Exelon 2014 Annual Report Download - page 47

The following table provides a reconciliation between net income attributable to common shareholders as determined in accordance
with GAAP and adjusted (non-GAAP) operating earnings for the year ended December 31, 2014 as compared to 2013:
For the years ended December 31,
2014 2013
(All amounts after tax; in millions, except per share amounts)
Earnings
per
Diluted
Share
Earnings
per
Diluted
Share
Net Income Attributable to Common Shareholders ............................... $1,623 $ 1.88 $1,719 $ 2.00
Mark-to-Market Impact of Economic Hedging Activities (a) ............................. 363 0.42 (310) (0.35)
Unrealized Gains Related to NDT Fund Investments (b) ............................... (86) (0.10) (78) (0.09)
Plant Retirements and Divestitures (c) ............................................. (245) (0.28) (13) (0.02)
Asset Retirement Obligation (d) ................................................... (13) (0.02) 7 0.01
Merger and Integration Costs (e) .................................................. 185 0.21 87 0.08
Amortization of Commodity Contract Intangibles (f) ................................... 64 0.07 347 0.41
Reassessment of State Deferred Income Taxes (g) .................................. (27) (0.03) 4 —
Long-Lived Asset Impairments (h) ................................................. 435 0.50 110 0.14
Bargain-Purchase Gain on Integrys acquisition (i) .................................... (28) (0.03) — —
Gain on CENG Integration (j) ..................................................... (159) (0.18) — —
Tax Settlements (k) ............................................................. (106) (0.12) — —
CENG Non-Controlling Interest (l) ................................................. 62 0.07 — —
Remeasurement of Like-Kind Exchange Tax Position (m) .............................. — — 267 0.31
Midwest Generation Bankruptcy Charges (n) ........................................ — — 16 0.02
Amortization of the Fair Value of Certain Debt (o) .................................... — — (7) (0.01)
Adjusted (non-GAAP) Operating Earnings ....................................... $2,068 $ 2.39 $2,149 $ 2.50
(a) Reflects the impact of losses (gains) for the years ended December 31, 2014 and December 31, 2013 (net of taxes of $232 million and ($201) million, respectively)
on Generation’s economic hedging activities. See Note 12—Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for
additional detail related to Generation’s hedging activities.
(b) Reflects the impact of unrealized gains for the years ended December 31, 2014 and December 31, 2013 (net of taxes of $(77) million and $(144) million, respectively)
on Generation’s NDT fund investments for Non-Regulatory Agreement Units. See Note 15—Asset Retirement Obligations of the Combined Notes to Consolidated
Financial Statements for additional detail related to Generation’s NDT fund investments.
(c) Reflects the impacts associated with the sales of Generation’s ownership interests in generating stations for the years ended December 31, 2014 and December 31,
2013 (net of taxes of $(163) million and ($4) million, respectively).
(d) Reflects the impacts of a decrease in Generation’s decommissioning obligation for the year ended December 31, 2014 (net of taxes of $(4) million). Reflects the
impacts of an increase in Generation’s asset retirement obligation for asbestos at retired fossil plants for the year ended December 31, 2013 (net of taxes of $5
million).
(e) Reflects certain costs incurred for the years ended December 31, 2014 and December 31, 2013 (net of taxes of $84 million and $33 million, respectively) including
professional fees, employee-related expenses, integration activities, upfront credit facilities, merger commitments, and certain pre-acquisition contingencies, if and
when applicable to the Constellation merger in 2013 and the Constellation merger, CENG integration, acquisition of Integrys Energy Services, Inc. (Integrys) and
pending PHI acquisition in 2014.
(f) Reflects the non-cash impact for the years ended December 31, 2014 and December 31, 2013 (net of taxes of $68 million and $219 million, respectively) of the
amortization of intangibles assets, net, related to commodity contracts recorded at fair value at the 2012 Constellation merger date, the 2014 CENG integration date,
and the 2014 Integrys acquisition date.
(g) Reflects the non-cash impacts of the remeasurement of state deferred income taxes, primarily as a result of changes in forecasted apportionment.
(h) In 2014, reflects charges to earnings related to the impairments of certain generating assets held for sale, Upstream assets, and wind generating assets (net of taxes
of $250 million). In 2013, reflects a charge to earnings primarily related to the cancellation of previously capitalized nuclear uprate projects and the impairment of
certain wind generating assets (net of taxes of $69 million).
(i) Reflects the excess of the fair value of assets and liabilities acquired over the purchase price for the Integrys acquisition (net of taxes of $(16) million) on November 1,
2014.
(j) Reflects the non-cash gain recorded upon consolidation of CENG in accordance with the execution of the NOSA on April 1, 2014 (net of taxes of $(102) million).
(k) Reflects a benefit related to the favorable settlement in 2014 of certain income tax positions on Constellation’s pre-acquisition 2009-2012 tax returns.
(l) Pursuant to the April 1, 2014 consolidation, represents adjustments to account for the CENG interest not owned by Generation, where applicable.
(m) For 2013, reflects a non-cash charge to earnings (net of taxes of $102 million) resulting from the remeasurement of a like-kind exchange tax position taken on
ComEd’s 1999 sale of fossil generating assets. See Note 14—Income Taxes of the Combined Notes to the Consolidated Financial Statements for additional
information.
(n) Reflects costs incurred in 2013 to establish estimated liabilities (net of taxes of $10 million) pursuant to the Midwest Generation bankruptcy, primarily related to lease
payments under a coal rail car lease and estimated payments for asbestos-related personal injury claims.
(o) Reflects the 2013 non-cash amortization of certain debt (net of taxes of ($5) million) recorded at fair value at the Constellation merger date which was retired in the
second quarter of 2013. See Note 4—Mergers, Acquisitions, and Dispositions of the Combined Notes to the Consolidated Financial Statements for additional
information.
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