10-QPeriod: Q2 FY2009

EXELON CORP Quarterly Report for Q2 Ended Jun 30, 2009

Filed July 24, 2009For Securities:EXC

Summary

Exelon Corporation's (EXC) Q2 2009 results show a decrease in net income for the three-month period ending June 30, 2009, to $657 million ($0.99 EPS) from $748 million ($1.13 EPS) in the prior year quarter, primarily due to lower energy gross margins at the Generation segment, unfavorable market conditions, and increased operating expenses. However, for the six-month period ending June 30, 2009, net income saw a slight increase to $1,369 million ($2.07 EPS) from $1,329 million ($2.01 EPS) in the comparable period of 2008. This improvement was driven by increased distribution revenues at ComEd and PECO, benefits from an Illinois Supreme Court decision regarding investment tax credits, and ongoing cost-saving initiatives. The company continues to navigate a challenging economic environment, monitoring liquidity and counterparty creditworthiness closely. Exelon has also terminated its efforts to acquire NRG.

Financial Highlights

48 data points
Beta

Revenue

$4.14B

Net Income

$657.00M

15.9% Net Margin

EPS (Diluted)

$0.99

Total Assets

$48.98B

Cash & Equivalents

$1.84B

Free Cash Flow

$365.00M

Financial Statements
Beta
Revenue$4.14B
Operating Expenses$3.13B
Operating Income$1.02B
Interest Expense$159.00M
Net Income$657.00M
EPS (Basic)$1.00
EPS (Diluted)$0.99
Shares Outstanding (Basic)659.00M
Shares Outstanding (Diluted)661.00M

Key Highlights

  • 1Net income for the three months ended June 30, 2009, decreased to $657 million from $748 million in the prior year period, impacting earnings per share (EPS) to $0.99 from $1.13.
  • 2For the six months ended June 30, 2009, net income increased to $1,369 million ($2.07 EPS) from $1,329 million ($2.01 EPS) in the same period of 2008.
  • 3The Generation segment experienced lower energy gross margins, impacted by trading portfolio results, uranium supply agreement gains in the prior year, and unfavorable market conditions.
  • 4Increased distribution revenue at ComEd and PECO, resulting from rate case orders, partially offset negative impacts.
  • 5Exelon has terminated its proposal to acquire NRG Energy, Inc., concluding an extensive exchange offer process.
  • 6The company is managing liquidity effectively despite challenging capital and credit markets, with significant available credit facilities.
  • 7Exelon is implementing cost-saving initiatives, including management reorganization and job reductions, projecting significant operational and maintenance expense savings.

Frequently Asked Questions

The decrease in net income for the three months ended June 30, 2009, compared to the prior year was primarily due to lower energy gross margins at the Generation segment, stemming from trading portfolio activities and prior-year gains. Additionally, unfavorable market conditions, increased depreciation and amortization, and higher pension and postretirement benefit costs contributed to the decline. These were partially offset by increased distribution revenues at ComEd and PECO.

The challenging economic environment led to decreased energy demand and prices, making bill collection more difficult. This impacted Exelon's wholesale generation fleet margins and put pressure on overall revenues. Management is employing heightened collection efforts and cost management strategies to mitigate these effects.

Exelon believes it has sufficient liquidity despite ongoing challenges in the capital and credit markets. The company has substantial aggregate credit facility commitments with significant availability. Exelon routinely reviews its liquidity position through stress tests and closely monitors market events and financial institutions associated with its credit facilities.

Following the termination of efforts to acquire NRG, rating agencies affirmed Exelon's investment grade ratings. Based on its understanding of rating agency requirements and internal analysis, Exelon expects to retain its investment grade ratings without needing to issue additional equity or sell assets.