ComEd 2013 Annual Report Download - page 40

The Years Ended
December 31, Favorable
(Unfavorable)
Variance2013 2012
Equity in earnings/(losses) of unconsolidated affiliates .................................. 10 (91)101
Operating income ................................................................... 3,656 2,3801,276
Other income and (deductions)
Interestexpense,net ............................................................. (1,356) (928) (428)
Other,net ....................................................................... 473346 127
Total other incomeand(deductions) ............................................. (883) (582)(301)
Income (loss) before income taxes .................................................... 2,7731,798 975
Income taxes ....................................................................... 1,044 627(417)
Net income (loss) ................................................................... 1,7291,171558
Net (loss) income attributable to noncontrollinginterests, preferredsecurity dividends and
preferencestock dividends........................................................... 10 11 1
Net income (loss) on common stock .................................................. $ 1,719$1,160$ 559
(a)TheRegistrants’ evaluate operatingperformanceusingthemeasure ofrevenue net ofpurchasedpower andfuel expense.TheRegistrants’ believethat revenue net
ofpurchasedpower andfuel expenseis auseful measurement becauseit providesinformation that can beusedto evaluate itsoperational performance.Revenue
net ofpurchasedpower andfuel expenseis not a presentation definedunder GAAPandmaynot becomparable to other companies’ presentationsor deemedmore
useful than theGAAPinformation providedelsewhere inthis report.
Exelon’s net incomeoncommon stock was$1,719million for theyear endedDecember 31,2013 ascomparedto $1,160million for
theyear endedDecember 31,2012,anddilutedearnings per averagecommon share were $2.00 for theyear endedDecember 31,
2013 ascomparedto $1.42for theyear endedDecember 31,2012.
Operatingrevenuesnet ofpurchasedpower andfuel expense, which is a non-GAAPmeasure discussedbelow, increasedby$832
million ascomparedto 2012.Theyear-over-year increasein operatingrevenue net ofpurchasedpower andfuel expensereflects
theinclusion ofConstellation and BGE’s resultsfor thefull periodin 2013 andwasprimarilydue to thefollowingfavorable factors:
•DecreaseinGeneration’s amortization expensefor theacquiredenergy contractsrecordedat fairvalue at themerger date of
$610 million;
•IncreaseinBGE’s revenue net ofpurchasedpower andfuel expenseof$278 million,primarilyasaresult oftheinclusion of
BGE’s resultsfor thefull periodin 2013,accrual oftheresidential customer rate creditthat wasacondition oftheMDPSC’s
approval ofExelon’s merger withConstellation in 2012,andtheimpactoftheMDPSC approvedelectric andnatural gas
distribution rate increasesthat becameeffectiveFebruary23,2013;
•IncreaseinGeneration’s revenue net ofpurchasedpower andfuel of$159 million on other activities, includingproprietary
trading, retailgas, energy efficiency, energy management anddemandresponse,upstreamnatural gasandthedesignand
construction ofcustomer sitedsolar facilities, primarilydue to theaddition ofConstellation;and
•IncreaseinComEd’s revenue net ofpurchasedpower expenseof$154 million primarilydue to increased distribution revenue
due to recoveryofincreasedcostsandcapital investment and higher allowedROE pursuant to theformula rate under EIMAand
the enactment ofSenate Bill 9.
Theyear-over-year increasein operatingrevenue net ofpurchasedpower andfuel expensewaspartiallyoffset by thefollowing
unfavorable factors:
•DecreaseinGeneration’s electric revenue net ofpurchasedpower andfuel expenseof $565 million primarilydue to lower
realizedenergy prices, lower loadvolumeandincreasednuclear fuel expense,partiallyoffset by higher capacityrevenue,
increasednuclear volumes, andlower energy supplycostsasaresult oftheintegration ofthe energy generation andload
servingbusinessesfollowingthemerger;
•Reducedrevenue net ofpurchasedpower andfuel at Generation of$136million in 2013 associatedwiththeMarylandClean
Coal assetsthat were soldinNovember 2012 andlostcompensation on the reliability-must-run programwith PJM for retired
fossilgeneratingassetsthat expiredon May31,2012;and
•DecreaseinPECO’s revenue net ofpurchasedpower andfuel expenseof$11 million primarilydue to thedecreaseineffective
ratesdue to increasedusage per customer across all customer classes, decreasedcostrecoveryfor energy efficiency and
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