Exhibit 99.1

 

 

Contact:		Ravi Ganti Investor Relations 312-394-2345   Paul Adams Corporate Communications 410-470-4167

EXELON ANNOUNCES SECOND QUARTER 2014 RESULTS

CHICAGO (Jul. 31, 2014) — Exelon Corporation (NYSE: EXC) announced second quarter 2014 consolidated earnings as follows:

 

		Second Quarter
		2014				2013
Adjusted (non-GAAP) Operating Results:
Net Income ($ millions)		$	440			$	454
Diluted Earnings per Share		$	0.51			$	0.53
GAAP Results:
Net Income ($ millions)		$	522			$	490
Diluted Earnings per Share		$	0.60			$	0.57

“Exelon achieved earnings above our guidance range this quarter, and all of our businesses continued to deliver strong operating performance,” said Christopher M. Crane, Exelon’s president and CEO. “With our year to date results, we are on track to meet our full-year financial targets and finish 2014 within our guidance range.”

Second Quarter Operating Results

As shown in the table above, Exelon’s adjusted (non-GAAP) operating earnings decreased to $0.51 per share in the second quarter of 2014 from $0.53 per share in the second quarter of 2013. Earnings in the second quarter of 2014 primarily reflected the following negative factors:

 

•

Lower realized energy prices;

 

•

Decreased nuclear and fossil output during 2014 primarily due to outage days; and

 

•

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

 

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These factors were offset by:

 

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Increased capacity pricing related to the Reliability Pricing Model (RPM) for the PJM Interconnection, LLC (PJM) market;

 

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Increased distribution revenue at BGE, due to the December 2013 rate case order for electric and natural gas, and higher distribution earnings at ComEd due to increased capital investment; and

 

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Decreased income tax expense as a result of an increase in Generation’s domestic production activities deduction and PECO’s electric tax repairs deduction.

Adjusted (non-GAAP) Operating Earnings for the second 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		$	440			$	0.51
Mark-to-Market Impact of Economic Hedging Activities			(8	)			(0.01	)
Unrealized Gains Related to Nuclear Decommissioning Trust (NDT) Fund Investments			76				0.09
Merger and Integration Costs			(19	)			(0.02	)
PHI Acquisition Costs			(12	)			(0.01	)
Amortization of Commodity Contract Intangibles			(23	)			(0.03	)
Long-Lived Asset Impairment			(68	)			(0.08	)
Gain on CENG Integration			159				0.18
Non-Controlling Interest			(23	)			(0.03	)
Exelon GAAP Net Income		$	522			$	0.60

Adjusted (non-GAAP) Operating Earnings for the second 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		$	454			$	0.53
Mark-to-Market Impact of Economic Hedging Activities			253				0.30
Unrealized Losses Related to NDT Fund Investments			(22	)			(0.03	)
Constellation Merger and Integration Costs			(15	)			(0.02	)
Amortization of Commodity Contract Intangibles			(115	)			(0.13	)
Amortization of the Fair Value of Certain Debt			4				—
Long-Lived Asset Impairment			(69	)			(0.08	)
Exelon GAAP Net Income		$	490			$	0.57

 

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Second Quarter and Recent Highlights

 

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Proposed Merger with Pepco Holdings, Inc.: On April 29, 2014, Exelon and Pepco Holdings, Inc. (PHI) signed an agreement and plan of merger to combine the two companies in an all-cash transaction. The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to be completed in the second or third quarter of 2015.

 

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Integration of Constellation Energy Nuclear Group, LLC: On April 1, 2014, Generation and subsidiaries and Constellation Energy Nuclear Group, LLC (CENG) entered into a Nuclear Operating Services Agreement (NOSA) pursuant to which Generation will operate the CENG nuclear generation fleet owned by CENG subsidiaries and provide corporate and administrative services for the remaining life of the CENG nuclear plants as if they were a part of the Generation nuclear fleet. The execution of the NOSA requires Exelon to fully consolidate CENG into Exelon’s financial statements. Upon consolidation, Exelon recorded a pre-tax net gain on integration of CENG of $261 million, which is excluded from second quarter operating earnings.

 

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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 41,397 gigawatt-hours (GWh), of which 7,546 GWh were produced by CENG, in the second quarter of 2014, compared with 34,601 GWh in the second quarter of 2013. Excluding Salem, the Exelon-operated nuclear plants at ownership achieved a 91.8 percent capacity factor for the second quarter of 2014, compared with 92.8 percent for the second quarter of 2013. The number of planned refueling outage days totaled 108, including 52 CENG planned outage days, in the second quarter of 2014, compared with 47 in the second quarter of 2013. There were 44 non-refueling outage days, including three CENG non-refueling outage days, in the second quarter of 2014, compared with 31 days in the second quarter of 2013.

 

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Fossil and Renewables Operations: The Dispatch Match rate for Generation’s gas/hydro fleet was 99.2 percent in the second quarter of 2014, compared with 99.1 percent in the second quarter of 2013. Energy Capture for the wind/solar fleet was 94.7 percent in the second quarter of 2014, compared with 92.4 percent in the second quarter of 2013. Energy Capture in the second quarter of 2014 reflects increased turbine availability. Construction of two 60.0 megawatt (MW) units at the Perryman Generating station in Hartford County, Md., began on July 1, with commercial operation scheduled to begin in 2015.

 

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Renewables Projects: The 50.4 MW Beebe 1B project in Gratiot, Mich., and 40.0 MW Fourmile Ridge project in Garrett County, Md., both began construction in the second quarter of 2014, with commercial operation expected by the fourth quarter. The remaining two blocks of the 230 MW Antelope Valley Solar Ranch project in California, Block 1 (28 MW) and Block 2 (20 MW) were officially turned over to Exelon on June 19, 2014.

 

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Spent Nuclear Fuel Obligation: In May 2014, the Department of Energy notified Generation that the spent nuclear fuel (SNF) disposal fee would be set to zero effective

 

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May 16, 2014. Through the effective date of the fee reduction, Generation incurred SNF disposal fees of $49 million, which includes Generation’s share of Salem and net of co-owner reimbursements (not including such fees incurred by CENG). Until a new fee structure is in effect, Generation will not accrue any further costs related to this fee.

 

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BGE Gas and Electric Distribution Rate Case: On July 2, 2014, BGE filed an application with the Maryland Public Service Commission (MDPSC) for increases of $118 million and $68 million to its electric and gas base rates, respectively. The requested rates of return on equity in the application were 10.65 percent for electric and 10.55 percent for gas. The MDPSC will determine any increase in rates after a proceeding with input from all interested parties. The new electric and gas distribution base rates are expected to take effect in late January 2015.

 

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Financing Activities:

 

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In April 2014, concurrently and in connection with entering into the agreement to acquire PHI, Exelon entered into a credit facility to which the lenders committed to provide Exelon a 364-day senior unsecured bridge credit facility of $7.2 billion to support the contemplated transaction and provide flexibility for timing of permanent financing. The bridge credit facility was subsequently reduced to $4.2 billion as a result of the June 2014 equity issuances.

 

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On June 11, 2014, Exelon executed a $2.0 billion equity offering of 57.5 million shares of common stock in connection with forward sales agreements and $1.2 billion of junior subordinated notes in the form of 23 million equity units.

 

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Hedging Update: Exelon’s hedging program involves the hedging of commodity risk for Exelon’s expected generation, typically on a ratable basis over a three-year period. Expected generation represents the amount of energy estimated to be generated or purchased through owned or contracted-for capacity. The proportion of expected generation hedged as of June 30, 2014, was 92 percent to 95 percent for 2014, 75 percent to 78 percent for 2015, and 46 percent to 49 percent for 2016. 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.

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. Beginning April 1, 2014, 100 percent of CENG’s operations are included in Generation’s results in connection with the NOSA referenced in the Second Quarter and Recent Highlights.

 

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The second quarter 2014 GAAP net income was $340 million, compared with a net income of $330 million in the second quarter of 2013. Adjusted (non-GAAP) operating earnings for the second 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)		2Q14				2Q13
Generation Adjusted (non-GAAP) Operating Earnings		$	231			$	273
Mark-to-Market Impact of Economic Hedging Activities			(8	)			263
Net Unrealized Gains (Losses) Related to NDT Fund Investments			76				(22	)
Merger and Integration Costs			(19	)			(12	)
Amortization of Commodity Contract Intangibles			(23	)			(115	)
Amortization of Fair Value of Certain Debt			—				4
Long-Lived Asset Impairment			(53	)			(61	)
Gain on CENG Integration			159				—
Non-Controlling Interest			(23	)			—
Generation GAAP Net Income		$	340			$	330

Generation’s Adjusted (non-GAAP) Operating Earnings in the second quarter of 2014 decreased $42 million compared with the same quarter in 2013. This decrease primarily reflected:

 

•

Lower realized energy prices;

 

•

Higher O&M expenses reflecting increased nuclear generating outage days and inflation, offset in part by reduced OPEB costs; and

 

•

Decreased nuclear and fossil output during 2014, primarily due to outage days.

These items were partially offset by favorable capacity pricing related to RPM for the PJM market.

ComEd consists of electricity transmission and distribution operations in Northern Illinois. ComEd recorded GAAP net income of $111 million in the second quarter of 2014, compared with net income of $96 million in the second quarter of 2013.

ComEd’s Adjusted (non-GAAP) Operating Earnings in the second quarter of 2014 were up $15 million from the same quarter in 2013, primarily reflecting higher distribution formula rate earnings due to increased capital investment.

For the second quarter of 2014, heating degree-days in the ComEd service territory were down 10.7 percent relative to the same period in 2013 and were 9.2 percent below normal. Meanwhile, cooling degree days were up 7.9 percent relative to the same period in 2013 and were 18.8 percent above normal. Total retail electric deliveries increased 0.4 percent in the second quarter of 2014 compared with the same period in 2013.

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

 

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

PECO’s GAAP net income in the second quarter of 2014 was $84 million, compared with $72 million in the second quarter of 2013. Adjusted (non-GAAP) Operating Earnings for the second quarter of 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)		2Q14				2Q13
PECO Adjusted (non-GAAP) Operating Earnings		$	84			$	74
Merger and Integration Costs			—				(2	)
PECO GAAP Net Income		$	84			$	72

PECO’s Adjusted (non-GAAP) Operating Earnings in the second quarter of 2014 increased $10 million from the same quarter in 2013, primarily due to a decreased income tax expense as a result of an increase in the electric tax repairs deduction.

For the second quarter of 2014, heating degree-days in the PECO service territory were down 6.7 percent relative to the same period in 2013 and were 15.1 percent below normal. Cooling degree-days were down 10.3 percent from prior year, but were 7.8 percent above normal. Total retail electric deliveries were down 1.8 percent compared with the second quarter of 2013. Natural gas deliveries (including both retail and transportation segments) in the second quarter of 2014 were up 4.3 percent compared with the second quarter of 2013.

Weather-normalized retail electric deliveries and gas deliveries increased 0.2 percent and 1.4 percent in the second quarter of 2014 relative to 2013, respectively. The variances are driven primarily by economic and customer growth (mainly in the residential classes), partially offset by energy efficiency and higher gas rates, respectively.

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

BGE’s GAAP net income in the second quarter of 2014 was $16 million, compared with $22 million in the second quarter of 2013. Adjusted (non-GAAP) Operating Earnings for the second quarter of 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)		2Q14				2Q13
BGE Adjusted (non-GAAP) Operating Earnings		$	16			$	23
Merger and Integration Costs			—				(1	)
BGE GAAP Net Income		$	16			$	22

BGE’s Adjusted (non-GAAP) Operating Earnings in the second quarter of 2014 decreased $7 million from the same quarter in 2013, primarily due to increased operating and maintenance expense, partially offset by increased revenue as a result of the December 2013 electric and gas distribution rate order issued by the MDPSC. Due to revenue decoupling, BGE is not affected by actual weather with the exception of major storms.

 

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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 page 8 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 July 31, 2014.

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 Second Quarter 2014 Quarterly Report on Form 10-Q (to be filed on July 31, 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 has 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).

 

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Earnings Release Attachments

Table of Contents

 

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

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EXELON CORPORATION

Consolidating Statements of Operations

(unaudited)

(in millions)

 

		Three Months Ended June 30, 2014 (a)
		Generation				ComEd				PECO				BGE				Other (b)				Exelon Consolidated
Operating revenues		$	3,789			$	1,128			$	656			$	653			$	(202	)		$	6,024
Operating expenses
Purchased power and fuel			1,835				269				241				268				(201	)			2,412
Operating and maintenance			1,413				355				184				188				26				2,166
Depreciation and amortization			254				174				59				89				14				590
Taxes other than income			118				72				38				53				7				288
Total operating expenses			3,620				870				522				598				(154	)			5,456
Equity in losses of unconsolidated affiliates			(1	)			—				—				—				1				—
Gain on consolidation of CENG			261				—				—				—				—				261
Operating income (loss)			429				258				134				55				(47	)			829
Other income and (deductions)
Interest expense			(86	)			(80	)			(28	)			(27	)			(17	)			(238	)
Other, net			228				5				1				5				4				243
Total other income and (deductions)			142				(75	)			(27	)			(22	)			(13	)			5
Income (loss) before income taxes			571				183				107				33				(60	)			834
Income taxes			199				72				23				14				(31	)			277
Net income (loss)			372				111				84				19				(29	)			557
Net income attributable to noncontrolling interests and preference stock dividends			32				—				—				3				—				35
Net income (loss) attibutable to common shareholders		$	340			$	111			$	84			$	16			$	(29	)		$	522
		Three Months Ended June 30, 2013
		Generation				ComEd				PECO				BGE				Other (b)				Exelon Consolidated
Operating revenues		$	4,070			$	1,080			$	672			$	653			$	(334	)		$	6,141
Operating expenses
Purchased power and fuel			1,946				248				258				288				(321	)			2,419
Operating and maintenance			1,189				359				181				160				3				1,892
Depreciation and amortization			210				170				56				82				15				533
Taxes other than income			101				71				39				54				6				271
Total operating expenses			3,446				848				534				584				(297	)			5,115
Equity in losses of unconsolidated affiliates			(21	)			—				—				—				—				(21	)
Operating income (loss)			603				232				138				69				(37	)			1,005
Other income and (deductions)
Interest expense			(93	)			(76	)			(28	)			(32	)			(23	)			(252	)
Other, net			(33	)			6				—				4				6				(17	)
Total other income and (deductions)			(126	)			(70	)			(28	)			(28	)			(17	)			(269	)
Income (loss) before income taxes			477				162				110				41				(54	)			736
Income taxes			149				66				32				16				(24	)			239
Net income (loss)			328				96				78				25				(30	)			497
Net income attributable to noncontrolling interests, preferred security dividends and preference stock dividends			(2	)			—				6				3				—				7
Net income (loss) attributable to common shareholders		$	330			$	96			$	72			$	22			$	(30	)		$	490

 

(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.

 

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EXELON CORPORATION

Consolidating Statements of Operations

(unaudited)

(in millions)

 

		Six Months Ended June 30, 2014 (a)
		Generation				ComEd				PECO				BGE				Other (b)				Exelon Consolidated
Operating revenues		$	8,179			$	2,262			$	1,649			$	1,707			$	(536	)		$	13,261
Operating expenses
Purchased power and fuel			5,191				589				705				797				(530	)			6,752
Operating and maintenance			2,499				681				464				376				4				4,024
Depreciation and amortization			466				347				117				197				27				1,154
Taxes other than income			223				149				80				113				15				580
Total operating expenses			8,379				1,766				1,366				1,483				(484	)			12,510
Equity in losses of unconsolidated affiliates			(20	)			—				—				—				—				(20	)
Gain on consolidation of CENG			261																				261
Operating income (loss)			41				496				283				224				(52	)			992
Other income and (deductions)
Interest expense			(172	)			(160	)			(56	)			(55	)			(22	)			(465	)
Other, net			318				10				3				9				8				348
Total other income and (deductions)			146				(150	)			(53	)			(46	)			(14	)			(117	)
Income (loss) before income taxes			187				346				230				178				(66	)			875
Income taxes			(1	)			137				57				72				(41	)			224
Net income (loss)			188				209				173				106				(25	)			651
Net income attributable to noncontrolling interests, preferred security dividends and redemption and preference stock dividends			33				—				—				6				—				39
Net income (loss) attributable to common shareholders		$	155			$	209			$	173			$	100			$	(25	)		$	612
		Six Months Ended June 30, 2013
		Generation				ComEd				PECO				BGE				Other (b)				Exelon Consolidated
Operating revenues		$	7,603			$	2,239			$	1,567			$	1,533			$	(719	)		$	12,223
Operating expenses
Purchased power and fuel			4,114				630				664				713				(721	)			5,400
Operating and maintenance			2,302				687				369				303				(5	)			3,656
Depreciation and amortization			424				337				113				175				27				1,076
Taxes other than income			194				145				80				109				20				548
Total operating expenses			7,034				1,799				1,226				1,300				(679	)			10,680
Equity in losses of unconsolidated affiliates			(30	)			—				—				—				—				(30	)
Operating income (loss)			539				440				341				233				(40	)			1,513
Other income and (deductions)
Interest expense			(176	)			(429	)			(57	)			(66	)			(148	)			(876	)
Other, net			95				11				3				9				37				155
Total other income and (deductions)			(81	)			(418	)			(54	)			(57	)			(111	)			(721	)
Income (loss) before income taxes			458				22				287				176				(151	)			792
Income taxes			148				8				87				70				(19	)			294
Net income (loss)			310				14				200				106				(132	)			498
Net income (loss) attributable to noncontrolling interests, preferred security dividends and preference stock dividends			(1	)			—				7				6				—				12
Net income (loss) attributable to common shareholders		$	311			$	14			$	193			$	100			$	(132	)		$	486

 

(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.

 

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EXELON CORPORATION

Business Segment Comparative Statements of Operations

(unaudited)

(in millions)

 

			Generation
		Three Months Ended June 30,												Six Months Ended June 30,
		2014 (a)				2013				Variance				2014 (a)				2013				Variance
Operating revenues		$	3,789			$	4,070			$	(281	)		$	8,179			$	7,603			$	576
Operating expenses
Purchased power and fuel			1,835				1,946				(111	)			5,191				4,114				1,077
Operating and maintenance			1,413				1,189				224				2,499				2,302				197
Depreciation and amortization			254				210				44				466				424				42
Taxes other than income			118				101				17				223				194				29
Total operating expenses			3,620				3,446				174				8,379				7,034				1,345
Equity in losses of unconsolidated affiliates			(1	)			(21	)			20				(20	)			(30	)			10
Gain on consolidation of CENG			261				—				261				261				—				261
Operating income			429				603				(174	)			41				539				(498	)
Other income and (deductions)
Interest expense			(86	)			(93	)			7				(172	)			(176	)			4
Other, net			228				(33	)			261				318				95				223
Total other income and (deductions)			142				(126	)			268				146				(81	)			227
Income before income taxes			571				477				94				187				458				(271	)
Income taxes			199				149				50				(1	)			148				(149	)
Net income			372				328				44				188				310				(122	)
Net income (loss) attributable to noncontrolling interests and preference stock dividends			32				(2	)			34				33				(1	)			34
Net income attributable to membership interest		$	340			$	330			$	10			$	155			$	311			$	(156	)
			ComEd
		Three Months Ended June 30,												Six Months Ended June 30,
		2014				2013				Variance				2014				2013				Variance
Operating revenues		$	1,128			$	1,080			$	48			$	2,262			$	2,239			$	23
Operating expenses
Purchased power			269				248				21				589				630				(41	)
Operating and maintenance			355				359				(4	)			681				687				(6	)
Depreciation and amortization			174				170				4				347				337				10
Taxes other than income			72				71				1				149				145				4
Total operating expenses			870				848				22				1,766				1,799				(33	)
Operating income			258				232				26				496				440				56
Other income and (deductions)
Interest expense			(80	)			(76	)			(4	)			(160	)			(429	)			269
Other, net			5				6				(1	)			10				11				(1	)
Total other income and (deductions)			(75	)			(70	)			(5	)			(150	)			(418	)			268
Income before income taxes			183				162				21				346				22				324
Income taxes			72				66				6				137				8				129
Net income		$	111			$	96			$	15			$	209			$	14			$	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

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EXELON CORPORATION

Business Segment Comparative Statements of Operations

(unaudited)

(in millions)

 

			PECO
		Three Months Ended June 30,												Six Months Ended June 30,
		2014				2013				Variance				2014				2013				Variance
Operating revenues		$	656			$	672			$	(16	)		$	1,649			$	1,567			$	82
Operating expenses
Purchased power and fuel			241				258				(17	)			705				664				41
Operating and maintenance			184				181				3				464				369				95
Depreciation and amortization			59				56				3				117				113				4
Taxes other than income			38				39				(1	)			80				80				—
Total operating expenses			522				534				(12	)			1,366				1,226				140
Operating income			134				138				(4	)			283				341				(58	)
Other income and (deductions)
Interest expense			(28	)			(28	)			—				(56	)			(57	)			1
Other, net			1				—				1				3				3				—
Total other income and (deductions)			(27	)			(28	)			1				(53	)			(54	)			1
Income before income taxes			107				110				(3	)			230				287				(57	)
Income taxes			23				32				(9	)			57				87				(30	)
Net income			84				78				6				173				200				(27	)
Preferred security dividends and redemption			—				6				(6	)			—				7				(7	)
Net income attributable to common shareholder		$	84			$	72			$	12			$	173			$	193			$	(20	)
			BGE
		Three Months Ended June 30,												Six Months Ended June 30,
		2014				2013				Variance				2014				2013				Variance
Operating revenues		$	653			$	653			$	—			$	1,707			$	1,533			$	174
Operating expenses
Purchased power and fuel			268				288				(20	)			797				713				84
Operating and maintenance			188				160				28				376				303				73
Depreciation and amortization			89				82				7				197				175				22
Taxes other than income			53				54				(1	)			113				109				4
Total operating expenses			598				584				14				1,483				1,300				183
Operating income			55				69				(14	)			224				233				(9	)
Other income and (deductions)
Interest expense			(27	)			(32	)			5				(55	)			(66	)			11
Other, net			5				4				1				9				9				—
Total other income and (deductions)			(22	)			(28	)			6				(46	)			(57	)			11
Income before income taxes			33				41				(8	)			178				176				2
Income taxes			14				16				(2	)			72				70				2
Net income			19				25				(6	)			106				106				—
Preference stock dividends			3				3				—				6				6				—
Net income attributable to common shareholders		$	16			$	22			$	(6	)		$	100			$	100			$	—

 

4

---

EXELON CORPORATION

Business Segment Comparative Statements of Operations

(unaudited)

(in millions)

 

			Other (a)
		Three Months Ended June 30,												Six Months Ended June 30,
		2014				2013				Variance				2014				2013				Variance
Operating revenues		$	(202	)		$	(334	)		$	132			$	(536	)		$	(719	)		$	183
Operating expenses
Purchased power and fuel			(201	)			(321	)			120				(530	)			(721	)			191
Operating and maintenance			26				3				23				4				(5	)			9
Depreciation and amortization			14				15				(1	)			27				27				—
Taxes other than income			7				6				1				15				20				(5	)
Total operating expenses			(154	)			(297	)			143				(484	)			(679	)			195
Equity in earnings of unconsolidated affiliates			1				—				1				—				—				—
Operating loss			(47	)			(37	)			(10	)			(52	)			(40	)			(12	)
Other income and (deductions)
Interest expense			(17	)			(23	)			6				(22	)			(148	)			126
Other, net			4				6				(2	)			8				37				(29	)
Total other income and (deductions)			(13	)			(17	)			4				(14	)			(111	)			97
Loss before income taxes			(60	)			(54	)			(6	)			(66	)			(151	)			85
Income benefit			(31	)			(24	)			(7	)			(41	)			(19	)			(22	)
Net loss		$	(29	)		$	(30	)		$	1			$	(25	)		$	(132	)		$	107

 

(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)

 

		June 30, 2014				December 31, 2013
		(unaudited)
ASSETS
Current assets
Cash and cash equivalents		$	1,362			$	1,609
Restricted cash and investments			207				167
Accounts receivable, net
Customer			2,973				2,981
Other			1,005				1,175
Mark-to-market derivative assets			629				727
Unamortized energy contract assets			264				374
Inventories, net
Fossil fuel			409				276
Materials and supplies			1,041				829
Deferred income taxes			426				573
Regulatory assets			732				760
Other			775				666
Total current assets			9,823				10,137
Property, plant and equipment, net			51,747				47,330
Deferred debits and other assets
Regulatory assets			5,545				5,910
Nuclear decommissioning trust funds			10,437				8,071
Investments			839				1,165
Investments in affiliates			22				22
Investment in CENG			—				1,925
Goodwill			2,674				2,625
Mark-to-market derivative assets			482				607
Unamortized energy contracts assets			593				710
Pledged assets for Zion Station decommissioning			402				458
Other			1,092				964
Total deferred debits and other assets			22,086				22,457
Total assets (a)		$	83,656			$	79,924
Liabilities and shareholders’ equity
Current liabilities
Short-term borrowings		$	621			$	341
Long-term debt due within one year			2,047				1,509
Accounts payable			2,633				2,484
Accrued expenses			1,382				1,633
Payables to affiliates			38				116
Deferred income taxes			17				40
Regulatory liabilities			368				327
Mark-to-market derivative liabilities			228				159
Unamortized energy contract liabilities			239				261
Other			994				858
Total current liabilities			8,567				7,728
Long-term debt			18,133				17,623
Long-term debt to financing trusts			648				648
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits			13,192				12,905
Asset retirement obligations			7,054				5,194
Pension obligations			1,804				1,876
Non-pension postretirement benefit obligations			1,419				2,190
Spent nuclear fuel obligation			1,021				1,021
Regulatory liabilities			4,670				4,388
Mark-to-market derivative liabilities			262				300
Unamortized energy contract liabilities			260				266
Payable for Zion Station decommissioning			264				305
Other			2,133				2,540
Total deferred credits and other liabilities			32,079				30,985
Total liabilities (a)			59,427				56,984
Commitments and contingencies
Shareholders’ equity
Common stock			16,651				16,741
Treasury stock, at cost			(2,327	)			(2,327	)
Retained earnings			10,435				10,358
Accumulated other comprehensive loss, net			(1,906	)			(2,040	)
Total shareholders’ equity			22,853				22,732
BGE preference stock not subject to mandatory redemption			193				193
Noncontrolling interest			1,183				15
Total equity			24,229				22,940
Total liabilities and shareholders’ equity		$	83,656			$	79,924

 

(a)

Exelon’s consolidated assets include $7,765 million and $1,755 million at June 30, 2014 and December 31, 2013, respectively, of certain VIEs that can only be used to settle the liabilities of the VIE. Exelon’s consolidated liabilities include $3,111 million and $658 million at June 30, 2014 and December 31, 2013, respectively, of certain VIEs for which the VIE creditors do not have recourse to Exelon. See Note 3 – Variable Interest Entities.

 

6

---

EXELON CORPORATION

Consolidated Statements of Cash Flows

(unaudited)

(in millions)

 

		Six Months Ended
		June 30,
		2014				2013
Cash flows from operating activities
Net income		$	651			$	498
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			1,925				1,972
Gain on Consolidation of CENG			(268	)			—
Deferred income taxes and amortization of investment tax credits			133				(468	)
Net fair value changes related to derivatives			751				(28	)
Net realized and unrealized gains on nuclear decommissioning trust fund investments			(168	)			(27	)
Other non-cash operating activities			567				576
Changes in assets and liabilities:
Accounts receivable			48				131
Inventories			(150	)			(18	)
Accounts payable, accrued expenses and other current liabilities			(358	)			(583	)
Option premiums received (paid), net			21				(10	)
Counterparty collateral posted, net			(606	)			(259	)
Income taxes			(16	)			705
Pension and non-pension postretirement benefit contributions			(499	)			(284	)
Other assets and liabilities			(280	)			133
Net cash flows provided by operating activities			1,751				2,338
Cash flows from investing activities
Capital expenditures			(2,501	)			(2,518	)
Proceeds from termination of direct financing lease investment			335				—
Proceeds from nuclear decommissioning trust fund sales			4,219				1,448
Investment in nuclear decommissioning trust funds			(4,238	)			(1,565	)
Acquisition of business			(66	)			(3	)
Proceeds from sale of long-lived assets			32				4
Cash consolidated from CENG			129				—
Change in restricted cash			(40	)			22
Other investing activities			(57	)			63
Net cash flows used in investing activities			(2,187	)			(2,549	)
Cash flows from financing activities
Changes in short-term borrowings			293				662
Issuance of long-term debt			2,100				509
Retirement of long-term debt			(1,191	)			(616	)
Redemption of preferred securities			—				(93	)
Distributions to non-controlling interest of consolidated VIE			(415	)			—
Dividends paid on common stock			(533	)			(716	)
Proceeds from employee stock plans			18				32
Other financing activities			(83	)			(62	)
Net cash flows provided by (used in) financing activities			189				(284	)
Decrease in cash and cash equivalents			(247	)			(495	)
Cash and cash equivalents at beginning of period			1,609				1,486
Cash and cash equivalents at end of period		$	1,362			$	991

 

7

---

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 June 30, 2014												Three Months Ended June 30, 2013
										Adjusted												Adjusted
		GAAP (a)				Adjustments				Non-GAAP				GAAP (a)				Adjustments				Non-GAAP
Operating revenues		$	6,024			$	170	(b),(c)		$	6,194			$	6,141			$	(259	)(b),(c)		$	5,882
Operating expenses
Purchased power and fuel			2,412				108	(b),(c)			2,520				2,419				(9	)(b),(c)			2,410
Operating and maintenance			2,166				(137	)(d),(e),(f)			2,029				1,892				(133	)(d),(f)			1,759
Depreciation and amortization			590				—				590				533				(1	)(d)			532
Taxes other than income			288				—				288				271				—				271
Total operating expenses			5,456				(29	)			5,427				5,115				(143	)			4,972
Equity in losses of unconsolidated affiliates			—				—				—				(21	)			21	(c)			—
Gain on consolidation of CENG			261				(261	)(g)			—				—				—				—
Operating income			829				(62	)			767				1,005				(95	)			910
Other income and (deductions)
Interest expense			(238	)			8	(e)			(230	)			(252	)			4	(i)			(248	)
Other, net			243				(162	)(h)			81				(17	)			57	(d),(h),(i)			40
Total other income and (deductions)			5				(154	)			(149	)			(269	)			61				(208	)
Income before income taxes			834				(216	)			618				736				(34	)			702
Income taxes			277				(111	)(b),(c),(d),(e),(f),(g),(h),(j)			166				239				2	(b),(c),(d),(f),(h),(i),(k)			241
Net income			557				(105	)			452				497				(36	)			461
Net income attributable to noncontrolling interests and preference stock dividends			35				(23	)(j)			12				7				—				7
Net income attributable to common shareholders		$	522			$	(82	)		$	440			$	490			$	(36	)		$	454
Effective tax rate			33.2	%							26.9	%			32.5	%							34.3	%
Earnings per average common share
Basic		$	0.61			$	(0.10	)		$	0.51			$	0.57			$	(0.04	)		$	0.53
Diluted		$	0.60			$	(0.09	)		$	0.51			$	0.57			$	(0.04	)		$	0.53
Average common shares outstanding
Basic			860								860				856								856
Diluted			864								864				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)						$	0.01											$	(0.30	)
Amortization of commodity contract intangibles (c)							0.03												0.13
Merger and integration costs (d)							0.02												0.02
PHI acquisition costs (e)							0.01												—
Long-lived asset impairment (f)							0.08												0.08
Gain on CENG Integration (g)							(0.18	)											—
Unrealized gains related to NDT fund investments (h)							(0.09	)											0.03
Non-controlling interest (j)							0.03												—
Total adjustments						$	(0.09	)										$	(0.04	)

For the three months ended June 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 merger date.

(d)

Adjustment to exclude certain costs incurred associated with the Constellation merger and at Generation the Constellation Energy Nuclear Group, LLC (CENG) transaction, including employee-related expenses (e.g. severance, retirement, relocation and retention bonuses), integration initiatives, and certain pre-acquisition contingencies.

(e)	Adjustment to exclude certain costs incurred associated with the Pepco Holdings Inc. acquisition, including professional fees and upfront credit facility fees.

(f)	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.

(g)	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.

(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)	Adjust 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.

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

(k)	Adjustment to exclude the non-cash impacts of the remeasurement of state deferred income taxes as a result of the merger.

 

8

---

EXELON CORPORATION

Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations

(unaudited)

(in millions, except per share data)

 

		Six Months Ended June 30, 2014												Six Months Ended June 30, 2013
										Adjusted												Adjusted
		GAAP (a)				Adjustments				Non-GAAP				GAAP (a)				Adjustments				Non-GAAP
Operating revenues		$	13,261			$	1,020	(b),(c),(d)		$	14,281			$	12,223			$	552	(c),(d)		$	12,775
Operating expenses
Purchased power and fuel			6,752				187	(c),(d)			6,939				5,400				244	(c),(d)			5,644
Operating and maintenance			4,024				(149	)(b),(e),(f)			3,875				3,656				(170	)(b),(f)			3,486
Depreciation and amortization			1,154				—				1,154				1,076				(2	)(b)			1,074
Taxes other than income			580				—				580				548				—				548
Total operating expenses			12,510				38				12,548				10,680				72				10,752
Equity in earnings (loss) of unconsolidated affiliates			(20	)			12	(b),(c)			(8	)			(30	)			39	(c)			9
Gain on consolidation of CENG			261				(261	)(g)			—				—				—				—
Operating income			992				733				1,725				1,513				519				2,032
Other income and (deductions)
Interest expense			(465	)			8	(e)			(457	)			(876	)			371	(b),(j),(f),(k)			(505	)
Other, net			348				(205	)(h),(i)			143				155				(53	)(b),(h),(k),(l)			102
Total other income and (deductions)			(117	)			(197	)			(314	)			(721	)			318				(403	)
Income before income taxes			875				536				1,411				792				837				1,629
Income taxes			224				201	(b),(c),(d),(e),(f),(j),(g),(h),(i)			425				294				267	(b),(c),(d),(f),(h),(j),(k),(l)			561
Net income			651				335				986				498				570				1,068
Net income attributable to noncontrolling interests, preferred security dividends and redemption and preference stock dividends			39				(23	)(m)			16				12				—				12
Net income attributable to common shareholders		$	612			$	358			$	970			$	486			$	570			$	1,056
Effective tax rate			25.6	%							30.1	%			37.1	%							34.4	%
Earnings per average common share
Basic		$	0.71			$	0.42			$	1.13			$	0.57			$	0.67			$	1.23
Diluted		$	0.71			$	0.41			$	1.12			$	0.57			$	0.66			$	1.23
Average common shares outstanding
Basic			860								860				856								856
Diluted			863								863				859								859
Effect of adjustments on earnings per average diluted common share recorded in accordance with GAAP:
Merger and integration costs (b)						$	0.03											$	0.05
Amortization of commodity contract intangibles (c)							0.06												0.27
Mark-to-market impact of economic hedging activities (d)							0.52												(0.02	)
PHI acquisition costs (e)							0.01												—
Long-lived asset impairment (f)							0.08												0.10
Gain on CENG Integration (g)							(0.18	)											—
Unrealized gains related to NDT fund investments (h)							(0.10	)											(0.02	)
Tax settlement (i)							(0.04	)											—
Remeasurement of like-kind exchange tax position (j)							—												0.31
Amortization of the fair value of certain debt (k)							—												(0.01	)
Plant retirements and divestitures (l)							—												(0.02	)
Non-controlling interest (m)							0.03												—
Total adjustments						$	0.41											$	0.66

For the six months ended June 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 certain costs incurred associated with the Constellation merger and at Generation the Constellation Energy Nuclear Group, LLC (CENG) transaction, including employee-related expenses (e.g. severance, retirement, relocation and retention bonuses), integration initiatives, and certain pre-acquisition contingencies.

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

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

(e)	Adjustment to exclude certain costs incurred associated with the Pepco Holdings Inc. acquisition, including professional fees and upfront credit facility fees.

(f)	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.

(g)	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.

(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 account for a favorable tax settlement in 2014 of certain income tax positions on Constellation’s 2009-2012 tax returns.

(j)	Adjustment to exclude the non-cash impacts of the remeasurement of state deferred income taxes as a result of the merger.

(k)	Adjust 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.

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

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

 

9

---

EXELON CORPORATION

Reconciliation of Adjusted (non-GAAP) Operating

Earnings to GAAP Earnings (in millions)

Three Months Ended June 30, 2014 and 2013

(unaudited)

 

		Exelon Earnings per Diluted Share				Generation				ComEd				PECO				BGE				Other (a)				Exelon
2013 GAAP Earnings (Loss)		$	0.57			$	330			$	96			$	72			$	22			$	(30	)		$	490
2013 Adjusted (non-GAAP) Operating Earnings (Loss) Adjustments:
Mark-to-Market Impact of Economic Hedging Activities			(0.30	)			(263	)			—				—				—				10				(253	)
Unrealized Losses Related to NDT Fund Investments (1)			0.03				22				—				—				—				—				22
Merger and Integration Costs (2)			0.02				12				—				2				1				—				15
Amortization of Commodity Contract Intangibles (3)			0.13				115				—				—				—				—				115
Amortization of the Fair Value of Certain Debt (4)			—				(4	)			—				—				—				—				(4	)
Long-Lived Asset Impairment (5)			0.08				61				—				—				—				8				69
2013 Adjusted (non-GAAP) Operating Earnings (Loss)			0.53				273				96				74				23				(12	)			454
Year Over Year Effects on Earnings:
Generation Energy Margins, Excluding Mark-to-Market:
Volume Impacts for Generation Revenue (9)			0.14				126				—				—				—				—				126
Fuel Cost Impacts for Generation (10)			(0.05	)			(46	)			—				—				—				—				(46	)
Capacity Pricing (11)			0.09				78				—				—				—				—				78
Market and Portfolio Conditions (12)			(0.07	)			(62	)			—				—				—				—				(62	)
ComEd, PECO and BGE Margins:
Weather			—				—				1				(5	)			—	(b)			—				(4	)
Load			—				—				—				2				—	(b)			—				2
Other Energy Delivery (13)			0.04				—				15				4				12				3				34
Operating and Maintenance Expense:
Labor, Contracting and Materials (14)			(0.10	)			(77	)			(2	)			(3	)			(5	)			1				(86	)
Planned Nuclear Refueling Outages (15)			(0.05	)			(42	)			—				—				—				—				(42	)
Pension and Non-Pension Postretirement Benefits(16)			0.04				17				15				1				(1	)			2				34
Other Operating and Maintenance (17)			(0.07	)			(28	)			(10	)			(1	)			(11	)			(4	)			(54	)
Depreciation and Amortization Expense (18)			(0.04	)			(28	)			(2	)			(2	)			(3	)			(1	)			(36	)
Equity in Earnings of Unconsolidated Affiliates			—				(1	)			—				—				—				1				—
Income Taxes (19)			0.03				19				1				9				(2	)			2				29
Interest Expense, Net (20)			0.01				2				(2	)			—				3				7				10
CENG Non-Controlling Interest			(0.01	)			(11	)			—				—				—				(1	)			(12	)
Other (21)			0.02				11				(1	)			5				—				—				15
2014 Adjusted (non-GAAP) Operating Earnings			0.51				231				111				84				16				(2	)			440
2014 Adjusted (non-GAAP) Operating Earnings (Loss) Adjustments:
Mark-to-Market Impact of Economic Hedging Activities			(0.01	)			(8	)			—				—				—				—				(8	)
Unrealized Gains Related to NDT Fund Investments (1)			0.09				76				—				—				—				—				76
Merger and Integration Costs (2)			(0.02	)			(19	)			—				—				—				—				(19	)
Amortization of Commodity Contract Intangibles (3)			(0.03	)			(23	)			—				—				—				—				(23	)
Long-Lived Asset Impairment (5)			(0.08	)			(53	)			—				—				—				(15	)			(68	)
Gain on CENG Integration (6)			0.18				159				—				—				—				—				159
PHI Acquisition Costs (7)			(0.01	)			—				—				—				—				(12	)			(12	)
Non-Controlling Interest (8)			(0.03	)			(23	)			—				—				—				—				(23	)
2014 GAAP Earnings (Loss)		$	0.60			$	340			$	111			$	84			$	16			$	(29	)		$	522

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)

Reflects certain costs incurred associated with the Constellation merger and at Generation the Constellation Energy Nuclear Group, LLC (CENG) integration, including employee-related expenses (e.g. severance, retirement, relocation and retention bonuses), integration initiatives and certain pre-acquisition contingencies.

(3)	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.

(4)	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.

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

(6)

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.

(7)	Reflects certain costs incurred associated with the Pepco Holdings Inc. (PHI) acquisition, including professional fees and upfront credit facility fees.

(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 second quarter in 2014 and increased fossil generation in the South region, partially offset by a reduction in revenue due to increased nuclear generating outage days in 2014, including Salem, and a decrease in fossil generation in New England as a result of optimizing favorable commodity pricing, which is partially offset within market and portfolio conditions.

(10)	Primarily reflects the inclusion of CENG’s results for the second quarter in 2014, and an increase in fossil generation in the South region, partially offset by lower nuclear generation and the cancellation of the DOE spent nuclear fuel disposal fee.

(11)	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 results for the second quarter in 2014.

(12)	Primarily reflects the impact of lower realized energy prices, partially offset by optimizing favorable commodity pricing in New England and the South.

(13)

For ComEd, primarily reflects higher distribution formula rate revenue due to increased capital investments and increased cost recovery associated with energy efficiency programs (offset in other operating and maintenance expenses), partially offset by lower distribution formula rate revenue due to decreased pension and non-pension postretirement expense (offset below). For BGE, includes increased distribution revenue pursuant to electric and natural gas distribution rate case orders issued by the Maryland PSC.

(14)	Primarily reflects the inclusion of CENG’s results for the second quarter in 2014 at Generation, an increase in contracting costs as a result of increased unplanned nuclear outage days at Generation, and inflation across all operating companies.

(15)	Primarily as a result of the inclusion of CENG’s results for the second quarter in 2014, and the impact of increased planned 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 second quarter in 2014.

(17)

At Generation, primarily relates to the inclusion of CENG’s results for the second quarter in 2014, and an increase in the reserve for future asbestos-related bodily injury claims. At ComEd, primarily relates to increased spend on energy and efficiency programs, and increased uncollectible accounts expense (both offset in other energy and delivery revenue). At BGE, primarily relates to increased uncollectible accounts expense.

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

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

(20)	Primarily relates to the unfavorable franchise tax settlement in 2013 at Exelon Corporate.

(21)	For Generation, primarily reflects higher realized NDT fund gains.

 

10

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EXELON CORPORATION (a)

Reconciliation of Adjusted (non-GAAP) Operating

Earnings to GAAP Earnings (in millions)

Six Months Ended June 30, 2014 and 2013

(unaudited)

 

		Exelon Earnings per Diluted Share				Generation				ComEd				PECO				BGE				Other (a)				Exelon
2013 GAAP Earnings (Loss)		$	0.57			$	311			$	14			$	193			$	100			$	(132	)		$	486
2013 Adjusted (non-GAAP) Operating Earnings (Loss) Adjustments:
Mark-to-Market Impact of Economic Hedging Activities			(0.02	)			(16	)			—				—				—				(2	)			(18	)
Unrealized Gains Related to NDT Fund Investments (1)			(0.02	)			(14	)			—				—				—				—				(14	)
Plant Retirements and Divestitures (2)			(0.02	)			(13	)			—				—				—				—				(13	)
Merger and Integration Costs (3)			0.05				41				—				3				(4	)			3				43
Amortization of Commodity Contract Intangibles (4)			0.27				232				—				—				—				—				232
Amortization of the Fair Value of Certain Debt (5)			(0.01	)			(7	)			—				—				—				—				(7	)
Remeasurement of Like-Kind Exchange Tax Position (6)			0.31				—				171				—				—				94				265
Long-Lived Asset Impairment (7)			0.10				75				—				—				—				7				82
2013 Adjusted (non-GAAP) Operating Earnings (Loss)			1.23				609				185				196				96				(30	)			1,056
Year Over Year Effects on Earnings:
Generation Energy Margins, Excluding Mark-to-Market:
Volume Impacts for Generation Revenue (12)			0.10				85				—				—				—				—				85
Fuel Cost Impacts for Generation (13)			(0.09	)			(82	)			—				—				—				—				(82	)
Capacity Pricing (14)			0.17				148				—				—				—				—				148
Market and Portfolio Conditions (15)			(0.16	)			(141	)			—				—				—				—				(141	)
ComEd, PECO and BGE Margins:
Weather			0.03				—				9				15				—	(b)			—				24
Load			0.01				—				4				5				—	(b)			—				9
Other Energy Delivery (16)			0.10				—				25				4				54				(1	)			82
Operating and Maintenance Expense:
Labor, Contracting and Materials (17)			(0.11	)			(74	)			(5	)			(3	)			(14	)			—				(96	)
Planned Nuclear Refueling Outages (18)			(0.06	)			(48	)			—				—				—				—				(48	)
Pension and Non-Pension Postretirement Benefits (19)			0.04				21				21				—				(2	)			3				43
Other Operating and Maintenance (20)			(0.13	)			(26	)			(12	)			(56	)			(24	)			3				(115	)
Depreciation and Amortization Expense (21)			(0.06	)			(28	)			(5	)			(2	)			(13	)			(2	)			(50	)
Equity in Earnings of Unconsolidated Affiliates (22)			(0.01	)			(10	)			—				—				—				—				(10	)
Income Taxes (23)			0.03				13				—				9				(1	)			5				26
Interest Expense, Net (24)			0.02				12				(10	)			—				7				12				21
Other (25)			0.03				22				(3	)			5				(3	)			8				29
CENG Non-Controlling Interest			(0.01	)			(11	)			—				—				—				—				(11	)
Share Differential			(0.01	)			—				—				—				—				—				—
2014 Adjusted (non-GAAP) Operating Earnings (Loss)			1.12				490				209				173				100				(2	)			970
2014 Adjusted (non-GAAP) Operating Earnings (Loss) Adjustments:
Mark-to-Market Impact of Economic Hedging Activities			(0.52	)			(455	)			—				—				—				4				(451	)
Unrealized Gains Related to NDT Fund Investments (1)			0.10				84				—				—				—				—				84
Merger and Integration Costs (3)			(0.03	)			(28	)			—				—				—				—				(28	)
Amortization of Commodity Contract Intangibles (4)			(0.06	)			(54	)			—				—				—				—				(54	)
Long-Lived Asset Impairment (7)			(0.08	)			(53	)			—				—				—				(15	)			(68	)
Tax Settlements (8)			0.04				35				—				—				—				—				35
Gain on CENG Integration (9)			0.18				159				—				—				—				—				159
PHI Acquisition Costs (10)			(0.01	)			—				—				—				—				(12	)			(12	)
Non-Controlling Interest (11)			(0.03	)			(23	)			—				—				—				—				(23	)
2014 GAAP Earnings (Loss)		$	0.71			$	155			$	209			$	173			$	100			$	(25	)		$	612

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)	Reflects the impacts associated with the sale or retirement of generating stations.

(3)

Reflects certain costs incurred associated with the Constellation merger and at Generation the Constellation Energy Nuclear Group, LLC (CENG) integration, including employee-related expenses (e.g. severance, retirement, relocation and retention bonuses), integration initiatives and certain pre-acquisition contingencies.

(4)	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.

(5)	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.

(6)	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.

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

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

(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 certain costs incurred associated with the Pepco Holdings Inc. (PHI) acquisition, including professional fees and upfront credit facility fees.

(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 quarter in 2014 and an increase in revenue in the ERCOT region as a result of extreme cold weather in the first quarter of 2014, partially offset by a reduction in revenue given increased nuclear generating outage days in 2014, including Salem, and a decrease in fossil generation in New England as a result of optimizing favorable commodity pricing, which is partially offset within market and portfolio conditions.

(13)

Primarily reflects the inclusion of CENG’s results for the second quarter in 2014, an increase in fossil fuel costs due to the extreme cold weather during the first quarter of 2014, and the increase in fossil generation in the South and Mid-Atlantic regions, partially offset by lower nuclear generation, decreased fossil generation in the New England region and 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 results for the second quarter in 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 optimizing favorable commodity pricing in New England and South.

(16)

For BGE, includes increased distribution revenue pursuant to electric and natural gas distribution rate case orders issued by the Maryland PSC and increased cost recovery for energy efficiency and demand response programs (primarily offset in depreciation and amortization expense). For ComEd, primarily reflects higher distribution formula rate revenue due to increased capital investments, and increased cost recovery associated with energy efficiency programs (offset in other operating and maintenance expenses), partially offset by lower distribution formula rate revenue due to decreased pension and non-pension postretirement expense (offset below).

(17)

Primarily reflects the inclusion of CENG’s results for the second quarter in 2014 at Generation, an increase in contracting costs as a result of increased unplanned nuclear outage days at Generation, an increase in maintenance related activities at BGE due to extreme cold temperatures, and inflation across all operating companies, partially offset at Generation by synergies realized in 2014.

(18)	Primarily as a result of the inclusion of CENG, and the impact of increased planned 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 quarter in 2014.

(20)

For Generation, primarily reflects the inclusion of CENG’s results for the second quarter in 2014 and an increase in the reserve for future asbestos-related bodily injury claims. In the PECO and BGE service territories, primarily reflects increased storm costs, including the February 5, 2014 ice storm. For BGE, also reflects an increase in uncollectible accounts expense. For ComEd, primarily reflects increased spend on energy and efficiency programs, partially offset by decreased uncollectible accounts expense (both offset in other energy and delivery revenue).

(21)

Primarily reflects the inclusion of CENG’s results for the second quarter in 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 (primarily offset in other energy delivery revenue).

(22)	Primarily reflects the second 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, which is now consolidated 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. 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 higher realized NDT fund gains.

 

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 June 30, 2014												Three Months Ended June 30, 2013
		GAAP (a)				Adjustments				Adjusted Non-GAAP				GAAP (a)				Adjustments				Adjusted Non-GAAP
Operating revenues		$	3,789			$	170	(b),(c)		$	3,959			$	4,070			$	(270	)(b),(c)		$	3,800
Operating expenses
Purchased power and fuel			1,835				108	(b),(c)			1,943				1,946				(9	)(b),(c)			1,937
Operating and maintenance			1,413				(101	)(d),(i)			1,312				1,189				(113	)(d),(i)			1,076
Depreciation and amortization			254				—				254				210				(1	)(d)			209
Taxes other than income			118				—				118				101				—				101
Total operating expenses			3,620				7				3,627				3,446				(123	)			3,323
Equity in (losses) earnings of unconsolidated affiliates			(1	)			—				(1	)			(21	)			21	(c)			—
Gain on consolidation of CENG			261				(261	)(e)			—				—				—
Operating income			429				(98	)			331				603				(126	)			477
Other income and (deductions)
Interest expense			(86	)			—				(86	)			(93	)			4	(i),(j)			(89	)
Other, net			228				(162	)(f)			66				(33	)			57	(d),(f),(j)			24
Total other income and (deductions)			142				(162	)			(20	)			(126	)			61				(65	)
Income before income taxes			571				(260	)			311				477				(65	)			412
Income (benefit) taxes			199				(128	)(b),(c),(d),(e),(f),(i)			71				149				(8	)(b),(c),(d),(f),(i),(j)			141
Net income			372				(132	)			240				328				(57	)			271
Net loss attributable to noncontrolling interests			32				(23	)(h)			9				(2	)			—				(2	)
Net income attributable to membership interest		$	340			$	(109	)		$	231			$	330			$	(57	)		$	273
		Six Months Ended June 30, 2014												Six Months Ended June 30, 2013
		GAAP (a)				Adjustments				Adjusted Non-GAAP				GAAP (a)				Adjustments				Adjusted Non-GAAP
Operating revenues		$	8,179			$	1,020	(b),(c),(d)		$	9,199			$	7,603			$	558	(b),(c)		$	8,161
Operating expenses
Purchased power and fuel			5,191				187	(b),(c)			5,378				4,114				244	(b),(c)			4,358
Operating and maintenance			2,499				(114	)(d),(i)			2,385				2,302				(154	)(d),(i)			2,148
Depreciation, amortization, accretion and depletion			466				—				466				424				(2	)(d),(i)			422
Taxes other than income			223				—				223				194				—				194
Total operating expenses			8,379				73				8,452				7,034				88				7,122
Equity in earnings (loss) of unconsolidated affiliates			(20	)			12	(c),(d)			(8	)			(30	)			39	(c)			9
Gain on consolidation of CENG			261				(261	)(e)			—				—				—
Operating income			41				698				739				539				509				1,048
Other income and (deductions)
Interest expense			(172	)			—				(172	)			(176	)			2	(d),(i),(j)			(174	)
Other, net			318				(205	)(f),(g)			113				95				(53	)(d),(f),(j),(k)			42
Total other income and (deductions)			146				(205	)			(59	)			(81	)			(51	)			(132	)
Income before income taxes			187				493				680				458				458				916
Income taxes			(1	)			181	(b),(c),(d),(e),(f),(g),(h),(i)			180				148				160	(b),(c),(d),(f),(i),(j),(k)			308
Net income			188				312				500				310				298				608
Net loss attributable to noncontrolling interests			33				(23	)(h)			10				(1	)			—				(1	)
Net income attributable to membership interest		$	155			$	335			$	490			$	311			$	298			$	609

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 merger date.

(d)

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

(e)	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.

(f)	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.

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

(h)

Adjustments for the non-cash amortization, net, related to commodity contracts recorded at fair value at the CENG integration date, costs incurred associated with the CENG integration, and the impact of unrealized gains and losses on NDT fund investments, to account for the CENG interest not owned by Generation.

(i)	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.

(j)	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.

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

 

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 June 30, 2014												Three Months Ended June 30, 2013
		GAAP (a)				Adjustments				Adjusted Non- GAAP				GAAP (a)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	1,128			$	—			$	1,128			$	1,080			$	—			$	1,080
Operating expenses
Purchased power			269				—				269				248				—				248
Operating and maintenance			355				—				355				359				—				359
Depreciation and amortization			174				—				174				170				—				170
Taxes other than income			72				—				72				71				—				71
Total operating expenses			870				—				870				848				—				848
Operating income			258				—				258				232				—				232
Other income and (deductions)
Interest expense			(80	)			—				(80	)			(76	)			—				(76	)
Other, net			5				—				5				6				—				6
Total other income and (deductions)			(75	)			—				(75	)			(70	)			—				(70	)
Income before income taxes			183				—				183				162				—				162
Income (benefit) taxes			72				—				72				66				—				66
Net income		$	111			$	—			$	111			$	96			$	—			$	96
		Six Months Ended June 30, 2014												Six Months Ended June 30, 2013
		GAAP (a)				Adjustments				Adjusted Non- GAAP				GAAP (a)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	2,262			$	—			$	2,262			$	2,239			$	—			$	2,239
Operating expenses
Purchased power			589				—				589				630				—				630
Operating and maintenance			681				—				681				687				—				687
Depreciation and amortization			347				—				347				337				—				337
Taxes other than income			149				—				149				145				—				145
Total operating expenses			1,766				—				1,766				1,799				—				1,799
Operating income			496				—				496				440				—				440
Other income and (deductions)
Interest expense			(160	)			—				(160	)			(429	)			288	(b)			(141	)
Other, net			10				—				10				11				—				11
Total other income and (deductions)			(150	)			—				(150	)			(418	)			288				(130	)
Income before income taxes			346				—				346				22				288				310
Income taxes			137				—				137				8				117	(b)			125
Net income		$	209			$	—			$	209			$	14			$	171			$	185

 

(a)	Results reported in accordance with GAAP.

(b)	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 June 30, 2014												Three Months Ended June 30, 2013
		GAAP (a)				Adjustments				Adjusted Non- GAAP				GAAP (a)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	656			$	—			$	656			$	672			$	—			$	672
Operating expenses
Purchased power and fuel			241				—				241				258				—				258
Operating and maintenance			184				—				184				181				(3	)(b)			178
Depreciation and amortization			59				—				59				56				—				56
Taxes other than income			38				—				38				39				—				39
Total operating expenses			522				—				522				534				(3	)			531
Operating income			134				—				134				138				3				141
Other income and (deductions)
Interest expense			(28	)			—				(28	)			(28	)			—				(28	)
Other, net			1				—				1				—				—				—
Total other income and (deductions)			(27	)			—				(27	)			(28	)			—				(28	)
Income before income taxes			107				—				107				110				3				113
Income taxes			23				—				23				32				1	(b)			33
Net income			84				—				84				78				2				80
Preferred security dividends			—				—				—				6				—				6
Net income attributable to common shareholder		$	84			$	—			$	84			$	72			$	2			$	74
		Six Months Ended June 30, 2014												Six Months Ended June 30, 2013
		GAAP (a)				Adjustments				Adjusted Non- GAAP				GAAP (a)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	1,649			$	—			$	1,649			$	1,567			$	—			$	1,567
Operating expenses
Purchased power and fuel			705				—				705				664				—				664
Operating and maintenance			464				—				464				369				(5	)(b)			364
Depreciation and amortization			117				—				117				113				—				113
Taxes other than income			80				—				80				80				—				80
Total operating expenses			1,366				—				1,366				1,226				(5	)			1,221
Operating income			283				—				283				341				5				346
Other income and (deductions)
Interest expense			—				—				—				(57	)			—				(57	)
Loss in equity method investments			(56	)			—				(56	)			—				—				—
Other, net			3				—				3				3				—				3
Total other income and (deductions)			(53	)			—				(53	)			(54	)			—				(54	)
Income before income taxes			230				—				230				287				5				292
Income taxes			57				—				57				87				2	(b)			89
Net income			173				—				173				200				3				203
Preferred security dividends and redemption			—				—				—				7				—				7
Net income attributable to common shareholder		$	173			$	—			$	173			$	193			$	3			$	196

 

(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 June 30, 2014												Three Months Ended June 30, 2013
		GAAP (a)				Adjustments				Adjusted Non- GAAP				GAAP (a)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	653			$	—			$	653			$	653			$	—			$	653
Operating expenses
Purchased power and fuel			268				—				268				288				—				288
Operating and maintenance			188				—				188				160				(1	)(b)			159
Depreciation and amortization			89				—				89				82				—				82
Taxes other than income			53				—				53				54				—				54
Total operating expenses			598				—				598				584				(1	)			583
Operating income			55				—				55				69				1				70
Other income and (deductions)
Interest expense			(27	)			—				(27	)			(32	)			—				(32	)
Other, net			5				—				5				4				—				4
Total other income and (deductions)			(22	)			—				(22	)			(28	)			—				(28	)
Income before income taxes			33				—				33				41				1				42
Income taxes			14				—				14				16				—	(b)			16
Net income			19				—				19				25				1				26
Preference stock dividends			3				—				3				3				—				3
Net income attributable to common shareholders		$	16			$	—			$	16			$	22			$	1			$	23
		Six Months Ended June 30, 2014												Six Months Ended June 30, 2013
		GAAP (a)				Adjustments				Adjusted Non- GAAP				GAAP (a)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	1,707			$	—			$	1,707			$	1,533			$	—			$	1,533
Operating expenses
Purchased power and fuel			797				—				797				713				—				713
Operating and maintenance			376				—				376				303				6	(b)			309
Depreciation and amortization			197				—				197				175				—				175
Taxes other than income			113				—				113				109				—				109
Total operating expenses			1,483				—				1,483				1,300				6				1,306
Operating income (loss)			224				—				224				233				(6	)			227
Other income and (deductions)
Interest expense			(55	)			—				(55	)			(66	)			—				(66	)
Other, net			9				—				9				9				—				9
Total other income and (deductions)			(46	)			—				(46	)			(57	)			—				(57	)
Income before income taxes			178				—				178				176				(6	)			170
Income taxes			72				—				72				70				(2	)(b)			68
Net income			106				—				106				106				(4	)			102
Preference stock dividends			6				—				6				6				—				6
Net income attributable to common shareholders		$	100			$	—			$	100			$	100			$	(4	)		$	96

 

(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, partially offset in 2013 by a one-time benefit pursuant to the February 22, 2013 order for BGE’s 2012 Maryland electric and natural gas distribution rates case for the recovery of previously incurred integration costs.

 

15

---

EXELON CORPORATION

Reconciliation of Adjusted (non-GAAP) Operating Earnings to

GAAP Consolidated Statements of Operations

(unaudited)

(in millions)

 

		Other (a)
		Three Months Ended June 30, 2014												Three Months Ended June 30, 2013
		GAAP (b)				Adjustments				Adjusted Non- GAAP				GAAP (b)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	(202	)		$	—			$	(202	)		$	(334	)		$	11	(e)		$	(323	)
Operating expenses
Purchased power and fuel			(201	)			—				(201	)			(321	)			—				(321	)
Operating and maintenance			26				(36	)(c),(d)			(10	)			3				(16	)(d),(f)			(13	)
Depreciation and amortization			14				—				14				15				—				15
Taxes other than income			7				—				7				6				—				6
Total operating expenses			(154	)			(36	)			(190	)			(297	)			(16	)			(313	)
Equity in earnings of unconsolidated affiliates			1				—				1				—				—				—
Operating loss			(47	)			36				(11	)			(37	)			27				(10	)
Other income and (deductions)
Interest expense			(17	)			8	(c)			(9	)			(23	)			—				(23	)
Other, net			4				—				4				6				—				6
Total other income and (deductions)			(13	)			8				(5	)			(17	)			—				(17	)
Loss before income taxes			(60	)			44				(16	)			(54	)			27				(27	)
Income (benefit) taxes			(31	)			17	(c),(d)			(14	)			(24	)			9	(d),(e),(f),(g)			(15	)
Net loss		$	(29	)		$	27			$	(2	)		$	(30	)		$	18			$	(12	)
		Six Months Ended June 30, 2014												Six Months Ended June 30, 2013 (b)
		GAAP (c)				Adjustments				Adjusted Non- GAAP				GAAP (c)				Adjustments				Adjusted Non- GAAP
Operating revenues		$	(536	)		$	—			$	(536	)		$	(719	)		$	(6	)(e)		$	(725	)
Operating expenses
Purchased power and fuel			(530	)			—				(530	)			(721	)			—				(721	)
Operating and maintenance			4				(35	)(c),(d)			(31	)			(5	)			(17	)(d),(f)			(22	)
Depreciation and amortization			27				—				27				27				—				27
Taxes other than income			15				—				15				20				—				20
Total operating expenses			(484	)			(35	)			(519	)			(679	)			(17	)			(696	)
Operating loss			(52	)			35				(17	)			(40	)			11				(29	)
Other income and (deductions)
Interest expense			(22	)			8	(c)			(14	)			(148	)			81	(g)			(67	)
Other, net			8				—				8				37				—				37
Total other income and (deductions)			(14	)			8				(6	)			(111	)			81				(30	)
Loss before income taxes			(66	)			43				(23	)			(151	)			92				(59	)
Income taxes			(41	)			20	(c),(d),(e)			(21	)			(19	)			(10	)(d),(e),(f),(g)			(29	)
Net loss		$	(25	)		$	23			$	(2	)		$	(132	)		$	102			$	(30	)

 

(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 incurred associated with the Pepco Holdings Inc. acquisition, including professional fees and upfront credit facility fees.

(d)	Adjustment to exclude a charge to earnings related to the impairment of investement 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 certain costs incurred associated with the Constellation merger, including transaction costs, employee-related expenses (e.g. severance, retirement, relocation and retention bonuses) integration initiatives and certain pre-acquisition contingencies.

(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
		Jun. 30, 2014				Mar. 31, 2014				Dec. 31, 2013				Sep. 30, 2013				Jun. 30, 2013
Supply (in GWhs)
Nuclear Generation
Mid-Atlantic (a)			14,912				12,136				11,900				12,424				11,794
Midwest			22,719				23,125				23,429				23,741				22,807
New York (a)			3,766				—				—				—				—
Total Nuclear Generation			41,397				35,261				35,329				36,165				34,601
Fossil and Renewables (a)
Mid-Atlantic			3,165				3,207				2,951				2,808				2,796
Midwest			319				417				363				217				318
New England			1,299				1,734				1,763				3,609				3,132
New York			1				1				—				—				—
ERCOT			1,553				1,656				1,582				2,522				1,617
Other (c)			2,041				1,630				1,064				1,913				1,431
Total Fossil and Renewables			8,378				8,645				7,723				11,069				9,294
Purchased Power
Mid-Atlantic (b)			810				3,233				3,955				4,289				2,616
Midwest			520				711				498				707				1,503
New England			2,290				2,070				2,605				2,178				1,365
New York (b)			—				2,857				3,493				3,565				3,073
ERCOT			2,518				3,440				2,792				3,803				4,269
Other (c)			3,654				3,355				2,986				3,244				4,998
Total Purchased Power			9,792				15,666				16,329				17,786				17,824
Total Supply/Sales by Region (e)
Mid-Atlantic (d)			18,887				18,576				18,806				19,521				17,206
Midwest (d)			23,558				24,253				24,290				24,665				24,628
New England			3,589				3,804				4,368				5,787				4,497
New York			3,767				2,858				3,493				3,565				3,073
ERCOT			4,071				5,096				4,374				6,325				5,886
Other (c)			5,695				4,985				4,050				5,157				6,429
Total Supply/Sales by Region			59,567				59,572				59,381				65,020				61,719
		Three Months Ended
		Jun. 30, 2014				Mar. 31, 2014 (g)				Dec. 31, 2013 (g)				Sep. 30, 2013 (g)				Jun. 30, 2013 (g)
Outage Days (f)
Refueling			108				52				94				43				47
Non-refueling			44				20				33				5				31
Total Outage Days			152				72				127				48				78

 

(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 June 30, 2014 includes physical volumes of 3,780 GWh in Mid-Atlantic and 3,766 GWh in New York for CENG.

(b)

Purchased power includes physical volumes of 2,489 GWhs, 3,226 GWhs, 3,138 GWhs, and 3,114 GWhs in the Mid-Atlantic and 2,857 GWhs, 3,051 GWhs, 3,147 GWhs, and 2,655 GWhs in New York as a result of the PPA with CENG for the three months ended March 31, 2014, December 31, 2013, September 30, 2013, and June 30, 2013 respectively.

(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 2,629 GWhs, 2,494 GWhs, 2,696 GWhs, 2,499 GWhs, and 1,995 GWhs for the three months ended June 30, 2014, March 31, 2014, December 31, 2013, September 30, 2013, and June 30, 2013 respectively.

(f)	Outage days exclude Salem.

(g)	Outage days exclude CENG

 

17

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EXELON CORPORATION

Exelon Generation Statistics

Six Months Ended June 30, 2014 and 2013

 

		June 30, 2014				June 30, 2013
Supply (in GWhs)
Nuclear Generation
Mid-Atlantic (a)			27,048				24,556
Midwest			45,844				46,076
New York (a)			3,766				—
Total Nuclear Generation			76,658				70,632
Fossil and Renewables (a)
Mid-Atlantic			6,373				5,956
Midwest			736				899
New England			3,033				5,524
New York			2				—
ERCOT			3,208				2,350
Other (c)			3,670				3,685
Total Fossil and Renewables			17,022				18,414
Purchased Power
Mid-Atlantic (b)			4,043				5,849
Midwest			1,231				3,203
New England			4,360				2,872
New York (b)			2,857				6,584
ERCOT			5,958				8,468
Other (c)			7,009				8,701
Total Purchased Power			25,458				35,677
Total Supply/Sales by Region (e)
Mid-Atlantic (d)			37,464				36,361
Midwest (d)			47,811				50,178
New England			7,393				8,396
New York			6,625				6,584
ERCOT			9,166				10,818
Other (c)			10,679				12,386
Total Supply/Sales by Region			119,138				124,723

 

(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 six months ended June 30, 2014 includes physical volumes of 3,780 GWh in Mid-Atlantic and 3,766 GWh in New York for CENG.

(b)	Purchased power includes physical volumes of 2,489 GWh and 5,702 GWh in the Mid-Atlantic and 2,857 GWh and 5,966 GWh in New York as a result of the PPA with CENG for the six months ended June 30, 2014 and 2013, respectively.

(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 5,123 GWh and 3,567 GWh for the six months ended June 30, 2014 and 2013, respectively.

 

18

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EXELON CORPORATION

ComEd Statistics

Three Months Ended June 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			6,177				6,090				1.4	%			1.1	%		$	499			$	476				4.8	%
Small Commercial & Industrial			7,759				7,832				(0.9	)%			(1.3	)%			340				315				7.9	%
Large Commercial & Industrial			6,769				6,711				0.9	%			0.5	%			113				113				0.0	%
Public Authorities & Electric Railroads			304				294				3.4	%			5.7	%			12				12				0.0	%
Total Retail			21,009				20,927				0.4	%			0.0	%			964				916				5.2	%
Other Revenue (b)																			164				164				0.0	%
Total Electric Revenue																		$	1,128			$	1,080				4.4	%
Purchased Power																		$	269			$	248				8.5	%

 

														% Change
Heating and Cooling Degree-Days		2014				2013				Normal				From 2013				From Normal
Heating Degree-Days			695				778				765				(10.7	)%			(9.2	)%
Cooling Degree-Days			259				240				218				7.9	%			18.8	%

Six Months Ended June 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			13,587				12,966				4.8	%			1.5	%		$	1,007			$	1,060				(5.0	)%
Small Commercial & Industrial			16,090				15,705				2.5	%			0.5	%			684				623				9.8	%
Large Commercial & Industrial			13,864				13,551				2.3	%			0.8	%			229				215				6.5	%
Public Authorities & Electric Railroads			701				667				5.1	%			5.5	%			24				24				0.0	%
Total Retail			44,242				42,889				3.2	%			0.9	%			1,944				1,922				1.1	%
Other Revenue (b)																			318				317				0.3	%
Total Electric Revenue																		$	2,262			$	2,239				1.0	%
Purchased Power																		$	589			$	630				(6.5	)%

 

														% Change
Heating and Cooling Degree-Days		2014				2013				Normal				From 2013				From Normal
Heating Degree-Days			4,569				4,037				3,929				13.2	%			16.3	%
Cooling Degree-Days			259				240				218				7.9	%			18.8	%

 

Number of Electric Customers		2014				2013
Residential			3,487,337				3,465,712
Small Commercial & Industrial			367,354				366,153
Large Commercial & Industrial			2,025				2,006
Public Authorities & Electric Railroads			4,827				4,852
Total			3,861,543				3,838,723

 

(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.

 

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EXELON CORPORATION

PECO Statistics

Three Months Ended June 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			2,801				2,888				(3.0	)%			1.6	%		$	338			$	354				(4.5	)%
Small Commercial & Industrial			1,947				1,960				(0.7	)%			0.7	%			101				109				(7.3	)%
Large Commercial & Industrial			3,741				3,784				(1.1	)%			(0.6	)%			54				61				(11.5	)%
Public Authorities & Electric Railroads			222				238				(6.8	)%			(6.8	)%			8				8				0.0	%
Total Retail			8,711				8,870				(1.8	)%			0.2	%			501				532				(5.8	)%
Other Revenue (b)																			58				53				9.4	%
Total Electric Revenue																			559				585				(4.4	)%
Gas (in mmcfs)
Retail Deliveries and Sales
Retail Sales (c)			7,424				6,919				7.3	%			3.9	%			88				78				12.8	%
Transportation and Other			6,005				5,956				0.8	%			(0.8	)%			9				9				0.0	%
Total Gas			13,429				12,875				4.3	%			1.4	%			97				87				11.5	%
Total Electric and Gas Revenues																		$	656			$	672				(2.4	)%
Purchased Power and Fuel																		$	241			$	258				(6.6	)%

 

														% Change
Heating and Cooling Degree-Days		2014				2013				Normal				From 2013				From Normal
Heating Degree-Days			393				421				463				(6.7	)%			(15.1	)%
Cooling Degree-Days			375				418				348				(10.3	)%			7.8	%

Six Months Ended June 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			6,649				6,353				4.7	%			1.5	%		$	782			$	749				4.4	%
Small Commercial & Industrial			4,002				3,969				0.8	%			0.1	%			212				215				(1.4	)%
Large Commercial & Industrial			7,518				7,430				1.2	%			0.7	%			117				120				(2.5	)%
Public Authorities & Electric Railroads			481				493				(2.4	)%			(2.4	)%			16				16				0.0	%
Total Retail			18,650				18,245				2.2	%			0.8	%			1,127				1,100				2.5	%
Other Revenue (b)																			109				108				0.9	%
Total Electric Revenue																			1,236				1,208				2.3	%
Gas (in mmcfs)
Retail Deliveries and Sales
Retail Sales (c)			40,594				35,357				14.8	%			1.4	%			390				338				15.4	%
Transportation and Other			14,374				14,839				(3.1	)%			(4.5	)%			23				21				9.5	%
Total Gas			54,968				50,196				9.5	%			(1.6	)%			413				359				15.0	%
Total Electric and Gas Revenues																		$	1,649			$	1,567				5.2	%
Purchased Power and Fuel																		$	705			$	664				6.2	%

 

														% Change
Heating and Cooling Degree-Days		2014				2013				Normal				From 2013				From Normal
Heating Degree-Days			3,237				2,861				2,939				13.1	%			10.1	%
Cooling Degree-Days			375				418				348				(10.3	)%			7.8	%

 

Number of Electric Customers		2014				2013				Number of Gas Customers		2014				2013
Residential			1,428,080				1,419,977			Residential			459,407				455,518
Small Commercial & Industrial			149,259				148,723			Commercial & Industrial			42,042				41,648
Large Commercial & Industrial			3,108				3,109			Total Retail			501,449				497,166
Public Authorities & Electric Railroads			9,712				9,672			Transportation			882				903
Total			1,590,159				1,581,481			Total			502,331				498,069

 

(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.

 

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EXELON CORPORATION

BGE Statistics

Three Months Ended June 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			2,639				2,757				(4.3	)%		$	293			$	302				(3.0	)%
Small Commercial & Industrial			704				716				(1.7	)%			64				60				6.7	%
Large Commercial & Industrial			3,593				3,610				(0.5	)%			120				112				7.1	%
Public Authorities & Electric Railroads			79				80				(1.3	)%			8				8				0.0	%
Total Retail			7,015				7,163				(2.1	)%			485				482				0.6	%
Other Revenue (b)															67				61				9.8	%
Total Electric Revenue															552				543				1.7	%
Gas (in mmcfs)
Retail Deliveries and Sales (c)
Retail Sales			14,834				14,951				(0.8	)%			92				100				(8.0	)%
Transportation and Other (d)			875				1,545				(43.4	)%			9				10				(10.0	)%
Total Gas			15,709				16,496				(4.8	)%			101				110				(8.2	)%
Total Electric and Gas Revenues														$	653			$	653				0.0	%
Purchased Power and Fuel														$	268			$	288				(6.9	)%

 

														% Change
Heating and Cooling Degree-Days		2014				2013				Normal				From 2013				From Normal
Heating Degree-Days			497				492				513				1.0	%			(3.1	)%
Cooling Degree-Days			233				263				252				(11.4	)%			(7.5	)%

Six Months Ended June 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			6,732				6,293				7.0	%		$	729			$	667				9.3	%
Small Commercial & Industrial			1,538				1,492				3.1	%			136				125				8.8	%
Large Commercial & Industrial			7,062				7,164				(1.4	)%			243				217				12.0	%
Public Authorities & Electric Railroads			157				161				(2.5	)%			16				15				6.7	%
Total Retail			15,489				15,110				2.5	%			1,124				1,024				9.8	%
Other Revenue (b)															138				124				11.3	%
Total Electric Revenue															1,262				1,148				9.9	%
Gas (in mmcfs)
Retail Deliveries and Sales (c)
Retail Sales			61,222				55,212				10.9	%			377				345				9.3	%
Transportation and Other (d)			7,204				7,195				0.1	%			68				40				70.0	%
Total Gas			68,426				62,407				9.6	%			445				385				15.6	%
Total Electric and Gas Revenues														$	1,707			$	1,533				11.4	%
Purchased Power and Fuel														$	797			$	713				11.8	%

 

														% Change
Heating and Cooling Degree-Days		2014				2013				Normal				From 2013				From Normal
Heating Degree-Days			3,358				2,943				2,900				14.1	%			15.8	%
Cooling Degree-Days			233				264				255				(11.7	)%			(8.6	)%

 

Number of Electric Customers		2014				2013				Number of Gas Customers		2014				2013
Residential			1,123,804				1,117,569			Residential			612,202				611,146
Small Commercial & Industrial			112,827				113,009			Commercial & Industrial			44,019				44,059
Large Commercial & Industrial			11,660				11,612			Total Retail			656,221				655,205
Public Authorities & Electric Railroads			290				294			Transportation			—				—
Total			1,248,581				1,242,484			Total			656,221				655,205

 

(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 875 mmcfs ($5 million) and 1,545 mmcfs ($8 million) for the three months ended June 30, 2014 and 2013, respectively, and 7,204 mmcfs ($58 million) and 7,195 mmcfs ($32 million) for the six months ended June 30, 2014 and 2013, respectively.

 

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