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Exelon Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 10, 2012 06:17AM
Exelon Corp. (EXC) filed Quarterly Report for the period ended 2012-03-31. Exelon Corp has a market cap of $32.87 billion; its shares were traded at around $38.35 with a P/E ratio of 9.3 and P/S ratio of 1.7. The dividend yield of Exelon Corp stocks is 5.4%. Exelon Corp had an annual average earning growth of 8.5% over the past 10 years.
Highlight of Business Operations:The current quarter impact of BGE on Exelons Statement of Operations includes operating revenues of $52 million and net loss of $65 million during three months ended March 31, 2012.
During the three months ended March 31, 2012, Exelon, Generation, ComEd, PECO and BGE incurred merger and integration-related costs of $484 million, $110 million, $2 million, $7 million and $153 million, respectively. These costs are classified primarily within Operating and Maintenance Expense in their respective Consolidated Statements of Operations, with the exception of the $113 million BGE customer rate credit, which is included as a reduction to operating revenues.
Exelon and Constellation both incurred non-recurring costs directly related to the merger that have been excluded in the pro forma earnings presented above. During the three months ended March 31, 2012, Exelon and Generation incurred $144 million and $75 million, respectively, of merger and integration costs, excluding the impact of Maryland commitments. In addition, during the three months ended March 31, 2012, Exelon and Generation incurred $328 million and $35 million, respectively, related to costs incurred as part of the Maryland order approving the merger transaction as discussed above.
As noted, the legislation provides for an annual reconciliation of the revenue requirement in effect in a given year to reflect the actual costs that the ICC determines are prudently and reasonably incurred for such year. The first year for which the reconciliation will be performed is 2011. ComEd made its initial 2011 reconciliation filing on April 30, 2012, and the rate adjustments necessary to reconcile the 2011 revenue requirement in effect to ComEds actual 2011 costs incurred will take effect in January 2013, after the ICCs review. A similar 2012 annual reconciliation will be filed in early 2013 with any adjustments to rates taking effect in January 2014. As of March 31, 2012 and December 31, 2011, ComEd recorded an estimated regulatory asset of $118 million and $84 million, respectively, which represents ComEds best estimate of the probable increase in distribution rates expected to be approved by the ICC to provide for recovery of prudent and reasonable costs incurred as of those dates. Of the amount recorded at March 31, 2012, $61 million relates to 2011 and $57 million relates to the first quarter of 2012. During the first quarter of 2012, ComEd reduced the 2011 portion of the regulatory asset by $19 million to reflect managements interpretation of how the ongoing formula rate tariff proceedings discussed above may impact the formula rate mechanism ultimately approved by the ICC. Based on its preliminary review, if the ALJs proposed order dated May 1, 2012, were to be implemented, ComEd does not believe it would have a material impact to the cumulative regulatory asset amount recorded as of March 31, 2012.
Generation has an initial basis difference of approximately $183 million between the initial carrying value of its investment in CENG and its underlying equity in CENG. This basis difference is created by the requirement to record the investment in CENG at fair value under purchase accounting while the underlying assets and liabilities within CENG continue to be accounted for on a historical cost basis. Generation will amortize this basis difference over the respective useful lives of the assets of CENG or as those assets and liabilities impact the earnings of CENG.
Stocks Discussed: EXC,