Q3 2011 Earnings Call
October 26, 2011 11:00 am ET
Doug J. Brown - Chief Investment Officer and Senior Vice President of Federal Government Affairs & Public Policy
Kenneth W. Cornew - Senior Vice President and President of Power Team
Stacie M. Frank - Vice President of Investor Relations
Darryl M. Bradford - Senior Vice President and General Counsel
Joseph Grimes -
Matthew F. Hilzinger - Chief Financial Officer, Senior Vice President and Treasurer
Unknown Executive -
William A. Von Hoene - Executive Vice President of Finance & Legal
Previous Statements by EXC
» Exelon's CEO Discusses Q2 2011 Results - Earnings Call Transcript
» Exelon's CEO Discusses Q1 2011 Results - Earnings Call Transcript
» Exelon's CEO Discusses Q4 2010 Results - Earnings Call Transcript
John W. Rowe - Chairman, Chief Executive Officer, Chairman of PECO, Chairman of Exelon Enterprises, Chairman of Exelon Energy Delivery and President of Exelon Generation
Julien Dumoulin-Smith - UBS Investment Bank, Research Division
Jonathan P. Arnold - Deutsche Bank AG, Research Division
Greg Gordon - ISI Group Inc., Research Division
Steven I. Fleishman - BofA Merrill Lynch, Research Division
James L. Dobson - Wunderlich Securities Inc., Research Division
Good morning. My name is Cassandra, and I will be your conference operator today. At this time, I would like to welcome everyone to the Exelon Third Quarter Conference Call. [Operator Instructions] And now I would like to turn the call over to Stacie Frank, Vice President of Investor Relations. Stacie, you may begin.
Stacie M. Frank
Thank you, and good morning. Welcome to Exelon's third quarter 2011 earnings conference call. We issued our earnings release this morning. And if you haven't received it, the release is available on the Exelon website. The earnings release and other matters we will discuss in today's call contain forward-looking statements and estimates that are subject to various risks and uncertainties, as well as adjusted non-GAAP operating earnings. Please refer to today's 8-K and Exelon's other filings for a discussion of factors that may cause results to differ from management's projections, forecasts and expectations and for a reconciliation of operating to GAAP earnings.
In addition, during the call, we will be discussing the proposed merger of Exelon and Constellation Energy. Today's discussion is not a substitute for disclosures in the definitive joint proxy statement that was mailed to shareholders on or about October 12. For important additional information regarding our proposed merger, including the associated risks and uncertainties, please refer to the earnings release in today's 8-K, as well as the definitive joint proxy statement prospectus.
Leading the call today are John Rowe, Exelon's Chairman and Chief Executive Officer; and Matthew Hilzinger, Exelon's Senior Vice President and Chief Financial Officer. They are joined by several other members of Exelon's senior management team, who will be available to answer your questions. And we'll now turn the call over to John Rowe, Exelon's CEO.
John W. Rowe
Thank you, Stacie. Our operating earnings of $1.12 beat our own expectations in the upper end of the range by a couple of cents and beat your consensus by $0.03. We are very proud of having achieved that because in the third quarter, we were haunted by intense storms. As you all know, we had a hurricane in the East and we had one month with the most severe repetitive storms that I have ever seen at ComEd. Matt will discuss the storm costs and restoration performance in most -- in more detail. But just let me say that at ComEd, Frank and Anne's ability to get the troops out again and again, to get extra troops in to deal with repetitive storms was really remarkable. And the preparation that Denis O'Brien and Craig did for the hurricane was really exceptional. PECO was one of the first utilities to have all of its customers back and did it with absolutely seamless public relations. So it was a tremendous performance.
Our nuclear organization continues to expand [ph] at world class levels. We have a capacity factor 95.8% in the third quarter. Now the standout driver, the thing that made our ability to recover all of those storm costs in the same quarter was our strong performance in Texas. Due to the extreme heat, tired men [ph] , we had on peak crisis in the ERCOT north zone of $107 per megawatt hour. We had some hours as high as $3,000 per megawatt hour. Our units generated 2.4 million-megawatt hours of electricity, which was an increase of 20% over last year.
Higher prices in the spot and the day-ahead markets, and the open generation link in our portfolio enabled us to gain about $0.10 per share in the third quarter from our Texas operations. Congratulations for this are due to Ken Cornew and his power team, for how they managed the open position, and to Chip Pardee and Sonny Garg for making the units perform when we needed them. This was just a good do-story for Exelon and it shows how different pieces of our system can contribute when they're really needed.
Based on our performance to date, we are reaffirming our 2011 full year earnings range of $4.05 to $4.25. But then[ph] Frank has allowed me to say we expect to be comfortably in that range, I would say, "Damned comfortably within that range." Matt will cover our financial performance in more detail in a few minutes but let me first give an update on the Constellation merger, our Solar acquisition and what's going on at EPA.
So far, all of the formal benchmarks are on track for an early first quarter close of the merger. We have mailed our proxies and scheduled our shareholder meeting for November 17. We appreciate the support of the transaction that we have received from so many of you and the earlier you cast your votes in support of it, the more momentum we will have. Our regulatory approvals are progressing nicely. We've made progress at both FERC and DOJ, and with the PJM market monitor. The key proceeding remains the Maryland utility commission approval and our negotiations with the governor's office in Maryland.