Fourth Quarter Operating Results
Fourth quarter 2012 earnings include financial results for Constellation Energy and Baltimore Gas and Electric Company (BGE). Therefore, the composition of results of operations from 2012 and 2011 are not comparable for Exelon Generation Company, LLC (Generation), BGE and Exelon.
As shown in the table above, Exelon’s adjusted (non-GAAP) operating earnings declined to $0.64 per share in the fourth quarter of 2012 from $0.82 per share in the fourth quarter of 2011. Earnings in fourth quarter 2012 primarily reflected the following negative factors:
- Lower energy margins at Generation, resulting from decreased capacity pricing related to the Reliability Pricing Model (RPM) for the PJM Interconnection, LLC (PJM) market, higher nuclear fuel costs and lower realized market prices for the sale of energy across all regions;
- Higher operating and maintenance expenses, including increased labor, contracting and materials and the impact of higher storm costs at PECO and BGE due to Sandy;
- Impact of increased average diluted common shares outstanding as a result of the merger; and
- Higher depreciation and amortization expense due to ongoing capital expenditures.
These factors were partially offset by:
- The addition of Constellation Energy’s contribution to Generation’s energy margins; and
- Favorable impacts of weather at ComEd and PECO.
|Adjusted (non-GAAP) operating earnings for the fourth quarter of 2012 do not include the following items (after tax) that were included in reported GAAP earnings:|
|(in millions)||(per diluted share)|
|Mark-to-Market Impact of Economic Hedging Activities||$123||$0.14|
Unrealized Gains Related to NDT (Nuclear Decommissioning Trust) Fund Investments
|Plant Retirements and Divestitures||($38)||($0.05)|
|Constellation Merger and Integration Costs||($46)||($0.05)|
|Non-Cash Remeasurement of Deferred Income Taxes||$1||-|
|Amortization of Commodity Contract Intangibles||($211)||($0.24)|
|Amortization of the Fair Value of Certain Debt||$3||-|
|Asset Retirement Obligation||$5||$0.01|
|Midwest Generation Bankruptcy Charges||($8)||($0.01)|
|Adjusted (non-GAAP) operating earnings for the fourth quarter of 2011 do not include the following items (after tax) that were included in reported GAAP earnings:|
|(in millions)||(per diluted share)|
|Mark-to-Market Impact of Economic Hedging Activities||$45||$0.07|
|Unrealized Gains Related to NDT Fund Investments||$46||$0.07|
|Plant Retirements and Divestitures||($4)||($0.01)|
|Constellation Merger and Integration Costs||($21)||($0.03)|
|Non-Cash Remeasurement of Deferred Income Taxes||($4)||($0.01)|
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