Earnings Per Share and Equity (Exelon)

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Share and Equity (Exelon)

Earnings Per Share and Equity (Exelon)

Earnings per Share (Exelon)

Diluted earnings per share is calculated by dividing Net income attributable to common shareholders by the weighted average number of shares of common stock outstanding adjusted to include the potentially dilutive effect of stock options, performance share awards and restricted stock outstanding under Exelon’s LTIPs. The following table sets forth the components of basic and diluted earnings per share and shows the effect of these stock options, performance share awards and restricted stock on the weighted average number of shares outstanding (in millions) used in calculating diluted earnings per share: 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Net income attributable to common shareholders	$	993	$	738	$	1,604	$	1,224
Average common shares outstanding — basic	861		857		860		856
Potentially dilutive effect of stock options, performance share awards and restricted stock	2		3		3		4
Average common shares outstanding — diluted	863		860		863		860

The number of stock options not included in the calculation of diluted common shares outstanding due to their antidilutive effect was approximately 16 million for the three and nine months endedSeptember 30, 2014 and 20 million for the three and nine months endedSeptember 30, 2013. The number of equity units related to the PHI merger not included in the calculation of diluted common shares outstanding due to their antidilutive effect was approximately 2 million for the three months ended September 30, 2014 and 1 million since issuance. The number of forward units related to the PHI merger not included in the calculation of diluted common shares outstanding due to their antidilutive effect was approximately 2 million for the three months ended September 30, 2014 and less than 1 million since issuance.

Under share repurchase programs, 35 million shares of common stock are held as treasury stock with a cost of $2.3 billion as of September 30, 2014. In 2008, Exelon management decided to defer indefinitely any share repurchases.

Preferred Securities Redemption (Exelon and PECO)

On March 25, 2013, PECO announced that it issued a notice of redemption for all of its outstanding preferred securities with a redemption date of May 1, 2013. PECO had $87 million of cumulative preferred securities that were redeemable at its option at any time for the redemption price established when each series of securities were issued. The redemption premium of $6 million is treated as a reduction to Net income to arrive at Net income attributable to common shareholders utilized in the calculation of the earnings per share for Exelon. As a result of the redemption, PECO is now indirectly, wholly-owned by Exelon.