CHICAGO--(BUSINESS WIRE)--Exelon Corporation (Nasdaq: EXC) today reported its financial results for the second quarter of 2020.
“From a financial and operational standpoint, we finished the quarter strong, with each of our utilities maintaining high reliability in the face of a particularly active storm season and our nuclear fleet delivering its highest capacity factor in a decade,” said Christopher M. Crane, president and CEO of Exelon. “We also reached an agreement with the U.S. Attorney’s Office to resolve its investigation into ComEd’s past lobbying practices in Illinois. The conduct cited in the agreement did not live up to our values, and we took immediate action to identify deficiencies and implement new policies to ensure it won’t happen again. As we go forward, our employees remain focused on doing their essential work safely during this pandemic, and serving our customers and communities with the highest standards of ethics, integrity and performance.”
“Accelerated cost savings at Exelon Generation helped offset the impact of damaging storms that affected utility earnings in the mid-Atlantic, resulting in solid adjusted (non-GAAP) earnings of $0.55 per share, which exceeded our guidance range of $0.35 to $0.45 per share,” said Joseph Nigro, senior executive vice president and CFO of Exelon. “Despite challenges caused by the pandemic, we continue to move forward with capital projects at our utilities, investing $1.5 billion during the second quarter to improve infrastructure, increase reliability and deliver better service to customers.”
Second Quarter 2020
Exelon's GAAP Net Income for the second quarter of 2020 increased to $0.53 per share from $0.50 per share in the second quarter of 2019. Adjusted (non-GAAP) Operating Earnings for the second quarter of 2020 decreased to $0.55 per share from $0.60 per share in the second quarter of 2019. For the reconciliations of GAAP Net Income to Adjusted (non-GAAP) Operating Earnings, refer to the tables beginning on page 5.
Adjusted (non-GAAP) Operating Earnings in the second quarter of 2020 primarily reflect:
- Lower utility earnings primarily due to higher storm costs at PECO related to the June 2020 storms, higher credit loss expense at PECO and PHI that includes the impact of COVID-19, and distribution formula rate timing at ComEd, partially offset by favorable weather conditions at PECO; and
- Higher Generation earnings due to lower operating and maintenance expense, partially offset by lower capacity revenues and reduction in load due to COVID-19.
Operating Company Results1
ComEd
ComEd had a GAAP Net Loss of $61 million in the second quarter of 2020 compared with GAAP Net Income of $186 million in the second quarter of 2019. ComEd's Adjusted (non-GAAP) Operating Earnings for the second quarter of 2020 decreased to $150 million from $186 million in the second quarter of 2019, primarily due to distribution formula rate timing. Due to revenue decoupling, ComEd's distribution earnings are not affected by actual weather or customer usage patterns.
PECO
PECO’s second quarter of 2020 GAAP Net Income decreased to $39 million from $102 million in the second quarter of 2019. PECO’s Adjusted (non-GAAP) Operating Earnings for the second quarter of 2020 decreased to $44 million from $103 million in the second quarter of 2019, primarily due to increased storm costs related to the June 2020 storms and credit loss expense that includes the impacts of COVID-19, partially offset by favorable weather conditions.
BGE
BGE’s second quarter of 2020 GAAP Net Income and Adjusted (non-GAAP) Operating Earnings remained relatively consistent with the second quarter of 2019. Due to revenue decoupling, BGE's distribution earnings are not affected by actual weather or customer usage patterns.
PHI
PHI’s second quarter of 2020 GAAP Net Income decreased to $94 million from $106 million in the second quarter of 2019. PHI’s Adjusted (non-GAAP) Operating Earnings for the second quarter of 2020 decreased to $98 million from $107 million in the second quarter of 2019, primarily due to credit loss expense that includes the impacts of COVID-19. Due to revenue decoupling, PHI's distribution earnings related to Pepco Maryland, DPL Maryland and Pepco District of Columbia are not affected by actual weather or customer usage patterns.
Generation
Generation's second quarter of 2020 GAAP Net Income increased to $476 million from $108 million in the second quarter of 2019. Generation’s Adjusted (non-GAAP) Operating Earnings for the second quarter of 2020 increased to $252 million from $202 million in the second quarter of 2019, primarily due to lower operating and maintenance expense, partially offset by lower capacity revenues and reduction in load due to COVID-19.
As of June 30, 2020, the percentage of expected generation hedged is 98%-101% and 76%-79% for 2020 and 2021, respectively.
___________
1Exelon’s five business units include ComEd, which consists of electricity transmission and distribution operations in northern Illinois; PECO, which consists of electricity transmission and distribution operations and retail natural gas distribution operations in southeastern Pennsylvania; BGE, which consists of electricity transmission and distribution operations and retail natural gas distribution operations in central Maryland; PHI, which consists of electricity transmission and distribution operations in the District of Columbia and portions of Maryland, Delaware, and New Jersey and retail natural gas distribution operations in northern Delaware; and Generation, which 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 and risk management services.
Recent Developments and Second Quarter Highlights
-
COVID-19: Exelon continues to monitor developments related to the global outbreak (pandemic) of the 2019 novel coronavirus (COVID-19) pandemic and has taken proactive measures to protect the health and safety of employees, contractors and customers. As a provider of critical resources, Exelon has robust plans and contingencies in place to ensure business and operational continuity across a wide range of potentially disruptive events, including extensive preparedness for major public health crises. Exelon and its operating companies are working in close coordination with designated state and local emergency preparedness and health officials, and at the federal level through the Electric Subsector Coordinating Council. All Exelon employees have access to up-to-date information and resources and are following Centers for Disease Control guidelines to ensure safety. In addition, Exelon utilities have established incident command centers to address emergent customer and employee needs in real time.
The estimated impact of COVID-19 to Exelon utilities’ and Generation’s GAAP Net income as a result of COVID-19 is approximately $100 million and $50 million, respectively, for the second quarter of 2020 and primarily reflects the impact of reduction in load, incremental credit loss expense and direct costs related to COVID-19. Direct costs related to COVID-19 are excluded from Adjusted (non-GAAP) Operating Earnings. The Utility Registrants and Generation also expect a reduction in operating revenues for the second half of 2020 due to expected reduction in electric load. Further, Generation expects an increase in credit loss expense in the second half of 2020. There remains significant uncertainty in the economic forecast for the remainder of the year and its impact on Exelon’s operating revenues. However, Exelon identified and is pursuing approximately $250 million in cost savings across its operating companies to offset part of the expected unfavorable impacts on operating revenues. - BGE Maryland Electric and Natural Gas Rate Case: On May 15, 2020, BGE filed an application for a three-year cumulative multi-year plan for 2021 through 2023 with the Maryland Public Service Commission (MDPSC) to increase its electric distribution rates by $140 million and natural gas distribution rates by $95 million in 2023 to recover capital investments made in late 2019 and planned capital investments from 2020 to 2023, reflecting an ROE of 10.1%. BGE currently expects a decision in the fourth quarter of 2020 but cannot predict if the MDPSC will approve the application as filed or the requested schedule.
- DPL Maryland Electric Distribution Rate Case: On July 14, 2020, the MDPSC approved an increase in DPL's annual electric distribution rates of $12 million with an effective date of July 16, 2020, and reflecting an ROE of 9.6%.
- Nuclear Operations: Generation’s nuclear fleet, including its owned output from the Salem Generating Station and 100% of the CENG units, produced 43,416 gigawatt-hours (GWhs) in the second quarter of 2020, compared with 44,748 GWhs in the second quarter of 2019. Excluding Salem, the Exelon-operated nuclear plants at ownership achieved a 95.4% capacity factor for the second quarter of 2020, compared with 95.1% for the second quarter of 2019. The number of planned refueling outage days in the second quarter of 2020 totaled 92, compared with 56 in the second quarter of 2019. There were no non-refueling outage days in the second quarter of 2020 and 28 in the second quarter of 2019.
- Fossil and Renewables Operations: The Dispatch Match rate for Generation’s fossil and hydro fleet was 97.4% in the second quarter of 2020, compared with 99.7% in the second quarter of 2019. The lower performance in the quarter was primarily due to outages at gas units in Texas. Energy Capture for the wind and solar fleet was 92.7% in the second quarter of 2020, compared with 96.0% in the second quarter of 2019. The lower performance in the quarter was attributed to turbines in outage awaiting parts to perform repairs.
-
Financing Activities:
- On June 8, 2020, PECO issued $350 million of its First and Refunding Mortgage Bonds, 2.80% Series due June 15, 2050. PECO used the proceeds for general corporate purposes.
- On June 5, 2020, BGE issued $400 million of its 2.90% Senior Notes due June 15, 2050. BGE used the proceeds to repay commercial paper obligations and for general corporate purposes.
- On June 9, 2020, DPL issued $100 million of its First Mortgage Bonds, 2.53% Series due June 9, 2030. DPL used the proceeds to repay existing indebtedness and for general corporate purposes.
- On July 1, 2020, DPL issued $78 million of its 1.05% Tax-Exempt Bonds due January 1, 2031. DPL used the proceeds to repay existing indebtedness.
- On June 2, 2020, ACE issued $23 million of its 2.25% Tax-Exempt First Mortgage Bonds due June 1, 2029. ACE used the proceeds to repay existing indebtedness.
- On June 9, 2020, ACE issued $100 million of its First Mortgage Bonds, 3.24% Series due June 9, 2050. ACE used the proceeds to repay existing indebtedness and for general corporate purposes.
- On May 15, 2020, Generation issued $900 million of its 3.25% Senior Notes due June 1, 2025. Generation used the proceeds to repay existing indebtedness and for general corporate purposes.
GAAP/Adjusted (non-GAAP) Operating Earnings Reconciliation
Adjusted (non-GAAP) Operating Earnings for the second quarter of 2020 do not include the following items (after tax) that were included in reported GAAP Net Income:
(in millions) |
Exelon
|
Exelon |
ComEd |
PECO |
BGE |
PHI |
Generation |
|||||||||||||||||||||
2020 GAAP Net Income (Loss) |
$ |
0.53 |
|
$ |
521 |
|
$ |
(61 |
) |
$ |
39 |
|
$ |
39 |
|
$ |
94 |
|
$ |
476 |
|
|||||||
Mark-to-Market Impact of Economic Hedging Activities (net of taxes of $18 and $20, respectively) |
(0.05 |
) |
(51 |
) |
— |
|
— |
|
— |
|
— |
|
(60 |
) |
||||||||||||||
Unrealized Gains Related to Nuclear Decommissioning Trust (NDT) Fund Investments (net of taxes of $275) |
(0.31 |
) |
(305 |
) |
— |
|
— |
|
— |
|
— |
|
(305 |
) |
||||||||||||||
Asset Impairments (net of taxes of $7, $4 and $3, respectively) |
0.02 |
|
19 |
|
11 |
|
— |
|
— |
|
— |
|
8 |
|
||||||||||||||
Plant Retirements and Divestitures (net of taxes of $2) |
0.01 |
|
7 |
|
— |
|
— |
|
— |
|
— |
|
7 |
|
||||||||||||||
Cost Management Program (net of taxes of $3, $1 and $2, respectively) |
0.01 |
|
6 |
|
— |
|
— |
|
— |
|
1 |
|
5 |
|
||||||||||||||
Change in Environmental Liabilities (net of taxes of $0) |
— |
|
1 |
|
— |
|
— |
|
— |
|
— |
|
1 |
|
||||||||||||||
COVID-19 Direct Costs (net of taxes of $10, $2, $2, $1 and $6, respectively) |
0.03 |
|
27 |
|
— |
|
5 |
|
4 |
|
3 |
|
16 |
|
||||||||||||||
Deferred Prosecution Agreement Payments (net of taxes of $0) |
0.20 |
|
200 |
|
200 |
|
— |
|
— |
|
— |
|
— |
|
||||||||||||||
Income Tax-Related Adjustments (entire amount represents tax expense) |
0.01 |
|
5 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
||||||||||||||
Noncontrolling Interests (net of taxes of $20) |
0.11 |
|
104 |
|
— |
|
— |
|
— |
|
— |
|
104 |
|
||||||||||||||
2020 Adjusted (non-GAAP) Operating Earnings |
$ |
0.55 |
|
$ |
536 |
|
$ |
150 |
|
$ |
44 |
|
$ |
43 |
|
$ |
98 |
|
$ |
252 |
|
|||||||
Adjusted (non-GAAP) Operating Earnings for the second quarter of 2019 do not include the following items (after tax) that were included in reported GAAP Net Income:
(in millions) |
Exelon
|
Exelon |
ComEd |
PECO |
BGE |
PHI |
Generation |
|||||||||||||||||||||
2019 GAAP Net Income |
$ |
0.50 |
|
$ |
484 |
|
$ |
186 |
|
$ |
102 |
|
$ |
45 |
|
$ |
106 |
|
$ |
108 |
|
|||||||
Mark-to-Market Impact of Economic Hedging Activities (net of taxes of $22 and $20, respectively) |
0.07 |
|
68 |
|
— |
|
— |
|
— |
|
— |
|
65 |
|
||||||||||||||
Unrealized Losses Related to NDT Fund Investments (net of taxes of $28) |
0.05 |
|
52 |
|
— |
|
— |
|
— |
|
— |
|
52 |
|
||||||||||||||
Asset Impairments (net of taxes of $1) |
— |
|
1 |
|
— |
|
— |
|
— |
|
— |
|
1 |
|
||||||||||||||
Plant Retirements and Divestitures (net of taxes of $37 and $38, respectively) |
(0.02 |
) |
(24 |
) |
— |
|
— |
|
— |
|
— |
|
(23 |
) |
||||||||||||||
Cost Management Program (net of taxes of $1, $0, $0, $0 and $1, respectively) |
0.01 |
|
6 |
|
— |
|
1 |
|
1 |
|
1 |
|
3 |
|
||||||||||||||
Litigation Settlement Gain (net of taxes of $7) |
(0.02 |
) |
(19 |
) |
— |
|
— |
|
— |
|
— |
|
(19 |
) |
||||||||||||||
Noncontrolling Interests (net of taxes of $3) |
0.02 |
|
15 |
|
— |
|
— |
|
— |
|
— |
|
15 |
|
||||||||||||||
2019 Adjusted (non-GAAP) Operating Earnings |
$ |
0.60 |
|
$ |
583 |
|
$ |
186 |
|
$ |
103 |
|
$ |
46 |
|
$ |
107 |
|
$ |
202 |
|
|||||||
Note:
Amounts may not sum due to rounding.
Unless otherwise noted, the income tax impact of each reconciling item between GAAP Net Income and Adjusted (non-GAAP) Operating Earnings is based on the marginal statutory federal and state income tax rates for each Registrant, taking into account whether the income or expense item is taxable or deductible, respectively, in whole or in part. For all items except the unrealized gains and losses related to NDT fund investments, the marginal statutory income tax rates for 2020 and 2019 ranged from 26.0% to 29.0%. Under IRS regulations, NDT fund investment returns are taxed at different rates for investments if they are in qualified or non-qualified funds. The effective tax rates for the unrealized gains and losses related to NDT fund investments were 47.4% and 35.1% for the three months ended June 30, 2020 and 2019, respectively.
Webcast Information
Exelon will discuss second quarter 2020 earnings in a conference call scheduled for today at 9 a.m. Central Time (10 a.m. Eastern Time). The webcast and associated materials can be accessed at www.exeloncorp.com/investor-relations.
About Exelon
Exelon Corporation (Nasdaq: EXC) is a Fortune 100 energy company with the largest number of electricity and natural gas customers in the U.S. Exelon does business in 48 states, the District of Columbia and Canada and had 2019 revenue of $34 billion. Exelon serves approximately 10 million customers in Delaware, the District of Columbia, Illinois, Maryland, New Jersey and Pennsylvania through its Atlantic City Electric, BGE, ComEd, Delmarva Power, PECO and Pepco subsidiaries. Exelon is one of the largest competitive U.S. power generators, with more than 31,000 megawatts of nuclear, gas, wind, solar and hydroelectric generating 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 2 million residential, public sector and business customers, including three fourths of the Fortune 100. Follow Exelon on Twitter @Exelon.
Non-GAAP Financial Measures
In addition to net income as determined under generally accepted accounting principles in the United States (GAAP), Exelon evaluates its operating performance using the measure of Adjusted (non-GAAP) Operating Earnings because management believes it represents earnings directly related to the ongoing operations of the business. Adjusted (non-GAAP) Operating Earnings exclude certain costs, expenses, gains and losses and other specified items. This measure is intended to enhance an investor’s overall understanding of period over period operating results and provide an indication of Exelon’s baseline operating performance excluding items that are considered by management to be not directly related to the ongoing operations of the business. In addition, this measure is among the primary indicators management uses as a basis for evaluating performance, allocating resources, setting incentive compensation targets and planning and forecasting of future periods. Adjusted (non-GAAP) Operating Earnings is not a presentation defined under GAAP and may not be comparable to other companies’ presentation. The Company has provided the non-GAAP financial measure as supplemental information and in addition to the financial measures that are calculated and presented in accordance with GAAP. Adjusted (non-GAAP) Operating Earnings should not be deemed more useful than, a substitute for, or an alternative to the most comparable GAAP Net Income measures provided in this earnings release and attachments. This press release and earnings release attachments provide reconciliations of Adjusted (non-GAAP) Operating Earnings to the most directly comparable financial measures calculated and presented in accordance with GAAP, are posted on Exelon’s website: www.exeloncorp.com, and have been furnished to the Securities and Exchange Commission on Form 8-K on Aug. 4, 2020.
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 including among others those related to the expected or potential impact of the novel coronavirus (COVID-19) pandemic, and the related responses of various governments and regulatory bodies, our customers, and the company, on our business, financial condition and results of operations; any such forward-looking statements, whether concerning the COVID-19 pandemic or otherwise, involve risks, assumptions and uncertainties. Words such as “could,” “may,” “expects,” “anticipates,” “will,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “predicts,” and variations on such words, and similar expressions that reflect our current views with respect to future events and operational, economic and financial performance, are intended to identify such forward-looking statements.
The factors that could cause actual results to differ materially from the forward-looking statements made by Exelon Corporation, Exelon Generation Company, LLC, Commonwealth Edison Company, PECO Energy Company, Baltimore Gas and Electric Company, Pepco Holdings LLC, Potomac Electric Power Company, Delmarva Power & Light Company, and Atlantic City Electric Company (Registrants) include those factors discussed herein, as well as the items discussed in (1) the Registrants' 2019 Annual Report on Form 10-K in (a) Part I, ITEM 1A. Risk Factors, (b) Part II, ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) Part II, ITEM 8. Financial Statements and Supplementary Data: Note 18, Commitments and Contingencies; (2) the Registrants' Second Quarter 2020 Quarterly Report on Form 10-Q (to be filed on Aug. 4, 2020) in (a) Part II, ITEM 1A. Risk Factors; (b) Part I, ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) Part I, ITEM 1. Financial Statements: Note 14, Commitments and Contingencies; and (3) other factors discussed in filings with the SEC by the Registrants.
Investors are cautioned not to place undue reliance on these forward-looking statements, whether written or oral, 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 |
||||||||||||||||||||
GAAP Consolidated Statements of Operations and |
||||||||||||||||||||
Adjusted (non-GAAP) Operating Earnings Reconciling Adjustments |
||||||||||||||||||||
(unaudited) |
||||||||||||||||||||
(in millions, except per share data) |
||||||||||||||||||||
|
Three Months Ended
|
|
Three Months Ended
|
|||||||||||||||||
|
GAAP (a) |
|
Non-GAAP
|
|
|
|
GAAP (a) |
|
Non-GAAP
|
|
|
|||||||||
Operating revenues |
$ |
7,322 |
|
|
$ |
(21 |
) |
|
(b) |
|
$ |
7,689 |
|
|
$ |
(38 |
) |
|
(b) |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Purchased power and fuel |
2,924 |
|
|
64 |
|
|
(b),(c) |
|
3,225 |
|
|
(117 |
) |
|
(b),(d) |
|||||
Operating and maintenance |
2,433 |
|
|
(280 |
) |
|
(c),(d),(e),(f),(g),(m) |
|
2,159 |
|
|
(2 |
) |
|
(c),(d),(f),(l) |
|||||
Depreciation and amortization |
1,001 |
|
|
(4 |
) |
|
(d) |
|
1,079 |
|
|
(99 |
) |
|
(d) |
|||||
Taxes other than income taxes |
411 |
|
|
— |
|
|
|
|
418 |
|
|
— |
|
|
|
|||||
Total operating expenses |
6,769 |
|
|
|
|
|
|
6,881 |
|
|
|
|
|
|||||||
Gain on sales of assets and businesses |
12 |
|
|
(4 |
) |
|
(b),(d) |
|
33 |
|
|
(33 |
) |
|
(d) |
|||||
Operating income |
565 |
|
|
|
|
|
|
841 |
|
|
|
|
|
|||||||
Other income and (deductions) |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest expense, net |
(427 |
) |
|
23 |
|
|
(b),(h) |
|
(409 |
) |
|
14 |
|
|
(b) |
|||||
Other, net |
656 |
|
|
(569 |
) |
|
(b),(i) |
|
212 |
|
|
(68 |
) |
|
(b),(d),(i) |
|||||
Total other income and (deductions) |
229 |
|
|
|
|
|
|
(197 |
) |
|
|
|
|
|||||||
Income before income taxes |
794 |
|
|
|
|
|
|
644 |
|
|
|
|
|
|||||||
Income taxes |
219 |
|
|
(262 |
) |
|
(b),(c),(d),(f),(g),(h),(i) |
|
144 |
|
|
9 |
|
|
(b),(c),(d),(f),(i),(l) |
|||||
Equity in losses of unconsolidated affiliates |
(1 |
) |
|
— |
|
|
|
|
(6 |
) |
|
— |
|
|
|
|||||
Net income |
574 |
|
|
|
|
|
|
494 |
|
|
|
|
|
|||||||
Net income attributable to noncontrolling interests |
53 |
|
|
(103 |
) |
|
(k) |
|
10 |
|
|
(15 |
) |
|
(k) |
|||||
Net income attributable to common shareholders |
$ |
521 |
|
|
|
|
|
|
$ |
484 |
|
|
|
|
|
|||||
Effective tax rate(j) |
27.6 |
% |
|
|
|
|
|
22.4 |
% |
|
|
|
|
|||||||
Earnings per average common share |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic |
$ |
0.53 |
|
|
|
|
|
|
$ |
0.50 |
|
|
|
|
|
|||||
Diluted |
$ |
0.53 |
|
|
|
|
|
|
$ |
0.50 |
|
|
|
|
|
|||||
Average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic |
976 |
|
|
|
|
|
|
972 |
|
|
|
|
|
|||||||
Diluted |
976 |
|
|
|
|
|
|
974 |
|
|
|
|
|
|||||||
__________
(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 reorganization costs related to cost management programs. |
(d) |
In 2020, adjustment to exclude accelerated depreciation and amortization expenses associated with the early retirement of certain fossil sites. In 2019, adjustment to exclude net realized gains related to Oyster Creek's NDT fund investments in conjunction with the Holtec sale on July 1, 2019 and a gain on the sale of certain wind assets, partially offset by accelerated depreciation and amortization expenses associated with the early retirement of the TMI nuclear facility. |
(e) |
Adjustment to exclude a change in environmental liabilities. |
(f) |
In 2020, adjustment to exclude an impairment at ComEd related to the acquisition of transmission assets and the impairment of certain wind assets at Generation. In 2019, adjustment to exclude other asset impairments. |
(g) |
Adjustment to exclude direct costs related to COVID-19 consisting primarily of costs to acquire personal protective equipment, costs for cleaning supplies and services, and costs to hire healthcare professionals to monitor the health of employees. |
(h) |
Adjustment to exclude income tax related adjustments. |
(i) |
Adjustment to exclude the impact of net unrealized gains and losses on Generation’s NDT fund investments for Non-Regulatory and Regulatory Agreement Units. The impacts of the Regulatory Agreement Units, including the associated income taxes, are contractually eliminated, resulting in no earnings impact. |
(j) |
The effective tax rate related to Adjusted (non-GAAP) Operating Earnings is (9.7)% and 20.8% for the three months ended June 30, 2020 and 2019, respectively. |
(k) |
Adjustment to exclude elimination from Generation’s results of the noncontrolling interest related to certain exclusion items, primarily related to the impact of unrealized gains and losses on NDT fund investments at CENG. |
(l) |
Adjustment to exclude litigation settlement gain. |
(m) |
Adjustment to exclude the payments that ComEd will make under the Deferred Prosecution Agreement, which ComEd entered into on July 17, 2020 with the U.S. Attorney’s Office for the Northern District of Illinois. |
Exelon |
||||||||||||||||||||
GAAP Consolidated Statements of Operations and |
||||||||||||||||||||
Adjusted (non-GAAP) Operating Earnings Reconciling Adjustments |
||||||||||||||||||||
(unaudited) |
||||||||||||||||||||
(in millions, except per share data) |
||||||||||||||||||||
|
Six Months Ended
|
|
Six Months Ended
|
|||||||||||||||||
|
GAAP (a) |
|
Non-GAAP
|
|
|
|
GAAP (a) |
|
Non-GAAP
|
|
|
|||||||||
Operating revenues |
$ |
16,069 |
|
|
$ |
(201 |
) |
|
(b) |
|
$ |
17,166 |
|
|
$ |
14 |
|
|
(b) |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Purchased power and fuel |
6,791 |
|
|
16 |
|
|
(b) |
|
7,778 |
|
|
(97 |
) |
|
(b),(c),(d) |
|||||
Operating and maintenance |
4,637 |
|
|
(304 |
) |
|
(c),(d),(e),(f),(g),(m) |
|
4,347 |
|
|
55 |
|
|
(c),(d),(l) |
|||||
Depreciation and amortization |
2,023 |
|
|
(14 |
) |
|
(d) |
|
2,154 |
|
|
(199 |
) |
|
(d) |
|||||
Taxes other than income taxes |
847 |
|
|
— |
|
|
|
|
863 |
|
|
— |
|
|
|
|||||
Total operating expenses |
14,298 |
|
|
|
|
|
|
15,142 |
|
|
|
|
|
|||||||
Gain on sales of assets and businesses |
13 |
|
|
(4 |
) |
|
(b),(d) |
|
36 |
|
|
(33 |
) |
|
(d) |
|||||
Operating income |
1,784 |
|
|
|
|
|
|
2,060 |
|
|
|
|
|
|||||||
Other income and (deductions) |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest expense, net |
(837 |
) |
|
39 |
|
|
(b),(h) |
|
(813 |
) |
|
29 |
|
|
(b) |
|||||
Other, net |
(68 |
) |
|
310 |
|
|
(i) |
|
679 |
|
|
(426 |
) |
|
(b),(d),(i) |
|||||
Total other income and (deductions) |
(905 |
) |
|
|
|
|
|
(134 |
) |
|
|
|
|
|||||||
Income before income taxes |
879 |
|
|
|
|
|
|
1,926 |
|
|
|
|
|
|||||||
Income taxes |
(75 |
) |
|
119 |
|
|
(b),(c),(d),(f),(g),(h),(i) |
|
454 |
|
|
(130 |
) |
|
(b),(c),(d),(i),(l) |
|||||
Equity in losses of unconsolidated affiliates |
(4 |
) |
|
— |
|
|
|
|
(12 |
) |
|
— |
|
|
|
|||||
Net income |
950 |
|
|
|
|
|
|
1,460 |
|
|
|
|
|
|||||||
Net (loss) income attributable to noncontrolling interests |
(153 |
) |
|
42 |
|
|
(k) |
|
69 |
|
|
(82 |
) |
|
(k) |
|||||
Net income attributable to common shareholders |
$ |
1,103 |
|
|
|
|
|
|
$ |
1,391 |
|
|
|
|
|
|||||
Effective tax rate(j) |
(8.5 |
)% |
|
|
|
|
|
23.6 |
% |
|
|
|
|
|||||||
Earnings per average common share |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic |
$ |
1.13 |
|
|
|
|
|
|
$ |
1.43 |
|
|
|
|
|
|||||
Diluted |
$ |
1.13 |
|
|
|
|
|
|
$ |
1.43 |
|
|
|
|
|
|||||
Average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic |
975 |
|
|
|
|
|
|
972 |
|
|
|
|
|
|||||||
Diluted |
976 |
|
|
|
|
|
|
973 |
|
|
|
|
|
|||||||
__________
(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 reorganization costs related to cost management programs. |
(d) |
In 2020, adjustment to exclude accelerated depreciation and amortization expenses associated with the early retirement of certain fossil sites. In 2019, adjustment to exclude net realized gains related to Oyster Creek's NDT fund investments in conjunction with the Holtec sale on July 1, 2019, a benefit associated with a remeasurement in the first quarter 2019 of the TMI asset retirement obligation and a gain on the sale of certain wind assets in the second quarter of 2019, partially offset by accelerated depreciation and amortization expenses associated with the early retirement of the TMI nuclear facility. |
(e) |
Adjustment to exclude a change in environmental liabilities. |
(f) |
Adjustment to exclude an impairment at ComEd related to the acquisition of transmission assets and the impairment of certain wind assets at Generation. |
(g) |
Adjustment to exclude direct costs related to COVID-19 consisting primarily of costs to acquire personal protective equipment, costs for cleaning supplies and services, and costs to hire healthcare professionals to monitor the health of employees. |
(h) |
Adjustment to exclude income tax related adjustments. |
(i) |
Adjustment to exclude the impact of net unrealized gains and losses on Generation’s NDT fund investments for Non-Regulatory and Regulatory Agreement Units. The impacts of the Regulatory Agreement Units, including the associated income taxes, are contractually eliminated, resulting in no earnings impact. |
(j) |
The effective tax rate related to Adjusted (non-GAAP) Operating Earnings is 3.3% and 18.5% for the six months ended June 30, 2020 and 2019, respectively. |
(k) |
Adjustment to exclude elimination from Generation’s results of the noncontrolling interests related to certain exclusion items, primarily related to the impact of unrealized gains and losses on NDT fund investments at CENG. |
(l) |
Adjustment to exclude litigation settlement gain. |
(m) |
Adjustment to exclude the payments that ComEd will make under the Deferred Prosecution Agreement, which ComEd entered into on July 17, 2020 with the U.S. Attorney’s Office for the Northern District of Illinois. |
