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Exelon Announces Fourth Quarter And Full Year 2012 Results; Introduces 2013 Guidance; Declares First Quarter Dividend And Sets Revised Dividend Policy

Stocks in this article: EXC

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

$2 -
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)
 

Dividend

Exelon’s Board of Directors declared the first quarter 2013 dividend of $0.525 per share and approved a revised dividend policy going forward. The first quarter dividend is payable on March 8, 2013, to shareholders of record at 5 p.m. EST on Feb. 19, 2013. The first quarter dividend is based on our previous level of $2.10 per share on an annualized basis, while the new dividend contemplates a regular $0.31 per share quarterly dividend beginning in the second quarter of 2013 (or $1.24 per share on an annualized basis). Exelon intends to maintain the normal cadence of quarterly dividend declarations by the Board, so the Board will take formal action to declare the next dividend in the second quarter.

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