax rate			26.8	%											32.4	%			37.6	%											34.4	%
Earnings per average common share
Basic		$	1.89			$	0.51							$	2.40			$	2.01			$	0.50							$	2.51
Diluted		$	1.88			$	0.51							$	2.39			$	2.00			$	0.50							$	2.50
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)							0.42												(0.35	)
Amortization of commodity contract intangibles (c)							0.07												0.41
Merger and integration costs (d)							0.21												0.08
Long-lived asset impairment (e)							0.50												0.14
Asset retirement obligation (f)							(0.02	)											0.01
Plant retirements and divestitures (g)							(0.28	)											(0.02	)
Gain on CENG integration (h)							(0.18	)											—
Bargain-purchase gain (i)							(0.03	)											—
Unrealized gains related to NDT fund investments (j)							(0.10	)											(0.09	)
Tax settlement (k)							(0.12	)											—
Reassessment of state deferred income taxes (l)							(0.03	)											—
Non-controlling interest (m)							0.07												—
Midwest Generation bankruptcy charges (n)							—												0.02
Amortization of the fair value of certain debt (o)							—												(0.01	)
Remeasurement of like-kind exchange tax position (p)							—												0.31
Total adjustments						$	0.51											$	0.50

Note: On April 1, 2014, Generation assumed operational control of Constellation Energy Nuclear Group’s (“CENG”) nuclear fleet. As a result, the 2014 financial results include CENG’s results of operations on a fully consolidated basis from April 1, 2014 through December 31, 2014.

 

(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 at the 2012 Constellation merger date and the 2014 CENG integration date.

(d)

Adjustment to exclude certain costs associated with mergers and acquisitions, including professional fees, employee-related expenses, integration activities, upfront credit facilities, merger commitments, and certain pre-acquisition contingencies, if and when applicable to the Constellation merger in 2013 and the Constellation merger, CENG integration, acquisition of Integrys and pending PHI acquisition in 2014.

(e)

Adjustment to exclude a 2014 charge to earnings primarily related to the impairment of wind generating assets, generating assets held for sale, and certain upstream assets, and a 2013 charge to earnings primarily related to the cancellation of previously capitalized nuclear uprate projects and impairment of certain wind generating assets.

(f)	Adjustment to exclude the 2014 decrease in Generation’s nuclear decommissioning obligation and the 2013 increase in asset retirement obligation for asbestos at retired fossil power plants.

(g)	Adjustment to exclude the impacts associated with the sales of Generation’s ownership interests in Safe Harbor Water Power Corporation and the Fore River and West Valley generating stations in 2014, and the sale or retirement of generating stations in 2013.

(h)	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.

(i)	Adjustment to exclude difference between the fair value of assets and liabilities acquired and the purchase price of the Integrys acquisition.

(j)	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.

(k)	Adjustment to reflect a benefit related to favorable settlements in 2014 of certain income tax positions on Constellation’s pre-acquisition 2009-2012 tax returns.

(l)	Adjustment to exclude the non-cash impact of the reassessment of state deferred income taxes, primarily as a result of changes in forecasted apportionment.

(m)	Adjustment to account for the CENG interest not owned by Generation, where applicable.

(n)	Adjustment to reflect estimated liabilities pursuant to the Midwest Generation bankruptcy.

(o)	Adjustment 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.

(p)	Adjustment to exclude a non-cash charge to earnings resulting from the first quarter 2013 remeasurement of a like-kind exchange tax position taken on ComEd’s 1999 sale of fossil generating assets.

 

9

---

EXELON CORPORATION

Reconciliation of Adjusted (non-GAAP) Operating

Earnings to GAAP Earnings (in millions)

Three Months Ended December 31, 2014 and 2013

(unaudited)

 

		Exelon Earnings per Diluted Share				Generation				ComEd				PECO				BGE								Other (a)				Exelon
2013 GAAP Earnings (Loss)		$	0.58			$	269			$	109			$	102			$	47							$	(32	)		$	495
2013 Adjusted (non-GAAP) Operating Earnings (Loss) Adjustments:
Mark-to-Market Impact of Economic Hedging Activities			(0.16	)			(143	)			—				—				—								—				(143	)
Unrealized Gains Related to NDT Fund Investments (1)			(0.05	)			(40	)			—				—				—								—				(40	)
Plant Retirements and Divestitures (2)			—				(1	)			—				—				—								—				(1	)
Merger and Integration Costs (3)			0.02				19				—				1				1								—				21
Reassessment of State Deferred Income Taxes (4)			—				(12	)			—				—				—								16				4
Amortization of Commodity Contract Intangibles (5)			0.09				75				—				—				—								—				75
Asset Retirement Obligation (6)			—				1				—				—				—								—				1
Midwest Generation Bankruptcy Charges (7)			0.02				16				—				—				—								—				16
Long-Lived Asset Impairment (8)			—				(1	)			—				—				—								—				(1	)
2013 Adjusted (non-GAAP) Operating Earnings (Loss)			0.50				183				109				103				48								(16	)			427
Year Over Year Effects on Earnings:
Generation Energy Margins, Excluding Mark-to-Market:
Nuclear Volume (12)			0.21				184				—				—				—								—				184
Nuclear Fuel Cost (13)			(0.01	)			(11	)			—				—				—								—				(11	)
Capacity Pricing (14)			0.03				27				—				—				—								—				27
Market and Portfolio Conditions (15)			0.03				27				—				—				—								—				27
ComEd, PECO and BGE Margins:
Weather			(0.01	)			—				(3	)			(6	)			—				(b	)			—				(9	)
Load			(0.01	)			—				(4	)			(2	)			—				(b	)			—				(6	)
Other Energy Delivery (16)			0.01				—				2				4				4								1				11
Operating and Maintenance Expense:
Labor, Contracting and Materials (17)			(0.08	)			(57	)			(15	)			(3	)			5								—				(70	)
Planned Nuclear Refueling Outages (18)			0.02				20				—				—				—								—				20
Pension and Non-Pension Postretirement Benefits (19)			0.04				16				15				1				(1	)							3				34
Other Operating and Maintenance (20)			(0.11	)			(69	)			(26	)			(1	)			1								(1	)			(96	)
Depreciation and Amortization Expense (21)			(0.03	)			(23	)			1				(1	)			(1	)							—				(24	)
Equity in Earnings of Unconsolidated Affiliates (22)			(0.02	)			(21	)			—				—				—								—				(21	)
Income Taxes (23)			(0.08	)			(37	)			(3	)			2				(4	)							(26	)			(68	)
Interest Expense, Net			—				3				(3	)			1				2								(1	)			2
CENG Non-Controlling Interest (24)			(0.03	)			(29	)			—				—				—								—				(29	)
Other (25)			0.02				18				2				1				(1	)							3				23
2014 Adjusted (non-GAAP) Operating Earnings (Loss)			0.48				231				75				99				53								(37	)			421
2014 Adjusted (non-GAAP) Operating Earnings (Loss) Adjustments:
Mark-to-Market Impact of Economic Hedging Activities			(0.08	)			(71	)			—				—				—								1				(70	)
Unrealized Gains Related to NDT Fund Investments (1)			0.03				24				—				—				—								—				24
Plant Retirements and Divestitures (2)			0.06				48				—				—				—								—				48
Merger and Integration Costs (3)			(0.09	)			(9	)			(2	)			(1	)			(1	)							(67	)			(80	)
Reassessment of State Deferred Income Taxes (4)			0.03				39				—				—												(12	)			27
Amortization of Commodity Contract Intangibles (5)			(0.03	)			(22	)			—				—				—								—				(22	)
Long-Lived Asset Impairment (8)			(0.39	)			(338	)			—				—				—								1				(337	)
Bargain-Purchase Gain (9)			0.03				28				—				—				—								—				28
Tax Settlements (10)			0.01				5				—				—				—								—				5
CENG Non-Controlling Interest (11)			(0.03	)			(26	)			—				—				—								—				(26	)
2014 GAAP Earnings (Loss)		$	0.02			$	(91	)		$	73			$	98			$	52							$	(114	)		$	18

Notes:

 

•

Beginning on April 1, 2014, each line item above includes 100% of CENG’s results of operations. Prior to April 1, 2014, CENG’s net results were included in equity in earnings of unconsolidated affiliates. Therefore, the results of operations from 2014 and 2013 for each line item above are not comparable for Generation and Exelon. The explanations below identify any other significant or unusual items affecting the results of operations.

 

(a)	Other primarily includes eliminating and consolidating adjustments, Exelon’s corporate operations, shared service entities and other financing and investment activities.

(b)	As approved by the Maryland PSC, BGE records a monthly adjustment to rates for residential and the majority of its commercial and industrial customers to eliminate the effect of abnormal weather and usage patterns per customer on distribution volumes.

(1)	Reflects the impact of unrealized gains on NDT fund investments to the extent not offset by contractual accounting as described in the notes to the consolidated financial statements.

(2)	Reflects the gains associated with the sales of Generation’s ownership interests in Fore River and West Valley Generating Stations.

(3)

Reflects certain costs associated with mergers and acquisitions, including professional fees, employee-related expenses, integration activities, upfront credit facilities, merger commitments, and certain pre-acquisition contingencies, if and when applicable, related to the Constellation merger in 2013 and the Constellation merger, CENG integration, acquisition of Integrys and pending PHI acquisition in 2014.

(4)	Reflects the non-cash impacts of the reassessment of state deferred income taxes, primarily as a result of changes in forecasted apportionment.

(5)	Represents the non-cash amortization of intangible assets, net, related to commodity contracts recorded at fair value at the 2012 Constellation merger date and the 2014 CENG integration date.

(6)	Reflects an increase in Generation’s asset retirement obligation primarily for asbestos at retired fossil power plants.

(7)	Reflects estimated liabilities pursuant to the Midwest Generation bankruptcy.

(8)	In 2014, reflects charges to earnings related to the impairments of certain generating assets which were held for sale and certain upstream assets.

(9)	Represents the excess of the fair value of assets and liabilities acquired over the purchase price related to the Integrys acquisition.

(10)	Reflects a benefit related to the favorable settlement in 2014 of certain income tax positions on Constellation’s 2009-2012 tax returns.

(11)

Represents Generation’s non-controlling interest related to CENG exclusion items, including the non-cash amortization of commodity contracts recorded at fair value during the integration date, costs incurred associated with the integration, and the impact of unrealized gains and losses on NDT fund investments.

(12)	Primarily reflects the inclusion of CENG’s results for the fourth quarter of 2014.

(13)	Primarily reflects the inclusion of CENG’s results for the fourth quarter of 2014, partially offset by the cancellation of the DOE spent nuclear fuel disposal fee.

(14)	Primarily reflects the inclusion of CENG’s capacity credits within the New York and PJM markets, with increased capacity prices for the Midwest market, mostly offset by a decrease in capacity prices for the Mid-Atlantic market.

(15)

Primarily reflects the impact of favorable portfolio management optimization activities in the Mid-Atlantic, New England, and South regions as well as the Integrys acquisition, partially offset by lower realized energy prices related to Exelon’s ratable hedging strategy and loss on gas inventory from lower of cost or market adjustments.

(16)

For ComEd primarily reflects higher transmission revenue due to increased capital investment, as well as increased cost recovery associated with energy efficiency programs and uncollectible accounts expense (both offset below in operating and maintenance expense), primarily offset by lower distribution formula rate revenue due to the impacts of bonus depreciation and decreased pension and non-pension postretirement expense (offset below). For PECO, primarily reflects increased recovery from regulatory programs (offset below primarily in operating and maintenance expense and depreciation and amortization expense). For BGE, reflects increased distribution revenue pursuant to electric and natural gas distribution rate case orders issued by the Maryland PSC in December 2013 and 2014.

(17)

Primarily reflects the inclusion of CENG’s results for the fourth quarter of 2014 at Generation, increased contracting costs related to EIMA and other preventative and corrective maintenance projects at ComEd, decreased contracting costs on maintenance related activities at BGE, and inflation across all companies.

(18)	Primarily reflects the impact of decreased operating and maintenance costs associated with nuclear refueling outages in 2014, excluding Salem.

(19)	Primarily reflects cost savings from plan design changes for certain OPEB plans and the favorable impact of higher actuarially assumed pension and OPEB discount rates for 2014, partially offset by the inclusion of CENG’s results for the fourth quarter of 2014 at Generation.

(20)

At Generation, primarily relates to the inclusion of CENG’s results for the fourth quarter of 2014 and an increase in nuclear refueling outage days at the Salem plant. At ComEd, primarily relates to increased spend on energy efficiency programs and increased uncollectible accounts expense (both offset above in other energy delivery).

(21)	Primarily reflects the inclusion of CENG’s results for the fourth quarter of 2014 at Generation.

(22)

Reflects the favorable fourth quarter 2013 non-cash amortization of the fair value basis difference recorded at the Constellation merger date, partially offset by equity in losses in CENG in 2013. CENG’s operating results are fully consolidated in 2014 and, as a result, are not reflected as equity method earnings in 2014.

(23)	At Generation, primarily reflects the unfavorable 2014 bonus depreciation extension impact on the domestic production activities deduction and a reduction in investment tax credit benefits.

(24)	Reflects Generation’s non-controlling interest related to the net impact of CENG’s operating revenues and expenses.

(25)	At Generation, primarily reflects the inclusion of CENG for the fourth quarter of 2014 and higher realized NDT fund gains.

 

10

---

EXELON CORPORATION

Reconciliation of Adjusted (non-GAAP) Operating

Earnings to GAAP Earnings (in millions)

Twelve Months Ended December 31, 2014 and 2013

(unaudited)

 

		Exelon Earnings per Diluted Share				Generation				ComEd				PECO				BGE								Other (a)				Exelon
2013 GAAP Earnings (Loss)		$	2.00			$	1,070			$	249			$	388			$	197							$	(185	)		$	1,719
2013 Adjusted (non-GAAP) Operating Earnings (Loss) Adjustments:
Mark-to-Market Impact of Economic Hedging Activities			(0.35	)			(309	)			—				—				—								(1	)			(310	)
Unrealized Gains Related to NDT Fund Investments (1)			(0.09	)			(78	)			—				—				—								—				(78	)
Plant Retirements and Divestitures (2)			(0.02	)			(13	)			—				—				—								—				(13	)
Asset Retirement Obligation (3)			0.01				7				—				—				—								—				7
Merger and Integration Costs (4)			0.08				80				2				5				(2	)							2				87
Amortization of Commodity Contract Intangibles (5)			0.41				347				—				—				—								—				347
Amortization of the Fair Value of Certain Debt (6)			(0.01	)			(7	)			—				—				—								—				(7	)
Reassessment of State Deferred Income Taxes (7)			—				(12	)			—				—				—								16				4
Midwest Generation Bankruptcy Charges (8)			0.02				16				—				—				—								—				16
Remeasurement of Like-Kind Exchange Tax Position (9)			0.31				—				170				—				—								97				267
Long-Lived Asset Impairment (10)			0.14				101				—				—				—								9				110
2013 Adjusted (non-GAAP) Operating Earnings (Loss)			2.50				1,202				421				393				195								(62	)			2,149
Year Over Year Effects on Earnings:
Generation Energy Margins, Excluding Mark-to-Market:
Nuclear Volume (15)			0.58				505				—				—				—								—				505
Nuclear Fuel Costs (16)			(0.05	)			(42	)			—				—				—								—				(42	)
Capacity Pricing (17)			0.24				209				—				—				—								—				209
Market and Portfolio Conditions (18)			(0.24	)			(204	)			—				—				—								—				(204	)
ComEd, PECO and BGE Margins:
Weather			(0.01	)			—				(10	)			(1	)			—				(b	)			—				(11	)
Load			—				—				—				4				—				(b	)			—				4
Other Energy Delivery (19)			0.17				—				68				16				62								(1	)			145
Operating and Maintenance Expense:
Labor, Contracting and Materials (20)			(0.32	)			(221	)			(34	)			(7	)			(13	)							—				(275	)
Planned Nuclear Refueling Outages (21)			(0.03	)			(23	)			—				—				—								—				(23	)
Pension and Non-Pension Postretirement Benefits (22)			0.13				50				51				3				(5	)							9				108
Other Operating and Maintenance (23)			(0.35	)			(152	)			(56	)			(71	)			(33	)							7				(305	)
Depreciation and Amortization Expense (24)			(0.12	)			(71	)			(11	)			(5	)			(14	)							(1	)			(102	)
Equity in Earnings of Unconsolidated Affiliates (25)			(0.08	)			(68	)			—				—				—								—				(68	)
Income Taxes (26)			0.02				17				—				14				2								(19	)			14
Interest Expense, Net (27)			0.03				18				(18	)			1				8								15				24
CENG Non-Controlling Interest (28)			(0.09	)			(79	)			—				—				—								—				(79	)
Other (29)			0.02				14				(1	)			6				(3	)							3				19
Share Differential			(0.01	)			—				—				—				—								—				—
2014 Adjusted (non-GAAP) Operating Earnings (Loss)			2.39				1,155				410				353				199								(49	)			2,068
2014 Adjusted (non-GAAP) Operating Earnings (Loss) Adjustments:
Mark-to-Market Impact of Economic Hedging Activities			(0.42	)			(365	)			—				—				—								2				(363	)
Unrealized Gains Related to NDT Fund Investments (1)			0.10				86				—				—				—								—				86
Plant Retirements and Divestitures (2)			0.28				246				—				—				—								(1	)			245
Asset Retirement Obligation (3)			0.02				13				—				—				—								—				13
Merger and Integration Costs (4)			(0.21	)			(85	)			(2	)			(1	)			(1	)							(96	)			(185	)
Amortization of Commodity Contract Intangibles (5)			(0.07	)			(64	)			—				—				—								—				(64	)
Reassessment of State Deferred Income Taxes (7)			0.03				39				—				—				—								(12	)			27
Long-Lived Asset Impairment (10)			(0.50	)			(421	)			—				—				—								(14	)			(435	)
Bargain-Purchase Gain (11)			0.03				28				—				—				—								—				28
Gain on CENG Integration (12)			0.18				159				—				—				—								—				159
Tax Settlements (13)			0.12				106				—				—				—								—				106
CENG Non-Controlling Interest (14)			(0.07	)			(62	)			—				—				—								—				(62	)
2014 GAAP Earnings (Loss)		$	1.88			$	835			$	408			$	352			$	198							$	(170	)		$	1,623

Notes:

 

•

Beginning on April 1, 2014, each line item above includes 100% of CENG’s results of operations. Prior to April 1, 2014, CENG’s net results were included in equity in earnings of unconsolidated affiliates. Therefore, the results of operations from 2014 and 2013 for each line item above are not comparable for Generation and Exelon. The explanations below identify any other significant or unusual items affecting the results of operations.

 

(a)	Other primarily includes eliminating and consolidating adjustments, Exelon’s corporate operations, shared service entities and other financing and investment activities.

(b)	As approved by the Maryland PSC, BGE records a monthly adjustment to rates for residential and the majority of its commercial and industrial customers to eliminate the effect of abnormal weather and usage patterns per customer on distribution volumes.

(1)	Reflects the impact of unrealized gains on NDT fund investments to the extent not offset by contractual accounting as described in the notes to the consolidated financial statements.

(2)	Primarily reflects the gains associated with the sales of Generation’s ownership interests in generating stations, including in 2014, the gains associated with the sales of the Fore River and West Valley generating stations and Generation’s equity interest in Safe Harbor.

(3)	In 2013, primarily reflects an increase in Generation’s asset retirement obligation for asbestos at retired fossil power plants. In 2014, primarily reflects a decrease in Generation’s nuclear decommissioning obligation.

(4)

Reflects certain costs associated with mergers and acquisitions, including professional fees, employee-related expenses, integration activities, upfront credit facilities, merger commitments, and certain pre-acquisition contingencies, if and when applicable to the Constellation merger in 2013 and the Constellation merger, CENG integration, acquisition of Integrys and pending PHI acquisition in 2014.

(5)	Represents the non-cash amortization of intangible assets, net, related to commodity contracts recorded at fair value at the 2012 Constellation merger date and the 2014 CENG integration date.

(6)	Represents the non-cash amortization of certain debt recorded at fair value at the Constellation merger date, which was retired in the second quarter of 2013.

(7)	Reflects the non-cash impacts of the remeasurement of state deferred income taxes, primarily as a result of changes in forecasted apportionment.

(8)	Reflects estimated liabilities pursuant to the Midwest Generation bankruptcy.

(9)	Represents a non-cash charge to earnings resulting from the first quarter 2013 remeasurement of a like-kind exchange tax position taken on ComEd’s 1999 sale of fossil generating assets.

(10)

In 2013, represents a charge to earnings primarily related to the cancellation of previously capitalized nuclear uprate projects and the impairment of wind generating assets. In 2014, reflects charges to earnings related to the impairment of generating assets which were held for sale, certain upstream assets, and wind generating assets.

(11)	Represents the excess of the fair value of assets and liabilities acquired and the purchase price related to the Integrys acquisition.

(12)

Represents the gain recorded upon consolidation of CENG resulting from the difference in the fair value of CENG’s net assets as of April 1, 2014, and the equity method investment previously recorded on Generation’s and Exelon’s books and the settlement of pre-existing transactions between Generation and CENG.

(13)	Reflects a benefit related to the favorable settlement in 2014 of certain income tax positions on Constellation’s 2009-2012 tax returns.

(14)

Represents Generation’s non-controlling interest related to CENG exclusion items, including the non-cash amortization of commodity contracts recorded at fair value during the integration date, costs incurred associated with the integration, and the impact of unrealized gains and losses on NDT fund investments.

(15)	Primarily reflects the inclusion of CENG’s results beginning April 1, 2014, partially offset by increased nuclear outage days in 2014.

(16)	Primarily reflects the inclusion of CENG’s results beginning April 1, 2014, partially offset by the cancellation of the DOE spent nuclear fuel disposal fee.

(17)	Primarily reflects the impact of increased capacity prices related to the Reliability Pricing Model (RPM) for the PJM Interconnection, LLC (PJM) market in addition to the inclusion of CENG’s capacity credits within the New York and PJM markets beginning April 1, 2014.

(18)

Primarily reflects the unfavorable impacts related to the extreme cold weather in the first quarter of 2014 due to higher procurement costs for replacement power, lower realized energy prices related to Exelon’s ratable hedging strategy, and loss on gas inventory from lower of cost or market adjustments, partially offset within the New England and South regions as a result of favorable portfolio management optimization activities.

(19)

For ComEd, primarily reflects higher transmission revenue, as well as increased cost recovery associated with energy efficiency programs and uncollectible accounts expense (both offset below in other operating and maintenance expense), with lower distribution formula rate revenue due to decreased pension and non-pension postretirement expense (offset below), partially offset by increased capital investment. For PECO, primarily reflects increased recovery from regulatory programs (offset below primarily in operating and maintenance expense and depreciation and amortization expense). For BGE, primarily reflects increased distribution revenue pursuant to increased rates effective in both December of 2013 and 2014, increased cost recovery for energy efficiency and demand response programs (offset below primarily in depreciation and amortization expense), and increased transmission revenue pursuant to increased rates effective June 2014.

(20)

Primarily reflects the inclusion of CENG’s results beginning April 1, 2014 at Generation, increased contracting costs associated with EIMA Smart Meter Project assistance at ComEd, increased maintenance activities at BGE, and inflation across all operating companies, partially offset at Generation by merger synergies realized in 2014.

(21)	Primarily reflects of the inclusion of CENG’s results beginning April 1, 2014, partially offset by the impact of decreased nuclear refueling outage days in 2014, excluding Salem.

(22)	Primarily reflects cost savings from plan design changes for certain OPEB plans and the favorable impact of higher actuarially assumed pension and OPEB discount rates for 2014, partially offset by the inclusion of CENG’s results beginning April 1, 2014.

(23)

For Generation, primarily reflects the inclusion of CENG’s results beginning April 1, 2014, an increase in the reserve for future asbestos-related bodily injury claims, an increase in nuclear decommissioning obligation expense, and increased nuclear refueling outage days at the Salem plant in 2014. For ComEd, primarily relates to increased spend on energy efficiency programs and increased uncollectible accounts expense (both offset above in other energy and delivery revenue). For PECO, primarily reflects increased storm costs, including the February 5, 2014 ice storm and July storms, as well as, increased spend on regulatory programs (offset above in other energy delivery). For BGE, primarily reflects increased storm costs and an increase in uncollectible accounts expense.

(24)

Primarily reflects the inclusion of CENG’s results beginning April 1, 2014 and increased depreciation expense across the operating companies for ongoing capital expenditures. Also, reflects increased amortization of regulatory assets associated with higher MGP remediation expenditures at ComEd, regulatory programs at PECO (offset above in other energy delivery), and energy efficiency and demand response programs at BGE (primarily offset in other energy delivery).

(25)

Reflects the favorable 2013 non-cash amortization of the fair value basis difference recorded at the Constellation merger date, partially offset by equity in losses in CENG in 2013. CENG’s operating results were fully consolidated as of April 1, 2014 and, as a result, are not reflected as equity method earnings from April 1, 2014 to December 31, 2014.

(26)	At Generation, primarily reflects an increase in domestic production activities deduction, partially offset by a reduction in investment tax credit benefits. At PECO, primarily reflects an increase in electric tax repairs deduction.

(27)

For Generation, primarily reflects a benefit recorded in 2014 related to the favorable settlement of certain income tax positions on Constellation’s 2009-2012 tax returns and an increase in interest income reflecting the inclusion of CENG’s results of operations beginning April 1, 2014. For ComEd, primarily reflects a favorable adjustment recorded in the first quarter of 2013 related to the 1999-2001 IRS settlement. For BGE, primarily reflects the impact of favorable interest rates in 2014. For Corporate, includes the impacts of a 2013 unfavorable franchise tax case settlement.

(28)	Reflects Generation’s non-controlling interest related to the net impact of CENG’s operating revenue and expenses.

(29)	For Generation, primarily reflects higher realized NDT fund gains, offset by the inclusion of CENG’s results beginning April 1, 2014 and losses on foreign currency exchanges.

 

11

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EXELON CORPORATION

Reconciliation of Adjusted (non-GAAP) Operating Earnings to

GAAP Consolidated Statements of Operations

(unaudited) (in millions)

 

		Generation
		Three Months Ended December 31, 2014														Three Months Ended December 31, 2013
		GAAP (a)				Adjustments						Adjusted Non-GAAP				GAAP (a)				Adjustments						Adjusted Non-GAAP
Operating revenues		$	4,802			$	(311	)		(b),(c)		$	4,491			$	3,773			$	79			(b),(c)		$	3,852
Operating expenses
Purchased power and fuel			2,853				(471	)		(b),(c)			2,382				1,903				208			(b),(c)			2,111
Operating and maintenance			1,801				(543	)		(d),(e),(f)			1,258				1,156				(44	)		(d),(e),(f), (l),(m)			1,112
Depreciation and amortization			248				—						248				214				(2	)		(f)			212
Taxes other than income			115				—						115				98				—						98
Total operating expenses			5,017				(1,014	)					4,003				3,371				162						3,533
Equity in earnings of unconsolidated affiliates			—				—						—				3				30			(c),(d)			33
Gain (loss) on sale of assets			82				(83	)		(f)			(1	)			—				—						—
Gain on acquisition of businesses			28				(28	)		(g)			—				—				—						—
Operating income (loss)			(105	)			592						487				405				(53	)					352
Other income and (deductions)
Interest expense			(96	)			—						(96	)			(99	)			—						(99	)
Other, net			101				(41	)		(h),(i)			60				138				(118	)		(h)			20
Total other income and (deductions)			5				(41	)					(36	)			39				(118	)					(79	)
Income (loss) before income taxes			(100	)			551						451				444				(171	)					273
Income taxes			(83	)			256			(b),(c),(d), (e),(f),(h), (i),(j)			173				179				(89	)		(b),(c),(d), (e),(f),(h), (j),(l),(m)			90
Net income (loss)			(17	)			295						278				265				(82	)					183
Net income (loss) attributable to noncontrolling interests			74				(27	)		(k)			47				(4	)			4			(k)			—
Net income (loss) attributable to membership interest		$	(91	)		$	322					$	231			$	269			$	(86	)				$	183
		Twelve Months Ended December 31, 2014														Twelve Months Ended December 31, 2013
		GAAP (a)				Adjustments						Adjusted Non-GAAP				GAAP (a)				Adjustments						Adjusted Non-GAAP
Operating revenues		$	17,393			$	460			(b),(c),(d)		$	17,853			$	15,630			$	547			(b),(c)		$	16,177
Operating expenses
Purchased power and fuel			9,925				(251	)		(b),(c)			9,674				8,197				563			(b),(c)			8,760
Operating and maintenance			5,566				(750	)		(d),(e),(f),(l)			4,816				4,534				(285	)		(d),(e),(f), (l),(m)			4,249
Depreciation, amortization, accretion and depletion			967				—						967				856				(5	)		(d),(f)			851
Taxes other than income			465				—						465				389				—						389
Total operating expenses			16,923				(1,001	)					15,922				13,976				273						14,249
Equity in earnings (loss) of unconsolidated affiliates			(20	)			12			(c),(d)			(8	)			10				92			(c),(d)			102
Gain on sales of assets			437				(411	)		(f)			26				13				(9	)		(f)			4
Gain on consolidation and acquisitions of businesses			289				(289	)		(g),(n)			—				—				—						—
Operating income			1,176				773						1,949				1,677				357						2,034
Other income and (deductions)
Interest expense			(356	)			3			(b)			(353	)			(357	)			2			(d),(e),(o)			(355	)
Other, net			406				(193	)		(h),(i)			213				355				(226	)		(d),(f),(h),(o)			129
Total other income and (deductions)			50				(190	)					(140	)			(2	)			(224	)					(226	)
Income before income taxes			1,226				583						1,809				1,675				133						1,808
Income taxes			207				326			(b),(c),(d),(e), (f),(h),(i), (j),(l),(m)			533				615				(3	)		(b),(c),(d),(e), (f),(h),(j), (l),(m),(o)			612
Net income			1,019				257						1,276				1,060				136						1,196
Net income (loss) attributable to noncontrolling interests			184				(63	)		(k)			121				(10	)			4			(k)			(6	)
Net income attributable to membership interest		$	835			$	320					$	1,155			$	1,070			$	132					$	1,202

Note: On April 1, 2014, Generation assumed operational control of Constellation Energy Nuclear Group’s (“CENG”) nuclear fleet. As a result, the 2014 financial results include CENG’s results of operations on a fully consolidated basis from April 1, 2014 through December 31, 2014.

 

(a)	Results reported in accordance with GAAP.

(b)	Adjustment to exclude the mark-to-market impact of Generation’s economic hedging activities.

(c)	Adjustment to exclude the non-cash amortization of intangible assets, net, related to commodity contracts recorded at fair value at the 2012 Constellation merger date and the 2014 CENG integration date.

(d)

Adjustment to exclude certain costs associated with mergers and acquisitions, including professional fees, employee-related expenses, integration activities, upfront credit facilities, merger commitments, and certain pre-acquisition contingencies, if and when applicable to the Constellation merger in 2013 and the Constellation merger, CENG integration, Integrys acquisition and pending PHI acquisition in 2014.

(e)

Adjustment to exclude a 2014 charge to earnings primarily related to the impairment of wind generating assets, generating assets which were held-for-sale, and certain upstream assets, and a 2013 charge to earnings primarily related to the cancellation of previously capitalized nuclear uprate projects.

(f)	Adjustment to exclude the impacts associated with the sales of Generation’s ownership interests in Safe Harbor Water Power Corporation and the Fore River and West Valley generating stations in 2014.

(g)	Adjustment to exclude difference between the fair value of assets and liabilities acquired and the purchase price of the Integrys acquisition.

(h)	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.

(i)	Adjustment to reflect a benefit related to favorable settlements in 2014 of certain income tax positions on Constellation’s pre-acquisition 2009-2012 tax returns.

(j)	Adjustment to exclude the non-cash impact of the reassessment of state deferred income taxes, primarily as a result of changes in forecasted apportionment. (k) Adjustment to exclude adjustments for CENG interest not owned by Generation.

(l)	Adjustment to exclude the 2014 decrease in Generation’s nuclear decommissioning obligation and the 2013 increase in Generation’s asset retirement obligation for asbestos at retired fossil fuel plants.

(m)	Adjustment to reflect estimated liabilities pursuant to the Midwest Generation bankruptcy.

(n)	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.

(o)	Adjustment to exclude the non-cash amortization of certain debt recorded at fair value at the merger date, which was retired in the second quarter of 2013.

 

12

---

EXELON CORPORATION

Reconciliation of Adjusted (non-GAAP) Operating Earnings to

GAAP Consolidated Statements of Operations

(unaudited)

(in millions)

 

		ComEd
		Three Months Ended December 31, 2014																Three Months Ended December 31, 2013
		GAAP (a)				Adjustments								Adjusted Non- GAAP				GAAP (a)				Adjustments						Adjusted Non- GAAP
Operating revenues		$	1,079			$	—							$	1,079			$	1,068			$	—					$	1,068
Operating expenses
Purchased power			262				—								262				243				—						243
Operating and maintenance			388				(4	)			(b	)			384				347				—						347
Depreciation and amortization			166				—								166				168				—						168
Taxes other than income			67				—								67				74				—						74
Total operating expenses			883				(4	)							879				832				—						832
Operating income			196				4								200				236				—						236
Other income and (deductions)
Interest expense			(80	)			—								(80	)			(76	)			—						(76	)
Other, net			4				—								4				8				—						8
Total other income and (deductions)			(76	)			—								(76	)			(68	)			—						(68	)
Income before income taxes			120				4								124				168				—						168
Income taxes			47				2				(b	)			49				59				—						59
Net income		$	73			$	2							$	75			$	109			$	—					$	109
		Twelve Months Ended December 31, 2014																Twelve Months Ended December 31, 2013
		GAAP (a)				Adjustments								Adjusted Non- GAAP				GAAP (a)				Adjustments						Adjusted Non- GAAP
Operating revenues		$	4,564			$	—							$	4,564			$	4,464			$	—					$	4,464
Operating expenses
Purchased power			1,177				—								1,177				1,174				—						1,174
Operating and maintenance			1,429				(4	)			(b	)			1,425				1,368				(2	)		(b)			1,366
Depreciation and amortization			687				—								687				669				—						669
Taxes other than income			293				—								293				299				—						299
Total operating expenses			3,586				(4	)							3,582				3,510				(2	)					3,508
Gain on sales of assets			2				—								2				—				—						—
Operating income			980				4								984				954				2						956
Other income and (deductions)
Interest expense			(321	)			—								(321	)			(579	)			287			(c)			(292	)
Other, net			17				—								17				26				—						26
Total other income and (deductions)			(304	)			—								(304	)			(553	)			287						(266	)
Income before income taxes			676				4								680				401				289						690
Income taxes			268				2				(b	)			270				152				117			(b), (c)			269
Net income		$	408			$	2							$	410			$	249			$	172					$	421

 

(a)	Results reported in accordance with GAAP.

(b)

Adjustment to exclude certain costs associated with mergers and acquisitions, including professional fees, employee-related expenses, integration activities, upfront credit facilities, merger commitments, and certain pre-acquisition contingencies related to the Constellation merger in 2013 and the pending PHI acquisition in 2014.

(c)	Adjustment to exclude a non-cash charge to earnings resulting from the first quarter 2013 remeasurement of a like-kind exchange tax position taken on ComEd’s 1999 sale of fossil generating assets.

 

13

---

EXELON CORPORATION

Reconciliation of Adjusted (non-GAAP) Operating Earnings to

GAAP Consolidated Statements of Operations

(unaudited)

(in millions)

 

		PECO
		Three Months Ended December 31, 2014																Three Months Ended December 31, 2013
		GAAP (a)				Adjustments								Adjusted Non- GAAP				GAAP (a)				Adjustments								Adjusted Non- GAAP
Operating revenues		$	750			$	—							$	750			$	805			$	—							$	805
Operating expenses
Purchased power and fuel			301				—								301				347				—								347
Operating and maintenance			198				(1	)			(b	)			197				194				(1	)			(b	)			193
Depreciation and amortization			59				—								59				58				—								58
Taxes other than income			36				—								36				38				—								38
Total operating expenses			594				(1	)							593				637				(1	)							636
Operating income			156				1								157				168				1								169
Other income and (deductions)
Interest expense			(28	)			—								(28	)			(29	)			—								(29	)
Other, net			2				—								2				2				—								2
Total other income and (deductions)			(26	)			—								(26	)			(27	)			—								(27	)
Income before income taxes			130				1								131				141				1								142
Income taxes			32				—								32				39				—								39
Net income attributable to common shareholder		$	98			$	1							$	99			$	102			$	1							$	103
		Twelve Months Ended December 31, 2014																Twelve Months Ended December 31, 2013
		GAAP (a)				Adjustments								Adjusted Non- GAAP				GAAP (a)				Adjustments								Adjusted Non- GAAP
Operating revenues		$	3,094			$	—							$	3,094			$	3,100			$	—							$	3,100
Operating expenses
Purchased power and fuel			1,261				—								1,261				1,300				—								1,300
Operating and maintenance			866				(2	)			(b	)			864				748				(9	)			(b	)			739
Depreciation and amortization			236				—								236				228				—								228
Taxes other than income			159				—								159				158				—								158
Total operating expenses			2,522				(2	)							2,520				2,434				(9	)							2,425
Operating income			572				2								574				666				9								675
Other income and (deductions)
Interest expense			(113	)			—								(113	)			(115	)			—								(115	)
Other, net			7				—								7				6				—								6
Total other income and (deductions)			(106	)			—								(106	)			(109	)			—								(109	)
Income before income taxes			466				2								468				557				9								566
Income taxes			114				1				(b	)			115				162				4				(b	)			166
Net income			352				1								353				395				5								400
Preferred security dividends and redemption			—				—								—				7				—								7
Net income attributable to common shareholder		$	352			$	1							$	353			$	388			$	5							$	393

 

(a)	Results reported in accordance with GAAP.

(b)

Adjustment to exclude certain costs associated with mergers and acquisitions, including professional fees, employee-related expenses, integration activities, upfront credit facilities, merger commitments, and certain pre-acquisition contingencies related to the Constellation merger in 2013 and the pending PHI acquisition in 2014.

 

14

---

EXELON CORPORATION

Reconciliation of Adjusted (non-GAAP) Operating Earnings to

GAAP Consolidated Statements of Operations

(unaudited)

(in millions)

 

														BGE
		Three Months Ended December 31, 2014																Three Months Ended December 31, 2013
		GAAP (a)				Adjustments								Adjusted Non- GAAP				GAAP (a)				Adjustments								Adjusted Non- GAAP
Operating revenues		$	761			$	—							$	761			$	794			$	—							$	794
Operating expenses
Purchased power and fuel			323				—								323				362				—								362
Operating and maintenance			176				(1	)			(b	)			175				185				(1	)			(b	)			184
Depreciation and amortization			96				—								96				95				—								95
Taxes other than income			53				—								53				51				—								51
Total operating expenses			648				(1	)							647				693				(1	)							692
Operating income			113				1								114				101				1								102
Other income and (deductions)
Interest expense			(25	)			—								(25	)			(28	)			—								(28	)
Other, net			4				—								4				4				—								4
Total other income and (deductions)			(21	)			—								(21	)			(24	)			—								(24	)
Income before income taxes			92				1								93				77				1								78
Income taxes			37				—								37				27				—								27
Net income			55				1								56				50				1								51
Preference stock dividends			3				—								3				3				—								3
Net income attributable to common shareholders		$	52			$	1							$	53			$	47			$	1							$	48
		Twelve Months Ended December 31, 2014																Twelve Months Ended December 31, 2013
		GAAP (a)				Adjustments								Adjusted Non- GAAP				GAAP (a)				Adjustments								Adjusted Non- GAAP
Operating revenues		$	3,165			$	—							$	3,165			$	3,065			$	—							$	3,065
Operating expenses
Purchased power and fuel			1,417				—								1,417				1,421				—								1,421
Operating and maintenance			717				(2	)			(b	)			715				634				3				(b	)			637
Depreciation and amortization			371				—								371				348				—								348
Taxes other than income			221				—								221				213				—								213
Total operating expenses			2,726				(2	)							2,724				2,616				3								2,619
Operating income (loss)			439				2								441				449				(3	)							446
Other income and (deductions)
Interest expense			(106	)			—								(106	)			(122	)			—								(122	)
Other, net			18				—								18				17				—								17
Total other income and (deductions)			(88	)			—								(88	)			(105	)			—								(105	)
Income before income taxes			351				2								353				344				(3	)							341
Income taxes			140				1				(b	)			141				134				(1	)			(b	)			133
Net income			211				1								212				210				(2	)							208
Preference stock dividends			13				—								13				13				—								13
Net income attributable to common shareholders		$	198			$	1							$	199			$	197			$	(2	)						$	195

 

(a)	Results reported in accordance with GAAP.

(b)

Adjustment to exclude certain costs associated with mergers and acquisitions, including professional fees, employee-related expenses, integration activities, upfront credit facilities, merger commitments, and certain pre-acquisition contingencies related to the Constellation merger in 2013 and the pending PHI acquisition in 2014.

 

15

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EXELON CORPORATION

Reconciliation of Adjusted (non-GAAP) Operating Earnings to

GAAP Consolidated Statements of Operations

(unaudited)

(in millions)

 

		Other (a)
		Three Months Ended December 31, 2014														Three Months Ended December 31, 2013
		GAAP (b)				Adjustments						Adjusted Non- GAAP				GAAP (b)				Adjustments						Adjusted Non- GAAP
Operating revenues		$	(137	)		$	—					$	(137	)		$	(265	)		$	—					$	(265	)
Operating expenses
Purchased power and fuel			(136	)			—						(136	)			(262	)			—						(262	)
Operating and maintenance			—				(8	)		(c)			(8	)			(3	)			(1	)		(c)			(4	)
Depreciation and amortization			13				—						13				12				—						12
Taxes other than income			(4	)			—						(4	)			9				—						9
Total operating expenses			(127	)			(8	)					(135	)			(244	)			(1	)					(245	)
Gain on sales of assets			(2	)			—						(2	)			—				—						—
Operating loss			(12	)			8						(4	)			(21	)			1						(20	)
Other income and (deductions)
Interest expense			(114	)			102			(c)			(12	)			(14	)			—						(14	)
Other, net			(1	)			—						(1	)			10				—						10
Total other income and (deductions)			(115	)			102						(13	)			(4	)			—						(4	)
Loss before income taxes			(127	)			110						(17	)			(25	)			1						(24	)
Income (benefit) taxes			(13	)			33			(c),(e), (f),(g)			20				7				(15	)		(g)			(8	)
Net loss		$	(114	)		$	77					$	(37	)		$	(32	)		$	16					$	(16	)
		Twelve Months Ended December 31, 2014														Twelve Months Ended December 31, 2013 (b)
		GAAP (c)				Adjustments						Adjusted Non- GAAP				GAAP (c)				Adjustments						Adjusted Non- GAAP
Operating revenues		$	(787	)		$	—					$	(787	)		$	(1,371	)		$	(6	)		(e)		$	(1,377	)
Operating expenses
Purchased power and fuel			(777	)			—						(777	)			(1,368	)			—						(1,368	)
Operating and maintenance			(10	)			(51	)		(c),(d)			(61	)			(14	)			(19	)		(c),(d)			(33	)
Depreciation and amortization			53				—						53				52				—						52
Taxes other than income			16				—						16				36				—						36
Total operating expenses			(718	)			(51	)					(769	)			(1,294	)			(19	)					(1,313	)
Gain on sale of assets			(2	)			—						(2	)			—				—						—
Operating loss			(71	)			51						(20	)			(77	)			13						(64	)
Other income and (deductions)
Interest expense			(169	)			131			(c)			(38	)			(183	)			81			(h)			(102	)
Other, net			7				—						7				56				—						56
Total other income and (deductions)			(162	)			131						(31	)			(127	)			81						(46	)
Loss before income taxes			(233	)			182						(51	)			(204	)			94						(110	)
Income taxes			(63	)			61			(c),(d), (e),(f), (g)			(2	)			(19	)			(29	)		(c),(d), (e),(g), (h)			(48	)
Net loss		$	(170	)		$	121					$	(49	)		$	(185	)		$	123					$	(62	)

 

(a)	Other primarily includes eliminating and consolidating adjustments, Exelon’s corporate operations, shared service entities and other financing and investment activities.

(b)	Results reported in accordance with GAAP.

(c)

Adjustment to exclude certain costs associated with mergers and acquisitions, including professional fees, employee-related expenses, integration activities, upfront credit facilities, merger commitments, and certain pre-acquisition contingencies, if and when applicable to the Constellation merger in 2013 and the Constellation merger, CENG integration, Integrys acquisition and pending PHI acquisition in 2014.

(d)	Adjustment to exclude a charge to earnings related to the impairment of investments in long-term leases in both 2014 and 2013.

(e)	Adjustment to exclude the mark-to-market impact of Exelon’s economic hedging activities, net of intercompany eliminations.

(f)	Adjustment to exclude the impacts associated with the sale or retirement of generating stations.

(g)	Adjustment to exclude the non-cash impact of the reassessment of state deferred income taxes, primarily as a result of changes in forecasted apportionment.

(h)	Adjustment to exclude a non-cash charge to earnings resulting from the first quarter 2013 remeasurement of a like-kind exchange tax position taken on ComEd’s 1999 sale of fossil generating assets.

 

16

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EXELON CORPORATION

Exelon Generation Statistics

 

		Three Months Ended,
		December 31, 2014				September 30, 2014				June 30, 2014				March 31, 2014				December 31, 2013
Supply (in GWhs)
Nuclear Generation
Mid-Atlantic (a)			15,768				15,993				14,912				12,136				11,900
Midwest			23,777				24,379				22,719				23,125				23,429
New York (a)			4,988				4,891				3,766				—				—
Total Nuclear Generation			44,533				45,263				41,397				35,261				35,329
Fossil and Renewables (a)
Mid-Atlantic			2,268				2,385				3,165				3,207				2,951
Midwest			424				212				319				417				363
New England			411				1,789				1,299				1,734				1,763
New York			1				1				1				1				—
ERCOT			1,624				2,331				1,553				1,656				1,582
Other (c)			1,999				2,285				2,041				1,630				1,064
Total Fossil and Renewables			6,727				9,003				8,378				8,645				7,723
Purchased Power
Mid-Atlantic (b)			929				1,110				810				3,233				3,955
Midwest			513				260				520				711				498
New England			4,763				3,231				2,290				2,070				2,605
New York (b)			—				—				—				2,857				3,493
ERCOT			1,966				2,184				2,518				3,440				2,792
Other (c)			3,389				4,397				3,654				3,355				2,986
Total Purchased Power			11,560				11,182				9,792				15,666				16,329
Total Supply/Sales by Region (e)
Mid-Atlantic (d)			18,965				19,488				18,887				18,576				18,806
Midwest (d)			24,714				24,851				23,558				24,253				24,290
New England			5,174				5,020				3,589				3,804				4,368
New York			4,989				4,892				3,767				2,858				3,493
ERCOT			3,590				4,515				4,071				5,096				4,374
Other (c)			5,388				6,682				5,695				4,985				4,050
Total Supply/Sales by Region			62,820				65,448				59,567				59,572				59,381
		Three Months Ended,
		December 31, 2014				September 30, 2014				June 30, 2014				March 31, 2014 (g)				December 31, 2013(g)
Outage Days (f)
Refueling			97				18				108				52				94
Non-refueling			8				20				44				20				33
Total Outage Days			105				38				152				72				127

 

(a)

Includes the proportionate share of output where Generation has an undivided ownership interest in jointly-owned generating plants and includes the total output of plants that are fully consolidated (e.g. CENG). Nuclear generation includes physical volumes of 3,902 GWh, 3,726 GWh, and 3,780 GWh in the Mid-Atlantic and 4,988 GWh, 4,891 GWh, and 3,766 GWh in New York for the three months ended December 31, 2014, September 30, 2014, and June 30, 2014, respectively for CENG.

(b)

Purchased power includes physical volumes of 2,489 GWh and 3,226 GWh in the Mid-Atlantic and 2,857 GWh and 3,051 GWh in New York as a result of the PPA with CENG for the three months ended March 31, 2014 and December 31, 2013, respectively. CENG volumes are included in nuclear generation beginning April 1, 2014.

(c)	Other Regions includes South, West and Canada, which are not considered individually significant.

(d)	Includes affiliate sales to PECO and BGE in the Mid-Atlantic region and affiliate sales to ComEd in the Midwest region.

(e)	Total sales do not include physical trading volumes of 2,442 GWh, 3,006 GWh, 2,629 GWh, 2,494 GWh, and 2,696 GWh for the three months ended December 31, 2014, September 30, 2014, June 30, 2014, March 31, 2014, and December 31, 2013, respectively.

(f)	Outage days exclude Salem.

(g)	Outage days exclude CENG

 

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EXELON CORPORATION

Exelon Generation Statistics

Twelve Months Ended December 31, 2014

 

		December 31, 2014				December 31, 2013
Supply (in GWhs)
Nuclear Generation
Mid-Atlantic (a)			58,809				48,881
Midwest			94,000				93,245
New York (a)			13,645				—
Total Nuclear Generation			166,454				142,126
Fossil and Renewables (a)
Mid-Atlantic			11,025				11,714
Midwest			1,372				1,478
New England			5,233				10,896
New York			4				—
ERCOT			7,164				6,453
Other (c)			7,955				6,664
Total Fossil and Renewables			32,753				37,205
Purchased Power
Mid-Atlantic (b)			6,082				14,092
Midwest			2,004				4,408
New England			12,354				7,655
New York (b)			2,857				13,642
ERCOT			10,108				15,063
Other (c)			14,795				14,931
Total Purchased Power			48,200				69,791
Total Supply/Sales by Region (e)
Mid-Atlantic (d)			75,916				74,687
Midwest (d)			97,376				99,131
New England			17,587				18,551
New York			16,506				13,642
ERCOT			17,272				21,516
Other (c)			22,750				21,595
Total Supply/Sales by Region			247,407				249,122

 

(a)

Includes the proportionate share of output where Generation has an undivided ownership interest in jointly-owned generating plants and includes the total output of plants that are fully consolidated (e.g. CENG). Nuclear generation for the twelve months ended December 31, 2014 includes physical volumes of 11,408 GWh in Mid-Atlantic and 13,645 GWh in New York for CENG.

(b)	Purchased power includes physical volumes of 2,489 GWh and 12,067 GWh in the Mid-Atlantic and 2,857 GWh and 12,165 GWh in New York as a result of the PPA with CENG for the twelve months ended December 31, 2014 and 2013, respectively.

(c)	Other Regions includes South, West and Canada, which are not considered individually significant.

(d)	Includes affiliate sales to PECO and BGE in the Mid-Atlantic region and affiliate sales to ComEd in the Midwest region.

(e)	Total sales do not include physical proprietary trading volumes of 10,571 GWh and 8,762 GWh for the twelve months ended December 31, 2014 and 2013, respectively.

 

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EXELON CORPORATION

ComEd Statistics

Three Months Ended December 31, 2014 and 2013

 

		Electric Deliveries (in GWhs)																Revenue (in millions)
														Weather-
														Normal
		2014				2013				% Change				% Change				2014				2013				% Change
Retail Deliveries and Sales (a)
Residential			6,310				6,646				(5.1	)%			(3.2	)%			502				485				3.5	%
Small Commercial & Industrial			7,690				7,920				(2.9	)%			(1.6	)%			301				303				(0.7	)%
Large Commercial & Industrial			6,738				6,752				(0.2	)%			1.2	%			91				100				(9.0	)%
Public Authorities & Electric Railroads			357				358				(0.3	)%			1.1	%			11				13				(15.4	)%
Total Retail			21,095				21,676				(2.7	)%			(1.2	)%			905				901				0.4	%
Other Revenue (b)																			174				167				4.2	%
Total Electric Revenue																		$	1,079			$	1,068				1.0	%
Purchased Power																			262				243				7.8	%

 

														% Change
		2014				2013				Normal				From 2013				From Normal
Heating and Cooling Degree-Days
Heating Degree-Days			2,347				2,487				2,293				(5.6	)%			2.4	%
Cooling Degree-Days			3				25				11				(88.0	)%			(72.7	)%

Twelve Months Ended December 31, 2014 and 2013

 

		Electric Deliveries (in GWhs)																Revenue (in millions)
														Weather-
														Normal
		2014				2013				% Change				% Change				2014				2013				% Change
Retail Deliveries and Sales (a)
Residential			27,230				27,800				(2.1	)%			0.3	%		$	2,074			$	2,073				—	%
Small Commercial & Industrial			32,146				32,305				(0.5	)%			(0.3	)%			1,335				1,250				6.8	%
Large Commercial & Industrial			27,847				27,684				0.6	%			0.7	%			434				427				1.6	%
Public Authorities & Electric Railroads			1,358				1,355				0.2	%			(0.7	)%			46				48				(4.2	)%
Total Retail			88,581				89,144				(0.6	)%			0.2	%			3,889				3,798				2.4	%
Other Revenue (b)																			675				666				1.4	%
Total Electric Revenue																		$	4,564			$	4,464				2.2	%
Purchased Power																		$	1,177			$	1,174				0.3	%

 

														% Change
		2014				2013				Normal				From 2013				From Normal
Heating and Cooling Degree-Days
Heating Degree-Days			7,027				6,603				6,341				6.4	%			10.8	%
Cooling Degree-Days			799				933				842				(14.4	)%			(5.1	)%

 

		2014				2013
Number of Electric Customers
Residential			3,502,386				3,480,398
Small Commercial & Industrial			369,053				367,569
Large Commercial & Industrial			1,998				1,984
Public Authorities & Electric Railroads			4,815				4,853
Total			3,878,252				3,854,804

 

(a)

Reflects delivery volume and revenue from customers purchasing electricity directly from ComEd and customers purchasing electricity from a competitive electric generation supplier, as all customers are assessed delivery charges. For customers purchasing electricity from ComEd, revenue also reflects the cost of energy and transmission.

(b)	Other revenue primarily includes transmission revenue from PJM. Other items include rental revenue, revenue related to late payment charges, revenue from other utilities for mutual assistance programs and recoveries of environmental costs associated with MGP sites.

 

19

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EXELON CORPORATION

PECO Statistics

Three Months Ended December 31, 2014 and 2013

 

		Electric and Gas Deliveries																Revenue (in millions)
														Weather-
														Normal
		2014				2013				% Change				% Change				2014				2013				% Change
Electric (in GWhs)
Retail Deliveries and Sales (a)
Residential			3,022				3,207				(5.8	)%			(2.0	)%		$	360			$	395				(8.9	)%
Small Commercial & Industrial			1,927				1,990				(3.2	)%			(0.6	)%			104				109				(4.6	)%
Large Commercial & Industrial			3,706				3,742				(1.0	)%			(0.3	)%			48				51				(5.9	)%
Public Authorities & Electric Railroads			215				218				(1.4	)%			(1.4	)%			8				7				14.3	%
Total Retail			8,870				9,157				(3.1	)%			(1.0	)%			520				562				(7.5	)%
Other Revenue (b)																			56				60				(6.7	)%
Total Electric Revenue																			576				622				(7.4	)%
Gas (in mmcfs)
Retail Deliveries and Sales
Retail Sales (c)			18,247				18,725				(2.6	)%			2.3	%			164				176				(6.8	)%
Transportation and Other			7,084				7,209				(1.7	)%			0.8	%			10				7				42.9	%
Total Gas			25,331				25,934				(2.3	)%			1.9	%			174				183				(4.9	)%
Total Electric and Gas Revenues																		$	750			$	805				(6.8	)%
Purchased Power and Fuel																		$	301			$	347				(13.3	)%

 

														% Change
		2014				2013				Normal				From 2013				From Normal
Heating and Cooling Degree-Days
Heating Degree-Days			1,498				1,577				1,629				(5.0	)%			(8.0	)%
Cooling Degree-Days			25				65				19				(61.5	)%			31.6	%

Twelve Months Ended December 31, 2014 and 2013

 

		Electric and Gas Deliveries																Revenue (in millions)
														Weather-
														Normal
		2014				2013				% Change				% Change				2014				2013				% Change
Electric (in GWhs)
Retail Deliveries and Sales (a)
Residential			13,222				13,341				(0.9	)%			0.5	%		$	1,555			$	1,592				(2.3	)%
Small Commercial & Industrial			8,025				8,101				(0.9	)%			—	%			423				433				(2.3	)%
Large Commercial & Industrial			15,310				15,379				(0.4	)%			(0.1	)%			217				224				(3.1	)%
Public Authorities & Electric Railroads			937				930				0.8	%			0.8	%			32				30				6.7	%
Total Retail			37,494				37,751				(0.7	)%			0.1	%			2,227				2,279				(2.3	)%
Other Revenue (b)																			221				221				—	%
Total Electric Revenue																			2,448				2,500				(2.1	)%
Gas (in mmcfs)
Retail Deliveries and Sales
Retail Sales (c)			62,734				57,613				8.9	%			2.2	%			608				562				8.2	%
Transportation and Other			27,208				28,089				(3.1	)%			(1.0	)%			38				38				—	%
Total Gas			89,942				85,702				4.9	%			1.2	%			646				600				7.7	%
Total Electric and Gas Revenues																		$	3,094			$	3,100				(0.2	)%
Purchased Power and Fuel																		$	1,261			$	1,300				(3.0	)%

 

														% Change
		2014				2013				Normal				From 2013				From Normal
Heating and Cooling Degree-Days
Heating Degree-Days			4,749				4,474				4,603				6.1	%			3.2	%
Cooling Degree-Days			1,311				1,411				1,301				(7.1	)%			0.8	%

 

Number of Electric Customers		2014				2013				Number of Gas Customers		2014				2013
Residential			1,434,011				1,423,068			Residential			462,663				458,356
Small Commercial & Industrial			149,149				149,117			Commercial & Industrial			42,686				42,174
Large Commercial & Industrial			3,103				3,105			Total Retail			505,349				500,530
Public Authorities & Electric Railroads			9,734				9,668			Transportation			855				909
Total			1,595,997				1,584,958			Total			506,204				501,439

 

(a)

Reflects delivery volume and revenue from customers purchasing electricity directly from PECO and customers purchasing electricity from a competitive electric generation supplier as all customers are assessed distribution charges. For customers purchasing electricity from PECO, revenue also reflects the cost of energy and transmission.

(b)	Other revenue includes transmission revenue from PJM and wholesale electric revenue.

(c)

Reflects delivery volume and revenue from customers purchasing natural gas directly from PECO and customers purchasing natural gas from a competitive natural gas supplier as all customers are assessed distribution charges. For customers purchasing natural gas from PECO, revenue also reflects the cost of natural gas.

 

20

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EXELON CORPORATION

BGE Statistics

Three Months Ended December 31, 2014 and 2013

 

		Electric and Gas Deliveries												Revenue (in millions)
		2014				2013				% Change				2014				2013				% Change
Electric (in GWhs)
Retail Deliveries and Sales (a)
Residential			2,952				3,227				(8.5	)%		$	327			$	347				(5.8	)%
Small Commercial & Industrial			743				735				1.1	%			63				60				5.0	%
Large Commercial & Industrial			3,311				3,293				0.5	%			114				106				7.5	%
Public Authorities & Electric Railroads			75				78				(3.8	)%			8				8				—	%
Total Retail			7,081				7,333				(3.4	)%			512				521				(1.7	)%
Other Revenue (b)															55				71				(22.5	)%
Total Electric Revenue															567				592				(4.2	)%
Gas (in mmcfs)
Retail Deliveries and Sales (c)
Retail Sales			27,716				28,166				(1.6	)%			183				180				1.7	%
Transportation and Other (d)			1,733				4,082				(57.5	)%			11				22				(50.0	)%
Total Gas			29,449				32,248				(8.7	)%			194				202				(4.0	)%
Total Electric and Gas Revenues														$	761			$	794				(4.2	)%
Purchased Power and Fuel														$	323			$	362				(10.8	)%

 

														% Change
		2014				2013				Normal				From 2013				From Normal
Heating and Cooling Degree-Days
Heating Degree-Days			1,652				1,690				1,681				(2.2	)%			(1.7	)%
Cooling Degree-Days			16				39				25				(59.0	)%			(36.0	)%

Twelve Months Ended December 31, 2014 and 2013

 

		Electric and Gas Deliveries												Revenue (in millions)
		2014				2013				% Change				2014				2013				% Change
Electric (in GWhs)
Retail Deliveries and Sales (a)
Residential			12,974				13,077				(0.8	)%		$	1,404			$	1,404				—	%
Small Commercial & Industrial			3,086				3,035				1.7	%			271				257				5.4	%
Large Commercial & Industrial			14,191				14,339				(1.0	)%			491				439				11.8	%
Public Authorities & Electric Railroads			311				317				(1.9	)%			32				31				3.2	%
Total Retail			30,562				30,768				(0.7	)%			2,198				2,131				3.1	%
Other Revenue (b)															262				274				(4.4	)%
Total Electric Revenue															2,460			$	2,405				2.3	%
Gas (in mmcfs)
Retail Deliveries and Sales (c)
Retail Sales			99,194				94,020				5.5	%			622				592				5.1	%
Transportation and Other (d)			9,242				12,210				(24.3	)%			83				68				22.1	%
Total Gas			108,436				106,230				2.1	%			705				660				6.8	%
Total Electric and Gas Revenues														$	3,165			$	3,065				3.3	%
Purchased Power and Fuel														$	1,417			$	1,421				(0.3	)%

 

														% Change
		2014				2013				Normal				From 2013				From Normal
Heating and Cooling Degree-Days
Heating Degree-Days			5,091				4,744				4,662				7.3	%			9.2	%
Cooling Degree-Days			732				869				876				(15.8	)%			(16.4	)%

 

Number of Electric Customers		2014				2013				Number of Gas Customers		2014				2013
Residential			1,125,369				1,120,431			Residential			609,626				611,532
Small Commercial & Industrial			112,972				112,850			Commercial & Industrial			44,200				44,162
Large Commercial & Industrial			11,730				11,652			Total Retail			653,826				655,694
Public Authorities & Electric Railroads			290				292			Transportation			—				—
Total			1,250,361				1,245,225			Total			653,826				655,694

 

(a)

Reflects delivery volume and revenue from customers purchasing electricity directly from BGE and customers purchasing electricity from a competitive electric generation supplier as all customers are assessed distribution charges. For customers purchasing electricity from BGE, revenue also reflects the cost of energy and transmission.

(b)	Other revenue includes wholesale transmission revenue and late payment charges.

(c)

Reflects delivery volume and revenue from customers purchasing natural gas directly from BGE and customers purchasing natural gas from a competitive natural gas supplier as all customers are assessed distribution charges. For customers purchasing natural gas from BGE, revenue also reflects the cost of natural gas.

(d)

Transportation and other gas revenue includes off-system revenue of 1,733 mmcfs ($11 million) and 4,082 mmcfs ($19 million) for the three months ended December 31, 2014 and 2013, respectively, and 9,242 mmcfs ($72 million) and 12,210 mmcfs ($55 million) for the twelve months ended December 31, 2014 and 2013, respectively.

 

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