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

November 1, 2012

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 November 1, 2012, Exelon Corporation (Exelon) announced via press release its results for the third quarter ended September 30, 2012. 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 third quarter 2012 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 10:00 AM ET (9:00 AM CT) on November 1, 2012. 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 33703408. 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 November 15, 2012. The U.S. and Canada call-in number for replays is 800-585-8367, and the international call-in number is 404-537-3406. The conference ID number is 33703408.

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 Current Report includes 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 these forward-looking statements include those discussed herein as well as those discussed in (1) Exelon’s 2011 Annual Report on Form 10-K in (a) ITEM 1A. Risk Factors, (b) ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) ITEM 8. Financial Statements and Supplementary Data: Note 18; (2) Constellation Energy Group’s 2011 Annual Report on Form 10-K in (a) ITEM 1A. Risk Factors, (b) ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) ITEM 8. Financial Statements and Supplementary Data: Note 12; (3) the Registrant’s Second Quarter 2012 Quarterly Report on Form 10-Q in (a) Part II, Other Information, ITEM 1A. Risk Factors and (b) Part I, Financial Information, ITEM 1. Financial Statements: Note 16; and (4) 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 Current 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 Current 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.

 

November 1, 2012

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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:		JaCee Burnes Investor Relations 312-394-2948   Paul Adams Corporate Communications 410-470-4167				FOR IMMEDIATE RELEASE

EXELON ANNOUNCES THIRD QUARTER 2012 RESULTS;

RAISES FULL-YEAR OPERATING EARNINGS GUIDANCE RANGE

CHICAGO (Nov. 1, 2012) — Exelon Corporation (NYSE: EXC) announced third quarter 2012 consolidated earnings as follows:

 

		Third Quarter
		2012				2011
Adjusted (non-GAAP) Operating Results:
Net Income ($ millions)		$	658			$	743
Diluted Earnings per Share		$	0.77			$	1.12
GAAP Results:
Net Income ($ millions)		$	296			$	601
Diluted Earnings per Share		$	0.35			$	0.90

“We delivered strong financial performance during the third quarter and exceeded our quarterly guidance range thanks in large part to the management of our portfolio by Constellation, Exelon’s retail and wholesale marketing organization,” said Christopher M. Crane, Exelon’s president and CEO. “Based on our results through September and the ICC’s reversal of its ComEd pension asset decision in October, we are revising our full-year operating earnings guidance range upwards to $2.75 to $2.95 per share.”

Third Quarter Operating Results

Third 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.

 

1

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As shown in the table above, Exelon’s adjusted (non-GAAP) operating earnings declined to $0.77 per share in the third quarter of 2012 from $1.12 per share in the third quarter of 2011. Earnings in third 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;

 

•

Lower nuclear volume due to increased planned and unplanned outage days;

 

•

Lower allowed ROE (return on equity) at ComEd;

 

•

Higher operating and maintenance expenses, including increased labor, contracting and materials;

 

•

Impact of increased average diluted common shares outstanding as a result of the merger; and

 

•

Increased 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

 

•

Decreased storm costs in the ComEd and PECO territories.

Adjusted (non-GAAP) operating earnings for the third 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		$	19			$	0.02
Unrealized Gains Related to NDT (Nuclear Decommissioning Trust) Fund Investments		$	38			$	0.04
Plant Retirements and Divestitures		$	(193	)		$	(0.22	)
Asset Retirement Obligation		$	(6	)		$	(0.01	)
Constellation Merger and Integration Costs		$	(36	)		$	(0.04	)
Amortization of Commodity Contract Intangibles		$	(187	)		$	(0.21	)
Amortization of the Fair Value of Certain Debt		$	3				—

 

2

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Adjusted (non-GAAP) operating earnings for the third 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		$	(55	)		$	(0.08	)
Unrealized Losses Related to NDT Fund Investments		$	(76	)		$	(0.12	)
Plant Retirements and Divestitures		$	(2	)			—
Asset Retirement Obligation		$	(16	)		$	(0.02	)
Constellation Merger and Integration Costs		$	(11	)		$	(0.02	)
Other Acquisition Costs		$	(5	)		$	(0.01	)
Wolf Hollow Acquisition		$	23			$	0.03

2012 Earnings Outlook

Exelon revised upward its guidance range for 2012 adjusted (non-GAAP) operating earnings to $2.75 to $2.95 per share. Operating earnings guidance is based on the assumption of normal weather for the balance of the year and preliminary cost estimates for the impact of Hurricane Sandy.

The outlook for 2012 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

 

•

Financial impacts associated with the planned retirement of fossil generating units and the expected sale in the fourth quarter of 2012 of three generating stations as required by the merger

 

•

Changes in decommissioning and other asset retirement obligation estimates

 

•

Certain costs related to the merger and integration initiatives

 

•

Costs incurred as part of the Maryland order approving the merger transaction

 

•

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

 

•

Costs incurred as part of a March 2012 settlement with the FERC

 

•

Changes in state deferred tax rates resulting from a reassessment of apportionment of Exelon’s deferred taxes as a result of the merger

 

•

Non-cash amortization of certain debt recorded at fair value at the merger date

 

•

Other acquisition costs

 

•

Significant impairments of assets, including goodwill

 

•

Other unusual items

 

•

Significant changes to GAAP

 

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Third Quarter and Recent Highlights

 

•

Nuclear Operations: Generation’s nuclear fleet, including its owned output from the Salem Generating Station, produced 34,581 gigawatt-hours (GWh) in the third quarter of 2012, compared with 36,045 GWh in the third quarter of 2011. The output data excludes the units owned by Constellation Energy Nuclear Group LLC (CENG). Excluding Salem and the units owned by CENG, the Exelon-operated nuclear plants achieved a 90.7 percent capacity factor for the third quarter of 2012, compared with 95.8 percent for the third quarter of 2011. The number of planned refueling outage days totaled 43 in the third quarter of 2012 versus 33 days in the third quarter of 2011. The number of non-refueling outage days at the Exelon-operated plants totaled 40 days in the third quarter of 2012, compared with three days in the third quarter of 2011.

 

•

Fossil and Renewables Operations: The equivalent demand forced outage rate for Generation’s fossil fleet is 3.7 percent for the first three quarters of 2012, compared with 6.0 percent in the first three quarters of 2011. The 2012 results include former Constellation plants, exclusive of the Maryland Clean Coal plants to be sold, whereas 2011 data includes only legacy Exelon plants. The equivalent availability factor for the hydroelectric facilities was 91.9 percent in the third quarter of 2012, compared with 93.9 percent in the third quarter of 2011. The change was largely due to planned outages in July and August of 2012. The energy capture for the wind fleet was 94.4 percent in the third quarter of 2012, compared with 91.6 percent in the third quarter of 2011.

 

•

ComEd Distribution Formula Rate Cases: The Illinois Commerce Commission (ICC) ruled on ComEd’s formula rate proceeding under the Electric Infrastructure Modernization Act (EIMA) on May 30, 2012 (May Order). EIMA is designed to provide for timely and regular recovery of actual costs to support a 10-year grid modernization program. As enacted by the General Assembly, EIMA expressly provides for recovery of certain categories of costs such as a return on equity tied to U.S. Treasury bonds and pension funding costs, and it also requires an annual revenue requirement reconciliation, or “true up,” to ensure customers pay no more or no less than ComEd’s true costs. In the proceeding covered by the May Order, ComEd had taken positions supporting a $59 million reduction in the annual revenue requirement being recovered in current rates (based on 2010 costs and 2011 plant additions), primarily reflecting a lower return on equity consistent with the provision of EIMA. The ICC’s May Order reduced the annual revenue requirements by $168 million, or approximately $110 million more than proposed by ComEd.

On October 3, 2012, the ICC issued its final Order on Remand (Rehearing Order) in ComEd’s expedited rehearing of specific items pursuant to EIMA. The Rehearing Order addressed three key conclusions reached in the ICC’s May Order: (1) ComEd’s pension asset recovery; (2) the rate of interest to affix to over or under recovered costs; and (3) the use of a year-end or an “average year” rate base in determining ComEd’s reconciliation revenue requirement.

 

4

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In the Rehearing Order, the ICC adopted ComEd’s position on the return on its pension asset, resulting in an increase in ComEd’s annual revenue requirement of $35 million based on ComEd’s 2010 Pension Asset. The impact on the 2011 reconciliation and subsequent periods will incorporate the additional investment in the pension asset ComEd made in 2011. However, the ICC ruled against ComEd in affirming its decision to use (1) an average rate base in ComEd’s reconciliation revenue requirement; and (2) the ICC amended its prior order to provide a short-term debt rate as the appropriate interest rate to apply to under/over recoveries of incurred costs. ComEd filed a notice of appeal with the Illinois Appellate Court on Oct. 4, 2012 on the May Order and the Rehearing Order because the impact of the issues in the two orders would be nearly $100 million per year that ComEd would not be able to recover and subsequently reinvest in the distribution system in 2014 and beyond.

Pursuant to the distribution formula rate mechanism and the May Order, ComEd had recorded as of June 30, 2012 a net regulatory asset of $26 million, reflecting its best estimate of the probable increase in distribution rates under the annual reconciliation mechanism reflecting costs incurred in 2011 and the first six months of 2012. ComEd expects to record in the fourth quarter an increase in revenue of approximately $135 million pre-tax in 2012 consistent with the terms of the Rehearing Order.

 

•

Maryland Clean Coal Asset Divestitures: On Aug. 8, 2012, Exelon reached an agreement to sell its three Maryland coal-fired power plants to Raven Power Holdings LLC (Raven Power), fulfilling its commitment to Maryland to divest the plants as part of its merger with Constellation Energy. The sale was required by the Federal Energy Regulatory Commission (FERC), U.S. Department of Justice (DOJ) and the Maryland Public Service Commission as part of Exelon’s merger approval. The three plants, known collectively as Maryland Clean Coal, include:

 

•

Brandon Shores (coal) in Pasadena, Md.: 1,273 MW of installed capacity, two units

 

•

C.P. Crane (coal and oil) in Middle River, Md.: 399 MW installed capacity, three units

 

•

H.A. Wagner (coal, natural gas and oil) in Pasadena, Md.: 976 MW installed capacity, five units

Generation expects to receive proceeds of approximately $388 million in the fourth quarter less cash payments of approximately $32 million to Raven Power Holdings LLC over a twelve-month period beginning in June 2014. Generation expects to incur transaction costs of approximately $20 million through the closing of the transaction in the fourth quarter of 2012. The sale will generate approximately $225 million of cash tax benefits, of which $135 million will be realized in periods through 2013 with the balance to be received in later years. Therefore, Generation expects net after-tax cash sale proceeds of approximately $500 million through 2013 and approximately $65 million in 2014 and subsequent years. Exelon recorded a pre-tax loss of $278 million in the third quarter to reflect the difference between the estimated sale price and the carrying value of the plants. The impact of the loss has been excluded from Adjusted (Non-GAAP) Operating Earnings. All regulatory preconditions to closing this transaction have been met and required FERC authorizations have been received. The transaction is expected to close in the fourth quarter of this year.

 

5

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•

Qualified Facility Sales: On Aug. 21, 2012, Exelon closed on the sale of its ownership share of five California power plants – a total of 70 megawatts (MW) of generating capacity – to Tokyo-based IHI Corporation. The power plants joined Exelon’s generating portfolio following the company’s merger with Constellation Energy in March 2012. The five California power plants include:

 

•

Chinese Station (biomass) in Jamestown, CA, in which Exelon owned a 9.9 MW share;

 

•

Rio Bravo Fresno (biomass) in Fresno, CA, in which Exelon owned a 12 MW share;

 

•

Rio Bravo Jasmin (coal) in Bakersfield, CA, in which Exelon owned a 17.5 MW share;

 

•

Rio Bravo Poso (coal) in Bakersfield, CA, in which Exelon owned a 17.5 MW share;

 

•

Rio Bravo Rocklin (biomass) in Lincoln, CA, in which Exelon owned a 12 MW share.

 

•

Riverside 6 & Schuylkill 1 Retirements: On Oct. 31, 2012, Exelon Generation notified PJM Interconnection of its intention to permanently retire Schuylkill Generating Station Unit 1 by Feb. 1, 2013, and Riverside Generating Station Unit 6 by Jun. 1, 2014. Schuylkill Unit 1 is a 166 MW peaking oil unit located in Philadelphia, PA, which was placed in service in 1958. Riverside 6 is a 115 MW peaking gas/kerosene unit located in Baltimore, MD, which was placed in service in 1970. The units are being retired because they are no longer economic to operate due to their age, relatively high capital and operating costs and current market conditions. PJM has 30 days to review whether the proposed retirements of the units create transmission system reliability issues. Once PJM’s review is complete, Exelon will determine final retirement dates for the units.

 

•

Texas ESP Application: On Aug. 28, 2012, Exelon halted efforts to gain initial federal regulatory approvals for new nuclear construction in Victoria County, TX. The company notified the Nuclear Regulatory Commission that it has withdrawn its Early Site Permit application for an 11,500-acre tract southeast of Victoria. The action is in response to low natural gas prices and economic and market conditions that have made construction of new merchant nuclear power plants in competitive markets uneconomical now and for the foreseeable future. Exelon originally submitted an application for a combined construction and operating license for the Victoria County site in 2008, but never made a decision to build a nuclear plant there. In 2010, the company applied for an Early Site Permit, a change in licensing strategy that allowed Exelon to continue with some aspects of site evaluation and regulatory approvals while deferring a construction decision for up to 20 years. The withdrawal of the license brings an end to all project activity.

 

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Constellation Solar Projects: In August 2012, Constellation announced two solar projects:

 

•

On Aug. 14, 2012, Constellation announced that it will develop a 4.35-MW solar generation system for the Casa Grande Union High School District in Casa Grande, AZ. Constellation will own and operate the solar power system and the school district will purchase the electricity it generates under a 20-year power purchase agreement.

 

•

On Aug. 29, 2012, Constellation announced the completion of a 16.1-MW (DC) grid-connected photovoltaic (PV) solar installation in Emmitsburg, MD., for the state of Maryland’s Generating Clean Horizons initiative. Constellation will own and operate the approximately $50 million solar facility on behalf of its customer, the State of Maryland. Electricity generated by the system is purchased by the state’s Department of General Services and the University System of Maryland under 20-year solar power purchase agreements with Constellation.

 

•

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 represents the amount of energy estimated to be generated or purchased through owned or contracted-for capacity. The proportion of expected generation hedged as of Sept. 30, 2012, is 99 to 102 percent for 2012, 88 to 91 percent for 2013, 56 to 59 percent for 2014 and 21 to 24 percent for 2015. 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.

 

•

Financing Activities:

 

•

BGE: On Aug. 17, 2012, BGE issued $250 million in principal amount of its 2.80 percent Notes due 2022. BGE will use the net proceeds to repay outstanding commercial paper obligations and for general corporate purposes.

 

•

PECO: On Sept. 17, 2012, PECO issued $350 million of First Mortgage Bonds, maturing on Sept. 15, 2022, with a coupon of 2.375 percent. PECO used a portion of the net proceeds from the sale of the bonds to pay at maturity $225 million aggregate principal amount of its 4.75 percent first mortgage bonds due Oct. 1, 2012, and the remaining proceeds were used for other general corporate purposes.

 

•

ComEd: On Oct. 1, 2012, ComEd issued $350 million aggregate principal amount of its First Mortgage 3.800 percent Bonds, Series 113 due Oct. 1, 2042. ComEd will use the net proceeds from the sale of the bonds to repay outstanding commercial paper obligations and for general corporate purposes.

 

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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, risk management services and natural gas exploration and production activities.

Third quarter 2012 GAAP net income was $91 million, compared with $386 million in the third quarter of 2011. Adjusted (non-GAAP) operating earnings for the third quarter of 2011 and 2012 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)		3Q12				3Q11
Generation Adjusted (non-GAAP) Operating Earnings		$	458			$	522
Mark-to-Market Impact of Economic Hedging Activities		$	9			$	(55	)
Unrealized Gains/Losses Related to NDT Fund Investments		$	38			$	(76	)
Plant Retirements and Divestitures		$	(193	)		$	(2	)
Asset Retirement Obligation		$	(6	)		$	(18	)
Constellation Merger and Integration Costs		$	(31	)		$	(3	)
Amortization of Commodity Contract Intangibles		$	(187	)			—
Amortization of Fair Value of Certain Debt		$	3				—
Other Acquisition Costs			—			$	(5	)
Wolf Hollow Acquisition			—			$	23
Generation GAAP Net Income		$	91			$	386

Generation’s Adjusted (non-GAAP) Operating Earnings in the third quarter of 2012 decreased $64 million compared with the same quarter in 2011. This decrease primarily reflected:

 

•

Lower energy margins at Generation, resulting from decreased capacity pricing related to RPM for the PJM market, higher nuclear fuel costs and lower realized market prices for the sale of energy across all regions;

 

•

Lower nuclear volume due to increased planned and unplanned outage days;

 

•

Higher operating and maintenance expenses; and

 

•

Increased depreciation and amortization expense due to ongoing capital expenditures.

 

8

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These items were partially offset by contribution to Generation’s energy margins from the addition of Constellation Energy to Generation’s operations.

Generation’s average realized margin on all electric sales, including sales to affiliates and excluding trading activity, was $25.96 per megawatt-hour (MWh) in the third quarter of 2012, compared with $39.19 per MWh in the third quarter of 2011.

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

ComEd recorded GAAP net income of $90 million in the third quarter of 2012, compared with net income of $112 million in the third quarter of 2011. Adjusted (non-GAAP) operating earnings for the third quarter of 2011 and 2012 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)		3Q12				3Q11
ComEd Adjusted (non-GAAP) Operating Earnings		$	90			$	113
Constellation Merger and Integration Costs			—			$	(1	)
ComEd GAAP Net Income		$	90			$	112

ComEd’s Adjusted (non-GAAP) Operating Earnings in the third quarter of 2012 were down $23 million from the same quarter in 2011, primarily due to decreased distribution revenues based on a lower allowed ROE as a result of a final order issued by the ICC on the 2011 performance based formula rate proceeding under the EIMA; this unfavorable item was partially offset by decreased storm costs in ComEd’s territory.

For the third quarter of 2012, cooling degree-days in the ComEd service territory were up 9.4 percent relative to the same period in 2011 and were 40.1 percent above normal. In the third quarter of 2012, heating degree-days in the ComEd service territory were down 27.2 percent relative to the same period in 2011 and were 10.1 percent below normal. Total retail electric deliveries increased 2.1 percent quarter over quarter.

Weather-normalized retail electric deliveries increased 0.2 percent in the third quarter of 2012 relative to 2011, reflecting increases in deliveries to residential and public authorities & railroads, partially offset by decreases in deliveries to both small and large commercial and industrial (C&I) customers. For ComEd, weather had no impact on third quarter 2012 earnings relative to 2011 and a favorable after-tax effect of $14 million relative to normal weather.

PECO consists of electricity transmission and distribution operations and retail natural gas distribution operations in southeastern Pennsylvania.

PECO’s GAAP net income in the third quarter of 2012 was $122 million, compared with $104 million in the third quarter of 2011. Adjusted (non-GAAP) Operating Earnings for the third quarter of 2011 and 2012 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)		3Q12				3Q11
PECO Adjusted (non-GAAP) Operating Earnings		$	124			$	103
Asset Retirement Obligation			—			$	2
Constellation Merger and Integration Costs		$	(2	)		$	(1	)
PECO GAAP Net Income		$	122			$	104

 

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PECO’s Adjusted (non-GAAP) Operating Earnings in the third quarter of 2012 increased $21 million from the same quarter in 2011, primarily reflecting the effect of lower storm costs from 2011’s Hurricane Irene; this favorable item was partially offset by lower load.

For the third quarter of 2012, cooling degree-days in the PECO service territory were up 2.6 percent relative to the same period in 2011 and were 21.8 percent above normal. In the third quarter of 2012, heating degree-days in the PECO service territory were down 22.2 percent from 2011 and were 60.0 percent below normal. Total retail electric deliveries were down 2.3 percent quarter over quarter. On the retail gas side, deliveries in the third quarter of 2012 were down 4.4 percent from the third quarter of 2011.

Weather-normalized retail electric deliveries were down 3.6 percent in the third quarter of 2012 relative to 2011, reflecting declines in deliveries to all customer classes except public authorities and electric railroads. Weather-normalized gas deliveries were down 4.4 percent in the third quarter of 2012. For PECO, weather had a favorable after-tax effect of $3 million on third quarter 2012 earnings relative to 2011 and a favorable after-tax effect of $12 million relative to normal weather.

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

BGE’s GAAP net income in the third quarter of 2012 was $(4) million. The net income included after-tax costs of $1 million associated with the merger and integration initiatives. Excluding the effects of these items, BGE’s adjusted (non-GAAP) Operating Earnings in the third quarter of 2012 was $(3) million. The primary driver of BGE’s loss for the quarter was significant storm costs associated with the derecho storm.

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 November 1, 2012.

 

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Cautionary Statements Regarding Forward-Looking Information

This news 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 2011 Annual Report on Form 10-K in (a) ITEM 1A. Risk Factors, (b) ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) ITEM 8. Financial Statements and Supplementary Data: Note 18; (2) Constellation Energy Group’s 2011 Annual Report on Form 10-K in (a) ITEM 1A. Risk Factors, (b) ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) ITEM 8. Financial Statements and Supplementary Data: Note 12; (3) the Registrant’s Second Quarter 2012 Quarterly Report on Form 10-Q in (a) Part II, Other Information, ITEM 1A. Risk Factors and (b) Part I, Financial Information, ITEM 1. Financial Statements: Note 15; and (4) 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 presentation. 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 news release.

# # #

Exelon Corporation is the nation’s leading competitive energy provider, with approximately $33 billion in annual revenues. Headquartered in Chicago, Exelon has operations and business activities in 47 states, the District of Columbia and Canada. Exelon is the largest competitive U.S. power generator, with approximately 35,000 megawatts of owned capacity comprising one of the nation’s cleanest and lowest-cost power generation fleets. The company’s Constellation business unit provides energy products and services to approximately 100,000 business and public sector customers and approximately 1 million residential customers. Exelon’s utilities deliver electricity and natural gas to more than 6.6 million customers in central Maryland (BGE), northern Illinois (ComEd) and southeastern Pennsylvania (PECO).

 

11

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Earnings Release Attachments

Table of Contents

 

Consolidating Statements of Operations - Three Months Ended September 30, 2012 and 2011			1
Consolidating Statements of Operations - Nine Months Ended September 30, 2012 and 2011			2
Business Segment Comparative Statements of Operations - Generation and ComEd - Three and Nine Months Ended September 30, 2012 and 2011			3
Business Segment Comparative Statements of Operations - PECO and BGE - Three and Nine Months Ended September 30, 2012 and 2011			4
Business Segment Comparative Statements of Operations - Other - Three and Nine Months Ended September 30, 2012 and 2011			5
Consolidated Balance Sheets - September 30, 2012 and December 31, 2011			6
Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2012 and 2011			7
Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations - Exelon - Three Months Ended September 30, 2012 and 2011			8
Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations - Exelon - Nine Months Ended September 30, 2012 and 2011			9
Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Earnings By Business Segment - Three Months Ended September 30, 2012 and 2011			10
Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Earnings By Business Segment - Nine Months Ended September 30, 2012 and 2011			11
Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations - Generation - Three and Nine Months Ended September 30, 2012 and 2011			12
Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations - ComEd - Three and Nine Months Ended September 30, 2012 and 2011			13
Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations - PECO - Three and Nine Months Ended September 30, 2012 and 2011			14
Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations - BGE - Three Months Ended September 30, 2012 and March 12, 2012 Through September 30, 2012			15
Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations - Other - Three and Nine Months Ended September 30, 2012 and 2011			16
Exelon Generation Statistics - Three Months Ended September 30, 2012, June 30, 2012, March 31, 2012, December 31, 2011 and September 30, 2011			17
Exelon Generation Statistics - Nine Months Ended September 30, 2012 and 2011			18
ComEd Statistics - Three and Nine Months Ended September 30, 2012 and 2011			19
PECO Statistics - Three and Nine Months Ended September 30, 2012 and 2011			20
BGE Statistics - Three Months Ended September 30, 2012 and March 12, 2012 Through September 30, 2012			21

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EXELON CORPORATION

Consolidating Statements of Operations

(unaudited)

(in millions)

 

		Three Months Ended September 30, 2012
		Generation				ComEd				PECO				BGE				Other (a)				Exelon Consolidated
Operating revenues		$	4,017			$	1,484			$	806			$	720			$	(462	)		$	6,565
Operating expenses
Purchased power and fuel			2,122				678				326				373				(473	)			3,026
Operating and maintenance			1,415				350				199				201				(9	)			2,156
Depreciation, amortization, accretion and depletion			207				157				55				68				13				500
Taxes other than income			109				81				48				48				4				290
Total operating expenses			3,853				1,266				628				690				(465	)			5,972
Equity in earnings of unconsolidated affiliates			10				—				—				—				—				10
Operating income			174				218				178				30				3				603
Other income and deductions
Interest expense			(85	)			(74	)			(32	)			(35	)			(20	)			(246	)
Other, net			83				5				2				5				6				101
Total other income and deductions			(2	)			(69	)			(30	)			(30	)			(14	)			(145	)
Income (loss) before income taxes			172				149				148				—				(11	)			458
Income taxes			85				59				25				—				(8	)			161
Net income (loss)			87				90				123				—				(3	)			297
Net loss attributable to noncontrolling interests, preferred security dividends and preference stock dividends			(4	)			—				1				4				—				1
Net income (loss) on common stock		$	91			$	90			$	122			$	(4	)		$	(3	)		$	296
		Three Months Ended September 30, 2011
		Generation				ComEd				PECO				BGE				Other (a)				Exelon Consolidated
Operating revenues		$	2,821			$	1,784			$	946			$	—			$	(297	)		$	5,254
Operating expenses
Purchased power and fuel			1,071				932				464				—				(346	)			2,121
Operating and maintenance			790				396				219				—				8				1,413
Depreciation, amortization, accretion and depletion			139				135				51				—				7				332
Taxes other than income			67				78				59				—				3				207
Total operating expenses			2,067				1,541				793				—				(328	)			4,073
Operating income			754				243				153				—				31				1,181
Other income and deductions
Interest expense			(37	)			(86	)			(34	)			—				(25	)			(182	)
Other, net			(164	)			16				3				—				3				(142	)
Total other income and deductions			(201	)			(70	)			(31	)			—				(22	)			(324	)
Income before income taxes			553				173				122								9				857
Income taxes			167				61				17				—				10				255
Net income (loss)			386				112				105				—				(1	)			602
Preferred security dividends			—				—				1				—				—				1
Net income (loss) on common stock		$	386			$	112			$	104			$	—			$	(1	)		$	601

 

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

 

1

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EXELON CORPORATION

Consolidating Statements of Operations

(unaudited)

(in millions)

 

		Nine Months Ended September 30, 2012 (a)
		Generation				ComEd				PECO				BGE				Other (b)				Exelon Consolidated
Operating revenues		$	10,509			$	4,154			$	2,396			$	1,388			$	(1,242	)		$	17,205
Operating expenses
Purchased power and fuel			5,018				1,886				1,033				727				(1,266	)			7,398
Operating and maintenance			3,756				1,000				574				423				196				5,949
Depreciation, amortization, accretion and depletion			564				458				161				157				36				1,376
Taxes other than income			272				224				122				104				15				737
Total operating expenses			9,610				3,568				1,890				1,411				(1,019	)			15,460
Equity in losses of unconsolidated affiliates			(69	)			—				—				—				—				(69	)
Operating income (loss)			830				586				506				(23	)			(223	)			1,676
Other income and deductions
Interest expense			(223	)			(230	)			(94	)			(77	)			(73	)			(697	)
Other, net			185				12				6				14				36				253
Total other income and deductions			(38	)			(218	)			(88	)			(63	)			(37	)			(444	)
Income (loss) before income taxes			792				368				418				(86	)			(260	)			1,232
Income taxes			373				149				118				(37	)			(158	)			445
Net income (loss)			419				219				300				(49	)			(102	)			787
Net loss attributable to noncontrolling interests, preferred security dividends and preference stock dividends			(6	)			—				3				8				—				5
Net income (loss) on common stock		$	425			$	219			$	297			$	(57	)		$	(102	)		$	782
		Nine Months Ended September 30, 2011
		Generation				ComEd				PECO				BGE				Other (b)				Exelon Consolidated
Operating revenues		$	7,919			$	4,694			$	2,942			$	—			$	(850	)		$	14,705
Operating expenses
Purchased power and fuel			2,795				2,436				1,506				—				(901	)			5,836
Operating and maintenance			2,306				930				597				—				30				3,863
Depreciation, amortization, accretion and depletion			416				405				150				—				16				987
Taxes other than income			199				226				165				—				12				602
Total operating expenses			5,716				3,997				2,418				—				(843	)			11,288
Operating income (loss)			2,203				697				524				—				(7	)			3,417
Other income and deductions
Interest expense			(128	)			(257	)			(102	)			—				(58	)			(545	)
Other, net			(12	)			24				11				—				31				54
Total other income and deductions			(140	)			(233	)			(91	)			—				(27	)			(491	)
Income (loss) before income taxes			2,063				464				433				—				(34	)			2,926
Income taxes			738				169				119				—				8				1,034
Net income (loss)			1,325				295				314				—				(42	)			1,892
Preferred security dividends			—				—				3				—				—				3
Net income (loss) on common stock		$	1,325			$	295			$	311			$	—			$	(42	)		$	1,889

 

(a)	Includes financial results for Constellation and BGE beginning on March 12, 2012, the date the merger was completed.

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

 

2

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EXELON CORPORATION

Business Segment Comparative Statements of Operations

(unaudited)

(in millions)

 

		Generation
		Three Months Ended September 30,												Nine Months Ended September 30,
		2012				2011				Variance				2012 (a)				2011				Variance
Operating revenues		$	4,017			$	2,821			$	1,196			$	10,509			$	7,919			$	2,590
Operating expenses
Purchased power and fuel			2,122				1,071				1,051				5,018				2,795				2,223
Operating and maintenance			1,415				790				625				3,756				2,306				1,450
Depreciation, amortization, accretion and depletion			207				139				68				564				416				148
Taxes other than income			109				67				42				272				199				73
Total operating expenses			3,853				2,067				1,786				9,610				5,716				3,894
Equity in earnings (losses) of unconsolidated affiliates			10				—				10				(69	)			—				(69	)
Operating income			174				754				(580	)			830				2,203				(1,373	)
Other income and deductions
Interest expense			(85	)			(37	)			(48	)			(223	)			(128	)			(95	)
Other, net			83				(164	)			247				185				(12	)			197
Total other income and deductions			(2	)			(201	)			199				(38	)			(140	)			102
Income before income taxes			172				553				(381	)			792				2,063				(1,271	)
Income taxes			85				167				(82	)			373				738				(365	)
Net income			87				386				(299	)			419				1,325				(906	)
Net loss attributable to noncontrolling interests			(4	)			—				(4	)			(6	)			—				(6	)
Net income on common stock		$	91			$	386			$	(295	)		$	425			$	1,325			$	(900	)

 

(a)	Includes financial results for Constellation beginning on March 12, 2012, the date the merger was completed.

 

		ComEd
		Three Months Ended September 30,												Nine Months Ended September 30,
		2012				2011				Variance				2012				2011				Variance
Operating revenues		$	1,484			$	1,784			$	(300	)		$	4,154			$	4,694			$	(540	)
Operating expenses
Purchased power			678				932				(254	)			1,886				2,436				(550	)
Operating and maintenance			350				396				(46	)			1,000				930				70
Depreciation and amortization			157				135				22				458				405				53
Taxes other than income			81				78				3				224				226				(2	)
Total operating expenses			1,266				1,541				(275	)			3,568				3,997				(429	)
Operating income			218				243				(25	)			586				697				(111	)
Other income and deductions
Interest expense			(74	)			(86	)			12				(230	)			(257	)			27
Other, net			5				16				(11	)			12				24				(12	)
Total other income and deductions			(69	)			(70	)			1				(218	)			(233	)			15
Income before income taxes			149				173				(24	)			368				464				(96	)
Income taxes			59				61				(2	)			149				169				(20	)
Net income		$	90			$	112			$	(22	)		$	219			$	295			$	(76	)

 

3

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EXELON CORPORATION

Business Segment Comparative Statements of Operations

(unaudited)

(in millions)

 

		PECO
		Three Months Ended September 30,												Nine Months Ended September 30,
		2012				2011				Variance				2012				2011				Variance
Operating revenues		$	806			$	946			$	(140	)		$	2,396			$	2,942			$	(546	)
Operating expenses
Purchased power and fuel			326				464				(138	)			1,033				1,506				(473	)
Operating and maintenance			199				219				(20	)			574				597				(23	)
Depreciation and amortization			55				51				4				161				150				11
Taxes other than income			48				59				(11	)			122				165				(43	)
Total operating expenses			628				793				(165	)			1,890				2,418				(528	)
Operating income			178				153				25				506				524				(18	)
Other income and deductions
Interest expense			(32	)			(34	)			2				(94	)			(102	)			8
Other, net			2				3				(1	)			6				11				(5	)
Total other income and deductions			(30	)			(31	)			1				(88	)			(91	)			3
Income before income taxes			148				122				26				418				433				(15	)
Income taxes			25				17				8				118				119				(1	)
Net income			123				105				18				300				314				(14	)
Preferred security dividends			1				1				—				3				3				—
Net income on common stock		$	122			$	104			$	18			$	297			$	311			$	(14	)
		BGE
		Three Months Ended September 30,												March 12, 2012 through September 30,
		2012				2011				Variance				2012				2011				Variance
Operating revenues		$	720			$	—			$	720			$	1,388			$	—			$	1,388
Operating expenses
Purchased power and fuel			373				—				373				727				—				727
Operating and maintenance			201				—				201				423				—				423
Depreciation and amortization			68				—				68				157				—				157
Taxes other than income			48				—				48				104				—				104
Total operating expenses			690				—				690				1,411				—				1,411
Operating income (loss)			30				—				30				(23	)			—				(23	)
Other income and deductions
Interest expense			(35	)			—				(35	)			(77	)			—				(77	)
Other, net			5				—				5				14				—				14
Total other income and deductions			(30	)			—				(30	)			(63	)			—				(63	)
Loss before income taxes			—				—				—				(86	)			—				(86	)
Income taxes			—				—				—				(37	)			—				(37	)
Net loss			—				—				—				(49	)			—				(49	)
Preference stock dividends			4				—				4				8				—				8
Net loss on common stock		$	(4	)		$	—			$	(4	)		$	(57	)		$	—			$	(57	)

 

4

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EXELON CORPORATION

Business Segment Comparative Statements of Operations

(unaudited)

(in millions)

 

		Other (a)
		Three Months Ended September 30,												Nine Months Ended September 30,
		2012				2011				Variance				2012 (b)				2011				Variance
Operating revenues		$	(462	)		$	(297	)		$	(165	)		$	(1,242	)		$	(850	)		$	(392	)
Operating expenses
Purchased power and fuel			(473	)			(346	)			(127	)			(1,266	)			(901	)			(365	)
Operating and maintenance			(9	)			8				(17	)			196				30				166
Depreciation and amortization			13				7				6				36				16				20
Taxes other than income			4				3				1				15				12				3
Total operating expenses			(465	)			(328	)			(137	)			(1,019	)			(843	)			(176	)
Operating income (loss)			3				31				(28	)			(223	)			(7	)			(216	)
Other income and deductions
Interest expense			(20	)			(25	)			5				(73	)			(58	)			(15	)
Other, net			6				3				3				36				31				5
Total other income and deductions			(14	)			(22	)			8				(37	)			(27	)			(10	)
Income (loss) before income taxes			(11	)			9				(20	)			(260	)			(34	)			(226	)
Income taxes			(8	)			10				(18	)			(158	)			8				(166	)
Net loss		$	(3	)		$	(1	)		$	(2	)		$	(102	)		$	(42	)		$	(60	)

 

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

(b)	Includes financial results for Constellation and BGE beginning on March 12, 2012, the date the merger was completed.

 

5

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EXELON CORPORATION

Consolidated Balance Sheets

(unaudited)

(in millions)

 

		September 30, 2012 (a)				December 31, 2011
ASSETS
Current assets
Cash and cash equivalents		$	1,602			$	1,016
Cash and cash equivalents of variable interest entities			98				—
Restricted cash and investments			73				40
Restricted cash and investments of variable interest entities			67				—
Accounts receivable, net
Customer			2,835				1,613
Other			1,216				1,000
Accounts receivable, net, variable interest entities			225				—
Mark-to-market derivative assets			928				432
Unamortized energy contract assets			1,141				13
Inventories, net
Fossil fuel			264				208
Materials and supplies			767				656
Deferred income taxes			254				—
Regulatory assets			786				390
Other			1,072				345
Total current assets			11,328				5,713
Property, plant and equipment, net			43,914				32,570
Deferred debits and other assets
Regulatory assets			6,192				4,518
Nuclear decommissioning trust (NDT) funds			7,140				6,507
Investments			838				751
Investments in affiliates			371				15
Investment in CENG			1,908				—
Goodwill			2,625				2,625
Mark-to-market derivative assets			1,039				650
Unamortized energy contracts assets			1,191				388
Pledged assets for Zion Station decommissioning			631				734
Other			1,176				524
Total deferred debits and other assets			23,111				16,712
Total assets		$	78,353			$	54,995
Liabilities and shareholders’ equity
Current liabilities
Short-term borrowings		$	60			$	163
Short-term notes payable - accounts receivable agreement			225				225
Long-term debt due within one year			1,049				828
Long-term debt of variable interest entities due within one year			70				—
Accounts payable			2,359				1,444
Accounts payable of variable interest entities			132				—
Accrued expenses			1,502				1,255
Deferred income taxes			52				1
Regulatory liabilities			299				197
Dividends payable			4				349
Mark-to-market derivative liabilities			521				112
Unamortized energy contract liabilities			523				—
Other			974				560
Total current liabilities			7,770				5,134
Long-term debt			17,050				11,799
Long-term debt to financing trusts			649				390
Long-term debt of variable interest entity			546				—
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits			11,600				8,253
Asset retirement obligations			4,866				3,884
Pension obligations			2,575				2,194
Non-pension postretirement benefit obligations			2,946				2,263
Spent nuclear fuel obligation			1,020				1,019
Regulatory liabilities			4,000				3,627
Mark-to-market derivative liabilities			407				126
Unamortized energy contract liabilities			621				—
Payable for Zion Station decommissioning			422				563
Other			1,691				1,268
Total deferred credits and other liabilities			30,148				23,197
Total liabilities			56,163				40,520
Commitments and contingencies
Preferred securities of subsidiary			87				87
Shareholders’ equity
Common stock			16,594				9,107
Treasury stock, at cost			(2,327	)			(2,327	)
Retained earnings			9,959				10,055
Accumulated other comprehensive loss, net			(2,405	)			(2,450	)
Total shareholders’ equity			21,821				14,385
BGE preference stock not subject to mandatory redemption			193				—
Noncontrolling interest			89				3
Total equity			22,103				14,388
Total liabilities and shareholders’ equity		$	78,353			$	54,995

 

(a)	Includes the financial information of Constellation and BGE.

 

6

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EXELON CORPORATION

Consolidated Statements of Cash Flows

(unaudited)

(in millions)

 

		Nine Months Ended September 30,
		2012 (a)				2011
Cash flows from operating activities
Net income		$	787			$	1,892
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation, amortization, accretion and depletion including nuclear fuel and energy contract amortization			2,909				1,702
Impairment of long-lived assets			278				—
Deferred income taxes and amortization of investment tax credits			263				1,008
Net fair value changes related to derivatives			(377	)			360
Net realized and unrealized gains on NDT fund investments			(142	)			90
Other non-cash operating activities			1,235				703
Changes in assets and liabilities:
Accounts receivable			240				3
Inventories			12				(44	)
Accounts payable, accrued expenses and other current liabilities			(837	)			(400	)
Option premiums (paid) received, net			(122	)			59
Counterparty collateral received (posted), net			408				(807	)
Income taxes			465				532
Pension and non-pension postretirement benefit contributions			(131	)			(2,089	)
Other assets and liabilities			(431	)			(92	)
Net cash flows provided by operating activities			4,557				2,917
Cash flows from investing activities
Capital expenditures			(4,145	)			(2,972	)
Proceeds from nuclear decommissioning trust fund sales			6,262				3,120
Investment in nuclear decommissioning trust funds			(6,422	)			(3,293	)
Acquisitions			—				(380	)
Cash acquired from Constellation			964				—
Proceeds from sales of investments			26				—
Purchases of investments			(13	)			—
Change in restricted cash			(38	)			(532	)
Other investing activities			41				26
Net cash flows used in financing activities			(3,325	)			(4,031	)
Cash flows from financing activities
Changes in short-term debt			(139	)			462
Issuance of long-term debt			1,558				1,199
Retirement of long-term debt			(731	)			(3	)
Dividends paid on common stock			(1,226	)			(1,044	)
Dividends paid to former Constellation shareholders			(51	)			—
Proceeds from employee stock plans			61				26
Other financing activities			(20	)			(67	)
Net cash flows (used in) provided by financing activities			(548	)			573
Increase (decrease) in cash and cash equivalents			684				(541	)
Cash and cash equivalents at beginning of period			1,016				1,612
Cash and cash equivalents at end of period		$	1,700			$	1,071

 

(a)	Includes financial results for Constellation and BGE beginning on March 12, 2012, the date the merger was completed.

 

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 September 30, 2012 (a)												Three Months Ended September 30, 2011
										Adjusted												Adjusted
		GAAP (b)				Adjustments				Non-GAAP				GAAP (b)				Adjustments				Non-GAAP
Operating revenues		$	6,565			$	464	(c),(d),(e)		$	7,029			$	5,254			$	(33	)(c),(j)		$	5,221
Operating expenses
Purchased power and fuel			3,026				278	(c),(d),(e)			3,304				2,121				(93	)(c),(d)			2,028
Operating and maintenance			2,156				(378	(c),(e),(f),  )(g)			1,778				1,413				(65	(c),(f),(g),  )(j),(k)			1,348
Depreciation, amortization, accretion and depletion			500				(13	)(c),(f)			487				332				(19	)(c)			313
Taxes other than income			290				(4	)(c)			286				207				—				207
Total operating expenses			5,972				(117	)			5,855				4,073				(177	)			3,896
Equity in earnings of unconsolidated affiliates			10				50	(e)			60				—				—				—
Operating income			603				631				1,234				1,181				144				1,325
Other income and deductions
Interest expense			(246	)			(2	)(f),(h)			(248	)			(182	)			—				(182	)
Other, net			101				(60	)(c),(f),(i)			41				(142	)			181	(i)			39
Total other income and deductions			(145	)			(62	)			(207	)			(324	)			181				(143	)
Income before income taxes			458				569				1,027				857				325				1,182
Income taxes			161				207	(c),(d),(e),   (f),(g),(h),(i)			368				255				183	(c),(d),(f),   (g),(i),(j),(k)			438
Net income			297				362				659				602				142				744
Net loss attributable to noncontrolling interests, preferred security dividends and preference stock dividends			1				—				1				1				—				1
Net income on common stock		$	296			$	362			$	658			$	601			$	142			$	743
Effective tax rate			35.2	%							35.8	%			29.8	%							37.1	%
Earnings per average common share
Basic		$	0.35			$	0.42			$	0.77			$	0.91			$	0.21			$	1.12
Diluted		$	0.35			$	0.42			$	0.77			$	0.90			$	0.22			$	1.12
Average common shares outstanding
Basic			854								854				663								663
Diluted			857								857				665								665

 

Effect of adjustments on earnings per average diluted common share recorded in accordance with GAAP:
Plant retirements and divestitures (c)				$	0.22							$	—
Mark-to-market impact of economic hedging activities (d)					(0.02	)							0.08
Amortization of commodity contract intangibles (e)					0.21								—
Constellation merger and integration costs (f)					0.04								0.02
Asset retirement obligation (g)					0.01								0.02
Amortization of the fair value of certain debt (h)					—								—
Unrealized (gains) losses related to NDT fund investments (i)					(0.04	)							0.12
Wolf Hollow acquisition (j)					—								(0.03	)
Other acquisition costs (k)					—								0.01
Total adjustments				$	0.42							$	0.22

 

(a)	Includes financial results for Constellation and BGE beginning on March 12, 2012, the date the merger was completed.

(b)	Results reported in accordance with accounting principles generally accepted in the United States (GAAP).

(c)

Adjustment to exclude costs associated with the retirement of fossil generating units, the impacts of the FERC approved reliability-must-run rate schedule and the impact associated with the expected sale in the fourth quarter of 2012 of three generating stations associated with certain of the regulatory approvals required for the merger.

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

(e)	Adjustment to exclude the non-cash amortization of intangible assets, net, related to commodity contracts recorded at fair value at the merger date.

(f)	Adjustment to exclude certain costs incurred associated with the merger, including transaction costs, employee-related expenses (e.g. severance, retirement, relocation and retention bonuses) and integration initiatives.

(g)	Adjustment to exclude the increase in Generation’s decommissioning obligation for spent nuclear fuel at retired nuclear units.

(h)	Adjustment to exclude the non-cash amortization of certain debt recorded at fair value at the merger date expected to be retired in 2013.

(i)	Adjustment to exclude the unrealized losses in 2011 and gains in 2012 associated with Generation’s NDT fund investments and the associated contractual accounting relating to income taxes.

(j)	Adjustment to exclude the non-cash bargain purchase gain (negative goodwill) associated with the acquisition of Wolf Hollow, net of acquisition costs.

(k)	Adjustment to exclude certain costs associated with Exelon’s acquisition of Antelope Valley Solar Ranch One (AVSR) in 2011.

 

8

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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)

 

		Nine Months Ended September 30, 2012 (a)												Nine Months Ended September 30, 2011
										Adjusted												Adjusted
		GAAP (b)				Adjustments				Non-GAAP				GAAP (b)				Adjustments				Non-GAAP
Operating revenues		$	17,205			$	1,024	(c),(d),(e),(f)		$	18,229			$	14,705			$	(42	)(c),(n)		$	14,663
Operating expenses
Purchased power and fuel			7,398				540	(c),(d),(e),(g)			7,938				5,836				(366	)(d)			5,470
Operating and maintenance			5,949				(1,051	(c),(e),(f),  )(g),(h),(i),(j)			4,898				3,863				(82	(c),(g),(i),  )(j),(n),(o)			3,781
Depreciation, amortization, accretion and depletion			1,376				(43	)(c),(g)			1,333				987				(65	)(c)			922
Taxes other than income			737				(6	)(c),(f)			731				602				—				602
Total operating expenses			15,460				(560	)			14,900				11,288				(513	)			10,775
Equity in earnings (losses) of unconsolidated affiliates			(69	)			110	(e),(g)			41				—				—				—
Operating income			1,676				1,694				3,370				3,417				471				3,888
Other income and deductions
Interest expense			(697	)			(8	)(g),(k)			(705	)			(545	)			—				(545	)
Other, net			253				(73	)(c),(g),(l)			180				54				94	(l),(n)			148
Total other income and deductions			(444	)			(81	)			(525	)			(491	)			94				(397	)
Income before income taxes			1,232				1,613				2,845				2,926				565				3,491
Income taxes			445				612	(c),(d),(e),(f),  (g),(h),(i),(j),  (k),(l),(m)			1,057				1,034				235	(c),(d),(g),(i),   (j),(l),(n),   (o),(p)			1,269
Net income on common stock			787				1,001				1,788				1,892				330				2,222
Net loss attributable to noncontrolling interests, preferred security dividends and preference stock dividends			5				—				5				3				—				3
Net income		$	782			$	1,001			$	1,783			$	1,889			$	330			$	2,219
Effective tax rate			36.1	%							37.2	%			35.3	%							36.4	%
Earnings per average common share
Basic		$	0.97			$	1.25			$	2.22			$	2.85			$	0.50			$	3.35
Diluted		$	0.97			$	1.24			$	2.21			$	2.84			$	0.50			$	3.34
Average common shares outstanding
Basic			804								804				663								663
Diluted			806								806				664								664
Effect of adjustments on earnings per average diluted common share recorded in accordance with GAAP:
Plant retirements and divestitures (c)						$	0.25											$	0.04
Mark-to-market impact of economic hedging activities (d)							(0.23	)											0.34
Amortization of commodity contract intangibles (e)							0.68												—
Maryland commitments (f)							0.28												—
Constellation merger and integration costs (g)							0.26												0.04
FERC settlement (h)							0.22												—
Other acquisition costs (i)							—												0.01
Asset retirement obligation (j)							0.01												0.02
Amortization of the fair value of certain debt (k)							(0.01	)											—
Unrealized (gains) losses related to NDT fund investments (l)							(0.07	)											0.07
Reassessment of state deferred income taxes (m)							(0.15	)											—
Wolf Hollow acquisition (n)							—												(0.03	)
Recovery of costs pursuant to the 2011 distribution rate case order (o)							—												(0.03	)
Charge resulting from Illinois tax rate change legislation (p)							—												0.04
Total adjustments						$	1.24											$	0.50

 

(a)	Includes financial results for Constellation Energy including BGE, beginning on March 12, 2012, the date the acquisition was completed.

(b)	Results reported in accordance with GAAP.

(c)

Adjustment to exclude costs associated with the retirement of fossil generating units, the impacts of the FERC approved reliability-must-run rate schedule, and the impact associated with the expected sale in the fourth quarter of 2012 of three generation stations associated with certain of the regulatory approvals required for the merger.

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

(e)	Adjustment to exclude the non-cash amortization of intangible assets, net, related to commodity contracts recorded at fair value at the merger date.

(f)	Adjustment to exclude costs incurred as part of the Maryland order approving the merger transaction.

(g)	Adjustment to exclude certain activities associated with the merger, including transaction costs, employee-related expenses (e.g. severance, retirement, relocation and retention bonuses) and integration initiatives.

(h)	Adjustment to exclude costs associated with the March 2012 settlement with the FERC.

(i)	Adjustment to exclude certain costs associated with various acquisitions.

(j)	Adjustment to exclude the increase in Generation’s decommissioning obligation for spent nuclear fuel and the decrease in PECO’s asset retirement obligation.

(k)	Adjustment to exclude the non-cash amortization of certain debt recorded at fair value at the merger date expected to be retired in 2013.

(l)	Adjustment to exclude the unrealized gains in 2011 and losses in 2012 associated with Generation’s NDT fund investments and the associated contractual accounting relating to income taxes.

(m)	Adjustment to exclude a one-time, non-cash benefit associated with a change in state deferred tax rates resulting from a reassessment of anticipated apportionment of Exelon’s deferred taxes as a result of the merger.

(n)	Adjustment to exclude the non-cash bargain purchase gain (negative goodwill) associated with the acquisition of Wolf Hollow, net of acquisition costs.

(o)	Adjustment to exclude one-time benefits for the recovery of previously incurred costs related to the 2009 restructuring plan and for the passage of Federal health care legislation in 2010.

(p)	Adjustment to exclude a one-time, non-cash charge to remeasure deferred taxes at higher corporate tax rates pursuant to the Illinois tax rate change legislation.

 

9

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EXELON CORPORATION (a)

Reconciliation of Adjusted (non-GAAP) Operating

Earnings to GAAP Earnings (in millions)

Three Months Ended September 30, 2012 and 2011

 

		Exelon
		Earnings per
		Diluted Share				Generation				ComEd				PECO				BGE				Other (b)				Exelon
2011 GAAP Earnings (Loss)		$	0.90			$	386			$	112			$	104			$	—			$	(1	)		$	601
2011 Adjusted (non-GAAP) Operating Earnings (Loss) Adjustments:
Mark-to-Market Impact of Economic Hedging Activities			0.08				55				—				—				—				—				55
Unrealized Losses Related to NDT Fund Investments (1)			0.12				76				—				—				—				—				76
Plant Retirements and Divestitures (2)			—				2				—				—				—				—				2
Asset Retirement Obligation (3)			0.02				18				—				(2	)			—				—				16
Constellation Merger and Integration Costs (4)			0.02				3				1				1				—				6				11
Other Acquisition Costs			0.01				5				—				—				—				—				5
Wolf Hollow Acquisition (5)			(0.03	)			(23	)			—				—				—				—				(23	)
2011 Adjusted (non-GAAP) Operating Earnings			1.12				522				113				103				—				5				743
Year Over Year Effects on Earnings:
Generation Energy Margins, Excluding Mark-to-Market:
Nuclear Volume (6)			(0.03	)			(24	)			—				—				—				—				(24	)
Nuclear Fuel Costs (7)			(0.01	)			(13	)			—				—				—				—				(13	)
Capacity Pricing (8)			—				2				—				—				—				—				2
Market and Portfolio Conditions (9)			0.22				185				—				—				—				—				185
Transmission Upgrades (10)			—				30				—				—				—				(30	)			—
ComEd, PECO and BGE Margins:
Weather			—				—				—				3				—	(c)			—				3
Load			(0.01	)			—				1				(7	)			—	(c)			—				(6	)
Other Energy Delivery (11)			0.21				—				(29	)			3				208				—				182
Operating and Maintenance Expense:
Labor, Contracting and Materials (12)			(0.25	)			(143	)			(14	)			7				(60	)			—				(210	)
Planned Nuclear Refueling Outages			—				(3	)			—				—				—				—				(3	)
Pension and Non-Pension Postretirement Benefits (13)			(0.03	)			(8	)			(9	)			(2	)			(7	)			(3	)			(29	)
Other Operating and Maintenance (14)			(0.03	)			(41	)			50				13				(53	)			7				(24	)
Depreciation and Amortization Expense (15)			(0.12	)			(46	)			(14	)			(3	)			(40	)			(4	)			(107	)
Equity in Earnings of Unconsolidated Affiliates (16)			0.04				38				—				—				—				—				38
Income Taxes (17)			0.01				8				(7	)			(2	)			—				10				9
Interest Expense, Net (18)			(0.05	)			(34	)			1				1				(21	)			7				(46	)
Other			(0.05	)			(15	)			(2	)			8				(30	)			(3	)			(42	)
Share Differential (19)			(0.25	)			—				—				—				—				—				—
2012 Adjusted (non-GAAP) Operating Earnings (Loss)			0.77				458				90				124				(3	)			(11	)			658
2012 Adjusted (non-GAAP) Operating Earnings (Loss) Adjustments:
Mark-to-Market Impact of Economic Hedging Activities			0.02				9				—				—				—				10				19
Unrealized Gains Related to NDT Fund Investments (1)			0.04				38				—				—				—				—				38
Plant Retirements and Divestitures (2)			(0.22	)			(193	)			—				—				—				—				(193	)
Asset Retirement Obligation (3)			(0.01	)			(6	)			—				—				—				—				(6	)
Constellation Merger and Integration Costs (4)			(0.04	)			(31	)			—				(2	)			(1	)			(2	)			(36	)
Amortization of Commodity Contract Intangibles (20)			(0.21	)			(187	)			—				—				—				—				(187	)
Amortization of the Fair Value of Certain Debt (21)			—				3				—				—				—				—				3
2012 GAAP Earnings (Loss)		$	0.35			$	91			$	90			$	122			$	(4	)		$	(3	)		$	296

 

(a)

For the three months ended September 30, 2012, includes financial results for Constellation and BGE. Therefore, the results of operations from 2012 and 2011 are not comparable for Generation, BGE, Other and Exelon. The explanations below identify any significant or unusual items affecting the results of operations.

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

(c)	As approved by the Maryland PSC, BGE records a monthly adjustment to 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 losses in 2011 and unrealized gains in 2012 on NDT fund investments to the extent not offset by contractual accounting as described in the notes to the consolidated financial statements.

 

(2)

For 2012, primarily reflects the impact associated with the expected sale in the fourth quarter of 2012 of three generating stations associated with certain of the regulatory approvals required for the merger. For 2011, primarily reflects incremental accelerated depreciation associated with the retirement of four fossil generating units and compensation for operating two of the units past their planned retirement date under a FERC-approved reliability-must-run rate schedule.

 

(3)	Primarily reflects an increase in Generation’s decommissioning obligation for spent nuclear fuel at retired nuclear units.

 

(4)	Reflects certain costs incurred associated with the merger, including transaction costs, employee-related expenses (e.g. severance, retirement, relocation and retention bonuses) and integration initiatives.

 

(5)	Primarily reflects a non-cash bargain purchase gain (negative goodwill) in 2011 in connection with the acquisition of Wolf Hollow, net of acquisition costs.

 

(6)	Primarily reflects the impact of increased planned and unplanned nuclear outage days in 2012, excluding Constellation Energy Nuclear Group, LLC (CENG).

(7)	Primarily reflects the impact of higher nuclear fuel prices, excluding CENG.

 

(8)	Primarily reflects the addition of Constellation’s financial results in 2012, offset by the impact of decreased capacity prices related to the Reliability Pricing Model (RPM) for the PJM Interconnection, LLC (PJM) market.

 

(9)	Primarily reflects the addition of Constellation’s financial results in 2012, partially offset by the impact of decreased realized market prices for the sale of energy across all regions.

 

(10)	Reflects intercompany expense in 2011 at Generation for upgrades in transmission assets owned by ComEd, which are reflected as assets at Exelon Corporate.

 

(11)	For ComEd, primarily reflects decreased distribution revenue pursuant to the performance based formula rate and decreased cost recovery for regulatory required programs (completely offset in operating and maintenance expense).

 

(12)

Primarily reflects the addition of Constellation and BGE's financial results in 2012 and the impacts of increased wages and other benefits and increased contracting expenses (exclusive of planned nuclear refueling outages and incremental storm costs). At ComEd, primarily reflects increased contracting expenses resulting from new projects related to EIMA. At PECO, primarily reflects a decrease in contracting expenses.

 

(13)	The increase in pension and OPEB costs primarily reflect the impact of lower actuarially assumed discount rates and expected return on assets for 2012 as compared to 2011.

 

(14)

Primarily reflects the addition of Constellation and BGE's financial results in 2012 and the impact of storm costs in the BGE service territory, partially offset by decreased storm costs in the ComEd and PECO service territories and decreased costs at ComEd associated with regulatory required programs (completely offset by decreased other energy delivery revenues at ComEd).

 

(15)	Includes increased depreciation expense across the operating companies due to ongoing capital expenditures and the non-cash amortization of intangible assets at Generation primarily related to the trade name and retail relationships recorded at fair value at the merger date.

 

(16)	Primarily reflects the equity in earnings in CENG, partially offset by the non-cash amortization of the fair value basis difference recorded at the merger date.

 

(17)

At Generation, primarily reflects an increase in investment tax credits attributable to AVSR, partially offset by a 2012 reduction in manufacturing deduction benefits. At PECO, primarily reflects a 2011 benefit for the electric transmission and distribution property repairs deduction, offset by a 2012 gas property repairs deduction.

 

(18)	Primarily reflects the addition of Constellation and BGE's financial results in 2012 and the impact of higher interest expense at Generation and BGE due to higher outstanding debt.

 

(19)	Reflects the impact on earnings per share due to the increase in Exelon's average diluted common shares outstanding as a result of the merger.

 

(20)	Represents the non-cash amortization of intangible assets, net, related to commodity contracts recorded at fair value at the merger date.

 

(21)	Represents the non-cash amortization of certain debt recorded at fair value at the merger date expected to be retired in 2013.

 

10

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EXELON CORPORATION (a)

Reconciliation of Adjusted (non-GAAP) Operating

Earnings to GAAP Earnings (in millions)

Nine Months Ended September 30, 2012 and 2011

 

		Exelon Earnings  per Diluted Share				Generation				ComEd				PECO				BGE				Other (b)				Exelon
2011 GAAP Earnings (Loss)		$	2.84			$	1,325			$	295			$	311			$	—			$	(42	)		$	1,889
2011 Adjusted (non-GAAP) Operating Earnings (Loss) Adjustments:
Mark-to-Market Impact of Economic Hedging Activities			0.34				219				—				—				—				—				219
Unrealized Losses Related to NDT Fund Investments (1)			0.07				46				—				—				—				—				46
Plant Retirements and Divestitures (2)			0.04				29				—				—				—				—				29
Asset Retirement Obligation (3)			0.02				18				—				(2	)			—				—				16
Non-Cash Charge Resulting From Illinois Tax Rate Change Legislation (4)			0.04				21				4				—				—				4				29
Recovery of Costs Pursuant to the 2011 Distribution Rate Case Order (5)			(0.03	)			—				(17	)			—				—				—				(17	)
Constellation Merger and Integration Costs (6)			0.04				3				1				1				—				21				26
Other Acquisition Costs			0.01				5				—				—				—				—				5
Wolf Hollow Acquisition (7)			(0.03	)			(23	)			—				—				—				—				(23	)
2011 Adjusted (non-GAAP) Operating Earnings (Loss)			3.34				1,643				283				310				—				(17	)			2,219
Year Over Year Effects on Earnings:
Generation Energy Margins, Excluding Mark-to-Market:
Nuclear Volume			—				—				—				—				—				—				—
Nuclear Fuel Costs (8)			(0.06	)			(45	)			—				—				—				—				(45	)
Capacity Pricing (9)			(0.13	)			(102	)			—				—				—				—				(102	)
Market and Portfolio Conditions (10)			0.49				394				—				—				—				—				394
Transmission Upgrades (11)			—				34				—				—				—				(34	)			—
ComEd, PECO and BGE Margins:
Weather			(0.04	)			—				—				(34	)			—	(c)			—				(34	)
Load			(0.02	)			—				(2	)			(15	)			—	(c)			—				(17	)
Discrete Impacts of the 2012 Distribution Formula Rate Order (12)			(0.06	)			—				(52	)			—				—				—				(52	)
Other Energy Delivery (13)			0.66				—				71				—				464				—				535
Discrete Impacts of the 2011 Distribution Rate Case Order (14)			(0.03	)			—				(22	)			—				—				—				(22	)
Operating and Maintenance Expense:
Labor, Contracting and Materials (15)			(0.59	)			(324	)			(40	)			17				(130	)			—				(477	)
Planned Nuclear Refueling Outages (16)			0.02				19				—				—				—				—				19
Pension and Non-Pension Postretirement Benefits (17)			(0.09	)			(24	)			(19	)			(5	)			(14	)			(8	)			(70	)
Other Operating and Maintenance (18)			(0.18	)			(133	)			36				14				(90	)			22				(151	)
Depreciation and Amortization Expense (19)			(0.31	)			(107	)			(32	)			(7	)			(94	)			(12	)			(252	)
2011 Nuclear Decommissioning Trust Fund Special Transfer Tax Deduction (20)			(0.06	)			(46	)			—				—				—				—				(46	)
Equity in Earnings of Unconsolidated Affiliates (21)			0.03				26				—				—				—				—				26
Income Taxes (22)			—				(3	)			(14	)			(6	)			2				18				(3	)
Interest Expense, Net (23)			(0.11	)			(61	)			9				5				(43	)			(1	)			(91	)
Other (24)			(0.06	)			(6	)			1				26				(67	)			(2	)			(48	)
Share Differential (25)			(0.59	)			—				—				—				—				—				—
2012 Adjusted (non-GAAP) Operating Earnings (Loss)			2.21				1,265				219				305				28				(34	)			1,783
2012 Adjusted (non-GAAP) Operating Earnings (Loss)
Adjustments:
Mark-to-Market Impact of Economic Hedging Activities			0.23				167				—				—				—				18				185
Unrealized Gains Related to NDT Fund Investments (1)			0.07				54				—				—				—				—				54
Plant Retirements and Divestitures (2)			(0.25	)			(200	)			—				—				—				—				(200	)
Asset Retirement Obligation (3)			(0.01	)			(6	)			—				—				—				—				(6	)
Constellation Merger and Integration Costs (6)			(0.26	)			(133	)			—				(8	)			(2	)			(68	)			(211	)
Maryland Commitments (26)			(0.28	)			(22	)			—				—				(83	)			(122	)			(227	)
Amortization of Commodity Contract Intangibles (27)			(0.68	)			(545	)			—				—				—				—				(545	)
FERC Settlement (28)			(0.22	)			(172	)			—				—				—				—				(172	)
Reassessment of State Deferred Income Taxes (29)			0.15				13				—				—				—				104				117
Amortization of the Fair Value of Certain Debt (30)			0.01				7				—				—				—				—				7
Other Acquisition Costs			—				(3	)			—				—				—				—				(3	)
2012 GAAP Earnings (Loss)		$	0.97			$	425			$	219			$	297			$	(57	)		$	(102	)		$	782

 

(a)

For the nine months ended September 30, 2012, includes financial results for Constellation and BGE beginning on March 12, 2012, the date the merger was completed. Therefore, the results of operations from 2012 and 2011 are not comparable for Generation, BGE, Other and Exelon. The explanations below identify any significant or unusual items affecting the results of operations.

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

(c)	As approved by the Maryland PSC, BGE records a monthly adjustment to 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 losses in 2011 and unrealized gains in 2012 on NDT fund investments to the extent not offset by contractual accounting as described in the notes to the consolidated financial statements.

 

(2)

For 2012, primarily reflects the impact associated with the expected sale in the fourth quarter of 2012 of three generating stations associated with certain of the regulatory approvals required for the merger. For 2012 and 2011, also reflects incremental accelerated depreciation associated with the retirement of certain fossil generating units and compensation for operating two of the units past their planned retirement date under a FERC-approved reliability-must-run rate schedule.

 

(3)	Primarily reflects an increase in Generation’s decommissioning obligation for spent nuclear fuel at retired nuclear units.

 

(4)	Reflects the impact of a one-time, non-cash charge to remeasure deferred taxes at higher corporate tax rates pursuant to the Illinois tax rate change legislation.

 

(5)	Reflects one-time benefits pursuant to the ComEd 2011 electric distribution rate case order for the recovery of previously incurred costs related to the 2009 restructuring plan and for the passage of Federal health care legislation in 2010.

 

(6)	Reflects certain costs incurred associated with the merger, including transaction costs, employee-related expenses (e.g. severance, retirement, relocation and retention bonuses) and integration initiatives.

 

(7)	Primarily reflects a non-cash bargain purchase gain (negative goodwill) in 2011 in connection with the acquisition of Wolf Hollow, net of acquisition costs.

 

(8)	Primarily reflects the impact of higher nuclear fuel prices, excluding CENG.

 

(9)	Primarily reflects the impact of decreased capacity prices related to the RPM for the PJM market, partially offset by the addition of Constellation’s financial results in 2012.

 

(10)	Primarily reflects the addition of Constellation’s financial results in 2012, partially offset by the impact of decreased realized market prices for the sale of energy in the Mid-Atlantic and Midwest regions.

 

(11)	Reflects intercompany expense in 2011 at Generation for upgrades in transmission assets owned by ComEd, which are reflected as assets at Exelon Corporate.

 

(12)	Reflects the impacts on distribution revenues recorded prior to December 31, 2011, pursuant to the final order issued by the ICC on the 2011 performance based formula rate proceeding under EIMA.

 

(13)

For ComEd, primarily reflects increased distribution revenue through June 2012 pursuant to the 2011 electric distribution rate case order, increased transmission revenue and increased cost recovery for energy efficiency and demand response programs (completely offset in operating and maintenance expense).

 

(14)	Primarily reflects one-time net benefits pursuant to the 2011 ComEd electric distribution rate case order to reestablish previously expensed plant balances and to recognize the estimated recovery of funds for working capital related to the procurement of energy.

 

(15)

Primarily reflects the addition of Constellation and BGE’s financial results in 2012 and the impacts of increased wages and other benefits and increased contracting expenses (exclusive of planned nuclear refueling outages and incremental storm costs). At ComEd, primarily reflects increased contracting expenses resulting from new projects related to EIMA. At PECO, primarily reflects a decrease in contracting expenses.

 

(16)	Primarily reflects the impact of decreased planned nuclear refueling outage days in 2012, excluding Salem and CENG.

 

(17)	The increase in pension and OPEB costs primarily reflect the impact of lower actuarially assumed discount rates and expected return on assets for 2012 as compared to 2011.

 

(18)

Primarily reflects the addition of Constellation and BGE’s financial results in 2012, increased costs at ComEd associated with energy efficiency and demand response programs (completely offset by increased other energy delivery revenues at ComEd) and the impact of storm costs in the BGE service territory, partially offset by decreased storm costs in the ComEd and PECO service territories.

 

(19)	Includes increased depreciation expense across the operating companies due to ongoing capital expenditures and the non-cash amortization of intangible assets at Generation primarily related to the trade name and retail relationships recorded at fair value at the merger date.

 

(20)

Reflects one-time interest and tax benefits in 2011 associated with a change in the timing of the deduction for the transfer of cash or investments from nonqualified nuclear decommissioning trust funds to qualified decommissioning trust funds pursuant to the Energy Policy Act of 2005 and related Treasury Regulations.

 

(21)	Primarily reflects equity in earnings in CENG, partially offset by the non-cash amortization of the fair value basis difference recorded at the merger date.

 

(22)

At Generation, primarily reflects a 2012 reduction in manufacturing deduction benefits, offset by an increase in investment tax credits attributable to AVSR. At PECO, primarily reflects a 2011 benefit for the electric transmission and distribution property repairs deduction, partially offset by a 2012 gas property repairs deduction.

 

(23)	Primarily reflects the addition of Constellation and BGE’s financial results in 2012 and the impact of higher interest expense at Generation and BGE due to higher outstanding debt, partially offset by the impact of lower interest expense at ComEd and PECO due to lower outstanding debt.

 

(24)

For Generation, primarily reflects the addition of Constellation’s financial results, partially offset by realized NDT fund gains related to changes to the investment strategy and favorable market conditions in 2012. For PECO, primarily reflects decreased gross receipts tax (completely offset by decreased PECO margins) and reduced sales and use tax.

 

(25)	Reflects the impact on earnings per share due to the increase in Exelon’s average diluted common shares outstanding as a result of the merger.

 

(26)	Reflects costs incurred as part of the Maryland order approving the merger transaction.

 

(27)	Represents the non-cash amortization of intangible assets, net, related to commodity contracts recorded at fair value at the merger date.

 

(28)	Reflects costs incurred as part of a March 2012 settlement with the FERC to resolve a dispute related to Constellation’s prior period hedging and risk management transactions.

 

(29)	Primarily reflects a change in state deferred tax rates resulting from a reassessment of anticipated apportionment of Exelon’s deferred taxes as a result of the merger.

 

(30)	Represents the non-cash amortization of certain debt recorded at fair value at the merger date expected to be retired in 2013.

 

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 September 30, 2012												Three Months Ended September 30, 2011
		GAAP (b)				Adjustments				Adjusted Non-GAAP				GAAP (b)				Adjustments				Adjusted Non-GAAP
Operating revenues		$	4,017			$	480	(c),(d),(e)		$	4,497			$	2,821			$	(33	)(c),(j)		$	2,788
Operating expenses
Purchased power and fuel			2,122				278	(c),(d),(e)			2,400				1,071				(93	)(c),(d)			978
Operating and maintenance			1,415				(373	)(c),(e),(f),(g)			1,042				790				(55	(c),(f),(g),  )(j),(k)			735
Depreciation, amortization, accretion and depletion			207				(13	)(c),(f)			194				139				(19	)(c)			120
Taxes other than income			109				(4	)(c)			105				67				—				67
Total operating expenses			3,853				(112	)			3,741				2,067				(167	)			1,900
Equity in earnings of unconsolidated affiliates			10				50	(e)			60				—				—				—
Operating income			174				642				816				754				134				888
Other income and deductions
Interest expense			(85	)			(5	)(h)			(90	)			(37	)			—				(37	)
Other, net			83				(60	)(c),(f),(i)			23				(164	)			181	(i),(j)			17
Total other income and deductions			(2	)			(65	)			(67	)			(201	)			181				(20	)
Income before income taxes			172				577				749				553				315				868
Income taxes			85				210	(c),(d),(e),  (f),(g),(h),(i)			295				167				179	(c),(d),(f),  (g),(i),(j),  (k)			346
Net income			87				367				454				386				136				522
Net loss attributable to noncontrolling interests			(4	)			—				(4	)			—				—				—
Net income on common stock		$	91			$	367			$	458			$	386			$	136			$	522
		Nine Months Ended September 30, 2012 (a)												Nine Months Ended September 30, 2011
		GAAP (b)				Adjustments				Adjusted Non-GAAP				GAAP (b)				Adjustments				Adjusted Non-GAAP
Operating revenues		$	10,509			$	942	(c),(d),(e)		$	11,451			$	7,919			$	(42	)(c),(j)		$	7,877
Operating expenses
Purchased power and fuel			5,018				540	(c),(d),(e),(f)			5,558				2,795				(366	)(c),(d)			2,429
Operating and maintenance			3,756				(778	(c),(e),(f),  )(g),(k),(l),(m)			2,978				2,306				(61	(c),(f),(g),  )(j),(k)			2,245
Depreciation, amortization, accretion and depletion			564				(43	)(c),(f)			521				416				(65	)(c)			351
Taxes other than income			272				(8	)(c)			264				199				—				199
Total operating expenses			9,610				(289	)			9,321				5,716				(492	)			5,224
Equity in earnings (losses) of unconsolidated affiliates			(69	)			110	(e),(f)			41				—				—				—
Operating income			830				1,341				2,171				2,203				450				2,653
Other income and deductions
Interest expense			(223	)			(11	)(h)			(234	)			(128	)			—				(128	)
Other, net			185				(73	)(c),(f),(i)			112				(12	)			94	(i),(j)			82
Total other income and deductions			(38	)			(84	)			(122	)			(140	)			94				(46	)
Income before income taxes			792				1,257				2,049				2,063				544				2,607
Income taxes			373				417	(c),(d),(e),(f),  (g),(h),(i),(k),  (l),(m),(n)			790				738				226	(c),(d),(f),  (g),(i),(j),  (k),(o)			964
Net income			419				840				1,259				1,325				318				1,643
Net income attributable to noncontrolling interests			(6	)			—				(6	)			—				—				—
Net income on common stock		$	425			$	840			$	1,265			$	1,325			$	318			$	1,643

 

(a)	Includes financial results for Constellation beginning on March 12, 2012, the date the merger was completed.

(b)	Results reported in accordance with GAAP.

(c)

Adjustment to exclude costs associated with the retirement of fossil generating units, the impacts of the FERC approved reliability-must-run rate schedule and the impact associated with the expected sale in the fourth quarter of 2012 of three generating stations associated with certain of the regulatory approvals required for the merger.

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

(e)	Adjustment to exclude the non-cash amortization of intangible assets, net, related to commodity contracts recorded at fair value at the merger date.

(f)	Adjustment to exclude certain costs incurred associated with the merger, including transaction costs, employee-related expenses (e.g. severance, retirement, relocation and retention bonuses) and integration initiatives.

(g)	Adjustment to exclude the increase in Generation's decommissioning obligation for spent nuclear fuel at retired nuclear units.

(h)	Adjustment to exclude the non-cash amortization of certain debt recorded at fair value at the merger date expected to be retired in 2013.

(i)	Adjustment to exclude the unrealized gains in 2012 and losses in 2011 associated with Generation’s NDT fund investments and the associated contractual accounting relating to income taxes.

(j)	Adjustment to exclude the non-cash bargain purchase gain (negative goodwill) associated with the acquisition of Wolf Hollow, net of acquisition costs.

(k)	Adjustment to exclude certain costs associated with various acquisitions.

(l)	Adjustment to exclude costs incurred as part of the Maryland order approving the merger transaction.

(m)	Adjustment to exclude costs associated with the March 2012 settlement with the FERC.

(n)	Adjustment to exclude a one-time, non-cash benefit associated with a change in state deferred tax rates resulting from a reassessment of anticipated apportionment of Exelon’s deferred taxes as a result of the merger.

(o)	Adjustment to exclude a one-time, non-cash charge to remeasure deferred taxes at higher corporate tax rates pursuant to the Illinois tax rate change legislation.

 

12

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EXELON CORPORATION

Reconciliation of Adjusted (non-GAAP) Operating Earnings to

GAAP Consolidated Statements of Operations

(unaudited)

(in millions)

 

		ComEd
		Three Months Ended September 30, 2012												Three Months Ended September 30, 2011
		GAAP (a)				Adjustments				Adjusted Non- GAAP				GAAP (a)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	1,484			$	—			$	1,484			$	1,784			$	—			$	1,784
Operating expenses
Purchased power			678				—				678				932				—				932
Operating and maintenance			350				—				350				396				(1	)(b)			395
Depreciation and amortization			157				—				157				135				—				135
Taxes other than income			81				—				81				78				—				78
Total operating expenses			1,266				—				1,266				1,541				(1	)			1,540
Operating income			218				—				218				243				1				244
Other income and deductions
Interest expense			(74	)			—				(74	)			(86	)			—				(86	)
Other, net			5				—				5				16				—				16
Total other income and deductions			(69	)			—				(69	)			(70	)			—				(70	)
Income before income taxes			149				—				149				173				1				174
Income taxes			59				—				59				61				—	(b)			61
Net income		$	90			$	—			$	90			$	112			$	1			$	113
		Nine Months Ended September 30, 2012												Nine Months Ended September 30, 2011
		GAAP (a)				Adjustments				Adjusted Non- GAAP				GAAP (a)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	4,154			$	—			$	4,154			$	4,694			$	—			$	4,694
Operating expenses
Purchased power			1,886				—				1,886				2,436				—				2,436
Operating and maintenance			1,000				—				1,000				930				12	(b),(c)			942
Depreciation and amortization			458				—				458				405				—				405
Taxes other than income			224				—				224				226				—				226
Total operating expenses			3,568				—				3,568				3,997				12				4,009
Operating income			586				—				586				697				(12	)			685
Other income and deductions
Interest expense			(230	)			—				(230	)			(257	)			—				(257	)
Other, net			12				—				12				24				—				24
Total other income and deductions			(218	)			—				(218	)			(233	)			—				(233	)
Income before income taxes			368				—				368				464				(12	)			452
Income taxes			149				—				149				169				—	(b),(c),(d)			169
Net income		$	219			$	—			$	219			$	295			$	(12	)		$	283

 

(a)	Results reported in accordance with GAAP.

(b)	Adjustment to exclude certain costs incurred associated with the merger, including transaction costs, employee-related expenses (e.g. severance, retirement, relocation and retention bonuses) and integration initiatives.

(c)	Adjustment to exclude one-time benefits for the recovery of previously incurred costs related to the 2009 restructuring plan and for the passage of Federal health care legislation in 2010.

(d)	Adjustment to exclude a one-time, non-cash charge to remeasure deferred taxes at higher corporate tax rates pursuant to the Illinois tax rate change legislation.

 

13

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EXELON CORPORATION

Reconciliation of Adjusted (non-GAAP) Operating Earnings to

GAAP Consolidated Statements of Operations

(unaudited)

(in millions)

 

		PECO
		Three Months Ended September 30, 2012												Three Months Ended September 30, 2011
		GAAP (a)				Adjustments				Adjusted Non- GAAP				GAAP (a)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	806			$	—			$	806			$	946			$	—			$	946
Operating expenses
Purchased power and fuel			326				—				326				464				—				464
Operating and maintenance			199				(3	)(b)			196				219				2	(b), (c)			221
Depreciation and amortization			55				—				55				51				—				51
Taxes other than income			48				—				48				59				—				59
Total operating expenses			628				(3	)			625				793				2				795
Operating income			178				3				181				153				(2	)			151
Other income and deductions
Interest expense			(32	)			—				(32	)			(34	)			—				(34	)
Other, net			2				—				2				3				—				3
Total other income and deductions			(30	)			—				(30	)			(31	)			—				(31	)
Income before income taxes			148				3				151				122				(2	)			120
Income taxes			25				1	(b)			26				17				(1	)(b), (c)			16
Net income			123				2				125				105				(1	)			104
Preferred security dividends			1				—				1				1				—				1
Net income on common stock		$	122			$	2			$	124			$	104			$	(1	)		$	103
		Nine Months Ended September 30, 2012												Nine Months Ended September 30, 2011
		GAAP (a)				Adjustments				Adjusted  Non- GAAP				GAAP (a)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	2,396			$	—			$	2,396			$	2,942			$	—			$	2,942
Operating expenses
Purchased power and fuel			1,033				—				1,033				1,506				—				1,506
Operating and maintenance			574				(13	)(b)			561				597				2	(b), (c)			599
Depreciation and amortization			161				—				161				150				—				150
Taxes other than income			122				—				122				165				—				165
Total operating expenses			1,890				(13	)			1,877				2,418				2				2,420
Operating income			506				13				519				524				(2	)			522
Other income and deductions
Interest expense			(94	)			—				(94	)			(102	)			—				(102	)
Other, net			6				—				6				11				—				11
Total other income and deductions			(88	)			—				(88	)			(91	)			—				(91	)
Income before income taxes			418				13				431				433				(2	)			431
Income taxes			118				5	(b)			123				119				(1	)(b), (c)			118
Net income			300				8				308				314				(1	)			313
Preferred security dividends			3				—				3				3				—				3
Net income on common stock		$	297			$	8			$	305			$	311			$	(1	)		$	310

 

(a)	Results reported in accordance with GAAP.

(b)	Adjustment to exclude certain costs incurred associated with the merger, including transaction costs, employee-related expenses (e.g. severance, retirement, relocation and retention bonuses) and integration initiatives

(c)	Adjustment to exclude a decrease in PECO's asset retirement obligation.

 

14

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EXELON CORPORATION

Reconciliation of Adjusted (non-GAAP) Operating Earnings to

GAAP Consolidated Statements of Operations

(unaudited)

(in millions)

 

		BGE
		Three Months Ended September 30, 2012
		GAAP (a)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	720			$	—			$	720
Operating expenses
Purchased power and fuel			373				—				373
Operating and maintenance			201				(1	)(b)			200
Depreciation and amortization			68				—				68
Taxes other than income			48				—				48
Total operating expenses			690				(1	)			689
Operating income			30				1				31
Other income and deductions
Interest expense			(35	)			—				(35	)
Other, net			5				—				5
Total other income and deductions			(30	)			—				(30	)
Income before income taxes			—				1				1
Income taxes			—				—	(b)			—
Net income			—				1				1
Preference stock dividends			4				—				4
Net loss on common stock		$	(4	)		$	1			$	(3	)
		March 12, 2012 through September 30, 2012
		GAAP (a)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	1,388			$	113	(c)		$	1,501
Operating expenses
Purchased power and fuel			727				—				727
Operating and maintenance			423				(33	)(b),(c)			390
Depreciation and amortization			157				—				157
Taxes other than income			104				2	(c)			106
Total operating expenses			1,411				(31	)			1,380
Operating income (loss)			(23	)			144				121
Other income and deductions
Interest expense			(77	)			—				(77	)
Other, net			14				—				14
Total other income and deductions			(63	)			—				(63	)
Income (loss) before income taxes			(86	)			144				58
Income taxes			(37	)			59	(b),(c)			22
Net income (loss)			(49	)			85				36
Preference stock dividends			8				—				8
Net income (loss) on common stock		$	(57	)		$	85			$	28

 

(a)	Results reported in accordance with GAAP.

(b)	Adjustment to exclude certain costs incurred associated with the merger, including transaction costs, employee-related expenses (e.g. severance, retirement, relocation and retention bonuses) and integration initiatives

(c)	Adjustment to exclude costs incurred as part of the Maryland order approving the merger transaction.

 

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 September 30, 2012 (b)												Three Months Ended September 30, 2011
		GAAP (c)				Adjustments				Adjusted Non- GAAP				GAAP (c)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	(462	)		$	(16	)(d)		$	(478	)		$	(297	)		$	—			$	(297	)
Operating expenses
Purchased power and fuel			(473	)			—				(473	)			(346	)			—				(346	)
Operating and maintenance			(9	)			(1	)(e)			(10	)			8				(11	)(e)			(3	)
Depreciation and amortization			13				—				13				7				—				7
Taxes other than income			4				—				4				3				—				3
Total operating expenses			(465	)			(1	)			(466	)			(328	)			(11	)			(339	)
Operating income (loss)			3				(15	)			(12	)			31				11				42
Other income and deductions
Interest expense			(20	)			3	(e)			(17	)			(25	)			—				(25	)
Other, net			6				—				6				3				—				3
Total other income and deductions			(14	)			3				(11	)			(22	)			—				(22	)
Income (loss) before income taxes			(11	)			(12	)			(23	)			9				11				20
Income taxes			(8	)			(4	)(d),(e)			(12	)			10				5	(e)			15
Net income (loss)		$	(3	)		$	(8	)		$	(11	)		$	(1	)		$	6			$	5
		Nine Months Ended September 30, 2012 (b)												Nine Months Ended September 30, 2011
		GAAP (c)				Adjustments				Adjusted Non- GAAP				GAAP (c)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	(1,242	)		$	(31	)(d)		$	(1,273	)		$	(850	)		$	—			$	(850	)
Operating expenses
Purchased power and fuel			(1,266	)			—				(1,266	)			(901	)			—				(901	)
Operating and maintenance			196				(227	)(e),(f)			(31	)			30				(35	)(e)			(5	)
Depreciation and amortization			36				—				36				16				—				16
Taxes other than income			15				—				15				12				—				12
Total operating expenses			(1,019	)			(227	)			(1,246	)			(843	)			(35	)			(878	)
Operating income (loss)			(223	)			196				(27	)			(7	)			35				28
Other income and deductions
Interest expense			(73	)			3	(e)			(70	)			(58	)			—				(58	)
Other, net			36				—				36				31				—				31
Total other income and deductions			(37	)			3				(34	)			(27	)			—				(27	)
Income (loss) before income taxes			(260	)			199				(61	)			(34	)			35				1
Income taxes			(158	)			131	(d),(e),  (f),(g)			(27	)			8				10	(e),(h)			18
Net loss		$	(102	)		$	68			$	(34	)		$	(42	)		$	25			$	(17	)

 

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

(b)	Includes financial results for Constellation and BGE, beginning on March 12, 2012, the date the merger was completed.

(c)	Results reported in accordance with GAAP.

(d)	Adjustment to exclude the mark-to-market impact of Exelon's economic hedging activities.

(e)	Adjustment to exclude certain costs incurred associated with the merger, including transaction costs, employee-related expenses (e.g. severance, retirement, relocation and retention bonuses) and integration initiatives.

(f)	Adjustment to exclude costs incurred as part of the Maryland order approving the merger transaction.

(g)	Adjustment to exclude a one-time, non-cash benefit associated with a change in state deferred tax rates resulting from a reassessment of anticipated apportionment of Exelon’s deferred taxes as a result of the merger.

(h)	Adjustment to exclude a one-time, non-cash charge to remeasure deferred taxes at higher corporate tax rates pursuant to the Illinois tax rate change legislation.

 

16

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EXELON CORPORATION

Exelon Generation Statistics

 

		Three Months Ended
		Sep. 30, 2012 (a)				Jun. 30, 2012 (a)				Mar. 31, 2012				Dec. 31, 2011				Sep. 30, 2011
Supply (in GWhs)
Nuclear Generation (b)
Mid-Atlantic			11,449				12,277				12,064				11,587				12,158
Midwest			23,132				22,860				23,198				23,306				23,887
Total Nuclear Generation			34,581				35,137				35,262				34,893				36,045
Fossil and Renewables (b)
Mid-Atlantic (b)(d)			2,547				2,316				1,791				1,637				1,722
Midwest			171				228				272				188				88
New England			3,953				2,755				889				—				2
New York			—				—				—				—				—
ERCOT (e)			2,410				2,177				840				457				1,214
Other (f)			1,813				1,923				819				394				249
Total Fossil and Renewables			10,894				9,399				4,611				2,676				3,275
Purchased Power
Mid-Atlantic (c)			6,811				7,111				2,577				739				702
Midwest			3,035				1,558				2,552				1,143				1,756
New England			1,961				3,905				1,100				—				—
New York (c)			4,026				2,818				935				—				—
ERCOT (e)			7,741				6,686				2,832				1,150				2,928
Other (f)			5,372				6,012				1,769				482				887
Total Purchased Power			28,946				28,090				11,765				3,514				6,273
Total Supply/Sales by Region (h)
Mid-Atlantic (g)			20,807				21,704				16,432				13,963				14,582
Midwest (g)			26,338				24,646				26,022				24,637				25,731
New England			5,914				6,660				1,989				—				2
New York			4,026				2,818				935				—				—
ERCOT			10,151				8,863				3,672				1,607				4,142
Other (f)			7,185				7,935				2,588				876				1,136
Total Supply/Sales by Region			74,421				72,626				51,638				41,083				45,593
		Three Months Ended
		Sep. 30, 2012 (a)				Jun. 30, 2012 (a)				Mar. 31, 2012				Dec. 31, 2011				Sep. 30, 2011
Average Margin ($/MWh) (i) (j)
Mid-Atlantic (k)		$	43.64			$	40.68			$	46.86			$	56.08			$	57.19
Midwest (k)			27.68				31.00				31.40				34.18				33.15
New England			13.70				9.01				19.61				n.m.				n.m.
New York			3.23				13.84				8.56				n.m.				n.m.
ERCOT			15.66				13.43				9.26				(6.02	)			24.85
Other (f)			5.85				4.28				5.41				(4.13	)			(4.85	)
Average Margin - Overall Portfolio		$	25.96			$	26.15			$	32.57			$	39.31			$	39.19
Around-the-clock Market Prices ($/MWh) (l)
PJM West Hub		$	38.13			$	30.40			$	31.10			$	35.07			$	46.17
NiHub			34.29				26.02				27.13				25.97				37.30
New England Mass Hub ATC Spark Spread			12.69				7.77				0.80				6.70				13.30
NYPP Zone A			34.56				27.87				27.18				32.03				40.89
ERCOT North Spark Spread			3.60				6.01				3.46				1.11				36.70
		Three Months Ended
		Sep. 30, 2012 (a)				Jun. 30, 2012 (a)				Mar. 31, 2012				Dec. 31, 2011				Sep. 30, 2011
Outage Days (m)
Refueling			43				51				67				103				33
Non-refueling			40				16				16				11				3
Total Outage Days			83				67				83				114				36

 

(a)	Includes results for Constellation beginning on March 12, 2012, the date the merger was completed.

(b)	Includes the proportionate share of output where Generation has an undivided ownership interest in jointly-owned generating plants and does not include ownership through equity method investments (e.g. CENG).

(c)	Purchased power includes physical volumes of 3,126 GWhs, 3,225 GWhs and 319 GWhs in the Mid-Atlantic and 2,997 GWhs, 2,817 GWhs and 722 GWhs in New York as a result of the PPA with CENG for the three months ended September 30, 2012, June 30, 2012 and March 31, 2012, respectively.

(d)	Excludes generation under the reliability-must-run rate schedule and generation of Brandon Shores, H.A. Wagner, and C.P. Crane, the generating facilities planned for divestiture as a result of the Exelon and Constellation merger.

(e)	Generation from Wolf Hollow is included in purchased power for the period ending June 30, 2011 and through the acquisition date of August 24, 2011, and included within Fossil and Renewables subsequent to the acquisition date.

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

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

(h)	Total sales do not include physical proprietary trading volumes of 4,352 GWhs, 3,873 GWhs, 1,757 GWhs, 1,235 GWhs and 1,679 GWhs for the three months ended September 30, 2012, June 30, 2012, March 31, 2012, December 31, 2011, and September 30, 2011, respectively.

(i)

Excludes Generation’s other business activities not allocated to a region, including retail and wholesale gas, upstream natural gas, proprietary trading, energy efficiency, energy management and demand response, and the design, construction and operation of renewable energy facilities. Also excludes Generation’s compensation under the reliability-must-run rate schedule, the financial results of Brandon Shores, H.A. Wagner, and C.P. Crane, the generating facilities planned for divestiture as a result of the merger, amortization of certain intangible assets relating to commodity contracts recorded at fair value as a result of the Exelon and Constellation merger and other miscellaneous revenues not allocated to a region.

(j)	Excludes the mark-to-market impact of Generation’s economic hedging activities.

(k)	Includes affiliate sales to PECO and BGE in the Mid-Atlantic region and affiliate sales to ComEd and settlements of the ComEd swap in the Midwest region.

(l)	Represents the average for the quarter.

(m)	Outage days exclude Salem and CENG.

 

17

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EXELON CORPORATION

Exelon Generation Statistics

Nine Months Ended September 30, 2012 and 2011

 

		September 30, 2012 (a)				September 30, 2011
Supply (in GWhs)
Nuclear Generation (b)
Mid-Atlantic			35,790				35,700
Midwest			69,190				68,704
Total Nuclear Generation			104,980				104,404
Fossil and Renewables (b)
Mid-Atlantic (b)(d)			6,654				5,936
Midwest			671				408
New England			7,597				8
ERCOT (e)			5,427				1,572
Other (f)			4,555				1,037
Total Fossil and Renewables			24,904				8,961
Purchased Power
Mid-Atlantic (c)			16,498				2,159
Midwest			7,145				4,827
New England			6,966				—
New York (c)			7,779				—
ERCOT (e)			17,259				6,387
Other (f)			13,153				2,021
Total Purchased Power			68,800				15,394
Total Supply/Sales by Region (h)
Mid-Atlantic(g)			58,942				43,795
Midwest (g)			77,006				73,939
New England			14,563				8
New York			7,779				—
ERCOT			22,686				7,959
Other (f)			17,708				3,058
Total Supply/Sales by Region			198,684				128,759
		September 30, 2012 (a)				September 30, 2011
Average Margin ($/MWh) (i) (j)
Mid-Atlantic (k)		$	43.48			$	58.61
Midwest (k)			30.00				36.57
New England			12.22				n.m.
New York			7.71				n.m.
ERCOT			13.75				11.81
Other (f)			5.08				(3.27	)
Average Margin - Overall Portfolio		$	27.75			$	41.62
Around-the-clock Market Prices ($/MWh) (l)
PJM West Hub		$	33.23			$	46.42
NiHub			29.16				35.46
NEPOOL Mass Hub			7.04				9.41
NYPP Zone A			29.79				38.65
ERCOT North Spark Spread			4.39				15.48

 

(a)	Includes results for Constellation beginning on March 12, 2012, the date the merger was completed.

(b)	Includes the proportionate share of output where Generation has an undivided ownership interest in jointly-owned generating plants and does not include ownership through equity method investments (e.g. CENG).

(c)	Purchased power includes physical volumes of 6,670 GWhs in the Mid-Atlantic and 6,536 GWhs in New York as a result of the PPA with CENG for the nine months ended September 30, 2012.

(d)	Excludes generation under the reliability-must-run rate schedule and generation of Brandon Shores, H.A. Wagner, and C.P. Crane, the generating facilities planned for divestiture as a result of the Exelon and Constellation merger.

(e)	Generation from Wolf Hollow is included in purchased power for the period ending June 30, 2011 and through the acquisition date of August 24, 2011, and included within Fossil and Renewables subsequent to the acquisition date.

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

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

(h)	Total sales do not include physical proprietary trading volumes of 9,981 GWhs and 4,508 GWhs for the nine months ended September 30, 2012 and 2011, respectively.

(i)

Excludes Generation's other business activities not allocated to a region, including retail and wholesale gas, upstream natural gas, proprietary trading, energy efficiency, energy management and demand response, and the design, construction and operation of renewable energy facilities. Also excludes Generation’s compensation under the reliability-must-run rate schedule, the financial results of Brandon Shores, H.A. Wagner, and C.P. Crane, the generating facilities planned for divestiture as a result of the merger, amortization of certain intangible assets relating to commodity contracts recorded at fair value as a result of the Exelon and Constellation merger and other miscellaneous revenues not allocated to a region.

(j)	Excludes the mark-to-market impact of Generation's economic hedging activities.

(k)	Includes affiliate sales to PECO and BGE in the Mid-Atlantic region and affiliate sales to ComEd and settlements of the ComEd swap in the Midwest region.

(l)	Represents the average for the quarter.

 

18

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EXELON CORPORATION

ComEd Statistics

 

		Three Months Ended September 30, 2012 and 2011
		Electric Deliveries (in GWhs)																Revenue (in millions)
														Weather- Normal
		2012				2011				% Change				% Change				2012				2011				% Change
Retail Deliveries and Sales (a)
Residential			9,265				8,876				4.4	%			1.4	%		$	876			$	1,111				(21.2	)%
Small Commercial & Industrial			8,939				8,812				1.4	%			(0.1	)%			344				410				(16.1	)%
Large Commercial & Industrial			7,506				7,494				0.2	%			(0.8	)%			102				102				0.0	%
Public Authorities & Electric Railroads			314				303				3.6	%			3.3	%			11				12				(8.3	)%
Total Retail			26,024				25,485				2.1	%			0.2	%			1,333				1,635				(18.5	)%
Other Revenue (b)																			151				149				1.3	%
Total Electric Revenue																		$	1,484			$	1,784				(16.8	)%
Purchased Power																		$	678			$	932				(27.3	)%
														% Change
Heating and Cooling Degree-Days		2012				2011				Normal				From 2011				From Normal
Heating Degree-Days			107				147				119				(27.2	)%			(10.1	)%
Cooling Degree-Days			859				785				613				9.4	%			40.1	%

 

		Nine Months Ended September 30, 2012 and 2011
		Electric Deliveries (in GWhs)																Revenue (in millions)
														Weather- Normal
		2012				2011				% Change				% Change				2012				2011				% Change
Retail Deliveries and Sales (a)
Residential			22,345				22,107				1.1	%			(0.5	)%		$	2,372			$	2,745				(13.6	)%
Small Commercial & Industrial			24,742				24,648				0.4	%			(0.2	)%			997				1,177				(15.3	)%
Large Commercial & Industrial			21,048				21,011				0.2	%			0.1	%			296				288				2.8	%
Public Authorities & Electric Railroads			932				920				1.3	%			3.4	%			32				38				(15.8	)%
Total Retail			69,067				68,686				0.6	%			(0.1	)%			3,697				4,248				(13.0	)%
Other Revenue (b)																			457				446				2.5	%
Total Electric Revenue																		$	4,154			$	4,694				(11.5	)%
Purchased Power																		$	1,886			$	2,436				(22.6	)%
														% Change
Heating and Cooling Degree-Days		2012				2011				Normal				From 2011				From Normal
Heating Degree-Days			3,035				4,302				4,048				(29.5	)%			(25.0	)%
Cooling Degree-Days			1,321				1,022				831				29.3	%			59.0	%
Number of Electric Customers		2012				2011
Residential			3,450,364				3,439,704
Small Commercial & Industrial			365,245				364,917
Large Commercial & Industrial			1,986				2,041
Public Authorities & Electric Railroads			4,795				4,801
Total			3,822,390				3,811,463

 

(a)

Reflects delivery volumes and revenues 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 late payment charges and mutual assistance program revenues.

 

19

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EXELON CORPORATION

PECO Statistics

 

		Three Months Ended September 30, 2012 and 2011 Electric and Gas Deliveries																Revenue (in millions)
														Weather- Normal
		2012				2011				% Change				% Change				2012				2011				% Change
Electric (in GWhs)
Retail Deliveries and Sales (a)
Residential			4,059				4,085				(0.6	)%			(3.6	)%		$	497			$	598				(16.9	)%
Small Commercial & Industrial			2,245				2,272				(1.2	)%			(1.7	)%			120				138				(13.0	)%
Large Commercial & Industrial			4,165				4,370				(4.7	)%			(4.8	)%			66				85				(22.4	)%
Public Authorities & Electric Railroads			240				239				0.4	%			0.4	%			8				9				(11.1	)%
Total Retail			10,709				10,966				(2.3	)%			(3.6	)%			691				830				(16.7	)%
Other Revenue (b)																			61				61				0.0	%
Total Electric Revenue																			752				891				(15.6	)%
Gas (in mmcfs)
Retail Deliveries and Sales
Retail Sales (c)			3,646				3,687				(1.1	)%			(3.0	)%			49				51				(3.9	)%
Transportation and Other			5,796				6,190				(6.4	)%			(5.3	)%			5				4				25.0	%
Total Gas			9,442				9,877				(4.4	)%			(4.4	)%			54				55				(1.8	)%
Total Electric and Gas Revenues																		$	806			$	946				(14.8	)%
Purchased Power and Fuel																		$	326			$	464				(29.7	)%
														% Change
Heating and Cooling Degree-Days		2012				2011				Normal				From 2011				From Normal
Heating Degree-Days			14				18				35				(22.2	)%			(60.0	)%
Cooling Degree-Days			1,138				1,109				934				2.6	%			21.8	%

 

		Nine Months Ended September 30, 2012 and 2011 Electric and Gas Deliveries																Revenue (in millions)
														Weather- Normal
		2012				2011				% Change				% Change				2012				2011				% Change
Electric (in GWhs)
Retail Deliveries and Sales (a)
Residential			10,154				10,750				(5.5	)%			(2.4	)%		$	1,297			$	1,542				(15.9	)%
Small Commercial & Industrial			6,155				6,437				(4.4	)%			(2.8	)%			357				472				(24.4	)%
Large Commercial & Industrial			11,545				12,012				(3.9	)%			(3.9	)%			179				261				(31.4	)%
Public Authorities & Electric Railroads			714				710				0.6	%			0.6	%			24				29				(17.2	)%
Total Retail			28,568				29,909				(4.5	)%			(3.0	)%			1,857				2,304				(19.4	)%
Other Revenue (b)																			171				183				(6.6	)%
Total Electric Revenue																			2,028				2,487				(18.5	)%
Gas (in mmcfs)
Retail Deliveries and Sales
Retail Sales (c)			32,301				38,982				(17.1	)%			0.5	%			344				429				(19.8	)%
Transportation and Other			19,397				21,428				(9.5	)%			(8.2	)%			24				26				(7.7	)%
Total Gas			51,698				60,410				(14.4	)%			(2.5	)%			368				455				(19.1	)%
Total Electric and Gas Revenues																		$	2,396			$	2,942				(18.6	)%
Purchased Power and Fuel																		$	1,033			$	1,506				(31.4	)%
														% Change
Heating and Cooling Degree-Days		2012				2011				Normal				From 2011				From Normal
Heating Degree-Days			2,265				2,855				2,974				(20.7	)%			(23.8	)%
Cooling Degree-Days			1,572				1,603				1,282				(1.9	)%			22.6	%

 

Number of Electric Customers		2012				2011				Number of Gas Customers		2012				2011
Residential			1,416,894				1,412,059			Residential			452,624				448,763
Small Commercial & Industrial			148,829				148,210			Commercial & Industrial			41,338				40,883
Large Commercial & Industrial			3,103				3,116			Total Retail			493,962				489,646
Public Authorities & Electric Railroads			9,666				9,693			Transportation			900				868
Total			1,578,492				1,573,078			Total			494,862				490,514

 

(a)

Reflects delivery volumes and revenues 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 revenues.

(c)

Reflects delivery volumes and revenues 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 September 30, 2012

 

		Electric and Gas Deliveries				Revenue (in  millions)
Electric (in GWhs)
Retail Deliveries and Sales (a)
Residential			3,829			$	400
Small Commercial & Industrial			4,458				166
Large Commercial & Industrial			462				10
Public Authorities & Electric Railroads			47				8
Total Retail			8,796				584
Other Revenue (b)							64
Total Electric Revenue							648
Gas (in mmcfs)
Retail Deliveries and Sales (c)
Retail Sales			11,147				63
Transportation and Other (d)			2,311				9
Total Gas			13,458				72
Total Electric and Gas Revenues						$	720
Purchased Power and Fuel						$	373
Heating and Cooling Degree-Days		2012
Heating Degree-Days			69
Cooling Degree-Days			698

March 12, 2012 through September 30, 2012

 

		Electric and Gas Deliveries				Revenue (in millions)
Electric (in GWhs)
Retail Deliveries and Sales (a)
Residential			7,107			$	682
Small Commercial & Industrial			8,636				327
Large Commercial & Industrial			1,942				41
Public Authorities & Electric Railroads			120				18
Total Retail			17,805				1,068
Other Revenue (b)							138
Total Electric Revenue							1,206
Gas (in mmcfs)
Retail Deliveries and Sales (c)
Retail Sales			31,549				153
Transportation and Other (d)			9,075				29
Total Gas			40,624				182
Total Electric and Gas Revenues						$	1,388
Purchased Power and Fuel						$	727
Heating and Cooling Degree-Days		2012
Heating Degree-Days			2,188
Cooling Degree-Days			987

As of September 30, 2012

 

Number of Electric Customers		2012				Number of Gas Customers		2012
Residential			1,115,764			Residential			610,353
Small Commercial & Industrial			119,431			Commercial & Industrial			43,978
Large Commercial & Industrial			5,448			Total Retail			654,331
Public Authorities & Electric Railroads			318			Transportation			—
Total			1,240,961			Total			654,331

 

(a)

Reflects delivery volumes and revenues from customers purchasing electricity directly from BGE and customers electing to receive electric generation service 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 volumes and revenues 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 2,311 mmcfs ($8 million) for the three months ended September 30, 2012 and off-system revenue of 9,075 mmcfs ($25 million) from March 12, 2012 through September 30, 2012.

 

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