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

October 29, 2014

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 October 29, 2014, Exelon Corporation (Exelon) announced via press release its results for the third quarter ended September 30, 2014. A copy of the press release and related attachments is attached hereto as Exhibit 99.1. Also attached as Exhibit 99.2 to this Current Report on Form 8-K are the presentation slides to be used at the third quarter 2014 earnings conference call. This Form 8-K and the attached exhibits are provided under Items 2.02, 7.01 and 9.01 of Form 8-K and are furnished to, but not filed with, the Securities and Exchange Commission.

Exelon has scheduled the conference call for 11:00 AM ET (10:00 AM CT) on October 29, 2014. 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 15202536. 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 29, 2014. The U.S. and Canada call-in number for replays is 855-859-2056, and the international call-in number is 404-537-3406. The conference ID number is 15202536.

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 2013 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 22; (2) Exelon’s Third Quarter 2014 Quarterly Report on Form 10-Q in (a) Part II, Other Information, ITEM 1A. Risk Factors; (b) Part 1, Financial Information, ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) Part I, Financial Information, ITEM 1. Financial Statements: Note 18; and (3) other factors discussed in filings with the Securities and Exchange Commission 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.

 

October 29, 2014

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EXHIBIT INDEX

 

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

Exhibit 99.1

 

 

Contact:

Francis Idehen

Investor Relations

312-394-3967

Paul Adams

Corporate Communications

410-470-4167

EXELON ANNOUNCES THIRD QUARTER 2014 RESULTS

CHICAGO (Oct. 29, 2014) — Exelon Corporation (NYSE: EXC) announced third quarter 2014 consolidated earnings as follows:

 

		Third Quarter
		2014				2013
Adjusted (non-GAAP) Operating Results:
Net Income ($ millions)		$	676			$	667
Diluted Earnings per Share		$	0.78			$	0.78
GAAP Results:
Net Income ($ millions)		$	993			$	738
Diluted Earnings per Share		$	1.15			$	0.86

“Exelon achieved earnings above our guidance range this quarter, with strong performance from both our utility and generation businesses,” said Christopher M. Crane, Exelon’s president and CEO. “We continue to execute our strategy to diversify and grow the business, and based on our results through September and our outlook for the fourth quarter, we are narrowing our full-year operating earnings guidance to $2.30 to $2.50 per share.”

 

1

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Third Quarter Operating Results

Exelon’s adjusted (non-GAAP) operating earnings were $0.78 per share in the third quarters of both 2014 and 2013. Earnings in the third quarter of 2014 primarily reflected the following favorable factors:

 

•

Higher revenue net fuel at Generation as a result of higher realized energy prices, favorable portfolio management optimization activities, and the cancellation of Department of Energy spent nuclear fuel disposal fees;

 

•

Favorable distribution and transmission revenue at ComEd due to increased capital investment; and

 

•

Higher distribution revenue pursuant to increased rates effective in December 2013 at BGE.

These factors were offset by:

 

•

Higher operating and maintenance (O&M) expenses reflecting increased non-refueling nuclear generating outage days and inflation across all operating companies, offset in part by reduced other postretirement benefit costs;

 

•

Incremental storm costs at PECO and BGE; and

 

•

Unfavorable weather at ComEd and PECO.

Adjusted (non-GAAP) operating earnings for the third quarter of 2014 do not include the following items (after tax) that were included in reported GAAP earnings:

 

		(in millions)				(per diluted share)
Exelon Adjusted (non-GAAP) Operating Earnings		$	676			$	0.78
Mark-to-Market Impact of Economic Hedging Activities			158				0.18
Unrealized Losses Related to NDT Fund Investments			(22	)			(0.03	)
Asset Retirement Obligation			13				0.02
Plant Retirements and Divestitures (primarily gain on sale of Safe Harbor)			197				0.23
Long-Lived Asset Impairment			(30	)			(0.03	)
Merger and Integration Costs			(64	)			(0.07	)
Amortization of Commodity Contract Intangibles			12				0.01
Tax Settlements			66				0.08
Non-Controlling Interest			(13	)			(0.02	)
Exelon GAAP Net Income		$	993			$	1.15

 

2

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Adjusted (non-GAAP) operating earnings for the third quarter of 2013 do not include the following items (after tax) that were included in reported GAAP earnings:

 

		(in millions)				(per diluted share)
Exelon Adjusted (non-GAAP) Operating Earnings		$	667			$	0.78
Mark-to-Market Impact of Economic Hedging Activities			148				0.17
Unrealized Gains Related to NDT Fund Investments			24				0.03
Asset Retirement Obligation			(6	)			(0.01	)
Long-Lived Asset Impairments			(28	)			(0.03	)
Merger and Integration Costs			(26	)			(0.03	)
Amortization of Commodity Contract Intangibles			(41	)			(0.05	)
Exelon GAAP Net Income		$	738			$	0.86

Third Quarter and Recent Highlights

 

•

Pepco Holdings, Inc. Merger: On September 23, 2014, Pepco Holdings, Inc. (PHI) stockholders overwhelmingly approved the merger of PHI and Exelon. The merger continues to be conditioned upon approval by the Federal Energy Regulatory Commission, the District of Columbia Public Service Commission, and the state public service commissions of Delaware, Maryland, and New Jersey. On October 7, 2014, the Virginia State Corporation Commission issued its order granting approval to transfer control of PHI subsidiaries Delmarva Power & Light Company and Potomac Electric Power Company to Exelon. In addition, the transfer of certain PHI communications licenses requires approval by the Federal Communication Commission. Exelon and PHI will continue to work cooperatively with the Department of Justice as it conducts its review of the proposed merger under the Hart-Scott Rodino Antitrust Improvements Act of 1976. Exelon and PHI continue to expect the merger to be complete in the second or third quarter of 2015.

 

•

Exelon Generation

 

•

On September 29th, Exelon Generation announced that it is planning to build two combined-cycle gas turbine (CCGT) units in Texas utilizing a new General Electric technology that will make them among the cleanest, most efficient CCGTs in the nation. The new units are being built on existing Exelon sites: one at Colorado Bend Generating Station, currently a 498 megawatt (MW) natural gas plant in Wharton County, Texas; and one at the 704 MW Wolf Hollow natural gas plant in Granbury, Texas. Each new unit will add approximately 1,000 MW of capacity to their respective sites.

 

3

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•

During the third quarter Exelon announced the sale of three natural gas generation assets. Sale agreements were signed for Fore River (CCGT) in Massachusetts, Quail Run (CCGT) in Texas, and West Valley (CT) in Utah. The sale of the three natural gas generation assets and Exelon’s interest in the Safe Harbor hydroelectric facility in Pennsylvania, which closed in August 2014 and resulted in after-tax proceeds of approximately $975 million, are expected to generate aggregate pre-tax proceeds of $1.3 billion, which will be used primarily to finance a portion of the acquisition of PHI.

 

•

On October 24, 2014, Exelon entered into a sale agreement to divest its proportional ownership interests in the Keystone and Conemaugh generating facilities in Pennsylvania for total sales proceeds of approximately $475 million, including approximately $60 million of working capital. Exelon and Generation anticipate recording a pre-tax impairment loss ranging from approximately $350 million to $400 million during the fourth quarter of 2014, which will not be included in Adjusted (non-GAAP) Operating Earnings. The estimated net after-tax cash proceeds of $418 million, excluding estimated working capital, are expected to be used to finance a portion of the acquisition of PHI and for general corporate purposes.

 

•

Constellation: On July 30th , Exelon announced it had entered into a definitive agreement for Exelon to purchase Integrys Energy Services Inc., a competitive retail electricity and natural gas subsidiary serving approximately 1.2 million commercial, industrial, public sector and residential customers across 22 Midwest, mid-Atlantic and Northeastern states and the District of Columbia for $60 million plus adjusted net working capital at the time of closing. Integrys Energy Services will become part of Exelon’s Constellation business unit, strengthening its retail power and gas business serving residential and business customers across the continental United States. The transaction is expected to close in the fourth quarter of 2014.

 

•

Nuclear Operations: Generation’s nuclear fleet, including its owned output from the Salem Generating Station and beginning April 1, 2014, 100 percent of the CENG units, produced 45,263 gigawatt-hours (GWh), of which 8,617 GWh were produced by CENG, in the third quarter of 2014, compared with 36,165 GWh in the third quarter of 2013. Excluding Salem, the Exelon-operated nuclear plants at ownership achieved a 96.5 percent capacity factor for the third quarter of 2014, compared with 94.8 percent for the third quarter of 2013. The number of planned refueling outage days in the third quarter of 2014 totaled 18, including no CENG planned outage days, compared with 43 in the third quarter of 2013. There were 20 non-refueling outage days, including two at CENG, in the third quarter of 2014, compared with five days in the third quarter of 2013.

 

4

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•

Fossil and Renewables Operations: The dispatch match rate for Generation’s gas/hydro fleet was 98.8 percent in the third quarter of 2014, compared with 99.1 percent in the third quarter of 2013. Energy capture for the wind/solar fleet was 94.9 percent in the third quarter of 2014, compared with 92.9 percent in the third quarter of 2013. The increase in energy capture for the third quarter of 2014 was due to the implementation of reliability programs that resulted in increased turbine availability.

 

•

Financing Activities:

 

•

On September 8, 2014, PECO issued $300 million of first and refunding mortgage bonds with an interest rate of 4.15 percent due Oct. 1, 2044. The net proceeds from the sale of the bonds were used to pay $250 million in aggregate principal of PECO’s 5 percent first and refunding mortgage bonds which would have come due on Oct. 1, 2014 and for other general corporate purposes. The offering closed on Sept. 15, 2014.

 

•

On September 18, 2014, ExGen Texas Power, LLC (an indirect subsidiary of Exelon and Exelon Generation) entered into a $695 million senior secured term loan and revolving credit facility. The company distributed the net proceeds from the term loans to Exelon Generation for its general corporate purposes.

 

•

Hedging Update: Exelon’s hedging program involves the hedging of commodity risk for Exelon’s expected generation, typically on a ratable basis over a three-year period. This strategy has not changed as a result of recent and pending asset divestitures. The proportion of expected generation hedged as of September 30, 2014, is 98.0 percent to 101.0 percent for 2014, 86.0 percent to 89.0 percent for 2015, and 55.0 percent to 58.0 percent for 2016. Expected generation is the volume of energy that best represents our financial exposure through owned or contracted capacity. 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.

 

5

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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.

The third quarter 2014 GAAP net income was $771 million, compared with $490 million in the third quarter of 2013. Adjusted (non-GAAP) operating earnings for the third quarter of 2014 and 2013 do not include various items (after tax) that were included in reported GAAP earnings. A reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Net Income is in the table below:

 

($ millions)		3Q14				3Q13
Generation Adjusted (non-GAAP) Operating Earnings		$	433			$	411
Mark-to-Market Impact of Economic Hedging Activities			161				151
Unrealized Gains/(Losses) Related to NDT Fund Investments			(22	)			23
Asset Retirement Obligation			13				(7	)
Plant Retirements and Divestitures (primarily gain on sale of Safe Harbor)			198				—
Long-Lived Asset Impairments			(30	)			(28	)
Merger and Integration Costs			(47	)			(20	)
Amortization of Commodity Contract Intangibles			12				(40	)
Tax Settlements			66				—
Non-Controlling Interest			(13	)			—
Generation GAAP Net Income		$	771			$	490

Generation’s Adjusted (non-GAAP) Operating Earnings in the third quarter of 2014 increased $22 million compared with the same quarter in 2013. This increase primarily reflected higher revenue net fuel at Generation as a result of higher realized energy prices, favorable portfolio management optimization activities, and the cancellation of DOE spent nuclear fuel disposal fees. The increase was partially offset by higher O&M expenses reflecting increased non-refueling nuclear generating outage days and inflation, offset in part by reduced other postretirement benefit costs.

ComEd consists of electricity transmission and distribution operations in Northern Illinois. ComEd recorded GAAP net income of $126 million in the third quarter of both 2014 and 2013. Adjusted (non-GAAP) Operating Earnings for the third quarter of 2013 do not include merger and integration costs that were included in reported GAAP earnings. A reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Net Income is in the table below:

 

($ millions)		3Q14				3Q13
ComEd Adjusted (non-GAAP) Operating Earnings		$	126			$	127
Merger and Integration Costs			—				(1	)
ComEd GAAP Net Income		$	126			$	126

 

6

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ComEd’s Adjusted (non-GAAP) Operating Earnings in the third quarter of 2014 were down $1 million from the same quarter in 2013, primarily reflecting unfavorable weather, partially offset by higher distribution and transmission revenue due to increased capital investment.

For the third quarter of 2014, heating degree-days in the ComEd service territory were up 40.5 percent relative to the same period in 2013 and were 6.7 percent below normal. Meanwhile, cooling degree-days were down 19.6 percent relative to the same period in 2013 and were 12.4 percent below normal. Total retail electric deliveries decreased 5.4 percent in the third quarter of 2014 compared with the same period in 2013.

Weather-normalized retail electric deliveries remained flat in the third quarter of 2014 relative to 2013.

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

PECO’s GAAP net income in the third quarter of 2014 was $81 million, compared with $92 million in the third quarter of 2013. Adjusted (non-GAAP) Operating Earnings for the third quarter of 2013 do not include merger and integration costs that were included in reported GAAP earnings. A reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Net Income is in the table below:

 

($ millions)		3Q14				3Q13
PECO Adjusted (non-GAAP) Operating Earnings		$	81			$	93
Merger and Integration Costs			—				(1	)
PECO GAAP Net Income		$	81			$	92

PECO’s Adjusted (non-GAAP) Operating Earnings in the third quarter of 2014 decreased $12 million from the same quarter in 2013, primarily due to increased storm costs and unfavorable weather conditions.

For the third quarter of 2014, heating degree-days in the PECO service territory were down 61.1 percent relative to the same period in 2013 and were 60.0 percent below normal. Cooling degree-days were down 1.8 percent from the prior year and were 2.5 percent below normal. Total retail electric deliveries were down 3.6 percent compared with the third quarter of 2013. Natural gas deliveries (including both retail and transportation segments) in the third quarter of 2014 were up 0.7 percent compared with the same period in 2013.

 

7

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Weather-normalized retail electric deliveries remained relatively consistent while gas deliveries increased 7.8 percent in the third quarter of 2014 compared with the same period in 2013. The increased gas volumes were driven primarily by increased usage per customer and customer growth, however gas retail volumes in the summer account for a small percentage of annual deliveries and tend to be more volatile.

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 2014 was $46 million, compared with $50 million in the third quarter of 2013. Adjusted (non-GAAP) Operating Earnings for the third quarter of 2013 do not include merger and integration costs that were included in reported GAAP earnings. A reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Net Income is in the table below:

 

($ millions)		3Q14				3Q13
BGE Adjusted (non-GAAP) Operating Earnings		$	46			$	51
Merger and Integration Costs			—				(1	)
BGE GAAP Net Income		$	46			$	50

BGE’s Adjusted (non-GAAP) Operating Earnings in the third quarter of 2014 decreased $5 million from the same quarter in 2013, primarily due to increased contracting as a result of an increase in maintenance related activities and incremental storm costs, which were partially offset by increased distribution revenues pursuant to increased rates effective in December 2013.

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 October 29, 2014.

 

8

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Cautionary Statements Regarding Forward-Looking Information

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that are subject to risks and uncertainties. The factors that could cause actual results to differ materially from the forward-looking statements made by Exelon Corporation, Commonwealth Edison Company, PECO Energy Company, Baltimore Gas and Electric Company and Exelon Generation Company, LLC (Registrants) include those factors discussed herein, as well as the items discussed in (1) Exelon’s 2013 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 22; (2) Exelon’s Third Quarter 2014 Quarterly Report on Form 10-Q (to be filed on October 29, 2014) in (a) Part II, Other Information, ITEM 1A. Risk Factors; (b) Part 1, Financial Information, ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) Part I, Financial Information, ITEM 1. Financial Statements: Note 18; and (3) other factors discussed in filings with the SEC by the Registrants. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this press release. None of the Registrants undertakes any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this press release.

#  #  #

Exelon Corporation (NYSE: EXC) is the nation’s leading competitive energy provider, with 2013 revenues of approximately $24.9 billion. Headquartered in Chicago, Exelon does business in 48 states, the District of Columbia and Canada. Exelon is one of the largest competitive U.S. power generators, with more than 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 7.8 million customers in central Maryland (BGE), northern Illinois (ComEd) and southeastern Pennsylvania (PECO). Follow Exelon on Twitter @Exelon.

 

9

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Earnings Release Attachments

Table of Contents

 

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

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EXELON CORPORATION

Consolidating Statements of Operations

(unaudited)

(in millions)

 

		Three Months Ended September 30, 2014 (a)
		Generation				ComEd				PECO				BGE				Other (b)				Exelon Consolidated
Operating revenues		$	4,412			$	1,222			$	693			$	697			$	(112	)		$	6,912
Operating expenses
Purchased power and fuel			1,880				326				255				297				(110	)			2,648
Operating and maintenance			1,266				359				204				165				(12	)			1,982
Depreciation and amortization			253				174				59				78				13				577
Taxes other than income			127				76				42				55				6				306
Total operating expenses			3,526				935				560				595				(103	)			5,513
Equity in earnings of unconsolidated affiliates			1				—				—				—				—				1
Operating income (loss)			887				287				133				102				(9	)			1,400
Other income and (deductions)
Interest expense			(89	)			(81	)			(29	)			(26	)			(33	)			(258	)
Other, net			342				4				2				4				2				354
Total other income and (deductions)			253				(77	)			(27	)			(22	)			(31	)			96
Income (loss) before income taxes			1,140				210				106				80				(40	)			1,496
Income taxes			291				84				25				31				(9	)			422
Net income (loss)			849				126				81				49				(31	)			1,074
Net income attributable to noncontrolling interests and preference stock dividends			78				—				—				3				—				81
Net income (loss) attributable to common shareholders		$	771			$	126			$	81			$	46			$	(31	)		$	993
		Three Months Ended September 30, 2013
		Generation				ComEd				PECO				BGE				Other (b)				Exelon Consolidated
Operating revenues		$	4,255			$	1,156			$	728			$	737			$	(374	)		$	6,502
Operating expenses
Purchased power and fuel			2,179				301				289				346				(372	)			2,743
Operating and maintenance			1,076				333				186				146				(6	)			1,735
Depreciation and amortization			218				164				57				78				13				530
Taxes other than income			98				80				41				53				5				277
Total operating expenses			3,571				878				573				623				(360	)			5,285
Equity in earnings of unconsolidated affiliates			37				—				—				—				—				37
Operating income (loss)			721				278				155				114				(14	)			1,254
Other income and (deductions)
Interest expense			(82	)			(74	)			(29	)			(29	)			(20	)			(234	)
Other, net			134				7				1				4				9				155
Total other income and (deductions)			52				(67	)			(28	)			(25	)			(11	)			(79	)
Income (loss) before income taxes			773				211				127				89				(25	)			1,175
Income taxes			288				85				35				36				(5	)			439
Net income (loss)			485				126				92				53				(20	)			736
Net income (loss) attributable to noncontrolling interests, preferred security dividends and preference stock dividends			(5	)			—				—				3				—				(2	)
Net income (loss) attributable to common shareholders		$	490			$	126			$	92			$	50			$	(20	)		$	738

 

(a)	Includes the results of operations of Constellation Energy Nuclear Group, LLC beginning on April 1, 2014, the date the nuclear operating services agreement was executed.

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

 

1

---

EXELON CORPORATION

Consolidating Statements of Operations

(unaudited)

(in millions)

 

		Nine Months Ended September 30, 2014 (a)
		Generation				ComEd				PECO				BGE				Other (b)				Exelon Consolidated
Operating revenues		$	12,591			$	3,484			$	2,343			$	2,404			$	(649	)		$	20,173
Operating expenses
Purchased power and fuel			7,071				915				960				1,094				(641	)			9,399
Operating and maintenance			3,765				1,040				668				541				(9	)			6,005
Depreciation and amortization			719				521				176				275				41				1,732
Taxes other than income			350				225				122				168				22				887
Total operating expenses			11,905				2,701				1,926				2,078				(587	)			18,023
Equity in losses of unconsolidated affiliates			(20	)			—				—				—				—				(20	)
Gain on consolidation of CENG			261				—				—				—				—				261
Operating income (loss)			927				783				417				326				(62	)			2,391
Other income and (deductions)
Interest expense			(261	)			(241	)			(85	)			(81	)			(54	)			(722	)
Other, net			661				14				5				14				8				702
Total other income and (deductions)			400				(227	)			(80	)			(67	)			(46	)			(20	)
Income (loss) before income taxes			1,327				556				337				259				(108	)			2,371
Income taxes			290				221				82				103				(50	)			646
Net income (loss)			1,037				335				255				156				(58	)			1,725
Net income attributable to noncontrolling interests, preferred security dividends and redemption and preference stock dividends			111				—				—				10				—				121
Net income (loss) attributable to common shareholders		$	926			$	335			$	255			$	146			$	(58	)		$	1,604
		Nine Months Ended September 30, 2013
		Generation				ComEd				PECO				BGE				Other (b)				Exelon Consolidated
Operating revenues		$	11,858			$	3,395			$	2,295			$	2,271			$	(1,094	)		$	18,725
Operating expenses
Purchased power and fuel			6,294				931				953				1,059				(1,094	)			8,143
Operating and maintenance			3,377				1,020				554				450				(10	)			5,391
Depreciation and amortization			643				501				171				252				39				1,606
Taxes other than income			292				225				121				162				25				825
Total operating expenses			10,606				2,677				1,799				1,923				(1,040	)			15,965
Equity in earnings of unconsolidated affiliates			7				—				—				—				—				7
Operating income (loss)			1,259				718				496				348				(54	)			2,767
Other income and (deductions)
Interest expense			(257	)			(503	)			(86	)			(94	)			(170	)			(1,110	)
Other, net			229				18				4				13				47				311
Total other income and (deductions)			(28	)			(485	)			(82	)			(81	)			(123	)			(799	)
Income (loss) before income taxes			1,231				233				414				267				(177	)			1,968
Income taxes			436				93				122				107				(25	)			733
Net income (loss)			795				140				292				160				(152	)			1,235
Net income (loss) attributable to noncontrolling interests, preferred security dividends and preference stock dividends			(6	)			—				7				10				—				11
Net income (loss) attributable to common shareholders		$	801			$	140			$	285			$	150			$	(152	)		$	1,224

 

(a)	Includes the results of operations of Constellation Energy Nuclear Group, LLC beginning on April 1, 2014, the date the nuclear operating services agreement was executed.

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

 

2

---

EXELON CORPORATION

Business Segment Comparative Statements of Operations

(unaudited)

(in millions)

 

			Generation
		Three Months Ended September 30,												Nine Months Ended September 30,
		2014 (a)				2013				Variance				2014 (a)				2013				Variance
Operating revenues		$	4,412			$	4,255			$	157			$	12,591			$	11,858			$	733
Operating expenses
Purchased power and fuel			1,880				2,179				(299	)			7,071				6,294				777
Operating and maintenance			1,266				1,076				190				3,765				3,377				388
Depreciation and amortization			253				218				35				719				643				76
Taxes other than income			127				98				29				350				292				58
Total operating expenses			3,526				3,571				(45	)			11,905				10,606				1,299
Equity in earnings (losses) of unconsolidated affiliates			1				37				(36	)			(20	)			7				(27	)
Gain on consolidation of CENG			—				—				—				261				—				261
Operating income			887				721				166				927				1,259				(332	)
Other income and (deductions)
Interest expense			(89	)			(82	)			(7	)			(261	)			(257	)			(4	)
Other, net			342				134				208				661				229				432
Total other income and (deductions)			253				52				201				400				(28	)			428
Income before income taxes			1,140				773				367				1,327				1,231				96
Income taxes			291				288				3				290				436				(146	)
Net income			849				485				364				1,037				795				242
Net income (loss) attributable to noncontrolling interests and preference stock dividends			78				(5	)			83				111				(6	)			117
Net income attributable to membership interest		$	771			$	490			$	281			$	926			$	801			$	125
			ComEd
		Three Months Ended September 30,												Nine Months Ended September 30,
		2014				2013				Variance				2014				2013				Variance
Operating revenues		$	1,222			$	1,156			$	66			$	3,484			$	3,395			$	89
Operating expenses
Purchased power			326				301				25				915				931				(16	)
Operating and maintenance			359				333				26				1,040				1,020				20
Depreciation and amortization			174				164				10				521				501				20
Taxes other than income			76				80				(4	)			225				225				—
Total operating expenses			935				878				57				2,701				2,677				24
Operating income			287				278				9				783				718				65
Other income and (deductions)
Interest expense			(81	)			(74	)			(7	)			(241	)			(503	)			262
Other, net			4				7				(3	)			14				18				(4	)
Total other income and (deductions)			(77	)			(67	)			(10	)			(227	)			(485	)			258
Income before income taxes			210				211				(1	)			556				233				323
Income taxes			84				85				(1	)			221				93				128
Net income		$	126			$	126			$	—			$	335			$	140			$	195

 

(a)	Includes the results of operations of Constellation Energy Nuclear Group, LLC beginning on April 1, 2014, the date the nuclear operating services agreement was executed.

 

3

---

EXELON CORPORATION

Business Segment Comparative Statements of Operations

(unaudited)

(in millions)

 

			PECO
		Three Months Ended September 30,												Nine Months Ended September 30,
		2014				2013				Variance				2014				2013				Variance
Operating revenues		$	693			$	728			$	(35	)		$	2,343			$	2,295			$	48
Operating expenses
Purchased power and fuel			255				289				(34	)			960				953				7
Operating and maintenance			204				186				18				668				554				114
Depreciation and amortization			59				57				2				176				171				5
Taxes other than income			42				41				1				122				121				1
Total operating expenses			560				573				(13	)			1,926				1,799				127
Operating income			133				155				(22	)			417				496				(79	)
Other income and (deductions)
Interest expense			(29	)			(29	)			—				(85	)			(86	)			1
Other, net			2				1				1				5				4				1
Total other income and (deductions)			(27	)			(28	)			1				(80	)			(82	)			2
Income before income taxes			106				127				(21	)			337				414				(77	)
Income taxes			25				35				(10	)			82				122				(40	)
Net income			81				92				(11	)			255				292				(37	)
Preferred security dividends and redemption			—				—				—				—				7				(7	)
Net income attributable to common shareholder		$	81			$	92			$	(11	)		$	255			$	285			$	(30	)
			BGE
		Three Months Ended September 30,												Nine Months Ended September 30,
		2014				2013				Variance				2014				2013				Variance
Operating revenues		$	697			$	737			$	(40	)		$	2,404			$	2,271			$	133
Operating expenses
Purchased power and fuel			297				346				(49	)			1,094				1,059				35
Operating and maintenance			165				146				19				541				450				91
Depreciation and amortization			78				78				—				275				252				23
Taxes other than income			55				53				2				168				162				6
Total operating expenses			595				623				(28	)			2,078				1,923				155
Operating income			102				114				(12	)			326				348				(22	)
Other income and (deductions)
Interest expense			(26	)			(29	)			3				(81	)			(94	)			13
Other, net			4				4				—				14				13				1
Total other income and (deductions)			(22	)			(25	)			3				(67	)			(81	)			14
Income before income taxes			80				89				(9	)			259				267				(8	)
Income taxes			31				36				(5	)			103				107				(4	)
Net income			49				53				(4	)			156				160				(4	)
Preference stock dividends			3				3				—				10				10				—
Net income attributable to common shareholders		$	46			$	50			$	(4	)		$	146			$	150			$	(4	)

 

4

---

EXELON CORPORATION

Business Segment Comparative Statements of Operations

(unaudited)

(in millions)

 

			Other (a)
		Three Months Ended September 30,												Nine Months Ended September 30,
		2014				2013				Variance				2014				2013				Variance
Operating revenues		$	(112	)		$	(374	)		$	262			$	(649	)		$	(1,094	)		$	445
Operating expenses
Purchased power and fuel			(110	)			(372	)			262				(641	)			(1,094	)			453
Operating and maintenance			(12	)			(6	)			(6	)			(9	)			(10	)			1
Depreciation and amortization			13				13				—				41				39				2
Taxes other than income			6				5				1				22				25				(3	)
Total operating expenses			(103	)			(360	)			257				(587	)			(1,040	)			453
Equity in earnings of unconsolidated affiliates			—				—				—				—				—				—
Operating loss			(9	)			(14	)			5				(62	)			(54	)			(8	)
Other income and (deductions)
Interest expense			(33	)			(20	)			(13	)			(54	)			(170	)			116
Other, net			2				9				(7	)			8				47				(39	)
Total other income and (deductions)			(31	)			(11	)			(20	)			(46	)			(123	)			77
Loss before income taxes			(40	)			(25	)			(15	)			(108	)			(177	)			69
Income benefit			(9	)			(5	)			(4	)			(50	)			(25	)			(25	)
Net loss		$	(31	)		$	(20	)		$	(11	)		$	(58	)		$	(152	)		$	94

 

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

 

5

---

EXELON CORPORATION

Consolidated Balance Sheets

(in millions)

 

		September 30, 2014				December 31, 2013
		(unaudited)
Assets
Current assets
Cash and cash equivalents		$	2,763			$	1,609
Restricted cash and investments			318				167
Accounts receivable, net
Customer			2,815				2,981
Other			898				1,175
Mark-to-market derivative assets			744				727
Unamortized energy contract assets			225				374
Inventories, net
Fossil fuel			546				276
Materials and supplies			1,045				829
Deferred income taxes			38				573
Regulatory assets			774				760
Assets held for sale			649				14
Other			1,022				652
Total current assets			11,837				10,137
Property, plant and equipment, net			51,630				47,330
Deferred debits and other assets
Regulatory assets			5,589				5,910
Nuclear decommissioning trust funds			10,349				8,071
Investments			562				1,165
Investments in affiliates			26				22
Investment in CENG			—				1,925
Goodwill			2,672				2,625
Mark-to-market derivative assets			524				607
Unamortized energy contracts assets			571				710
Pledged assets for Zion Station decommissioning			365				458
Other			1,139				964
Total deferred debits and other assets			21,797				22,457
Total assets		$	85,264			$	79,924
Liabilities and shareholders’ equity
Current liabilities
Short-term borrowings		$	562			$	341
Long-term debt due within one year			2,064				1,509
Accounts payable			2,502				2,484
Accrued expenses			1,462				1,633
Payables to affiliates			22				116
Deferred income taxes			26				40
Regulatory liabilities			364				327
Mark-to-market derivative liabilities			249				159
Unamortized energy contract liabilities			195				261
Other			985				858
Total current liabilities			8,431				7,728
Long-term debt			19,200				17,623
Long-term debt to financing trusts			648				648
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits			13,181				12,905
Asset retirement obligations			7,003				5,194
Pension obligations			1,809				1,876
Non-pension postretirement benefit obligations			1,459				2,190
Spent nuclear fuel obligation			1,021				1,021
Regulatory liabilities			4,593				4,388
Mark-to-market derivative liabilities			291				300
Unamortized energy contract liabilities			214				266
Payable for Zion Station decommissioning			260				305
Other			2,104				2,540
Total deferred credits and other liabilities			31,935				30,985
Total liabilities			60,214				56,984
Commitments and contingencies
Shareholders’ equity
Common stock			16,679				16,741
Treasury stock, at cost			(2,327	)			(2,327	)
Retained earnings			11,160				10,358
Accumulated other comprehensive loss, net			(1,917	)			(2,040	)
Total shareholders’ equity			23,595				22,732
BGE preference stock not subject to mandatory redemption			193				193
Noncontrolling interest			1,262				15
Total equity			25,050				22,940
Total liabilities and shareholders’ equity		$	85,264			$	79,924

 

6

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EXELON CORPORATION

Consolidated Statements of Cash Flows

(unaudited)

(in millions)

 

		Nine Months Ended September 30,
		2014				2013
Cash flows from operating activities
Net income		$	1,725			$	1,235
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation, amortization, depletion and accretion, including nuclear fuel and energy contract amortization			2,856				2,844
Impairment of long-lived assets			162				171
Gain on Consolidation of CENG			(268	)			—
Gain on sale of assets			(356	)			(17	)
Deferred income taxes and amortization of investment tax credits			459				(164	)
Net fair value changes related to derivatives			522				(229	)
Net realized and unrealized gains on nuclear decommissioning trust fund investments			(141	)			(95	)
Other non-cash operating activities			698				584
Changes in assets and liabilities:
Accounts receivable			198				54
Inventories			(316	)			(103	)
Accounts payable, accrued expenses and other current liabilities			(322	)			(243	)
Option premiums received (paid), net			21				(38	)
Counterparty collateral posted, net			(615	)			(73	)
Income taxes			72				863
Pension and non-pension postretirement benefit contributions			(516	)			(360	)
Other assets and liabilities			(536	)			(35	)
Net cash flows provided by operating activities			3,643				4,394
Cash flows from investing activities
Capital expenditures			(4,114	)			(3,887	)
Proceeds from termination of direct financing lease investment			335				—
Proceeds from nuclear decommissioning trust fund sales			5,464				3,344
Investment in nuclear decommissioning trust funds			(5,550	)			(3,518	)
Acquisition of business			(67	)			—
Proceeds from sale of long-lived assets			660				32
Proceeds from sale of investments			7				20
Purchases of investments			(3	)			(3	)
Cash consolidated from CENG			129				—
Change in restricted cash			(151	)			(23	)
Other investing activities			(86	)			65
Net cash flows used in investing activities			(3,376	)			(3,970	)
Cash flows from financing activities
Payment of accounts receivable agreement			—				(210	)
Changes in short-term borrowings			236				205
Issuance of long-term debt			3,212				2,031
Retirement of long-term debt			(1,214	)			(1,156	)
Redemption of preferred securities			—				(93	)
Distributions to non-controlling interest of consolidated VIE			(415	)			—
Dividends paid on common stock			(799	)			(981	)
Proceeds from employee stock plans			25				40
Other financing activities			(158	)			(102	)
Net cash flows provided by (used in) financing activities			887				(266	)
Increase in cash and cash equivalents			1,154				158
Cash and cash equivalents at beginning of period			1,609				1,486
Cash and cash equivalents at end of period		$	2,763			$	1,644

 

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, 2014												Three Months Ended September 30, 2013
		GAAP (a)				Adjustments				Adjusted Non-GAAP				GAAP (a)				Adjustments				Adjusted Non-GAAP
Operating revenues		$	6,912			$	(248	)(b),(c)		$	6,664			$	6,502			$	(90	)(b),(c)		$	6,412
Operating expenses
Purchased power and fuel			2,648				33	(b),(c)			2,681				2,743				112	(b),(c)			2,855
Operating and maintenance			1,982				(99	)(d),(e),(f),(g)			1,883				1,735				(96	)(d),(e),(f)			1,639
Depreciation and amortization			577				—				577				530				(1	)(d)			529
Taxes other than income			306				—				306				277				—				277
Total operating expenses			5,513				(66	)			5,447				5,285				15				5,300
Equity in earnings of unconsolidated affiliates			1				—				1				37				23	(c),(d)			60
Operating income			1,400				(182	)			1,218				1,254				(82	)			1,172
Other income and (deductions)
Interest expense			(258	)			24	(b),(d)			(234	)			(234	)			—				(234	)
Other, net			354				(275	)(g),(h),(i)			79				155				(63	)(h)			92
Total other income and (deductions)			96				(251	)			(155	)			(79	)			(63	)			(142	)
Income before income taxes			1,496				(433	)			1,063				1,175				(145	)			1,030
Income taxes			422				(103	)(b),(c),(d),(e),(f),(g),(h),(i)			319				439				(74	)(b),(c),(d),(e),(f),(h)			365
Net income			1,074				(330	)			744				736				(71	)			665
Net income (loss) attributable to noncontrolling interests and preference stock dividends			81				(13	)(j)			68				(2	)			—				(2	)
Net income attributable to common shareholders		$	993			$	(317	)		$	676			$	738			$	(71	)		$	667
Effective tax rate			28.2	%							30.0	%			37.4	%							35.4	%
Earnings per average common share
Basic		$	1.15			$	(0.37	)		$	0.78			$	0.86			$	(0.08	)		$	0.78
Diluted		$	1.15			$	(0.37	)		$	0.78			$	0.86			$	(0.08	)		$	0.78
Average common shares outstanding
Basic			861								861				857								857
Diluted			863								863				860								860
Effect of adjustments on earnings per average diluted common share recorded in accordance with GAAP:
Mark-to-market impact of economic hedging activities (b)						$	(0.18	)										$	(0.17	)
Amortization of commodity contract intangibles (c)							(0.01	)											0.05
Merger and integration costs (d)							0.07												0.03
Long-lived asset impairment (e)							0.03												0.03
Asset retirement obligation (f)							(0.02	)											0.01
Plant retirements and divestitures (g)							(0.23	)											—
Unrealized (gains) losses related to NDT fund investments (h)							0.03												(0.03	)
Tax settlements (i)							(0.08	)											—
Non-controlling interest (j)							0.02												—
Total adjustments						$	(0.37	)										$	(0.08	)

For the three months ended September 30, 2014, includes the results of operations of Constellation Energy Nuclear Group, LLC beginning on April 1, 2014, the date the nuclear operating services agreement was executed.

 

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

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

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

(d)

Adjustment to exclude certain costs associated with the Constellation merger, PHI acquisition, and at Generation, the CENG integration, including professional fees, employee-related expenses, integration activities, upfront credit facilities fees, merger commitments, and certain pre-acquisition contingencies.

(e)	Adjustment to exclude a 2014 charge to earnings primarily related to the impairment of certain assets held for sale and a 2013 charge to earnings primarily related to the impairment of certain wind generating assets.

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

(g)	Adjustment to exclude the impacts associated with the sale of Generation’s ownership interest in generating stations, primarily the gain from the sale of Generation’s equity interest in Safe Harbor Water Power Corporation.

(h)	Adjustment to exclude the unrealized gains and losses on NDT fund investments to the extent not offset by contractual accounting as described in the notes to the consolidated financial statements.

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

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

 

8

---

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, 2014												Nine Months Ended September 30, 2013
										Adjusted												Adjusted
		GAAP (a)				Adjustments				Non-GAAP				GAAP (a)				Adjustments				Non-GAAP
Operating revenues		$	20,173			$	772	(b),(c),(d)		$	20,945			$	18,725			$	462	(b),(c)		$	19,187
Operating expenses
Purchased power and fuel			9,399				220	(b),(c)			9,619				8,143				355	(b),(c)			8,498
Operating and maintenance			6,005				(250	)(d),(e),(f),(g)			5,755				5,391				(265	)(d),(e),(f),(g)			5,126
Depreciation and amortization			1,732				—				1,732				1,606				(3	)(b)			1,603
Taxes other than income			887				—				887				825				—				825
Total operating expenses			18,023				(30	)			17,993				15,965				87				16,052
Equity in earnings (loss) of unconsolidated affiliates			(20	)			12	(c),(d)			(8	)			7				62	(c),(d)			69
Gain on consolidation of CENG			261				(261	)(i)			—				—				—				—
Operating income			2,391				553				2,944				2,767				437				3,204
Other income and (deductions)
Interest expense			(722	)			32	(b),(d)			(690	)			(1,110	)			370	(d),(e),(l),(m)			(740	)
Other, net			702				(480	)(g),(h),(j)			222				311				(117	)(d),(g),(h),(l)			194
Total other income and (deductions)			(20	)			(448	)			(468	)			(799	)			253				(546	)
Income before income taxes			2,371				105				2,476				1,968				690				2,658
Income taxes			646				99	(b),(c),(d),(e),(f),(g),(h),(i),(j)			745				733				192	(b),(c),(d),(e),(f),(g),(h),(l),(m)			925
Net income			1,725				6				1,731				1,235				498				1,733
Net income attributable to noncontrolling interests, preferred security dividends and redemption and preference stock dividends			121				(36	)(k)			85				11				—				11
Net income attributable to common shareholders		$	1,604			$	42			$	1,646			$	1,224			$	498			$	1,722
Effective tax rate			27.2	%							30.1	%			37.2	%							34.8	%
Earnings per average common share
Basic		$	1.87			$	0.05			$	1.92			$	1.43			$	0.58			$	2.01
Diluted		$	1.86			$	0.05			$	1.91			$	1.42			$	0.58			$	2.00
Average common shares outstanding
Basic			860								860				856								856
Diluted			863								863				860								860
Effect of adjustments on earnings per average diluted common share recorded in accordance with GAAP:
Mark-to-market impact of economic hedging activities (b)							0.34												(0.21	)
Amortization of commodity contract intangibles (c)							0.06												0.32
Merger and integration costs (d)							0.12												0.08
Long-lived asset impairment (e)							0.11												0.13
Asset retirement obligation (f)							(0.02	)											0.01
Plant retirements and divestitures (g)							(0.23	)											(0.01	)
Unrealized gains related to NDT fund investments (h)							(0.07	)											(0.04	)
Gain on CENG integration (i)							(0.18	)											—
Tax settlement (j)							(0.12	)											—
Non-controlling interest (k)							0.04												—
Amortization of the fair value of certain debt (l)							—												(0.01	)
Remeasurement of like-kind exchange tax position (m)							—												0.31
Total adjustments						$	0.05											$	0.58

For the nine months ended September 30, 2014, includes the results of operations of Constellation Nuclear Energy Group, LLC beginning on April 1, 2014, the date the nuclear operating services agreement was executed.

 

(a)	Results reported in accordance with GAAP.

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

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

(d)

Adjustment to exclude certain costs associated with the Constellation merger, PHI acquisition, and at Generation, the CENG integration, including professional fees, employee-related expenses, integration activities, upfront credit facilities fees, merger commitments, and certain pre-acquisition contingencies.

(e)

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

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

(g)	Adjustment to exclude the impacts associated with the sale of Generation’s ownership interest in generating stations, primarily the gain from sale of Generation’s equity interest in Safe Harbor Water Power Corporation in 2014.

(h)	Adjustment to exclude the unrealized gains on NDT fund investments to the extent not offset by contractual accounting as described in the notes to the consolidated financial statements.

(i)	Adjustment to exclude the gain recorded upon consolidation of CENG resulting from the difference in the fair value of CENG’s net assets and the equity method investment previously recorded on Generation’s and Exelon’s books and the settlement of pre-existing commitments between Generation and CENG.

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

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

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

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

 

9

---

EXELON CORPORATION

Reconciliation of Adjusted (non-GAAP) Operating

Earnings to GAAP Earnings (in millions)

Three Months Ended September 30, 2014 and 2013

(unaudited)

 

		Exelon Earnings per Diluted Share				Generation				ComEd				PECO				BGE				Other (a)				Exelon
2013 GAAP Earnings (Loss)		$	0.86			$	490			$	126			$	92			$	50			$	(20	)		$	738
2013 Adjusted (non-GAAP) Operating (Earnings) Loss Adjustments:
Mark-to-Market Impact of Economic Hedging Activities			(0.17	)			(151	)			—				—				—				3				(148	)
Unrealized Gains Related to NDT Fund Investments (1)			(0.03	)			(23	)			—				—				—				(1	)			(24	)
Asset Retirement Obligation (2)			0.01				7				—				—				—				(1	)			6
Long-Lived Asset Impairment (3)			0.03				28				—				—				—				—				28
Merger and Integration Costs (4)			0.03				20				1				1				1				3				26
Amortization of Commodity Contract Intangibles (5)			0.05				40				—				—				—				1				41
2013 Adjusted (non-GAAP) Operating Earnings (Loss)			0.78				411				127				93				51				(15	)			667
Year Over Year Effects on Earnings:
Generation Energy Margins, Excluding Mark-to-Market:
Volume Impacts for Generation Revenue (9)			0.15				133				—				—				—				—				133
Fuel Cost Impacts for Generation (10)			—				(3	)			—				—				—				—				(3	)
Capacity Pricing (11)			0.04				34				—				—				—				—				34
Market and Portfolio Conditions (12)			0.08				67				—				—				—				—				67
ComEd, PECO and BGE Margins:
Weather			(0.03	)			—				(16	)			(10	)			—	(b)			—				(26	)
Load			—				—				1				1				—	(b)			—				2
Other Energy Delivery (13)			0.06				—				39				8				5				—				52
Operating and Maintenance Expense:
Labor, Contracting and Materials (14)			(0.14	)			(93	)			(11	)			(2	)			(8	)			(3	)			(117	)
Planned Nuclear Refueling Outages (15)			0.01				6				—				—				—				—				6
Pension and Non-Pension Postretirement Benefits (16)			0.03				13				14				1				(1	)			2				29
Other Operating and Maintenance (17)			(0.08	)			(40	)			(18	)			(11	)			(4	)			6				(67	)
Depreciation and Amortization Expense (18)			(0.04	)			(22	)			(6	)			(1	)			—				(1	)			(30	)
Equity in Earnings of Unconsolidated Affiliates (19)			(0.04	)			(36	)			—				—				—				—				(36	)
Income Taxes (20)			0.03				19				—				2				2				—				23
Interest Expense, Net			0.01				6				(4	)			—				1				3				6
CENG Non-Controlling Interest			(0.05	)			(43	)			—				—				—				—				(43	)
Other (21)			(0.03	)			(19	)			—				—				—				(2	)			(21	)
2014 Adjusted (non-GAAP) Operating Earnings (Loss)			0.78				433				126				81				46				(10	)			676
2014 Adjusted (non-GAAP) Operating Earnings (Loss) Adjustments:
Mark-to-Market Impact of Economic Hedging Activities			0.18				161				—				—				—				(3	)			158
Unrealized Losses Related to NDT Fund Investments (1)			(0.03	)			(22	)			—				—				—				—				(22	)
Asset Retirement Obligation (2)			0.02				13				—				—				—				—				13
Plant Retirements and Divestitures (6)			0.23				198				—				—				—				(1	)			197
Long-Lived Asset Impairment (3)			(0.03	)			(30	)			—				—				—				—				(30	)
Merger and Integration Costs (4)			(0.07	)			(47	)			—				—				—				(17	)			(64	)
Amortization of Commodity Contract Intangibles (5)			0.01				12				—				—				—				—				12
Tax Settlements (7)			0.08				66				—				—				—				—				66
Non-Controlling Interest (8)			(0.02	)			(13	)			—				—				—				—				(13	)
2014 GAAP Earnings (Loss)		$	1.15			$	771			$	126			$	81			$	46			$	(31	)		$	993

Notes:

 

•

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

•

Effective in the fourth quarter of 2013 Exelon switched from applying a blended tax rate to applying a marginal tax rate to the drivers and exclusions presented above, resulting in minor changes when comparing to historical earnings release filings.

•

Effective in the first quarter of 2014, ‘Nuclear Volume’ and ‘Nuclear Fuel Costs’ were changed to ‘Volume Impacts for Generation Revenue’ and ‘Fuel Cost Impacts for Generation,’ respectively, reflecting a full Generation perspective.

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

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

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

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

(3)	Reflects charges to earnings primarily related to the impairment of certain wind generating assets in 2013 and the impairment of certain generating assets held for sale in 2014.

(4)	Reflects certain costs associated with the Constellation merger, PHI acquisition, and, at Generation, the CENG integration, including professional fees, employee-related expenses, integration activities, upfront credit facilities fees, merger commitments, and certain pre-acquisition contingencies.

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

(6)	Reflects the impacts associated with the sale of Generation’s ownership interest in generating stations, primarily the gain from sale of Generation’s equity interest in Safe Harbor Water Power Corporation.

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

(8)	Represents adjustments to account for the CENG interest not owned by Generation, where applicable.

(9)

Primarily reflects the inclusion of CENG’s results for the third quarter of 2014 and decreased nuclear outage days in 2014, partially offset by a decrease in fossil generation within the New England region as a result of favorable portfolio management optimization activities, which is partially offset below within market and portfolio conditions.

(10)	Primarily reflects the inclusion of CENG’s results for the third quarter of 2014 and increased nuclear generation, partially offset by lower fossil fuel cost within the New England region and the cancellation of the DOE spent nuclear fuel disposal fee.

(11)	Primarily reflects the inclusion of CENG’s capacity credits within the New York and PJM markets for the third quarter of 2014.

(12)	Primarily reflects the impact of favorable portfolio management optimization activities within the New England region and higher realized energy prices within the Mid-Atlantic and New York regions.

(13)

For ComEd, primarily reflects higher distribution and transmission revenue as a result of increased capital investments, as well as increased cost recovery associated with energy efficiency programs and uncollectible accounts expense due to timing of regulatory cost recovery (both offset below, in other operating and maintenance expense). For PECO, primarily reflects increased recovery from regulatory programs (offset below primarily in operating and maintenance expense). For BGE, primarily reflects increased distribution revenue pursuant to increased rates effective in December 2013.

(14)

Primarily reflects the inclusion of CENG’s results for the third quarter of 2014 at Generation, an increase in contracting costs as a result of increased nuclear non-refueling outage days at Generation, increased contracting as a result of an increase in maintenance related activities at ComEd and BGE, increased contracting costs associated with EIMA Smart Meter Project assistance at ComEd, and inflation across all operating companies.

(15)	Primarily reflects the impact of decreased nuclear refueling outage days in 2014, excluding Salem.

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

(17)

At Generation, primarily relates to the inclusion of CENG’s results for the third quarter of 2014 and an increase in nuclear decommissioning obligation expense. At ComEd, primarily relates to increased spend on energy and efficiency programs and increased uncollectible accounts expense (both offset above, in other energy and delivery revenue). In the PECO and BGE service territory, primarily reflects increased storm costs. Also at PECO, reflects increased spend on regulatory programs (offset above in other energy delivery revenue).

(18)	Primarily reflects the inclusion of CENG’s results for the third quarter of 2014 at Generation and increased depreciation expense across all operating companies for ongoing capital expenditures.

(19)

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

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

(21)	At Generation, primarily reflects the inclusion of CENG for the third quarter of 2014.

 

10

---

EXELON CORPORATION

Reconciliation of Adjusted (non-GAAP) Operating

Earnings to GAAP Earnings (in millions)

Nine Months Ended September 30, 2014 and 2013

(unaudited)

 

		Exelon Earnings per Diluted Share				Generation				ComEd				PECO				BGE				Other (a)				Exelon
2013 GAAP Earnings (Loss)		$	1.42			$	801			$	140			$	285			$	150			$	(152	)		$	1,224
2013 Adjusted (non-GAAP) Operating (Earnings) Loss Adjustments:
Mark-to-Market Impact of Economic Hedging Activities			(0.21	)			(166	)			—				—				—				(2	)			(168	)
Unrealized Gains Related to NDT Fund Investments (1)			(0.04	)			(37	)			—				—				—				—				(37	)
Asset Retirement Obligation (2)			0.01				6				—				—				—				—				6
Plant Retirements and Divestitures (3)			(0.01	)			(13	)			—				—				—				—				(13	)
Long-Lived Asset Impairment (4)			0.13				102				—				—				—				9				111
Merger and Integration Costs (5)			0.08				60				2				5				(3	)			2				66
Amortization of Commodity Contract Intangibles (6)			0.32				273				—				—				—				—				273
Remeasurement of Like-Kind Exchange Tax Position (7)			0.31				—				170				—				—				97				267
Amortization of the Fair Value of Certain Debt (8)			(0.01	)			(7	)			—				—				—				—				(7	)
2013 Adjusted (non-GAAP) Operating Earnings (Loss)			2.00				1,019				312				290				147				(46	)			1,722
Year Over Year Effects on Earnings:
Generation Energy Margins, Excluding Mark-to-Market:
Volume Impacts for Generation Revenue (12)			0.25				218				—				—				—				—				218
Fuel Cost Impacts for Generation (13)			(0.10	)			(85	)			—				—				—				—				(85	)
Capacity Pricing (14)			0.21				182				—				—				—				—				182
Market and Portfolio Conditions (15)			(0.09	)			(75	)			—				—				—				—				(75	)
ComEd, PECO and BGE Margins:
Weather			—				—				(7	)			5				—	(b)			—				(2	)
Load			0.01				—				4				6				—	(b)			—				10
Other Energy Delivery (16)			0.16				—				64				12				58				(1	)			133
Operating and Maintenance Expense:
Labor, Contracting and Materials (17)			(0.26	)			(177	)			(20	)			(4	)			(21	)			(1	)			(223	)
Planned Nuclear Refueling Outages (18)			(0.03	)			(29	)			—				—				—				—				(29	)
Pension and Non-Pension Postretirement Benefits (19)			0.09				34				36				2				(4	)			6				74
Other Operating and Maintenance (20)			(0.23	)			(86	)			(28	)			(69	)			(27	)			10				(200	)
Depreciation and Amortization Expense (21)			(0.09	)			(48	)			(12	)			(3	)			(14	)			(1	)			(78	)
Equity in Earnings of Unconsolidated Affiliates (22)			(0.05	)			(47	)			—				—				—				—				(47	)
Income Taxes (23)			0.08				54				3				11				2				3				73
Interest Expense, Net (24)			0.04				24				(14	)			—				7				16				33
CENG Non-Controlling Interest			(0.06	)			(50	)			—				—				—				—				(50	)
Other (25)			(0.01	)			(10	)			(3	)			5				(2	)			—				(10	)
Share Differential			(0.01	)			—				—				—				—				—				—
2014 Adjusted (non-GAAP) Operating Earnings (Loss)			1.91				924				335				255				146				(14	)			1,646
2014 Adjusted (non-GAAP) Operating Earnings (Loss) Adjustments:
Mark-to-Market Impact of Economic Hedging Activities			(0.34	)			(294	)			—				—				—				1				(293	)
Unrealized Gains Related to NDT Fund Investments (1)			0.07				62				—				—				—				—				62
Asset Retirement Obligation (2)			0.02				13				—				—				—				—				13
Plant Retirements and Divestitures (3)			0.23				198				—				—				—				(1	)			197
Long-Lived Asset Impairment (4)			(0.11	)			(83	)			—				—				—				(15	)			(98	)
Gain on CENG Integration (9)			0.18				159				—				—				—				—				159
Merger and Integration Costs (5)			(0.12	)			(76	)			—				—				—				(29	)			(105	)
Amortization of Commodity Contract Intangibles (6)			(0.06	)			(42	)			—				—				—				—				(42	)
Tax Settlements (10)			0.12				101				—				—				—				—				101
Non-Controlling Interest (11)			(0.04	)			(36	)			—				—				—				—				(36	)
2014 GAAP Earnings (Loss)		$	1.86			$	926			$	335			$	255			$	146			$	(58	)		$	1,604

Note:

 

•

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

•

Effective in the fourth quarter of 2013 Exelon switched from applying a blended tax rate to applying a marginal tax rate to the drivers and exclusions presented above, resulting in minor changes when comparing to historical earnings release filings.

•

Effective in the first quarter of 2014, ‘Nuclear Volume’ and ‘Nuclear Fuel Costs’ were changed to ‘Volume Impacts for Generation Revenue’ and ‘Fuel Cost Impacts for Generation,’ respectively, reflecting a full Generation perspective.

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

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

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

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

(3)	Reflects the impacts associated with the sale of Generation’s ownership interests in generating stations, primarily the gain from sale of Generation’s equity interest in Safe Harbor Water Power Corporation in 2014.

(4)	Reflects a 2013 charge to earnings primarily related to the cancellation of previously capitalized nuclear uprate projects and the impairment of wind generating assets and a 2014 charge primarily related to the impairment of wind generating assets and certain generating assets held for sale.

(5)	Reflects certain costs associated with the Constellation merger, PHI acquisition, and, at Generation, the CENG integration, including professional fees, employee-related expenses, integration activities, upfront credit facilities fees, merger commitments, and certain pre-acquisition contingencies.

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

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

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

(9)

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

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

(11)	Represents adjustments to account for the CENG interest not owned by Generation, where applicable.

(12)

Primarily reflects the inclusion of CENG’s results for the second and third quarters of 2014 and an increase in revenue in ERCOT as a result of extreme cold weather in the first quarter of 2014, partially offset by increased nuclear outage days in 2014 as well as a decrease in fossil generation within the New England region as a result of favorable portfolio management optimization activities (offset below in market and portfolio conditions).

(13)

Primarily reflects the inclusion of CENG’s results for the second and third quarters of 2014, increased fossil generation, and increased fossil fuel costs due to the extreme cold weather during the first quarter of 2014, partially offset by the cancellation of the DOE spent nuclear fuel disposal fee.

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

(15)	Primarily reflects the impact of lower realized energy prices and higher procurement costs for replacement power as a result of the extreme cold weather in the first quarter of 2014, partially offset by favorable portfolio management optimization activities.

(16)

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

(17)

Primarily reflects the inclusion of CENG’s results for the second and third quarters of 2014 at Generation, an increase in contracting costs as a result of increased nuclear non-refueling outage days at Generation, increased maintenance activities at ComEd and BGE, increased contracting costs associated with EIMA Smart Meter Project assistance at ComEd, and inflation across all operating companies, partially offset at Generation by merger synergies realized in 2014.

(18)	Primarily reflects of the inclusion of CENG’s results for the second and third quarters of 2014 and the impact of increased nuclear refueling outage days in 2014, excluding Salem.

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

(20)

For Generation, primarily reflects the inclusion of CENG’s results for the second and third quarters of 2014, an increase in the reserve for future asbestos-related bodily injury claims, an increase in nuclear decommissioning obligation expense, and an increase in regulatory fees and assessments. For ComEd, primarily relates to increased spend on energy efficiency programs and increased uncollectible accounts expense (both offset above, in other energy and delivery revenue). In the PECO service territory, primarily reflects increased storm costs, including the February 5, 2014 ice storm and July storms, as well as, increased spend on regulatory programs (offset above in other energy delivery revenue). In the BGE service territory, primarily reflects increased storm costs and an increase in uncollectible accounts expense.

(21)

Primarily reflects the inclusion of CENG’s results for the second and third quarters of 2014 and increased depreciation expense across the operating companies for ongoing capital expenditures. At BGE, also reflects increased regulatory asset amortization related to higher energy efficiency and demand response program expenditures (offset above, primarily in other energy delivery revenue).

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

(23)	At Generation, primarily reflects the favorable settlement of certain income positions and an increase in domestic production activities deduction, partially offset by a reduction in investment tax credit benefits. At PECO, primarily reflects an increase in electric tax repairs deduction.

(24)

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

(25)	For Generation, primarily reflects the inclusion of CENG’s results for the second and third quarters of 2014.

 

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, 2014												Three Months Ended September 30, 2013
		GAAP (a)				Adjustments				Adjusted Non-GAAP				GAAP (a)				Adjustments				Adjusted Non-GAAP
Operating revenues		$	4,412			$	(248	)(b),(c)		$	4,164			$	4,255			$	(90	)(b),(c)		$	4,165
Operating expenses
Purchased power and fuel			1,880				33	(b),(c)			1,913				2,179				112	(b),(c)			2,291
Operating and maintenance			1,266				(90	)(d),(e),(f),(g)			1,176				1,076				(87	)(d),(e),(f)			989
Depreciation and amortization			253				—				253				218				(1	)(d)			217
Taxes other than income			127				—				127				98				—				98
Total operating expenses			3,526				(57	)			3,469				3,571				24				3,595
Equity in earnings of unconsolidated affiliates			1				—				1				37				23	(c),(d)			60
Operating income			887				(191	)			696				721				(91	)			630
Other income and (deductions)
Interest expense			(89	)			3	(b)			(86	)			(82	)			—				(82	)
Other, net			342				(275	)(g),(h),(i)			67				134				(63	)(h)			71
Total other income and (deductions)			253				(272	)			(19	)			52				(63	)			(11	)
Income before income taxes			1,140				(463	)			677				773				(154	)			619
Income taxes			291				(112	)(b),(c),(d),(e),(f),(g),(h),(i)			179				288				(75	)(b),(c),(d),(e),(f),(h)			213
Net income			849				(351	)			498				485				(79	)			406
Net income (loss) attributable to noncontrolling interests			78				(13	)(j)			65				(5	)			—				(5	)
Net income attributable to membership interest		$	771			$	(338	)		$	433			$	490			$	(79	)		$	411
		Nine Months Ended September 30, 2014												Nine Months Ended September 30, 2013
		GAAP (a)				Adjustments				Adjusted Non-GAAP				GAAP (a)				Adjustments				Adjusted Non-GAAP
Operating revenues		$	12,591			$	772	(b),(c),(d)		$	13,363			$	11,858			$	469	(b),(c)		$	12,327
Operating expenses
Purchased power and fuel			7,071				220	(b),(c)			7,291				6,294				355	(b),(c)			6,649
Operating and maintenance			3,765				(207	)(d),(e),(f),(g)			3,558				3,377				(241	)(d),(e)(f),(g)			3,136
Depreciation and amortization			719				—				719				643				(3	)(d)			640
Taxes other than income			350				—				350				292				—				292
Total operating expenses			11,905				13				11,918				10,606				111				10,717
Equity in earnings (loss) of unconsolidated affiliates			(20	)			12	(c),(d)			(8	)			7				62	(c),(d)			69
Gain on consolidation of CENG			261				(261	)(k)			—				—				—				—
Operating income			927				510				1,437				1,259				420				1,679
Other income and (deductions)
Interest expense			(261	)			3	(b)			(258	)			(257	)			1	(d),(e),(l)			(256	)
Other, net			661				(480	)(g),(h),(i)			181				229				(117	)(d),(g),(h),(l)			112
Total other income and (deductions)			400				(477	)			(77	)			(28	)			(116	)			(144	)
Income before income taxes			1,327				33				1,360				1,231				304				1,535
Income taxes			290				71	(b),(c),(d),(e),(f),(g),(h),(i),(k)			361				436				86	(b),(c),(d),(e),(f),(g),(h),(l)			522
Net income			1,037				(38	)			999				795				218				1,013
Net income (loss) attributable to noncontrolling interests			111				(36	)(j)			75				(6	)			—				(6	)
Net income attributable to membership interest		$	926			$	(2	)		$	924			$	801			$	218			$	1,019

Note: Includes the results of operations of Constellation Energy Nuclear Group, LLC beginning on April 1, 2014, the date the nuclear operating services agreement was executed.

 

(a)	Results reported in accordance with GAAP.

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

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

(d)	Adjustment to exclude certain costs associated with the Constellation merger, PHI acquisition, and the CENG integration, including professional fees, employee-related expenses, integration activities, upfront credit facilities fees, merger commitments, and certain pre-acquisition contingencies.

(e)	Adjustment to exclude a 2014 charge to earnings primarily related to the impairment of certain wind generating assets and a 2013 charge to earnings primarily related to the cancellation of previously capitalized nuclear uprate projects.

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

(g)	Adjustment to exclude the impacts associated with the sale or retirement of generating stations, primarily the gain from sale of Generation’s equity interest in Safe Harbor Water Power Corporation.

(h)	Adjustment to exclude the unrealized gains and losses on NDT fund investments to the extent not offset by contractual accounting as described in the notes to the consolidated financial statements.

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

(j)	Adjustment to exclude adjustments for CENG interest not owned by Generation.

(k)	Adjustment to exclude the gain recorded upon consolidation of CENG resulting from the difference in the fair value of CENG’s net assets and the equity method investment previously recorded on Generation’s and Exelon’s books and the settlement of pre-existing commitments between Generation and CENG.

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

 

12

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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, 2014												Three Months Ended September 30, 2013
		GAAP (a)				Adjustments				Adjusted Non- GAAP				GAAP (a)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	1,222			$	—			$	1,222			$	1,156			$	—			$	1,156
Operating expenses
Purchased power			326				—				326				301				—				301
Operating and maintenance			359				—				359				333				(2	)(b)			331
Depreciation and amortization			174				—				174				164				—				164
Taxes other than income			76				—				76				80				—				80
Total operating expenses			935				—				935				878				(2	)			876
Operating income			287				—				287				278				2				280
Other income and (deductions)
Interest expense			(81	)			—				(81	)			(74	)			—				(74	)
Other, net			4				—				4				7				—				7
Total other income and (deductions)			(77	)			—				(77	)			(67	)			—				(67	)
Income before income taxes			210				—				210				211				2				213
Income taxes			84				—				84				85				1	(b)			86
Net income		$	126			$	—			$	126			$	126			$	1			$	127
		Nine Months Ended September 30, 2014												Nine Months Ended September 30, 2013
		GAAP (a)				Adjustments				Adjusted Non- GAAP				GAAP (a)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	3,484			$	—			$	3,484			$	3,395			$	—			$	3,395
Operating expenses
Purchased power			915				—				915				931				—				931
Operating and maintenance			1,040				—				1,040				1,020				(2	)(b)			1,018
Depreciation and amortization			521				—				521				501				—				501
Taxes other than income			225				—				225				225				—				225
Total operating expenses			2,701				—				2,701				2,677				(2	)			2,675
Operating income			783				—				783				718				2				720
Other income and (deductions)
Interest expense			(241	)			—				(241	)			(503	)			288	(c)			(215	)
Other, net			14				—				14				18				—				18
Total other income and (deductions)			(227	)			—				(227	)			(485	)			288				(197	)
Income before income taxes			556				—				556				233				290				523
Income taxes			221				—				221				93				118	(b),(c)			211
Net income		$	335			$	—			$	335			$	140			$	172			$	312

 

(a)	Results reported in accordance with GAAP.

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

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

 

13

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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, 2014												Three Months Ended September 30, 2013
		GAAP (a)				Adjustments				Adjusted Non- GAAP				GAAP (a)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	693			$	—			$	693			$	728			$	—			$	728
Operating expenses
Purchased power and fuel			255				—				255				289				—				289
Operating and maintenance			204				—				204				186				(2	)(b)			184
Depreciation and amortization			59				—				59				57				—				57
Taxes other than income			42				—				42				41				—				41
Total operating expenses			560				—				560				573				(2	)			571
Operating income			133				—				133				155				2				157
Other income and (deductions)
Interest expense			(29	)			—				(29	)			(29	)			—				(29	)
Other, net			2				—				2				1				—				1
Total other income and (deductions)			(27	)			—				(27	)			(28	)			—				(28	)
Income before income taxes			106				—				106				127				2				129
Income taxes			25				—				25				35				1	(b)			36
Net income			81				—				81				92				1				93
Preferred security dividends			—				—				—				—				—				—
Net income attributable to common shareholder		$	81			$	—			$	81			$	92			$	1			$	93
		Nine Months Ended September 30, 2014												Nine Months Ended September 30, 2013
		GAAP (a)				Adjustments				Adjusted Non- GAAP				GAAP (a)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	2,343			$	—			$	2,343			$	2,295			$	—			$	2,295
Operating expenses
Purchased power and fuel			960				—				960				953				—				953
Operating and maintenance			668				—				668				554				(8	)(b)			546
Depreciation and amortization			176				—				176				171				—				171
Taxes other than income			122				—				122				121				—				121
Total operating expenses			1,926				—				1,926				1,799				(8	)			1,791
Operating income			417				—				417				496				8				504
Other income and (deductions)
Interest expense			(85	)			—				(85	)			(86	)			—				(86	)
Other, net			5				—				5				4				—				4
Total other income and (deductions)			(80	)			—				(80	)			(82	)			—				(82	)
Income before income taxes			337				—				337				414				8				422
Income taxes			82				—				82				122				3	(b)			125
Net income			255				—				255				292				5				297
Preferred security dividends and redemption			—				—				—				7				—				7
Net income attributable to common shareholder		$	255			$	—			$	255			$	285			$	5			$	290

 

(a)	Results reported in accordance with GAAP.

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

 

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, 2014												Three Months Ended September 30, 2013
		GAAP (a)				Adjustments				Adjusted Non- GAAP				GAAP (a)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	697			$	—			$	697			$	737			$	—			$	737
Operating expenses
Purchased power and fuel			297				—				297				346				—				346
Operating and maintenance			165				—				165				146				(2	)(b)			144
Depreciation and amortization			78				—				78				78				—				78
Taxes other than income			55				—				55				53				—				53
Total operating expenses			595				—				595				623				(2	)			621
Operating income			102				—				102				114				2				116
Other income and (deductions)
Interest expense			(26	)			—				(26	)			(29	)			—				(29	)
Other, net			4				—				4				4				—				4
Total other income and (deductions)			(22	)			—				(22	)			(25	)			—				(25	)
Income before income taxes			80				—				80				89				2				91
Income taxes			31				—				31				36				1	(b)			37
Net income			49				—				49				53				1				54
Preference stock dividends			3				—				3				3				—				3
Net income attributable to common shareholders		$	46			$	—			$	46			$	50			$	1			$	51
		Nine Months Ended September 30, 2014												Nine Months Ended September 30, 2013
		GAAP (a)				Adjustments				Adjusted Non- GAAP				GAAP (a)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	2,404			$	—			$	2,404			$	2,271			$	—			$	2,271
Operating expenses
Purchased power and fuel			1,094				—				1,094				1,059				—				1,059
Operating and maintenance			541				—				541				450				4	(b)			454
Depreciation and amortization			275				—				275				252				—				252
Taxes other than income			168				—				168				162				—				162
Total operating expenses			2,078				—				2,078				1,923				4				1,927
Operating income (loss)			326				—				326				348				(4	)			344
Other income and (deductions)
Interest expense			(81	)			—				(81	)			(94	)			—				(94	)
Other, net			14				—				14				13				—				13
Total other income and (deductions)			(67	)			—				(67	)			(81	)			—				(81	)
Income before income taxes			259				—				259				267				(4	)			263
Income taxes			103				—				103				107				(1	)(b)			106
Net income			156				—				156				160				(3	)			157
Preference stock dividends			10				—				10				10				—				10
Net income attributable to common shareholders		$	146			$	—			$	146			$	150			$	(3	)		$	147

 

(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) integration initiatives and certain pre-acquisition contingencies.

 

15

---

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, 2014												Three Months Ended September 30, 2013
		GAAP (b)				Adjustments				Adjusted Non- GAAP				GAAP (b)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	(112	)		$	—			$	(112	)		$	(374	)		$	—			$	(374	)
Operating expenses
Purchased power and fuel			(110	)			—				(110	)			(372	)			—				(372	)
Operating and maintenance			(12	)			(9	)(c)			(21	)			(6	)			(3	)(c)			(9	)
Depreciation and amortization			13				—				13				13				—				13
Taxes other than income			6				—				6				5				—				5
Total operating expenses			(103	)			(9	)			(112	)			(360	)			(3	)			(363	)
Operating loss			(9	)			9				—				(14	)			3				(11	)
Other income and (deductions)
Interest expense			(33	)			21	(c)			(12	)			(20	)			—				(20	)
Other, net			2				—				2				9				—				9
Total other income and (deductions)			(31	)			21				(10	)			(11	)			—				(11	)
Loss before income taxes			(40	)			30				(10	)			(25	)			3				(22	)
Income taxes			(9	)			9	(c),(e),(f)			—				(5	)			(2	)(c),(d),(e)			(7	)
Net loss		$	(31	)		$	21			$	(10	)		$	(20	)		$	5			$	(15	)
			Nine Months Ended September 30, 2014												Nine Months Ended September 30, 2013
			GAAP (b)				Adjustments				Adjusted Non- GAAP				GAAP (b)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	(649	)		$	—			$	(649	)		$	(1,094	)		$	(7	)(e)		$	(1,101	)
Operating expenses
Purchased power and fuel			(641	)			—				(641	)			(1,094	)			—				(1,094	)
Operating and maintenance			(9	)			(43	)(c),(d)			(52	)			(10	)			(18	)(c),(d)			(28	)
Depreciation and amortization			41				—				41				39				—				39
Taxes other than income			22				—				22				25				—				25
Total operating expenses			(587	)			(43	)			(630	)			(1,040	)			(18	)			(1,058	)
Operating loss			(62	)			43				(19	)			(54	)			11				(43	)
Other income and (deductions)
Interest expense			(54	)			29	(c)			(25	)			(170	)			81	(h)			(89	)
Other, net			8				—				8				47				—				47
Total other income and (deductions)			(46	)			29				(17	)			(123	)			81				(42	)
Loss before income taxes			(108	)			72				(36	)			(177	)			92				(85	)
Income taxes			(50	)			28	(c),(d),(e),(f)			(22	)			(25	)			(14	)(c),(d),(e),(g)			(39	)
Net loss		$	(58	)		$	44			$	(14	)		$	(152	)		$	106			$	(46	)

 

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

(b)	Results reported in accordance with GAAP.

(c)	Adjustment to exclude certain costs associated with the Constellation merger, PHI acquisition, and the CENG integration, including professional fees, employee-related expenses, integration activities, upfront credit facilities fees, merger commitments, and certain pre-acquisition contingencies.

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

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

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

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

 

16

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EXELON CORPORATION

Exelon Generation Statistics

 

		Three Months Ended,
		September 30, 2014				June 30, 2014				March 31, 2014				December 31, 2013				September 30, 2013
Supply (in GWhs)
Nuclear Generation
Mid-Atlantic (a)			15,993				14,912				12,136				11,900				12,424
Midwest			24,379				22,719				23,125				23,429				23,741
New York (a)			4,891				3,766				—				—				—
Total Nuclear Generation			45,263				41,397				35,261				35,329				36,165
Fossil and Renewables (a)
Mid-Atlantic			2,385				3,165				3,207				2,951				2,808
Midwest			212				319				417				363				217
New England			1,789				1,299				1,734				1,763				3,609
New York			1				1				1				—				—
ERCOT			2,331				1,553				1,656				1,582				2,522
Other (c)			2,285				2,041				1,630				1,064				1,913
Total Fossil and Renewables			9,003				8,378				8,645				7,723				11,069
Purchased Power
Mid-Atlantic (b)			1,110				810				3,233				3,955				4,289
Midwest			260				520				711				498				707
New England			3,231				2,290				2,070				2,605				2,178
New York (b)			—				—				2,857				3,493				3,565
ERCOT			2,184				2,518				3,440				2,792				3,803
Other (c)			4,397				3,654				3,355				2,986				3,244
Total Purchased Power			11,182				9,792				15,666				16,329				17,786
Total Supply/Sales by Region (e)
Mid-Atlantic (d)			19,488				18,887				18,576				18,806				19,521
Midwest (d)			24,851				23,558				24,253				24,290				24,665
New England			5,020				3,589				3,804				4,368				5,787
New York			4,892				3,767				2,858				3,493				3,565
ERCOT			4,515				4,071				5,096				4,374				6,325
Other (c)			6,682				5,695				4,985				4,050				5,157
Total Supply/Sales by Region			65,448				59,567				59,572				59,381				65,020
		Three Months Ended,
		September 30, 2014				June 30, 2014				March 31, 2014 (g)				December 31, 2013 (g)				September 30, 2013 (g)
Outage Days (f)
Refueling			18				108				52				94				43
Non-refueling			20				44				20				33				5
Total Outage Days			38				152				72				127				48

 

(a)

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

(b)

Purchased power includes physical volumes of 2,489 GWhs, 3,226 GWhs, and 3,138 GWhs in the Mid-Atlantic and 2,857 GWhs, 3,051 GWhs, and 3,147 GWhs in New York as a result of the PPA with CENG for the three months ended March 31, 2014, December 31, 2013, and September 30, 2013 respectively. As of the integration date of April 1, 2014, CENG volumes are included in nuclear generation.

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

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

(e)	Total sales do not include physical trading volumes of 3,006 GWhs, 2,629 GWhs, 2,494 GWhs, 2,696 GWhs, and 2,499 GWhs for the three months ended September 30, 2014, June 30, 2014, March 31, 2014, December 31, 2013, and September 30, 2013 respectively.

(f)	Outage days exclude Salem.

(g)	Outage days exclude CENG.

 

17

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EXELON CORPORATION

Exelon Generation Statistics

Nine Months Ended September 30, 2014 and 2013

 

		September 30, 2014				September 30, 2013
Supply (in GWhs)
Nuclear Generation
Mid-Atlantic (a)			43,042				36,980
Midwest			70,223				69,817
New York (a)			8,657				—
Total Nuclear Generation			121,922				106,797
Fossil and Renewables (a)
Mid-Atlantic			8,758				8,764
Midwest			948				1,116
New England			4,822				9,133
New York			3				—
ERCOT			5,541				4,872
Other (c)			5,954				5,598
Total Fossil and Renewables			26,026				29,483
Purchased Power
Mid-Atlantic (b)			5,152				10,138
Midwest			1,491				3,910
New England			7,591				5,050
New York (b)			2,857				10,149
ERCOT			8,142				12,271
Other (c)			11,406				11,945
Total Purchased Power			36,639				53,463
Total Supply/Sales by Region (e)
Mid-Atlantic (d)			56,952				55,882
Midwest (d)			72,662				74,843
New England			12,413				14,183
New York			11,517				10,149
ERCOT			13,683				17,143
Other (c)			17,360				17,543
Total Supply/Sales by Region			184,587				189,743

 

(a)

Includes the proportionate share of output where Generation has an undivided ownership interest in jointly-owned generating plants and includes the total output of plants that are fully consolidated (e.g. CENG). Nuclear generation for nine months ended September 30, 2014 includes physical volumes of 7,507 GWh in Mid-Atlantic and 8,657 GWh in New York for CENG.

(b)

Purchased power includes physical volumes of 2,489 GWh and 8,840 GWh in the Mid-Atlantic and 2,857 GWh and 9,113 GWh in New York as a result of the PPA with CENG for the nine months ended September 30, 2014 and 2013, respectively. As of the integration date of April 1, 2014, CENG volumes are included in nuclear generation.

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

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

(e)	Total sales do not include physical proprietary trading volumes of 8,129 GWh and 6,066 GWh for the nine months ended September 30, 2014 and 2013, respectively.

 

18

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EXELON CORPORATION

ComEd Statistics

Three Months Ended September 30, 2014 and 2013

 

		Electric Deliveries (in GWhs)																Revenue (in millions)
		2014				2013				% Change				Weather- Normal % Change				2014				2013				% Change
Retail Deliveries and Sales (a)
Residential			7,332				8,188				(10.5	)%			1.3	%		$	566			$	529				7.0	%
Small Commercial & Industrial			8,366				8,680				(3.6	)%			(0.6	)%			349				322				8.4	%
Large Commercial & Industrial			7,245				7,381				(1.8	)%			—	%			115				112				2.7	%
Public Authorities & Electric Railroads			301				329				(8.5	)%			(8.3	)%			10				12				(16.7	)%
Total Retail			23,244				24,578				(5.4	)%			0.1	%			1,040				975				6.7	%
Other Revenue (b)																			182				181				0.6	%
Total Electric Revenue																		$	1,222			$	1,156				5.7	%
Purchased Power																		$	326			$	301				8.3	%

 

														% Change
		2014				2013				Normal				From 2013				From Normal
Heating and Cooling Degree-Days
Heating Degree-Days			111				79				119				40.5	%			(6.7	)%
Cooling Degree-Days			537				668				613				(19.6	)%			(12.4	)%

Nine Months Ended September 30, 2014 and 2013

 

		Electric Deliveries (in GWhs)																Revenue (in millions)
		2014				2013				% Change				Weather- Normal % Change				2014				2013				% Change
Retail Deliveries and Sales (a)
Residential			20,920				21,154				(1.1	)%			1.4	%		$	1,572			$	1,589				(1.1	)%
Small Commercial & Industrial			24,456				24,385				0.3	%			0.1	%			1,033				945				9.3	%
Large Commercial & Industrial			21,109				20,932				0.8	%			0.6	%			343				327				4.9	%
Public Authorities & Electric Railroads			1,001				997				0.4	%			(1.3	)%			35				35				—	%
Total Retail			67,486				67,468				—	%			0.6	%			2,983				2,896				3.0	%
Other Revenue (b)																			501				499				0.4	%
Total Electric Revenue																		$	3,484			$	3,395				2.6	%
Purchased Power																		$	915			$	931				(1.7	)%

 

														% Change
		2014				2013				Normal				From 2013				From Normal
Heating and Cooling Degree-Days
Heating Degree-Days			4,680				4,116				4,048				13.7	%			15.6	%
Cooling Degree-Days			796				908				831				(12.3	)%			(4.2	)%

 

		2014				2013
Number of Electric Customers
Residential			3,486,438				3,465,635
Small Commercial & Industrial			367,446				366,216
Large Commercial & Industrial			1,992				1,978
Public Authorities & Electric Railroads			4,821				4,860
Total			3,860,697				3,838,689

 

(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 rental revenues, revenues related to late payment charges, revenues from other utilities for mutual assistance programs and recoveries of environmental costs associated with MGP sites.

 

19

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EXELON CORPORATION

PECO Statistics

Three Months Ended September 30, 2014 and 2013

 

		Electric and Gas Deliveries																Revenue (in millions)
		2014				2013				% Change				Weather- Normal % Change				2014				2013				% Change
Electric (in GWhs)
Retail Deliveries and Sales (a)
Residential			3,551				3,781				(6.1	)%			0.9	%		$	413			$	448				(7.8	)%
Small Commercial & Industrial			2,096				2,142				(2.2	)%			0.3	%			107				109				(1.8	)%
Large Commercial & Industrial			4,086				4,207				(2.9	)%			(1.4	)%			52				53				(1.9	)%
Public Authorities & Electric Railroads			241				219				10.0	%			10.0	%			7				7				—	%
Total Retail			9,974				10,349				(3.6	)%			—	%			579				617				(6.2	)%
Other Revenue (b)																			55				55				—	%
Total Electric Revenue																			634				672				(5.7	)%
Gas (in mmcfs)
Retail Deliveries and Sales
Retail Sales (c)			3,893				3,531				10.2	%			10.4	%			54				48				12.5	%
Transportation and Other			5,750				6,041				(4.8	)%			6.1	%			5				8				(37.5	)%
Total Gas			9,643				9,572				0.7	%			7.8	%			59				56				5.4	%
Total Electric and Gas Revenues																		$	693			$	728				(4.8	)%
Purchased Power and Fuel																		$	255			$	289				(11.8	)%

 

														% Change
		2014				2013				Normal				From 2013				From Normal
Heating and Cooling Degree-Days
Heating Degree-Days			14				36				35				(61.1	)%			(60.0	)%
Cooling Degree-Days			911				928				934				(1.8	)%			(2.5	)%

Nine Months Ended September 30, 2014 and 2013

 

		Electric and Gas Deliveries																Revenue (in millions)
		2014				2013				% Change				Weather- Normal % Change				2014				2013				% Change
Electric (in GWhs)
Retail Deliveries and Sales (a)
Residential			10,200				10,134				0.7	%			1.3	%		$	1,195			$	1,197				(0.2	)%
Small Commercial & Industrial			6,098				6,111				(0.2	)%			0.2	%			319				324				(1.5	)%
Large Commercial & Industrial			11,604				11,637				(0.3	)%			—	%			169				173				(2.3	)%
Public Authorities & Electric Railroads			722				712				1.4	%			1.4	%			23				23				—	%
Total Retail			28,624				28,594				0.1	%			0.5	%			1,706				1,717				(0.6	)%
Other Revenue (b)																			165				163				1.4	%
Total Electric Revenue																			1,871				1,880				(0.5	)%
Gas (in mmcfs)
Retail Deliveries and Sales
Retail Sales (c)			44,487				38,888				14.4	%			2.2	%			444				386				15.1	%
Transportation and Other			20,124				20,880				(3.6	)%			(1.6	)%			28				29				(3.4	)%
Total Gas			64,611				59,768				8.1	%			0.9	%			472				415				13.7	%
Total Electric and Gas Revenues																		$	2,343			$	2,295				2.1	%
Purchased Power and Fuel																		$	960			$	953				0.7	%

 

														% Change
		2014				2013				Normal				From 2013				From Normal
Heating and Cooling Degree-Days
Heating Degree-Days			3,251				2,897				2,974				12.2	%			9.3	%
Cooling Degree-Days			1,286				1,346				1,282				(4.5	)%			0.3	%

 

Number of Electric Customers		2014				2013				Number of Gas Customers		2014				2013
Residential			1,429,293				1,419,837			Residential			459,678				455,809
Small Commercial & Industrial			149,172				148,843			Commercial & Industrial			42,008				41,591
Large Commercial & Industrial			3,103				3,114			Total Retail			501,686				497,400
Public Authorities & Electric Railroads			9,737				9,666			Transportation			866				909
Total			1,591,305				1,581,460			Total			502,552				498,309

 

(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, 2014 and 2013

 

		Electric and Gas Deliveries												Revenue (in millions)
		2014				2013				% Change				2014				2013				% Change
Electric (in GWhs)
Retail Deliveries and Sales (a)
Residential			3,291				3,557				(7.5	)%		$	348			$	390				(10.8	)%
Small Commercial & Industrial			805				808				(0.4	)%			72				72				—	%
Large Commercial & Industrial			3,818				3,882				(1.6	)%			134				116				15.5	%
Public Authorities & Electric Railroads			79				78				1.3	%			8				8				—	%
Total Retail			7,993				8,325				(4.0	)%			562				586				(4.1	)%
Other Revenue (b)															69				78				(11.5	)%
Total Electric Revenue															631				664				(5.0	)%
Gas (in mmcfs)
Retail Deliveries and Sales (c)
Retail Sales			10,257				10,642				(3.6	)%			62				66				(6.1	)%
Transportation and Other (d)			304				933				(67.4	)%			4				7				(42.9	)%
Total Gas			10,561				11,575				(8.8	)%			66				73				(9.6	)%
Total Electric and Gas Revenues														$	697			$	737				(5.4	)%
Purchased Power and Fuel														$	297			$	346				(14.2	)%

 

														% Change
		2014				2013				Normal				From 2013				From Normal
Heating and Cooling Degree-Days
Heating Degree-Days			82				111				81				(26.1	)%			1.2	%
Cooling Degree-Days			484				567				596				(14.6	)%			(18.8	)%

Nine Months Ended September 30, 2014 and 2013

 

		Electric and Gas Deliveries												Revenue (in millions)
		2014				2013				% Change				2014				2013				% Change
Electric (in GWhs)
Retail Deliveries and Sales (a)
Residential			10,023				9,849				1.8	%		$	1,077			$	1,056				2.0	%
Small Commercial & Industrial			2,343				2,301				1.8	%			208				197				5.6	%
Large Commercial & Industrial			10,880				11,046				(1.5	)%			377				333				13.2	%
Public Authorities & Electric Railroads			236				239				(1.3	)%			24				23				4.3	%
Total Retail			23,482				23,435				0.2	%			1,686				1,609				4.8	%
Other Revenue (b)															207				203				2.0	%
Total Electric Revenue															1,893			$	1,812				4.5	%
Gas (in mmcfs)
Retail Deliveries and Sales (c)
Retail Sales			71,479				65,854				8.5	%			439				412				6.6	%
Transportation and Other (d)			7,508				8,128				(7.6	)%			72				47				53.2	%
Total Gas			78,987				73,982				6.8	%			511				459				11.3	%
Total Electric and Gas Revenues														$	2,404			$	2,271				5.9	%
Purchased Power and Fuel														$	1,094			$	1,059				3.3	%

 

														% Change
		2014				2013				Normal				From 2013				From Normal
Heating and Cooling Degree-Days
Heating Degree-Days			3,439				3,054				2,981				12.6	%			15.4	%
Cooling Degree-Days			717				830				851				(13.6	)%			(15.7	)%

 

Number of Electric Customers		2014				2013				Number of Gas Customers		2014				2013
Residential			1,123,644				1,119,209			Residential			610,750				612,065
Small Commercial & Industrial			112,580				112,988			Commercial & Industrial			43,963				44,028
Large Commercial & Industrial			11,707				11,634			Total Retail			654,713				656,093
Public Authorities & Electric Railroads			290				293			Transportation			—				—
Total			1,248,221				1,244,124			Total			654,713				656,093

 

(a)

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

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

(c)

Reflects delivery 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 304 mmcfs ($2 million) and 933 mmcfs ($5 million) for the three months ended September 30, 2014 and 2013, respectively, and 7,508 mmcfs ($60 million) and 8,128 mmcfs ($37 million) for the nine months ended September 30, 2014 and 2013, respectively.

 

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