ComEd 2013 Annual Report Download - page 42

Thefollowingtable providesareconciliation between net incomeasdeterminedinaccordancewithGAAPandadjusted(non-GAAP)
operatingearnings for theyear endedDecember 31,2013 ascomparedto 2012:
December 31,
2013 2012
(All amounts after tax; in millions, except per share amounts)
Earnings
per
Diluted
Share
Earnings
per
Diluted
Share
Net Income .................................................................. $1,719$2.00 $1,160$1.42
Mark-to-Market ImpactofEconomic HedgingActivities(a)............................. (310)(0.35) (310)(0.38)
UnrealizedNet GainsRelatedto NDT FundInvestments(b) ........................... (78) (0.09) (56) (0.07)
Plant Retirementsand Divestitures(c) ............................................. (13)(0.02)2360.29
Asset Retirement Obligation (d) ................................................... 7 0.01 1 —
Merger andIntegration Costs(e).................................................. 87 0.08257 0.31
Other Acquisition Costs(f) ....................................................... — — 3—
Reassessment ofState DeferredIncomeTaxes(g) .................................. 4 — (117) (0.14)
Amortization ofCommodityContractIntangibles(h) .................................. 347 0.41758 0.93
Amortization oftheFairValue ofCertainDebt(i) .................................... (7) (0.01) (9) (0.01)
Remeasurement of Like-Kind ExchangeTaxPosition (j) .............................. 267 0.31 ——
Long-LivedAsset Impairment (k) .................................................. 110 0.14— —
MarylandCommitments(l)....................................................... — — 2270.28
FERCSettlement (m) ........................................................... — — 1720.21
MidwestGeneration Bankruptcy Charges(n)........................................ 160.02 80.01
Adjusted (non-GAAP) Operating Earnings ....................................... $2,149 $ 2.50$2,330 $2.85
(a)Reflectstheimpactof(gains) lossesfor theyearsendedDecember 31,2013 and2012,respectively, on Generation’s economic hedgingactivities(net oftaxesof
$201 million and$200 million,respectively). Inorder to better aligntheimpactsofeconomic hedgingwiththeunderlyingbusiness activity(e.g. thesale ofpower and/
or theuseoffuel), these unrealized(gains) lossesare excludedfromoperatingearnings untilthe transactionsare realized. See Note 12—DerivativeFinancial
InstrumentsoftheCombinedNotesto ConsolidatedFinancial Statementsfor additional detail relatedto Generation’s hedgingactivities.
(b) Reflectstheimpactofunrealizedgainsfor theyearsendedDecember 31,2013 and2012,respectively, on Generation’s NDT fundinvestmentsfor Non-Regulatory
Agreement Units(net oftaxesof$(144) million and$(132)million,respectively). See Note 15—Nuclear DecommissioningoftheCombinedNotesto Consolidated
Financial Statementsfor additional detail relatedto Generation’s NDT fundinvestments.
(c) Reflectstheimpactsassociatedwiththesale or retirement ofgeneratingstationsintheyearsendedDecember 31,2013 and2012 (net oftaxesof$4million and
$106million,respectively). See “ResultsofOperations—Generation”for additional detail relatedto thegeneratingunit retirements.
(d) Primarilyreflectstheimpactofan increaseinGeneration’s asset retirement obligation for asbestosat retiredfossil plantsfor theyear endedDecember 31,2013 (net
oftaxesof $(5) million). Primarilyreflectstheimpactofan increaseinGeneration’s decommissioningobligation for spent nuclear fuel at retirednuclear unitsfor the
year endedDecember 31,2012 (net oftaxesof$(1)million).
(e)ReflectscertaincostsincurredintheyearsendedDecember 31,2013 and2012 (net oftaxesof$33 million and$161million,respectively) associatedwiththe
merger,includingemployee-relatedexpenses(e.g. severance,retirement,relocation andretention bonuses) integration initiatives, certain pre-acquisition
contingencies, and CENG transaction costs, partiallyoffset in 2013 by a one-timebenefit pursuant to theBGE 2012 electric andgas distribution rate caseorder for
therecoveryofpreviouslyincurredintegration costs. See Note 4—Merger andAcquisitionsoftheCombinedNotesto theConsolidatedFinancial Statementsfor
additional information.
(f) Reflectscertaincostsincurredintheyear ended2012 associatedwithvariousacquisitions(net oftaxesof$2million).
(g) Reflectsthe non-cash impactsoftheremeasurement ofstate deferredincometaxes, primarilyasaresult ofchangesinforecastedapportionment in 2013 andasa
result ofthemerger in 2012.See Note 14—IncomeTaxesoftheCombinedNotesto theConsolidatedFinancial Statementsfor additional information.
(h) Reflectsthe non-cash impactfor theyearsendedDecember 31,2013 and2012 (net oftaxesof$219million and $491million,respectively) oftheamortization of
intangible assets, net,relatedto commoditycontractsrecordedat fairvalue at theConstellation merger date.See Note 4—Merger andAcquisitionsoftheCombined
Notesto theConsolidatedFinancial Statementsfor additional information.
(i) Reflectsthe non-cash amortization ofcertaindebtfor theyearsendedDecember 31,2013 and2012 (net oftaxesof$5million and$6million,respectively) recorded
at fairvalue at theConstellation merger date which wasretiredinthesecondquarter of2013.See Note 4—Merger andAcquisitionsoftheCombinedNotesto
ConsolidatedFinancial Statementsfor additional information.
(j) Reflectsa non-cash charge to earnings for theyear endedDecember 31,2013 (net oftaxesof$102 million)resultingfromthefirstquarter 2013 remeasurement ofa
like-kindexchangetaxposition taken on ComEd’s 1999 sale offossilgeneratingassets. See Note 14oftheCombinedNotesto theConsolidatedFinancial
statementsfor additional information.
(k) Reflects2013 impairment andrelatedchargesto earnings for theyear endedDecember 31,2013 (net oftaxesof $69 million)primarilyrelatedto Generation’s
cancellation ofnuclear uprate projectsandtheimpairment ofcertainwindgeneratingassets.
(l)Reflectscostsincurredfor theyear endedDecember 31,2012 associatedwiththeConstellation merger (net oftaxesof$101 million)aspart oftheMarylandorder
approvingthemerger transaction.See Note 4oftheCombinedNotesto ConsolidatedFinancial Statementsfor additional information.
(m) Reflectscostsincurredfor theyear endedDecember 31,2012 (net oftaxesof$23 million)aspart ofasettlement withtheFERCto resolveadispute relatedto
Constellation’s pre-merger hedgingandrisk management transactions. See Note 14oftheCombinedNotesto ConsolidatedFinancial Statementsfor additional
information.
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