01—Abstract
Summary
Summary of the 10-K filed February 9, 2012. Cited figures are marked; the original filing is the authoritative source.
Exelon Corporation, in its 2011 annual report, highlighted a stable financial performance with net income of $2.5 billiona, or $3.75 per diluted share, a slight decrease from 2010's $2.6 billion.
The company is strategically navigating a transitional period, notably with the pending merger with Constellation Energy Group, Inc., announced in April 2011, which is anticipated to be accretive to earnings post-completion. Exelon Generation continues to be a strong performer, operating the largest nuclear fleet in the U.S. and demonstrating high capacity factors, while the regulated utilities, ComEd and PECO, are investing heavily in infrastructure modernization, supported by new legislation in Illinois (EIMA) and ongoing rate case approvals in Pennsylvania.
Key strategic initiatives include the nuclear uprate program, expansion into renewable energy projects, and a focus on cost management and operational excellence across all business segments. The company's outlook for 2012 and beyond remains positive, contingent on the successful closure of the Constellation merger and continued regulatory support.
02—Key points
Key Highlights
- Exelon reported net income of $2.5 billion, or $3.75 per diluted share, for 2011, a slight decrease from 2010.
- The company is proceeding with its proposed merger with Constellation Energy Group, Inc., announced in April 2011, which is expected to be earnings accretive post-completion.
- Exelon Generation maintained strong operational performance, with its nuclear fleet achieving capacity factors above 93% for the ninth consecutive year.
- ComEd is investing in infrastructure modernization through the Illinois Energy Infrastructure Modernization Act (EIMA), supported by new legislation.
- PECO received approval for new electric and natural gas distribution rates effective January 1, 2011, and is proceeding with its smart meter program.
- Exelon Generation made significant investments in renewable energy, acquiring Antelope Valley Solar Ranch One and Wolf Hollow Generating Station.
- The company continues to focus on cost management and operational excellence across its generation and energy delivery businesses.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2011filed February 9, 2012Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $19.06B$18.64B | +2.2% |
| Operating Expenses | $14.58B$13.92B | +4.8% |
| Operating Income | $4.48B$4.73B | −5.2% |
| Interest Expense | $701.00M$792.00M | −11.5% |
| Net Income | $2.50B$2.56B | −2.5% |
| EPS (Diluted) | $3.75$3.87 | −3.1% |
| Shares Outstanding (Basic) | 663.00M661.00M | +0.3% |
| Shares Outstanding (Diluted) | 665.00M663.00M | +0.3% |
05—Questions
Frequently Asked Questions
What is the impact of the proposed merger with Constellation Energy Group on Exelon?
The merger, announced in April 2011, is a stock-for-stock transaction where Constellation shareholders will receive 0.930 shares of Exelon common stock per Constellation share. The combined company will retain the Exelon name and headquarters in Chicago. The merger is expected to be earnings accretive to Exelon starting in 2013 and requires regulatory approvals from FERC, NRC, and MDPSC, among others. Exelon anticipates closing the transaction in the first quarter of 2012, pending these approvals.
How is Exelon Generation performing, particularly its nuclear fleet?
Exelon Generation is one of the largest competitive electric generators in the U.S. Its nuclear fleet, comprising 17,115 MW of capacity, consistently operates at high capacity factors, achieving 93.3% in 2011. Generation's strategy includes a nuclear uprate program to add between 1,175 and 1,300 MW of capacity, representing a significant investment. The company also focuses on its wholesale energy marketing operations and competitive retail supply, managing risks through an integrated hedging strategy.
What are the key regulatory developments for ComEd and PECO?
For ComEd, the Illinois Energy Infrastructure Modernization Act (EIMA), enacted in late 2011, facilitates substantial capital investment over ten years to modernize the electric utility infrastructure. This includes a formula rate tariff for cost recovery and investments in smart grid technology. For PECO, rate adjustments for electric and natural gas distribution became effective January 1, 2011, following settlements in their respective rate cases. PECO is also progressing with its Smart Meter Procurement and Installation Plan, supported by DOE grant funding.
How is Exelon managing commodity price risk for its Generation segment?
Exelon Generation hedges commodity price risk through long-term power purchase agreements and financial derivative contracts. As of December 31, 2011, approximately 88%-91% of expected generation was hedged for 2012, 61%-64% for 2013, and 32%-35% for 2014. This strategy aims to mitigate the impact of short-term market volatility.
06—Continue