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Exelon Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 9, 2012 01:22PM
Exelon Corp. (EXC) filed Quarterly Report for the period ended 2012-06-30. Exelon Corporation has a market cap of $32.79 billion; its shares were traded at around $38.587 with a P/E ratio of 11.3 and P/S ratio of 1.7. The dividend yield of Exelon Corporation stocks is 4.1%. Exelon Corporation had an annual average earning growth of 8.5% over the past 10 years.
Highlight of Business Operations:The impact of BGE on Exelons Consolidated Statement of Operations and Comprehensive Income includes operating revenues of $616 million and net income of $16 million during three months ended June 30, 2012, and operating revenues of $668 million and net loss of $49 million during the six months ended June 30, 2012.
During the three months ended June 30, 2012, Exelon, Generation, PECO and BGE incurred merger and integration-related costs of $111 million, $94 million, $4 million and $2 million, respectively. During the six months ended June 30, 2012, Exelon, Generation, ComEd, PECO and BGE incurred merger and integration-related costs of $584 million, $204 million, $2 million, $11 million and $154 million, respectively. These costs are classified primarily within Operating and Maintenance Expense in the Registrants respective Consolidated Statements of Operations and Comprehensive Income, with the exception of the $113 million BGE customer rate credit, which is included as a reduction to operating revenues for the six months ended June 30, 2012.
On November 8, 2011, ComEd filed its initial formula rate tariff and associated testimony based on 2010 costs and 2011 plant additions. The primary purpose of that proceeding was to establish the formula rate under which rates will be calculated going-forward, and the initial rates, which went into effect in late June. On May 30, 2012, the ICC issued its final Order (Order) in that proceeding. The Order reduced the annual revenue requirement by $168 million, or approximately $110 million more than proposed by ComEd. Of this incremental revenue requirement reduction, approximately $50 million reflected the ICCs determination that certain costs should be recovered through alternative rate recovery tariffs available to ComEd or will be reflected in the annual reconciliation, thereby primarily delaying the timing of cash flows. The incremental revenue reduction also reflected a $35 million reduction for the disallowance of return on ComEds pension asset, a $10 million reduction for incentive compensation related adjustments, and $15 million of reductions for various adjustments for cash working capital, operating reserves, and other technical items. In the second quarter of 2012, ComEd recorded a reduction of revenue of approximately $100 million pre-tax to decrease the regulatory asset for the 2011 periods and for the first three months of 2012 consistent with the terms of the Order. On June 5, 2012, ComEd filed its application for rehearing with the ICC. On June 22, 2012 the ICC granted expedited rehearing on ComEds pension asset recovery, the use of average or year-end rate base in determining ComEds reconciliation revenue requirement and the interest rate charged on over/under recovered costs. The expected schedule for the rehearing allows for a decision by September 19, 2012. As a further result of the Order, on July 6, 2012, ComEd filed for rehearing of the AMI Deployment Plan to amend the timing and amount of the capital investment under that plan. On July 11, 2012, the ICC granted rehearing on ComEds AMI Deployment Plan. A final order on rehearing is due by December 7, 2012.
ComEd will file an annual reconciliation of the revenue requirement in effect in a given year to reflect actual costs that the ICC determines are prudently and reasonably incurred for such year. ComEd made its initial 2011 reconciliation filing on April 30, 2012, which reconciled the 2011 revenue requirement in effect to ComEds actual 2011 costs incurred (the rates will take effect in January 2013). ComEd updated its 2011 reconciliation filing on June 12, 2012 to reflect the impacts of the Order discussed above. A similar reconciliation with respect to 2012 will be filed in second quarter 2013 with any adjustments to rates taking effect in January 2014. As of June 30, 2012 and December 31, 2011, ComEd recorded an estimated net regulatory asset of $26 million and $84 million, respectively, which represents the ICCs approved distribution formula and associated rulings as of June 30, 2012 and 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 for the twelve months ended December 31, 2011 and for the six months ended June 30, 2012. The evidentiary hearing in ComEds 2011 reconciliation rate case is expected to begin on September 25, 2012, with a final order due by December 26, 2012.
Excludes net assets (liabilities) of $30 million and $(57) million at June 30, 2012 and December 31, 2011, respectively. These items consist of receivables related to pending securities sales, interest and dividend receivables, and payables related to pending securities purchases.
Stocks Discussed: EXC,