Summary
This filing for Exelon Corporation (EXC) on August 9, 2012, primarily focuses on the company's market risk disclosures, specifically concerning commodity prices, counterparty credit, interest rates, and equity prices. A significant portion details Exelon Generation's hedging strategies for electricity and fuel, highlighting that a substantial percentage of expected generation was hedged for 2012 and 2013, with a lower but still significant hedge for 2014. The filing also addresses the company's proprietary trading activities, which represent a small portion of overall revenue, and notes pre-tax gains from these activities in the first half of 2012. Of particular note for investors is the discussion on credit risk and collateral. Exelon Generation has a substantial net credit exposure, with the majority of it being with investment-grade counterparties. The company holds significant collateral from counterparties, with a portion being non-cash collateral. The filing also mentions the ongoing integration of Constellation following their merger, which closed in March 2012, and acknowledges potential risks associated with this integration, including the possibility that the merger may not be accretive to earnings in the anticipated timeframe and could cause dilution to earnings per share.
Financial Highlights
49 data points| Revenue | $5.97B |
| Operating Expenses | $5.20B |
| Operating Income | $714.00M |
| Interest Expense | $250.00M |
| Net Income | $286.00M |
| EPS (Basic) | $0.34 |
| EPS (Diluted) | $0.33 |
| Shares Outstanding (Basic) | 853.00M |
| Shares Outstanding (Diluted) | 856.00M |
Key Highlights
- 1Exelon Generation has hedged 99%-102% of its expected generation for 2012, 79%-82% for 2013, and 46%-49% for 2014, mitigating commodity price risk.
- 2Proprietary trading activities contributed $11 million in pre-tax gains for the first six months of 2012, representing a small portion of overall revenue.
- 3Exelon Generation has a total net credit exposure of $2,361 million as of June 30, 2012, with the majority ($1,721 million) from investment-grade counterparties.
- 4As of June 30, 2012, Exelon Generation held $1,007 million in cash collateral deposits from counterparties, while posting $697 million.
- 5The merger with Constellation, which closed in March 2012, is subject to integration risks, including potential delays and the possibility of not being accretive to earnings as anticipated.
- 6ComEd has a net mark-to-market energy contract liability of $617 million as of June 30, 2012, primarily related to financial swap contracts.
- 7The company's risk management policies are overseen by a Risk Management Committee (RMC) which reports to the Exelon Board of Directors' Risk Oversight Committee.