Summary
Exelon Corporation and Exelon Generation Company, LLC (the "Registrants") are announcing a change in how they present certain non-GAAP financial metrics, specifically Exelon Generation Gross Margin, Operating and Maintenance (O&M) expenses, and Depreciation & Amortization (D&A). This adjustment, effective for presentations beginning September 30, 2013, involves reclassifying certain direct costs from their Cost of Sales for specific Constellation businesses (Energy Efficiency, BGE Home, and Exploration and Production) into Gross Margin and removing them from O&M or D&A. While these changes are described as material to the individual line items affected, the company explicitly states there will be no impact on Exelon or Exelon Generation's overall reported financial results. The purpose of this reclassification is to better reflect the scale of these Constellation businesses and reduce volatility in Gross Margin disclosures. Investors should note this is a presentation and classification change, not an alteration of underlying operational or financial performance.
Key Highlights
- 1Exelon and Exelon Generation are revising non-GAAP presentation definitions for Gross Margin, O&M, and D&A.
- 2The change primarily affects the presentation of certain Constellation business segments (Energy Efficiency, BGE Home, Exploration & Production).
- 3Direct costs previously in Cost of Sales for these segments will now be included in Gross Margin.
- 4These reclassified costs will be removed from Operating and Maintenance (O&M) and Depreciation & Amortization (D&A) line items.
- 5The company explicitly states there is no impact on the overall results for Exelon or Exelon Generation.
- 6The objective is to better reflect the scale of certain businesses and reduce Gross Margin volatility.
- 7A presentation of these changes and comparative amounts as of September 30, 2013, is provided as an exhibit.