Exelon 2011 Annual Report Download - page 5

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A LETTER FROM THE CHAIRMAN & CEO
FINANCIAL PERFORMANCE
Our GAAP earnings were $3.75 per diluted
share in 2011, compared to $3.87 in 2010.
On an operating (non-GAAP) basis, our
earnings were $4.16 per diluted share,
better than both our plan for the year and
prior year earnings of $4.06. The increase
in the operating (non-GAAP) results largely
reflects higher realized energy margins in
the Mid-Atlantic region given expiration of
the power purchase agreement with PECO
in 2010, improved 2011 market and portfolio
conditions in the South and West, increased
electric distribution rates at both ComEd
and PECO, and higher gas rates at PECO.
These were partially offset by lower PJM
capacity pricing, increased operating and
maintenance expenses, and the impacts
of unfavorable weather as compared to
2010. On a GAAP earnings basis, these net
positive factors were more than offset by
mark-to-market losses from Generation’s
2011 economic hedging activities and
2010 unrealized gains on nuclear
decommissioning trust investments.
Exelon’s share price on Dec. 31, 2011, was
$43.37, up 4.2 percent compared to the
year-end 2010 price of $41.64. Our share
price maintains its structural tie to natural
gas prices, as well as to overall economic
growth. While the company waits for a
more robust economic recovery, we hunt
for other opportunities for growth.
Meanwhile, we delivered a yield of 4.8
percent, compared to an average 4.2
percent from both our competitive
peers and regulated utilities. I retain my
conviction that we have more upside to
market recovery than our peers. I only wish
I could tell you how soon that will happen.
OPERATING PERFORMANCE
Exelon’s operations are among the best in
the business. Our utilities handled weather
extremes very effectively in 2011. Despite its
summer storms, ComEd’s customer outage
frequency was its best ever on record. PECO
storm response in the face of a hurricane,
record rain and an October snowstorm
remained excellent. Both ComEd and PECO
saw all-time peak demand this summer,
despite the impact of the economy on load.
Nuclear performance continued to be
exemplary, with the fleet achieving its
ninth consecutive annual capacity factor
above 93 percent. Our initiative to increase
the capacity of our existing plants through
power uprates continues, with the addition
of a total of 138 megawatts at five of our
plants. The nuclear workforce is deeply
involved in learning and applying the
lessons of the Fukushima disaster.
Exelon Power continued its transformation
into a cleaner, more modern fleet, while
making substantial contributions to
Exelon’s profits. Our Texas gas plants were
available to run and Power Team capitalized
on market conditions during the February
cold and the summer heat. We retired
three aging fossil units in Pennsylvania
as planned, with one additional coal unit
scheduled for retirement in 2012. Exelon
On an operating (non-GAAP)
basis, our earnings were
$4.16 per diluted share, better
than both our plan for the year
and prior year earnings of $4.06.