Exelon Corporation (NYSE: EXC) announced third quarter 2014 consolidated earnings as follows:

     
 

Third Quarter

   

2014

 

2013

Adjusted (non-GAAP) Operating Results:  
Net Income ($ millions) $676 $667
Diluted Earnings per Share   $0.78   $0.78
GAAP Results:
Net Income ($ millions) $993 $738
Diluted Earnings per Share   $1.15   $0.86
 

“Exelon achieved earnings above our guidance range this quarter, with strong performance from both our utility and generation businesses,” said Christopher M. Crane, Exelon’s president and CEO. “We continue to execute our strategy to diversify and grow the business, and based on our results through September and our outlook for the fourth quarter, we are narrowing our full-year operating earnings guidance to $2.30 to $2.50 per share.”

Third Quarter Operating Results

Exelon’s adjusted (non-GAAP) operating earnings were $0.78 per share in the third quarters of both 2014 and 2013. Earnings in the third quarter of 2014 primarily reflected the following favorable factors:

  • Higher revenue net fuel at Generation as a result of higher realized energy prices, favorable portfolio management optimization activities and the cancellation of Department of Energy spent nuclear fuel disposal fees;
  • Favorable distribution and transmission revenue at ComEd due to increased capital investment; and
  • Higher distribution revenue pursuant to increased rates effective in December 2013 at BGE.

These factors were offset by:

  • Higher operating and maintenance (O&M) expenses reflecting increased non-refueling nuclear generating outage days and inflation across all operating companies, offset in part by reduced other postretirement benefit costs;
  • Incremental storm costs at PECO and BGE; and
  • Unfavorable weather at ComEd and PECO.

Adjusted (non-GAAP) operating earnings for the third quarter of 2014 do not include the following items (after tax) that were included in reported GAAP earnings:

         
    (in millions)   (per diluted share)

Exelon Adjusted (non-GAAP) Operating Earnings

 

$676

 

$0.78

Mark-to-Market Impact of Economic Hedging

Activities

158 0.18
Unrealized Losses Related to NDT Fund Investments (22) (0.03)
Asset Retirement Obligation 13 0.02

Plant Retirements and Divestitures (primarily gain on sale of Safe Harbor)

197 0.23
Long-Lived Asset Impairment (30) (0.03)
Merger and Integration Costs (64) (0.07)
Amortization of Commodity Contract Intangibles 12 0.01
Tax Settlements 66 0.08
Non-Controlling Interest   (13)   (0.02)

Exelon GAAP Net Income

 

$993

 

$1.15

 

Adjusted (non-GAAP) operating earnings for the third quarter of 2013 do not include the following items (after tax) that were included in reported GAAP earnings:

         
    (in millions)   (per diluted share)

Exelon Adjusted (non-GAAP) Operating Earnings

 

$667

 

$0.78

Mark-to-Market Impact of Economic Hedging

Activities

148 0.17
Unrealized Gains Related to NDT Fund Investments 24 0.03
Asset Retirement Obligation (6) (0.01)
Long-Lived Asset Impairments (28) (0.03)
Merger and Integration Costs (26) (0.03)
Amortization of Commodity Contract Intangibles   (41)   (0.05)

Exelon GAAP Net Income

 

$738

 

$0.86

 

Third Quarter and Recent Highlights

  • Pepco Holdings, Inc. Merger: On September 23, 2014, Pepco Holdings, Inc. (PHI) stockholders overwhelmingly approved the merger of PHI and Exelon. The merger continues to be conditioned upon approval by the Federal Energy Regulatory Commission, the District of Columbia Public Service Commission, and the state public service commissions of Delaware, Maryland, and New Jersey. On October 7, 2014, the Virginia State Corporation Commission issued its order granting approval to transfer control of PHI subsidiaries Delmarva Power & Light Company and Potomac Electric Power Company to Exelon. In addition, the transfer of certain PHI communications licenses requires approval by the Federal Communication Commission. Exelon and PHI will continue to work cooperatively with the Department of Justice as it conducts its review of the proposed merger under the Hart-Scott Rodino Antitrust Improvements Act of 1976. Exelon and PHI continue to expect the merger to be complete in the second or third quarter of 2015.
  • Exelon Generation
    • On September 29th, Exelon Generation announced that it is planning to build two combined-cycle gas turbine (CCGT) units in Texas utilizing a new General Electric technology that will make them among the cleanest, most efficient CCGTs in the nation. The new units are being built on existing Exelon sites: one at Colorado Bend Generating Station, currently a 498 megawatt (MW) natural gas plant in Wharton County, Texas; and one at the 704 MW Wolf Hollow natural gas plant in Granbury, Texas. Each new unit will add approximately 1,000 MW of capacity to their respective sites.
    • During the third quarter Exelon announced the sale of three natural gas generation assets. Sale agreements were signed for Fore River (CCGT) in Massachusetts, Quail Run (CCGT) in Texas, and West Valley (CT) in Utah. The sale of the three natural gas generation assets and Exelon's interest in the Safe Harbor hydroelectric facility in Pennsylvania, which closed in August 2014 and resulted in after-tax proceeds of approximately $975 million, are expected to generate aggregate pre-tax proceeds of $1.3 billion, which will be used primarily to finance a portion of the acquisition of PHI.
    • On October 24, 2014, Exelon entered into a sale agreement to divest its proportional ownership interests in the Keystone and Conemaugh generating facilities in Pennsylvania for total sales proceeds of approximately $475 million, including approximately $60 million of working capital. Exelon and Generation anticipate recording a pre-tax impairment loss ranging from approximately $350 million to $400 million during the fourth quarter of 2014, which will not be included in Adjusted (non-GAAP) Operating Earnings. The estimated net after-tax cash proceeds of $418 million, excluding estimated working capital, are expected to be used to finance a portion of the acquisition of PHI and for general corporate purposes.
  • Constellation: On July 30th , Exelon announced it had entered into a definitive agreement for Exelon to purchase Integrys Energy Services Inc., a competitive retail electricity and natural gas subsidiary serving approximately 1.2 million commercial, industrial, public sector and residential customers across 22 Midwest, mid-Atlantic and Northeastern states and the District of Columbia for $60 million plus adjusted net working capital at the time of closing. Integrys Energy Services will become part of Exelon’s Constellation business unit, strengthening its retail power and gas business serving residential and business customers across the continental United States. The transaction is expected to close in the fourth quarter of 2014.
  • Nuclear Operations: Generation’s nuclear fleet, including its owned output from the Salem Generating Station and beginning April 1, 2014, 100 percent of the CENG units, produced 45,263 gigawatt-hours (GWh), of which 8,617 GWh were produced by CENG, in the third quarter of 2014, compared with 36,165 GWh in the third quarter of 2013. Excluding Salem, the Exelon-operated nuclear plants at ownership achieved a 96.5 percent capacity factor for the third quarter of 2014, compared with 94.8 percent for the third quarter of 2013. The number of planned refueling outage days in the third quarter of 2014 totaled 18, including no CENG planned outage days, compared with 43 in the third quarter of 2013. There were 20 non-refueling outage days, including two at CENG, in the third quarter of 2014, compared with five days in the third quarter of 2013.
  • Fossil and Renewables Operations: The dispatch match rate for Generation’s gas/hydro fleet was 98.8 percent in the third quarter of 2014, compared with 99.1 percent in the third quarter of 2013. Energy capture for the wind/solar fleet was 94.9 percent in the third quarter of 2014, compared with 92.9 percent in the third quarter of 2013. The increase in energy capture for the third quarter of 2014 was due to the implementation of reliability programs that resulted in increased turbine availability.
  • Financing Activities:
    • On September 8, 2014, PECO issued $300 million of first and refunding mortgage bonds with an interest rate of 4.15 percent due Oct. 1, 2044. The net proceeds from the sale of the bonds were used to pay $250 million in aggregate principal of PECO’s 5 percent first and refunding mortgage bonds which would have come due on Oct. 1, 2014 and for other general corporate purposes. The offering closed on Sept. 15, 2014.
    • On September 18, 2014, ExGen Texas Power, LLC (an indirect subsidiary of Exelon and Exelon Generation) entered into a $695 million senior secured term loan and revolving credit facility. The company distributed the net proceeds from the term loans to Exelon Generation for its general corporate purposes.
  • Hedging Update: Exelon’s hedging program involves the hedging of commodity risk for Exelon’s expected generation, typically on a ratable basis over a three-year period. This strategy has not changed as a result of recent and pending asset divestitures. The proportion of expected generation hedged as of September 30, 2014, is 98.0 percent to 101.0 percent for 2014, 86.0 percent to 89.0 percent for 2015, and 55.0 percent to 58.0 percent for 2016. Expected generation is the volume of energy that best represents our financial exposure through owned or contracted capacity. The primary objective of Exelon’s hedging program is to manage market risks and protect the value of its generation and its investment-grade balance sheet, while preserving its ability to participate in improving long-term market fundamentals.

Operating Company Results

Generation consists of owned and contracted electric generating facilities and wholesale and retail customer supply of electric and natural gas products and services, including renewable energy products, risk management services and natural gas exploration and production activities.

The third quarter 2014 GAAP net income was $771 million, compared with $490 million in the third quarter of 2013. Adjusted (non-GAAP) operating earnings for the third quarter of 2014 and 2013 do not include various items (after tax) that were included in reported GAAP earnings. A reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Net Income is in the table below:

         
($ millions)   3Q14   3Q13

Generation Adjusted (non-GAAP) Operating Earnings

 

$433

 

$411

Mark-to-Market Impact of Economic Hedging Activities 161 151
Unrealized Gains/(Losses) Related to NDT Fund

Investments

(22) 23
Asset Retirement Obligation 13 (7)
Plant Retirements and Divestitures (primarily gain on sale

of Safe Harbor)

198
Long-Lived Asset Impairments (30) (28)
Merger and Integration Costs (47) (20)
Amortization of Commodity Contract Intangibles 12 (40)
Tax Settlements 66
Non-Controlling Interest   (13)  

Generation GAAP Net Income

 

$771

 

$490

 

Generation’s Adjusted (non-GAAP) Operating Earnings in the third quarter of 2014 increased $22 million compared with the same quarter in 2013. This increase primarily reflected higher revenue net fuel at Generation as a result of higher realized energy prices, favorable portfolio management optimization activities, and the cancellation of DOE spent nuclear fuel disposal fees. The increase was partially offset by higher O&M expenses reflecting increased non-refueling nuclear generating outage days and inflation, offset in part by reduced other postretirement benefit costs.

ComEd consists of electricity transmission and distribution operations in Northern Illinois. ComEd recorded GAAP net income of $126 million in the third quarter of both 2014 and 2013. Adjusted (non-GAAP) Operating Earnings for the third quarter of 2013 do not include merger and integration costs that were included in reported GAAP earnings. A reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Net Income is in the table below:

         
($ millions)  

3Q14

 

3Q13

ComEd Adjusted (non-GAAP) Operating Earnings

 

$

126

 

$

127

Merger and Integration Costs       (1 )

ComEd GAAP Net Income

 

$

126

   

$

126

 
 

ComEd’s Adjusted (non-GAAP) Operating Earnings in the third quarter of 2014 were down $1 million from the same quarter in 2013, primarily reflecting unfavorable weather, partially offset by higher distribution and transmission revenue due to increased capital investment.

For the third quarter of 2014, heating degree-days in the ComEd service territory were up 40.5 percent relative to the same period in 2013 and were 6.7 percent below normal. Meanwhile, cooling degree-days were down 19.6 percent relative to the same period in 2013 and were 12.4 percent below normal. Total retail electric deliveries decreased 5.4 percent in the third quarter of 2014 compared with the same period in 2013.

Weather-normalized retail electric deliveries remained flat in the third quarter of 2014 relative to 2013.

PECO consists of electricity transmission and distribution operations and retail natural gas distribution operations in Southeastern Pennsylvania.

PECO’s GAAP net income in the third quarter of 2014 was $81 million, compared with $92 million in the third quarter of 2013. Adjusted (non-GAAP) Operating Earnings for the third quarter of 2013 do not include merger and integration costs that were included in reported GAAP earnings. A reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Net Income is in the table below:

         
($ millions)   3Q14   3Q13

PECO Adjusted (non-GAAP) Operating Earnings

 

$81

 

$93

Merger and Integration Costs     (1)

PECO GAAP Net Income

 

$81

 

$92

 

PECO’s Adjusted (non-GAAP) Operating Earnings in the third quarter of 2014 decreased $12 million from the same quarter in 2013, primarily due to increased storm costs and unfavorable weather conditions.

For the third quarter of 2014, heating degree-days in the PECO service territory were down 61.1 percent relative to the same period in 2013 and were 60.0 percent below normal. Cooling degree-days were down 1.8 percent from the prior year and were 2.5 percent below normal. Total retail electric deliveries were down 3.6 percent compared with the third quarter of 2013. Natural gas deliveries (including both retail and transportation segments) in the third quarter of 2014 were up 0.7 percent compared with the same period in 2013.

Weather-normalized retail electric deliveries remained relatively consistent while gas deliveries increased 7.8 percent in the third quarter of 2014 compared with the same period in 2013. The increased gas volumes were driven primarily by increased usage per customer and customer growth, however gas retail volumes in the summer account for a small percentage of annual deliveries and tend to be more volatile.

BGE consists of electricity transmission and distribution operations and retail natural gas distribution operations in Central Maryland.

BGE’s GAAP net income in the third quarter of 2014 was $46 million, compared with $50 million in the third quarter of 2013. Adjusted (non-GAAP) Operating Earnings for the third quarter of 2013 do not include merger and integration costs that were included in reported GAAP earnings. A reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Net Income is in the table below:

         
($ millions)   3Q14   3Q13

BGE Adjusted (non-GAAP) Operating Earnings

 

$46

 

$51

Merger and Integration Costs     (1)

BGE GAAP Net Income

 

$46

 

$50

 

BGE’s Adjusted (non-GAAP) Operating Earnings in the third quarter of 2014 decreased $5 million from the same quarter in 2013, primarily due to increased contracting as a result of an increase in maintenance related activities and incremental storm costs, which were partially offset by increased distribution revenues pursuant to increased rates effective in December 2013.

Adjusted (non-GAAP) Operating Earnings

Adjusted (non-GAAP) operating earnings, which generally exclude significant one-time charges or credits that are not normally associated with ongoing operations, mark-to-market adjustments from economic hedging activities and unrealized gains and losses from NDT fund investments, are provided as a supplement to results reported in accordance with GAAP. Management uses such adjusted (non-GAAP) operating earnings measures internally to evaluate the company’s performance and manage its operations. Reconciliation of GAAP to adjusted (non-GAAP) operating earnings for historical periods is attached. Additional earnings release attachments, which include the reconciliation on pages 8 and 9 are posted on Exelon’s Web site: www.exeloncorp.com and have been furnished to the Securities and Exchange Commission on Form 8-K on October 29, 2014.

Cautionary Statements Regarding Forward-Looking Information

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that are subject to risks and uncertainties. The factors that could cause actual results to differ materially from the forward-looking statements made by Exelon Corporation, Commonwealth Edison Company, PECO Energy Company, Baltimore Gas and Electric Company and Exelon Generation Company, LLC (Registrants) include those factors discussed herein, as well as the items discussed in (1) Exelon’s 2013 Annual Report on Form 10-K in (a) ITEM 1A. Risk Factors, (b) ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) ITEM 8. Financial Statements and Supplementary Data: Note 22; (2) Exelon’s Third Quarter 2014 Quarterly Report on Form 10-Q (to be filed on October 29, 2014) in (a) Part II, Other Information, ITEM 1A. Risk Factors; (b) Part 1, Financial Information, ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) Part I, Financial Information, ITEM 1. Financial Statements: Note 18; and (3) other factors discussed in filings with the SEC by the Registrants. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this press release. None of the Registrants undertakes any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this press release.

Exelon Corporation (NYSE: EXC) is the nation’s leading competitive energy provider, with 2013 revenues of approximately $24.9 billion. Headquartered in Chicago, Exelon does business in 48 states, the District of Columbia and Canada. Exelon is one of the largest competitive U.S. power generators, with more than 35,000 megawatts of owned capacity comprising one of the nation’s cleanest and lowest-cost power generation fleets. The company’s Constellation business unit provides energy products and services to approximately 100,000 business and public sector customers and approximately 1 million residential customers. Exelon’s utilities deliver electricity and natural gas to more than 7.8 million customers in central Maryland (BGE), northern Illinois (ComEd) and southeastern Pennsylvania (PECO). Follow Exelon on Twitter @Exelon.

   

EXELON CORPORATION

Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations

(unaudited)

(in millions, except per share data)

 
Three Months Ended September 30, 2014 Three Months Ended September 30, 2013
      Adjusted       Adjusted
GAAP (a) Adjustments Non-GAAP GAAP (a) Adjustments Non-GAAP
Operating revenues $ 6,912 $ (248 ) (b),(c) $ 6,664 $ 6,502 $ (90 ) (b),(c) $ 6,412
Operating expenses
Purchased power and fuel 2,648 33 (b),(c) 2,681 2,743 112 (b),(c) 2,855
Operating and maintenance 1,982 (99 ) (d),(e),(f),(g) 1,883 1,735 (96 ) (d),(e),(f) 1,639
Depreciation and amortization 577 577 530 (1 ) (d) 529
Taxes other than income 306     306   277     277  
Total operating expenses 5,513 (66 ) 5,447 5,285 15 5,300
Equity in earnings of unconsolidated affiliates 1     1   37   23   (c),(d) 60  
Operating income 1,400   (182 ) 1,218   1,254   (82 ) 1,172  
Other income and (deductions)
Interest expense (258 ) 24 (b),(d) (234 ) (234 ) (234 )
Other, net 354   (275 ) (g),(h),(i) 79   155   (63 ) (h) 92  
Total other income and (deductions) 96   (251 ) (155 ) (79 ) (63 ) (142 )
Income before income taxes 1,496 (433 ) 1,063 1,175 (145 ) 1,030
Income taxes 422   (103 ) (b),(c),(d),(e),(f),(g),(h),(i) 319   439   (74 ) (b),(c),(d),(e),(f),(h) 365  
Net income 1,074 (330 ) 744 736 (71 ) 665
Net income (loss) attributable to noncontrolling interests and preference stock dividends 81   (13 ) (j) 68   (2 )   (2 )
Net income attributable to common shareholders $ 993   $ (317 ) $ 676   $ 738   $ (71 ) $ 667  
Effective tax rate 28.2 % 30.0 % 37.4 % 35.4 %
Earnings per average common share
Basic $ 1.15 $ (0.37 ) $ 0.78 $ 0.86 $ (0.08 ) $ 0.78
Diluted $ 1.15   $ (0.37 ) $ 0.78   $ 0.86   $ (0.08 ) $ 0.78  
Average common shares outstanding
Basic 861 861 857 857
Diluted 863 863 860 860
Effect of adjustments on earnings per average diluted common share recorded in accordance with GAAP:
Mark-to-market impact of economic hedging activities (b) $ (0.18 ) $ (0.17 )
Amortization of commodity contract intangibles (c) (0.01 ) 0.05
Merger and integration costs (d) 0.07 0.03
Long-lived asset impairment (e) 0.03 0.03
Asset retirement obligation (f) (0.02 ) 0.01
Plant retirements and divestitures (g) (0.23 )
Unrealized (gains) losses related to NDT fund investments (h) 0.03 (0.03 )
Tax settlements (i) (0.08 )
Non-controlling interest (j) 0.02    
Total adjustments $ (0.37 ) $ (0.08 )

For the three months ended September 30, 2014, includes the results of operations of Constellation Energy Nuclear Group, LLC beginning on April 1, 2014, the date the nuclear operating services agreement was executed.

(a)   Results reported in accordance with accounting principles generally accepted in the United States (GAAP).
(b) Adjustment to exclude the mark-to-market impact of Exelon’s economic hedging activities, net of intercompany eliminations.
(c) Adjustment to exclude the non-cash amortization of intangible assets, net, related to commodity contracts recorded at fair value at the Constellation merger date and at the CENG integration date.
(d) Adjustment to exclude certain costs associated with the Constellation merger, PHI acquisition, and at Generation, the CENG integration, including professional fees, employee-related expenses, integration activities, upfront credit facilities fees, merger commitments, and certain pre-acquisition contingencies.
(e) Adjustment to exclude a 2014 charge to earnings primarily related to the impairment of certain assets held for sale and a 2013 charge to earnings primarily related to the impairment of certain wind generating assets.
(f) Adjustment to exclude the 2014 decrease in Generation's nuclear decommissioning obligation and 2013 increase in Generation's asset retirement obligation for retired fossil power plants.
(g) Adjustment to exclude the impacts associated with the sale of Generation's ownership interest in generating stations, primarily the gain from the sale of Generation's equity interest in Safe Harbor Water Power Corporation.
(h) Adjustment to exclude the unrealized gains and losses on NDT fund investments to the extent not offset by contractual accounting as described in the notes to the consolidated financial statements.
(i) Adjustment to reflect a benefit related to favorable settlements in 2014 of certain income tax positions on Constellation’s 2009-2012 tax returns.
(j) Adjustments to account for the CENG interest not owned by Generation, where applicable.
   
EXELON CORPORATION
Reconciliation of Adjusted (non-GAAP) Operating Earnings to GAAP Consolidated Statements of Operations

(unaudited)

(in millions, except per share data)

 
Nine Months Ended September 30, 2014 Nine Months Ended September 30, 2013
      Adjusted       Adjusted
GAAP (a) Adjustments Non-GAAP GAAP (a) Adjustments Non-GAAP
Operating revenues $ 20,173 $ 772 (b),(c),(d) $ 20,945 $ 18,725 $ 462 (b),(c) $ 19,187
Operating expenses
Purchased power and fuel 9,399 220 (b),(c) 9,619 8,143 355 (b),(c) 8,498
Operating and maintenance 6,005 (250 ) (d),(e),(f),(g) 5,755 5,391 (265 ) (d),(e),(f),(g) 5,126
Depreciation and amortization 1,732 1,732 1,606 (3 ) (b) 1,603
Taxes other than income 887     887   825     825  
Total operating expenses 18,023 (30 ) 17,993 15,965 87 16,052
Equity in earnings (loss) of unconsolidated affiliates (20 ) 12 (c),(d) (8 ) 7 62 (c),(d) 69
Gain on consolidation of CENG 261   (261 ) (i)        
Operating income 2,391   553   2,944   2,767   437   3,204  
Other income and (deductions)
Interest expense (722 ) 32 (b),(d) (690 ) (1,110 ) 370 (d),(e),(l),(m) (740 )
Other, net 702   (480 ) (g),(h),(j) 222   311   (117 ) (d),(g),(h),(l) 194  
Total other income and (deductions) (20 ) (448 ) (468 ) (799 ) 253   (546 )
Income before income taxes 2,371 105 2,476 1,968 690 2,658
Income taxes 646   99   (b),(c),(d),(e),(f),(g),(h),(i),(j) 745   733   192   (b),(c),(d),(e),(f),(g),(h),(l),(m) 925  
Net income 1,725 6 1,731 1,235 498 1,733
Net income attributable to noncontrolling interests, preferred security dividends and redemption and preference stock dividends 121   (36 ) (k) 85   11     11  
Net income attributable to common shareholders $ 1,604   $ 42   $ 1,646   $ 1,224   $ 498   $ 1,722  
Effective tax rate 27.2 % 30.1 % 37.2 % 34.8 %
Earnings per average common share
Basic $ 1.87 $ 0.05 $ 1.92 $ 1.43 $ 0.58 $ 2.01
Diluted $ 1.86   $ 0.05   $ 1.91   $ 1.42   $ 0.58   $ 2.00  
Average common shares outstanding
Basic 860 860 856 856
Diluted 863 863 860 860
Effect of adjustments on earnings per average diluted common share recorded in accordance with GAAP:
Mark-to-market impact of economic hedging activities (b) 0.34 (0.21 )
Amortization of commodity contract intangibles (c) 0.06 0.32
Merger and integration costs (d) 0.12 0.08
Long-lived asset impairment (e) 0.11 0.13
Asset retirement obligation (f) (0.02 ) 0.01
Plant retirements and divestitures (g) (0.23 ) (0.01 )
Unrealized gains related to NDT fund investments (h) (0.07 ) (0.04 )
Gain on CENG integration (i) (0.18 )
Tax settlement (j) (0.12 )
Non-controlling interest (k) 0.04
Amortization of the fair value of certain debt (l) (0.01 )
Remeasurement of like-kind exchange tax position (m)   0.31  
Total adjustments $ 0.05   $ 0.58  

For the nine months ended September 30, 2014, includes the results of operations of Constellation Nuclear Energy Group, LLC beginning on April 1, 2014, the date the nuclear operating services agreement was executed.

(a)   Results reported in accordance with GAAP.
(b) Adjustment to exclude the mark-to-market impact of Exelon’s economic hedging activities, net of intercompany eliminations.
(c) Adjustment to exclude the non-cash amortization of intangible assets, net, related to commodity contracts recorded at fair value at the Constellation merger date and at the CENG integration date.
(d) Adjustment to exclude certain costs associated with the Constellation merger, PHI acquisition, and at Generation, the CENG integration, including professional fees, employee-related expenses, integration activities, upfront credit facilities fees, merger commitments, and certain pre-acquisition contingencies.
(e) Adjustment to exclude a 2014 charge to earnings primarily related to the impairment of certain wind generating assets and certain assets held for sale, and a 2013 charge to earnings primarily related to the cancellation of previously capitalized nuclear uprate projects and impairment of certain wind generating assets.
(f) Adjustment to exclude the 2014 decrease in Generation's nuclear decommissioning obligation and the 2013 increase in asset retirement obligation for fossil power plants.
(g) Adjustment to exclude the impacts associated with the sale of Generation's ownership interest in generating stations, primarily the gain from sale of Generation's equity interest in Safe Harbor Water Power Corporation in 2014.
(h) Adjustment to exclude the unrealized gains on NDT fund investments to the extent not offset by contractual accounting as described in the notes to the consolidated financial statements.
(i) Adjustment to exclude the gain recorded upon consolidation of CENG resulting from the difference in the fair value of CENG’s net assets and the equity method investment previously recorded on Generation’s and Exelon’s books and the settlement of pre-existing commitments between Generation and CENG.
(j) Adjustment to reflect a benefit related to favorable settlements in 2014 of certain income tax positions on Constellation’s 2009-2012 tax returns.
(k) Adjustment to account for the CENG interest not owned by Generation, where applicable.
(l) Adjustment to exclude the non-cash amortization of certain debt recorded at fair value at the Constellation merger date, which was retired in the second quarter of 2013.
(m) Adjustment to exclude a non-cash charge to earnings resulting from the first quarter 2013 remeasurement of a like-kind exchange tax position taken on ComEd's 1999 sale of fossil generating assets.