SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EXELON CORPORATION
COMMONWEALTH EDISON COMPANY
PECO ENERGY COMPANY
EXELON GENERATION COMPANY, LLC
/s/ Robert S. Shapard
--------------------------------------
Robert S. Shapard
Executive Vice President and Chief Financial Officer
Exelon Corporation
October 23, 2003
Exhibit 99
EXELON [LOGO]
- --------------------------------------------------------------------------------
News Release
From: Exelon Corporation FOR IMMEDIATE RELEASE
Corporate Communications October 23, 2003
P.O. Box 805379 Chicago, IL 60680-5379
Contact: Linda Marsicano, Media Relations
312.394.3099
Linda Byus, CFA, Investor Relations
312.394.7696
Exelon Announces Third Quarter Earnings;
Raises 2003 Operating Earnings Guidance
Chicago (October 23, 2003) - Exelon Corporation (NYSE: EXC) today announced
operating earnings for the third quarter of 2003 of $535 million, or $1.63 per
share (diluted), compared with operating earnings of $551 million, or $1.70 per
share (diluted), for the same period in 2002. The 3% decrease in year-over-year
operating earnings was due primarily to a weather-related decrease in kWh sales
and decreased competitive transition charge (CTC) revenue at ComEd, which was
only partially offset by higher margins at Generation and lower interest
expense.
Reported third quarter 2003 consolidated earnings prepared in accordance with
accounting principles generally accepted in the United States (GAAP) were a loss
of $102 million, or $0.31 per share. Reported results for the third quarter
include the $573 million, or $1.74 per share, after-tax charge for the
impairment of the Exelon Boston Generating (EBG) assets as a result of
management's decision to transition out of ownership of those assets. After-tax
severance charges related to The Exelon Way program reduced reported earnings by
$104 million or $0.32 per share. Reported earnings also include a $36 million,
or $0.11 per share, after-tax charge related to the impairment of Exelon's
investment in Sithe Energies, Inc. (Sithe). Exelon also recorded an after-tax
gain of $29 million, or $0.09 per share, during the third quarter of 2003
associated with the closing of the sale of certain businesses of InfraSource,
Inc. Finally, reported earnings include a $47 million after-tax gain, or $0.14
per share, related to the reduction of certain real estate tax reserves.
Third quarter operating earnings drivers include savings related to the Midwest
Generation contracts, increased market sales at higher prices at Generation,
lower interest expense and higher interest income in the quarter compared with
third quarter 2002. These positives were not sufficient to offset a
weather-related decrease in kWh sales and revenue and reduced CTC revenue at
ComEd. The estimated net impact of weather for the quarter is a decrease of
$0.14 per share in the third quarter compared with the prior year but a $0.02
per share increase relative to the normal weather that was incorporated in
Exelon's guidance.
"I am pleased by all that we accomplished during the third quarter," said John
W. Rowe, Exelon Chairman and CEO. "Our operating earnings strength is evidence
of our commitment to excellence and the success of The Exelon Way. The completed
sale of InfraSource and the announced purchase of British Energy's interest in
AmerGen demonstrate our focus on our core strengths. We have revised our
earnings guidance for 2003 to $5.05 to $5.20 per share. Based on the current
outlook, we believe we are in a position to earn $5.25 to $5.55 per share in
2004."
2003 and 2004 Earnings Outlook
Exelon's 2003 earnings outlook has been updated to incorporate year-to-date
events including year-to-date operating results and our expectations for the
balance of the year. Exelon's current guidance for consolidated 2003 operating
earnings, excluding unusual items, is a range of $5.05 to $5.20 per diluted
share based on the assumption of normal weather in the fourth quarter. Operating
earnings exclude the first quarter $0.34 per share gain from the cumulative
effect for the change in accounting principle (SFAS 143), the net $0.05 per
share charge related to the March 3 ComEd settlement agreement and the $0.51 per
share impairment charge of our Sithe Energies investment. We also exclude the
$1.74 per share impairment charge related to EBG, the $0.32 per share severance
charge related to The Exelon Way and the $0.14 per share positive effect of the
reduction of property tax reserves in the third quarter. We have increased our
guidance for 2004 operating earnings to a range of $5.25 to $5.55 per share, to
include the impact of the purchase of 50% of AmerGen during the first quarter.
Third Quarter Highlights
o Nuclear Operations Exelon Generation's nuclear fleet, excluding AmerGen,
produced 30,152 GWhs for the third quarter of 2003, compared with 29,817
GWhs output for the third quarter of 2002. The fleet, including AmerGen,
achieved a capacity factor of 95.3% for the third quarter of 2003, compared
with 93.9% for the third quarter of 2002. Exelon Generation's nuclear group
did not have any outages scheduled during July and August and began two
scheduled outages in September, a similar schedule to the third quarter
2002.
o Sithe Energies, Inc. Investment On August 13, 2003, Exelon Generation
announced an agreement with entities controlled by Reservoir Capital Group
(Reservoir), a private investment firm, to sell 50% of Sithe in exchange
for $75.8 million in cash. This sale will occur after Exelon Generation
closes on the Call Transaction announced in May 2003. Both Exelon's and
Reservoir's 50% interest in Sithe will be subject to Put and Call Options
that could result in either party owning 100% of Sithe. While Exelon's
intent is to fully divest Sithe by the end of 2004, the timing of the Put
and Call Options vary by acquirer and can extend through March 2006. The
sale is expected to close in the fourth quarter 2003. In a separate
transaction, Sithe has entered into an agreement with Reservoir to sell
entities holding six U.S. generating facilities, each a Qualifying Facility
under the Public Utility Regulatory Policies Act, and an entity holding
Sithe's Canadian assets in exchange for $46.2 million ($26.2 million in
cash and a $20 million two-year note). The sale is also expected to close
in the fourth quarter 2003. This sale is not contingent on the sale of
Exelon's 50% interest in Sithe to Reservoir.
o InfraSource Sale On September 24, 2003, Exelon Enterprises, parent company
of InfraSource, Inc., announced that it had finalized the sale of the
electric construction and services, underground and telecom businesses of
InfraSource to GFI Energy Ventures LLC and Oaktree Capital Management LLC.
The InfraSource companies involved in the sale are MJ Electric, InfraSource
Underground, Electric Services Inc., Dashiell and Dacon, Blair Park
Services/Sunesys and RJE Telecom.
o Midwest Generation Options On October 1, 2003, Exelon Generation notified
Midwest Generation (Midwest) of the exercise of its termination options
under the existing Collins and Peaking Purchase Power Agreements. Exelon
Generation released 303 MWs of peaking capacity and will retain the output
of 1,476 MWs of Collins and peaking unit capacity in 2004. On June 25,
2003, Exelon exercised its call option to retain 687 MWs of coal capacity.
For the contract year 2004, Exelon has contracted for 3,859 MWs of capacity
from Midwest, which includes 1,696 MWs of non-option coal capacity. By
exercising the Midwest contract options and restructuring the 2004 supply
portfolio, the expected pre-tax net capacity savings in 2004 compared with
2003, after replacement energy and other associated costs, are
approximately $20-$40 million.
o AmerGen On October 10, 2003, Exelon Corporation reached an agreement to buy
British Energy's 50-percent interest in AmerGen Energy Co. LLC for $276.5
million, giving Exelon sole ownership of AmerGen and its three nuclear
plants. AmerGen owns the Clinton Power Station, Three Mile Island Unit 1
and the Oyster Creek Generating Station. The three plants represent about
2,500 megawatts of generating capacity. The AmerGen purchase is expected to
be completed around the end of the first quarter of 2004.
BUSINESS UNIT RESULTS
Exelon Corporation's consolidated net loss in accordance with GAAP for the third
quarter of 2003 was $102 million compared with net income of $551 million in the
third quarter of 2002.
Exelon Energy Delivery consists of the retail electricity transmission and
distribution operations of ComEd and PECO and the natural gas distribution
business of PECO. Energy Delivery's net income in the third quarter of 2003 was
$303 million compared with net income of $370 million in the third quarter of
2002, primarily due to decreased weather-related kWh sales, reduced CTC
recoveries at ComEd and severance charges associated with The Exelon Way,
partially offset by lower regulatory asset amortization at ComEd and the
reduction of certain property tax reserves at PECO in 2003.
Cooling degree-days in the ComEd service territory were down 25% relative to
last year and 3% below normal. In the PECO service territory, cooling
degree-days were down 11% compared with 2002 but were 13% above normal. Total
retail kWh deliveries decreased 5% for ComEd, with a 10% decrease in deliveries
to the weather-sensitive residential customer class. PECO's residential
deliveries were down 5% and retail kWh deliveries decreased 2% overall. Energy
Delivery's total revenues for the third quarter of 2003 of $2,886 million were
down 9% from $3,162 million in 2002, offset by a $124 million net decrease in
fuel and purchased power. Operating and maintenance expense increased $84
million reflecting severance charges associated with The Exelon Way and higher
storm costs in the ComEd and PECO service territories in 2003. The impact of the
cooler summer weather decreased Exelon's third quarter 2003 earnings per share
(diluted) by approximately $0.14 relative to 2002, but results were favorable by
$0.02 relative to the normal weather that was incorporated in our earnings
guidance.
Exelon Generation consists of Exelon's electric generation operations and power
marketing and trading functions. Generation's third quarter 2003 net loss was
$428 million compared to third quarter 2002 net income of $163 million. The loss
is primarily attributable to the $573 million after-tax charge for the
impairment of the EBG assets, an additional impairment loss of $36 million after
tax on the investment in Sithe, a $30 million after-tax severance reserve
related to The Exelon Way, and a $9 million after-tax benefit for the reduction
of an accrual for Pennsylvania property taxes. Excluding these items, net income
was $202 million in the third quarter of 2003.
Energy sales for the third quarter of 2003 totaled 61,850 GWhs, exclusive of
trading volumes, compared with 57,173 GWhs in 2002. Generation's third quarter
2003 revenue of $2,537 million includes a net trading portfolio gain of $1
million compared with third quarter 2002 revenue of $2,213 million, which
includes a net trading portfolio loss of $12 million. Revenues, excluding the
trading portfolio, increased 14% from the third quarter of 2002, reflecting the
increased revenue from the 2002 acquisition of the New England plants and higher
market prices for energy.
Generation's revenue net fuel increased by $183 million in third quarter 2003
compared with third quarter 2002 excluding the mark-to-market impact in both
years. The improvement includes $59 million of incremental margin contribution
from the New England plants acquired in the fourth quarter of 2002. The increase
was driven by higher wholesale power prices and volume in all regions in which
Power Team operates, a higher average power price to ComEd, higher nuclear
generation and lower capacity payments to Midwest Generation, offset partially
by higher supply costs, primarily fuel costs. The average realized price
excluding trading activity in the third quarter of 2003 was $40.03 per MWh
compared with $38.69 per MWh in 2002. Higher market prices, driven by higher
market gas and oil prices, were partially offset by our hedged position during
the quarter. Higher gas prices resulted in higher supply costs, primarily fuel
costs.
Operating and maintenance expenses include the $945 million pre-tax charge for
the impairment of the EBG assets. Excluding this charge, operating and
maintenance expenses were up for the quarter reflecting $30 million of
additional expenses resulting from the acquired New England plants, $46 million
of severance costs associated with The Exelon Way and the effects of certain new
accounting treatments under FAS 143. The net impact of FAS 143 was neutral in
the third quarter of 2003 versus a net expense impact in the third quarter 2002.
Depreciation expense was $17 million lower in the third quarter 2003 versus 2002
due to the impact of FAS 143, partially offset by additional depreciation for
the acquired New England plants and new capital additions.
Earnings from equity affiliates were $34 million lower for the quarter driven by
lower earnings from Sithe as a result of Exelon's acquisition of Sithe's New
England plants in the fourth quarter of 2002 and lower earnings at AmerGen.
Exelon Enterprises consists of Exelon's competitive retail energy sales, energy
solutions and infrastructure services, venture capital investments and related
businesses. Enterprises reported third quarter 2003 net income of $16 million
compared with third quarter 2002 net income of $15 million. Enterprises achieved
a $1 million net income improvement compared with 2002 due to an after-tax gain
of $29 million recognized during the third quarter of 2003 upon the closing of
the sale of certain businesses of InfraSource. Absent that gain, operating
earnings were down $28 million primarily from lower operating results at
InfraSource resulting from a decrease in the electric line of business and lower
equity in earnings of unconsolidated affiliates compared with the recovery of
trade receivables at a communications joint venture in 2002.
Conference call information: Exelon has scheduled a conference call for 11 AM ET
(10 AM CT) on October 23. The call-in number in the U.S. is 877-407-4094 and the
international call-in number is 201-689-8037. No password is required. Media
representatives are invited to participate on a listen-only basis. The call will
be web-cast and archived on Exelon's web site: www.exeloncorp.com. (Please
select the Investor Relations page.)
Telephone replays will be available through November 7. The U.S. call-in number
is 877-660-6853 and the international call-in number is 201-612-7415. The
account number is 4094 and the conference call number is 79176.
Operating Earnings
Operating earnings (pro forma), which generally exclude non-operational items as
well as one-time charges or credits that are not normally associated with our
ongoing operations, are provided as a complement to results provided in
accordance with GAAP. Management uses such pro forma measures internally to
evaluate the company's performance and manage its operations. A reconciliation
of GAAP to operating earnings is included in the attachments to this release.
===============================================================================
Except for the historical information contained herein, certain of the matters
discussed in this news release are 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 a registrant
include those factors discussed herein as well as the items discussed in Exelon
Corporation's 2002 Annual Report on Form10-K in (a) ITEM 7. Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Business Outlook and the Challenges in Managing Our Business for
each of Exelon, ComEd, PECO and Generation and (b) ITEM 8. Financial Statements
and Supplementary Data: Exelon--Note 19, ComEd--Note 16, PECO--Note 18 and
Generation--Note 13, and (c) other factors discussed in filings with the
Securities and Exchange Commission (SEC) by Exelon Corporation, Commonwealth
Edison Company, PECO Energy Company and Exelon Generation Company, LLC
(Registrants). Readers are cautioned not to place undue reliance on these
forward-looking statements, which apply only as of the date of this news
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 news release.
###
Exelon Corporation is one of the nation's largest electric utilities with
approximately 5 million customers and $15 billion in annual revenues. The
company has one of the industry's largest portfolios of electricity
generation capacity, with a nationwide reach and strong positions in the
Midwest and Mid-Atlantic. Exelon distributes electricity to approximately 5
million customers in Illinois and Pennsylvania and gas to more than 450,000
customers in the Philadelphia area. Exelon is headquartered in Chicago and
trades on the NYSE under the ticker EXC.
EXELON CORPORATION
Consolidated Statements of Income
(unaudited)
(in millions, except per share data)
Three Months Ended September 30, 2003 Three Months Ended September 30, 2002
------------------------------------- -------------------------------------
Pro Forma Pro Forma
GAAP (a) Adjustments Pro Forma GAAP (a) Adjustments Pro Forma
--------- ----------- ---------- -------- ----------- ----------
Operating revenues $ 4,441 $ - $ 4,441 $ 4,370 $ - $ 4,370
Operating expenses
Purchased power 1,312 - 1,312 1,337 - 1,337
Fuel 551 - 551 373 - 373
Impairment of Exelon Boston Generating, LLC 945 (945)(b) - - - -
Operating and maintenance 1,226 (123)(c), (d) 1,103 1,114 - 1,114
Depreciation and amortization 293 - 293 345 - 345
Taxes other than income 131 74 (e) 205 201 - 201
--------- ----------- ---------- -------- ----------- ----------
Total operating expenses 4,458 (994) 3,464 3,370 - 3,370
--------- ----------- ---------- -------- ----------- ----------
Operating income (loss) (17) 994 977 1,000 - 1,000
Other income and deductions
Interest expense (217) - (217) (249) - (249)
Distributions on preferred securities
of subsidiaries (8) - (8) (11) - (11)
Equity in earnings of unconsolidated
affiliates 49 3 (d) 52 92 - 92
Other, net (21) 55 (f) 34 16 - 16
--------- ----------- ---------- -------- ----------- ----------
Total other income and deductions (197) 58 (139) (152) - (152)
--------- ----------- ---------- -------- ----------- ----------
Income (loss) before income taxes (214) 1,052 838 848 - 848
Income taxes (112) 415 303 297 - 297
--------- ----------- ---------- -------- ----------- ----------
Net income (loss) $ (102) $ 637 $ 535 $ 551 $ - $ 551
========= =========== ========== ======== =========== ==========
Earnings (loss) per average common share
Basic $ (0.31) $ 1.95 $ 1.64 $ 1.71 $ - $ 1.71
Diluted $ (0.31) $ 1.94 $ 1.63 $ 1.70 $ - $ 1.70
Average common shares outstanding
Basic 326 326 323 323
Diluted 326 329 324 324
Effect of pro forma adjustments on earnings (loss)
per average diluted common share recorded in
accordance with GAAP:
EBG impairment $ (1.74)
Severance (0.32)
Property tax accrual reductions 0.14
Impairment of investment in Sithe Energies, Inc. (0.11)
Sale of InfraSource 0.09
-----------
Total pro forma adjustments $ (1.94)
===========
(a) Results reported in accordance with accounting principles generally
accepted in the United States (GAAP).
(b) Pro forma adjustment for the EBG impairment recorded during the third
quarter of 2003.
(c) Pro forma adjustment for the sale of InfraSource to GFI during the third
quarter of 2003.
(d) Pro forma adjustment for severance and severance-related costs recorded
during the third quarter of 2003.
(e) Pro forma adjustment for the reduction of property tax accruals at PECO and
Generation recorded during the third quarter of 2003.
(f) Pro forma adjustment for the impairment of Exelon's investment in Sithe
Energies, Inc. recorded during the third quarter of 2003.
1
EXELON CORPORATION
Consolidated Statements of Income
(unaudited)
(in millions, except per share data)
Nine Months Ended September 30, 2003 Nine Months Ended September 30, 2002
------------------------------------ ------------------------------------
Pro Forma Pro Forma
GAAP (a) Adjustments Pro Forma GAAP (a) Adjustments Pro Forma
-------- ----------- --------- ------- ----------- ----------
Operating revenues $ 12,236 $ - $ 12,236 $ 11,245 $ - $ 11,245
Operating expenses
Purchased power 3,075 - 3,075 2,763 - 2,763
Fuel 1,908 - 1,908 1,233 - 1,233
Impairment of Exelon Boston Generating, LLC 945 (945)(b) - - - -
Operating and maintenance 3,438 (212)(c),(d),(e) 3,226 3,252 (10)(i) 3,242
Depreciation and amortization 842 - 842 1,012 - 1,012
Taxes other than income 489 74 (f) 563 568 - 568
-------- ----------- --------- -------- ----------- ----------
Total operating expenses 10,697 (1,083) 9,614 8,828 (10) 8,818
-------- ----------- --------- -------- ----------- ----------
Operating income 1,539 1,083 2,622 2,417 10 2,427
Other income and deductions
Interest expense (661) - (661) (739) - (739)
Distributions on preferred securities
of subsidiaries (30) - (30) (34) - (34)
Equity in earnings of unconsolidated
affiliates 82 3 (e) 85 114 - 114
Other, net (153) 242 (c),(g) 89 239 (198)(j) 41
-------- ----------- --------- -------- ----------- ----------
Total other income and deductions (762) 245 (517) (420) (198) (618)
-------- ----------- --------- -------- ----------- ----------
Income before income taxes and cumulative
effect of changes in accounting principles 777 1,328 2,105 1,997 (188) 1,809
Income taxes 258 514 772 724 (84) 640
-------- ----------- --------- -------- ----------- ----------
Income before cumulative effect of changes
in accounting principles 519 814 1,333 1,273 (104) 1,169
Cumulative effect of changes in accounting
principles, net of income taxes 112 (112)(h) - (230) 230 (k) -
-------- ----------- --------- -------- ----------- ----------
Net income $ 631 $ 702 $ 1,333 $ 1,043 $ 126 $ 1,169
======== =========== ========= ======== =========== ==========
Earnings per average common share
Basic:
Income before cumulative effect of
changes in accounting principles $ 1.60 $ 2.50 $ 4.10 $ 3.95 $ (0.32) $ 3.63
Cumulative effect of changes in accounting
principles, net of income taxes 0.34 (0.34) - (0.71) 0.71 -
-------- ----------- --------- -------- ----------- ----------
Net income $ 1.94 $ 2.16 $ 4.10 $ 3.24 $ 0.39 $ 3.63
======== =========== ========= ======== =========== ==========
Diluted:
Income before cumulative effect of
changes in accounting principles $ 1.59 $ 2.48 $ 4.07 $ 3.93 $ (0.32) $ 3.61
Cumulative effect of changes in accounting
principles, net of income taxes 0.34 (0.34) - (0.71) 0.71 -
-------- ----------- --------- -------- ----------- ----------
Net income $ 1.93 $ 2.14 $ 4.07 $ 3.22 $ 0.39 $ 3.61
======== =========== ========= ======== =========== ==========
Average common shares outstanding
Basic 325 325 322 322
Diluted 328 328 324 324
Effect of pro forma adjustments on earnings per
average diluted common share recorded in
accordance with GAAP:
EBG impairment $ (1.74) $ -
Impairment of Exelon's investment in Sithe Energies, Inc. (0.51) -
Cumulative effect of adopting SFAS No. 143 0.34 -
Exelon Way severance (0.32) -
Property tax accrual reductions 0.14 -
March 3 ComEd Settlement Agreement (0.05) -
Net gain on the sale of InfraSource - -
Employee severance costs - (0.04)
Gain on sale of investment in AT&T Wireless - 0.36
Cumulative effect of adopting SFAS No. 141 and SFAS No. 14 - (0.71)
----------- -----------
Total pro forma adjustments $ (2.14) $ (0.39)
=========== ===========
(a) Results reported in accordance with accounting principles generally accepted in the United States (GAAP).
(b) Pro forma adjustment for the EBG impairment recorded during the third quarter of 2003.
(c) Pro forma adjustment for the March 3 ComEd Settlement Agreement.
(d) Pro forma adjustment for the impairment of Exelon Enterprises' InfraSource goodwill and subsequent gain on the sale of
InfraSource to GFI.
(e) Pro forma adjustment for severance and severance-related costs recorded during the third quarter of 2003.
(f) Pro forma adjustment for the reduction of property tax accruals at PECO and Generation recorded during the third quarter of
2003.
(g) Pro forma adjustment for the impairments of Generation's investment in Sithe Energies, Inc. recorded during the first and third
quarters of 2003.
(h) Pro forma adjustment for the cumulative effect of adopting SFAS No. 143.
(i) Pro forma adjustment for severance costs of $10 million pre-tax primarily related to executive severance. Not all of the
severance expense was tax deductible.
(j) Pro forma adjustment for the sale of investment in AT&T Wireless.
(k) Pro forma adjustment for the cumulative effect of adopting SFAS No. 141 and SFAS No. 142 reflecting the impairment of Exelon
Enterprises' goodwill and the benefit of AmerGen's negative goodwill.
2
EXELON CORPORATION
Earnings Per Diluted Share Reconciliation
Three Months Ended September 30, 2003 vs. Three Months Ended September 30, 2002
2002 Earnings per Diluted Share $ 1.70
Year Over Year Effects on Earnings:
Energy Margins:
Weather Impact (1) (0.14)
Lower CTCs Recovered (2) (0.09)
Generation (3) 0.17
Other (0.01)
Higher Operating and Maintenance Expense (O&M) - Storm Costs (4) (0.07)
Lower O&M - Other (5) 0.11
Lower Non-Energy Margins at Enterprises (6) (0.10)
Lower Interest Expense (7) 0.08
Lower Equity in Earnings of Unconsolidated Subsidiaries (8) (0.04)
ENE Acquisition Effect (9) (0.02)
Other 0.04
-----------
2003 Pro Forma Earnings 1.63
2003 Pro Forma Adjustments:
Exelon Boston Generating (EBG) Impairment (10) (1.74)
Severance (11) (0.32)
Property Tax Accrual Reductions (12) 0.14
Impairment of Investment in Sithe Energies, Inc. (13) (0.11)
Sale of InfraSource (14) 0.09
-----------
2003 Loss per Diluted Share $(0.31)
===========
(1) Primarily related to cooler summer weather in 2003 as compared to 2002.
(2) Reflects a decrease in the CTC rates recovered by ComEd due to increased wholesale market
price of electricity, net of increased mitigation factors.
(3) Primarily related to increased market sales of electricity at higher prices by Generation
along with reductions in capacity payments to Midwest Generation. Excludes the effect of
the acquisition of Sithe New England (currently known as Exelon New England (ENE)) in
November 2002.
(4) Reflects increased storm costs in the Energy Delivery service territories.
(5) Reflects reduced operating expenses, excluding severance charges, storm costs at Energy
Delivery, gain on the sale of InfraSource and the effect of the acquisition of ENE,
primarily due to decreased salaries and wages at Energy Delivery, decreased environmental
reserves at ComEd and the deployment of automated meter reading technology at PECO.
(6) Reflects lower non-energy margins at Enterprises, primarily InfraSource, due to an overall
decline in revenue.
(7) Reflects lower interest expense, excluding the effect of the acquisition of ENE, due to
refinancing of existing debt at lower interest rates and the gradual retirement of ComEd's
Transitional Trust Notes.
(8) Reflects lower equity in earnings of unconsolidated affiliates, excluding the effect of
the acquisition of ENE in November 2002, related to AmerGen and Sithe Energies, Inc.
(9) Reflects the effect on net income of the acquisition of ENE, excluding the impairments of
EBG and Sithe Energies, Inc.
(10) Reflects the impairment of the EBG assets recorded by Generation during the third quarter
of 2003.
(11) Reflects severance and severance-related costs recorded during the third quarter of 2003.
(12) Reflects the reduction of certain property tax accruals at PECO and Generation during the
third quarter of 2003.
(13) Reflects an additional impairment of the investment held by Generation in Sithe Energies,
Inc. recorded during the third quarter of 2003.
(14) Reflects a gain on the sale of the electric construction and services, underground and
telecom businesses of InfraSource Inc. recorded during the third quarter of 2003.
3
EXELON CORPORATION
Earnings Per Diluted Share Reconciliation
Nine Months Ended September 30, 2003 vs. Nine Months Ended September 30, 2002
2002 Earnings per Diluted Share $ 3.22
2002 Pro Forma Adjustments:
Cumulative Effect of Adopting SFAS No. 142 0.71
Gain on the Sale of Investment in AT&T Wireless (1) (0.36)
Severance (2) 0.04
-------------
2002 Pro Forma Earnings 3.61
Year Over Year Effects on Earnings:
Energy Margins:
Generation (3) 0.31
Weather Impact (4) (0.12)
Other (0.04)
Lower Interest Expense (5) 0.18
Lower O&M (6) 0.12
Higher Investment Income (7) 0.09
Lower Non-Energy Margins at Enterprises (8) (0.09)
Lower Depreciation and Amortization Expense (9) 0.08
ENE Acquisition Effect (10) (0.06)
Other (0.01)
-------------
2003 Pro Forma Earnings 4.07
2003 Pro Forma Adjustments:
Exelon Boston Generating (EBG) Impairment (11) (1.74)
Impairment of Investment in Sithe Energies, Inc. (12) (0.51)
Cumulative Effect of Adopting SFAS No. 143 0.34
Severance (13) (0.32)
Property Tax Accrual Reductions (14) 0.14
March 3 ComEd Settlement Agreement (15) (0.05)
InfraSource Sale (16) -
-------------
2003 Earnings per Diluted Share $ 1.93
=============
(1) Gain on Exelon Enterprises' sale of its 49% interest in AT&T Wireless PCS of
Philadelphia.
(2) Executive severance partially offset by favorable adjustments to previous
severance estimates. A portion of the executive severance was not tax
deductible. As a result, the after-tax impact on earnings was $0.04 per share.
(3) Primarily related to increased market sales of electricity at higher prices by
Generation along with reductions in capacity payments to Midwest Generation.
Excludes the effect of the acquisition of Sithe New England (currently known as
Exelon New England (ENE)) in November 2002.
(4) Primarily related to cooler spring and summer weather in 2003 as compared to
2002, partially offset by colder winter weather in 2003 as compared to 2002.
(5) Reflects lower interest expense, excluding the effect of the acquisition of
ENE, due to refinancing of existing debt at lower interest rates and the
gradual retirement of ComEd's Transitional Trust Notes.
(6) Reflects reduced operating expenses, excluding severance charges, the effect of
the acquisition of ENE, the net loss on the sale of InfraSource, Inc.
in the second quarter of 2003 and SFAS No. 143, primarily due to decreased
salaries and wages at Energy Delivery, decreased nuclear refueling outages at
Generation and the deployment of automated meter reading technology at PECO.
These decreases were partially offset by increased pension and postretirement
benefit expense and increased storm costs in the Energy Delivery service
territories.
(7) Primarily reflects the effects of write-downs of communication and
energy-related investments at Enterprises in 2002 and higher investment income
related to nuclear decommissioning trust funds in 2003, partially offset by an
impairment of communication and energy-related investments of Enterprises in
2003.
(8) Reflects lower non-energy margins at Enterprises, primarily InfraSource, due to
an overall decline in revenue.
(9) Depreciation and amortization expense, excluding SFAS No. 143 and the effect of
the acquisition of ENE in November 2002, was lower primarily due to lower
depreciation rates and lower recoverable transition cost amortization at ComEd,
partially offset by increased depreciation related to higher depreciable plant
balances, reflecting Generation's plant acquisitions in 2002 and additions at
Energy Delivery, and higher CTC amortization at PECO.
(10) Reflects the effect on net income of the acquisition of ENE in November 2002,
excluding the impairments of EBG and Sithe Energies, Inc.
(11) Reflects the impairment of the EBG assets recorded by Generation during the
third quarter of 2003.
(12) Impairment of the investment held by Generation in Sithe Energies, Inc.
recorded during the first and third quarters of 2003.
(13) Reflects severance and severance related costs recorded during the third
quarter of 2003.
(14) Reflects the reduction of certain property tax accruals at PECO and Generation
during the third quarter of 2003.
(15) Agreement reached by ComEd and various Illinois suppliers, customers, and
governmental parties regarding several matters affecting ComEd's rates for
electric service during the first quarter of 2003.
(16) Reflects the net impact of an impairment of goodwill related to InfraSource,
Inc. in the second quarter of 2003 and the loss on the sale of the electric
construction and services, underground and telecom businesses of InfraSource
Inc., which closed during the third quarter of 2003.
4
EXELON CORPORATION
Consolidating Statements of Income
(unaudited)
(in millions)
Three Months Ended September 30, 2003
-----------------------------------------------------------------------
Energy Exelon
Delivery Generation Enterprises Corp/Elim Consolidated
----------- ----------- ----------- ---------- ---------------
Operating revenues $ 2,886 $ 2,537 $ 437 $ (1,419) $ 4,441
Operating expenses
Purchased power 1,373 1,240 69 (1,370) 1,312
Fuel 28 449 75 (1) 551
Impairment of Exelon Boston Generating, LLC - 945 - - 945
Operating and maintenance 491 530 263 (58) 1,226
Depreciation and amortization 231 51 3 8 293
Taxes other than income 99 28 3 1 131
----------- ----------- ----------- ---------- ---------------
Total operating expenses 2,222 3,243 413 (1,420) 4,458
----------- ----------- ----------- ---------- ---------------
Operating income (loss) 664 (706) 24 1 (17)
Other income and deductions
Interest expense (182) (25) (2) (8) (217)
Distributions on preferred securities of subsidiaries (8) - - - (8)
Equity in earnings (losses) of unconsolidated affiliates - 53 (1) (3) 49
Other, net 5 (30) 5 (1) (21)
----------- ----------- ----------- ---------- ---------------
Total other income and deductions (185) (2) 2 (12) (197)
----------- ----------- ----------- ---------- ---------------
Income (loss) before income taxes 479 (708) 26 (11) (214)
Income taxes 176 (280) 10 (18) (112)
----------- ----------- ----------- ---------- ---------------
Net income (loss) $ 303 $ (428) $ 16 $ 7 $ (102)
=========== =========== =========== ========== ===============
Three Months Ended September 30, 2002
------------------------------------------------------------------------
Energy Exelon
Delivery Generation Enterprises Corp/Elim Consolidated
----------- ---------- ----------- ---------- ---------------
Operating revenues $ 3,162 $ 2,213 $ 509 $ (1,514) $ 4,370
Operating expenses
Purchased power 1,485 1,257 73 (1,478) 1,337
Fuel 40 273 60 - 373
Operating and maintenance 407 391 349 (33) 1,114
Depreciation and amortization 256 68 11 10 345
Taxes other than income 162 37 1 1 201
----------- ---------- ----------- ---------- ---------------
Total operating expenses 2,350 2,026 494 (1,500) 3,370
----------- ---------- ----------- ---------- ---------------
Operating income (loss) 812 187 15 (14) 1,000
Other income and deductions
Interest expense (215) (23) (3) (8) (249)
Distributions on preferred securities of subsidiaries (11) - - - (11)
Equity in earnings (losses) of unconsolidated affiliates - 87 8 (3) 92
Other, net 5 14 - (3) 16
----------- ---------- ----------- ---------- ---------------
Total other income and deductions (221) 78 5 (14) (152)
----------- ---------- ----------- ---------- ---------------
Income (loss) before income taxes 591 265 20 (28) 848
Income taxes 221 102 5 (31) 297
----------- ---------- ----------- ---------- ---------------
Net income $ 370 $ 163 $ 15 $ 3 $ 551
=========== ========== =========== ========== ===============
5
EXELON CORPORATION
Consolidating Statements of Income
(unaudited) (in millions)
Nine Months Ended September 30, 2003
-----------------------------------------------------------------------
Energy Exelon
Delivery Generation Enterprises Corp/Elim Consolidated
--------- ------------- ----------- ----------- -------------
Operating revenues $ 7,850 $ 6,301 $ 1,459 $ (3,374) $ 12,236
Operating expenses
Purchased power 3,291 2,881 187 (3,284) 3,075
Fuel 285 1,156 467 - 1,908
Impairment of Exelon Boston Generating, LLC - 945 - - 945
Operating and maintenance 1,234 1,473 834 (103) 3,438
Depreciation and amortization 657 142 23 20 842
Taxes other than income 358 115 8 8 489
--------- ------------- ----------- ----------- -------------
Total operating expenses 5,825 6,712 1,519 (3,359) 10,697
--------- ------------- ----------- ----------- -------------
Operating income (loss) 2,025 (411) (60) (15) 1,539
Other income and deductions
Interest expense (565) (63) (8) (25) (661)
Distributions on preferred securities of subsidiaries (30) - - - (30)
Equity in earnings (losses) of unconsolidated affiliates - 90 - (8) 82
Other, net 48 (164) (31) (6) (153)
--------- ------------- ----------- ----------- -------------
Total other income and deductions (547) (137) (39) (39) (762)
--------- ------------- ----------- ----------- -------------
Income (loss) before income taxes and cumulative effect
of change in accounting principle 1,478 (548) (99) (54) 777
Income taxes 558 (209) (37) (54) 258
--------- ------------- ----------- ----------- -------------
Income (loss) before cumulative effect of change in
accounting principle 920 (339) (62) - 519
Cumulative effect of change in accounting
principle, net of income taxes 5 108 (1) - 112
--------- ------------- ----------- ----------- -------------
Net income (loss) $ 925 $ (231) $ (63) $ - $ 631
========= ============= =========== =========== =============
Nine Months Ended September 30, 2002
----------------------------------------------------------------------
Energy Exelon
Delivery Generation Enterprises Corp/Elim Consolidated
--------- ------------- ----------- ---------- ------------
Operating revenues $ 7,973 $ 5,233 $ 1,475 $ (3,436) $ 11,245
Operating expenses
Purchased power 3,331 2,581 181 (3,330) 2,763
Fuel 228 706 294 5 1,233
Operating and maintenance 1,131 1,234 983 (96) 3,252
Depreciation and amortization 745 197 46 24 1,012
Taxes other than income 430 126 6 6 568
--------- ------------- ----------- ---------- ------------
Total operating expenses 5,865 4,844 1,510 (3,391) 8,828
--------- ------------- ----------- ---------- ------------
Operating income (loss) 2,108 389 (35) (45) 2,417
Other income and deductions
Interest expense (654) (51) (11) (23) (739)
Distributions on preferred securities of subsidiaries (34) - - - (34)
Equity in earnings (losses) of unconsolidated affiliates - 119 3 (8) 114
Other, net 35 54 158 (8) 239
--------- ------------- ----------- ---------- ------------
Total other income and deductions (653) 122 150 (39) (420)
--------- ------------- ----------- ---------- ------------
Income (loss) before income taxes and cumulative effect
of change in accounting principle 1,455 511 115 (84) 1,997
Income taxes 547 198 46 (67) 724
--------- ------------- ----------- ---------- ------------
Income (loss) before cumulative effect of change in
accounting principle 908 313 69 (17) 1,273
Cumulative effect of change in accounting
principle, net of income taxes - 13 (243) - (230)
--------- ------------- ----------- ---------- ------------
Net income (loss) $ 908 $ 326 $ (174) $ (17) $ 1,043
========= ============= =========== ========== ============
6
EXELON CORPORATION
Business Segment Comparative Income Statements
(unaudited)
(in millions)
Energy Delivery
----------------------------------------------------------------------
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- ---------------------------------
2003 2002 Variance 2003 2002 Variance
------- ------- -------- ------- ------- ----------
Operating revenues $ 2,886 $ 3,162 $ (276) $ 7,850 $ 7,973 $ (123)
Operating expenses
Purchased power 1,373 1,485 (112) 3,291 3,331 (40)
Fuel 28 40 (12) 285 228 57
Operating and maintenance 491 407 84 1,234 1,131 103
Depreciation and amortization 231 256 (25) 657 745 (88)
Taxes other than income 99 162 (63) 358 430 (72)
------- ------- ------- ------- ------- -------
Total operating expenses 2,222 2,350 (128) 5,825 5,865 (40)
------- ------- ------- ------- ------- -------
Operating income 664 812 (148) 2,025 2,108 (83)
Other income and deductions
Interest expense (182) (215) 33 (565) (654) 89
Distributions on preferred securities of subsidiaries (8) (11) 3 (30) (34) 4
Other, net 5 5 - 48 35 13
------- ------- ------- ------- ------- -------
Total other income and deductions (185) (221) 36 (547) (653) 106
------- ------- ------- ------- ------- -------
Income before income taxes and cumulative effect
of change in accounting principle 479 591 (112) 1,478 1,455 23
Income taxes 176 221 (45) 558 547 11
------- ------- ------- ------- ------- -------
Income before cumulative effect of change in
accounting principle 303 370 (67) 920 908 12
Cumulative effect of change in accounting
principle, net of income taxes - - - 5 - 5
------- ------- ------- ------- ------- -------
Net income $ 303 $ 370 $ (67) $ 925 $ 908 $ 17
======= ======= ======= ======= ======= =======
Generation
----------------------------------------------------------------------
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- ---------------------------------
2003 2002 Variance 2003 2002 Variance
------- ------- -------- ------- ------- ----------
Operating revenues $ 2,537 $ 2,213 $ 324 $ 6,301 $ 5,233 $ 1,068
Operating expenses
Purchased power 1,240 1,257 (17) 2,881 2,581 300
Fuel 449 273 176 1,156 706 450
Impairment of Exelon Boston Generating, LLC 945 - 945 945 - 945
Operating and maintenance 530 391 139 1,473 1,234 239
Depreciation and amortization 51 68 (17) 142 197 (55)
Taxes other than income 28 37 (9) 115 126 (11)
------- ------- ------- ------- ------- -------
Total operating expenses 3,243 2,026 1,217 6,712 4,844 1,868
------- ------- ------- ------- ------- -------
Operating income (706) 187 (893) (411) 389 (800)
Other income and deductions
Interest expense (25) (23) (2) (63) (51) (12)
Equity in earnings of unconsolidated affiliates 53 87 (34) 90 119 (29)
Other, net (30) 14 (44) (164) 54 (218)
------- ------- ------- ------- ------- -------
Total other income and deductions (2) 78 (80) (137) 122 (259)
------- ------- ------- ------- ------- -------
Income (loss) before income taxes and cumulative effect
of changes in accounting principles (708) 265 (973) (548) 511 (1,059)
Income taxes (280) 102 (382) (209) 198 (407)
------- ------- ------- ------- ------- -------
Income (loss) before cumulative effect of changes in
accounting principles (428) 163 (591) (339) 313 (652)
Cumulative effect of changes in accounting
principles, net of income taxes - - - 108 13 95
------- ------- ------- ------- ------- -------
Net income (loss) $ (428) $ 163 $ (591) $ (231) $ 326 $ (557)
======= ======= ======= ======= ======= =======
7
EXELON CORPORATION
Business Segment Comparative Income Statements
(unaudited)
(in millions)
Enterprises
--------------------------------------------------------------------
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- --------------------------------
2003 2002 Variance 2003 2002 Variance
------- ------- --------- ------- ------- --------
Operating revenues $ 437 $ 509 $ (72) $ 1,459 $ 1,475 $ (16)
Operating expenses
Purchased power 69 73 (4) 187 181 6
Fuel 75 60 15 467 294 173
Operating and maintenance 263 349 (86) 834 983 (149)
Depreciation and amortization 3 11 (8) 23 46 (23)
Taxes other than income 3 1 2 8 6 2
------- ------- ------- ------- ------- -------
Total operating expenses 413 494 (81) 1,519 1,510 9
------- ------- ------- ------- ------- -------
Operating income (loss) 24 15 9 (60) (35) (25)
Other income and deductions
Interest expense (2) (3) 1 (8) (11) 3
Equity in earnings (losses) of unconsolidated affiliates (1) 8 (9) - 3 (3)
Other, net 5 - 5 (31) 158 (189)
------- ------- ------- ------- ------- -------
Total other income and deductions 2 5 (3) (39) 150 (189)
------- ------- ------- ------- ------- -------
Income (loss) before income taxes and cumulative
effect of changes in accounting principles 26 20 6 (99) 115 (214)
Income taxes 10 5 5 (37) 46 (83)
------- ------- ------- ------- ------- -------
Income (loss) before cumulative effect of
changes in accounting principles 16 15 1 (62) 69 (131)
Cumulative effect of changes in accounting
principles, net of income taxes - - - (1) (243) 242
------- ------- ------- ------- ------- -------
Net income (loss) $ 16 $ 15 $ 1 $ (63) $ (174) $ 111
======= ======= ======= ======= ======= =======
Corporate and Eliminations
--------------------------------------------------------------------
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- --------------------------------
2003 2002 Variance 2003 2002 Variance
------- ------- --------- ------- ------- --------
Operating revenues $(1,419) $(1,514) $ 95 $(3,374) $(3,436) $ 62
Operating expenses
Purchased power (1,370) (1,478) 108 (3,284) (3,330) 46
Fuel (1) - (1) - 5 (5)
Operating and maintenance (58) (33) (25) (103) (96) (7)
Depreciation and amortization 8 10 (2) 20 24 (4)
Taxes other than income 1 1 - 8 6 2
------- ------- ------- ------- ------- -------
Total operating expenses (1,420) (1,500) 80 (3,359) (3,391) 32
------- ------- ------- ------- ------- -------
Operating income (loss) 1 (14) 15 (15) (45) 30
Other income and deductions
Interest expense (8) (8) - (25) (23) (2)
Equity in earnings (losses) of
unconsolidated affiliates (3) (3) - (8) (8) -
Other, net (1) (3) 2 (6) (8) 2
------- ------- ------- ------- ------- -------
Total other income and deductions (12) (14) 2 (39) (39) -
------- ------- ------- ------- ------- -------
Income (loss) before income taxes (11) (28) 17 (54) (84) 30
Income taxes (18) (31) 13 (54) (67) 13
------- ------- ------- ------- ------- -------
Net income (loss) $ 7 $ 3 $ 4 $ - $ (17) $ 17
======= ======= ======= ======= ======= =======
8
EXELON CORPORATION
Consolidated Balance Sheets
(unaudited)
(in millions)
September 30, December 31,
2003 2002
------------------- -------------------
Current assets
Cash and cash equivalents $ 604 $ 469
Restricted cash 318 396
Accounts receivable, net
Customers 1,952 2,076
Other 270 284
Receivable from unconsolidated affiliate - 39
Inventories - fossil fuel 198 175
Inventories - materials and supplies 289 306
Other 429 380
Assets held for sale 109 -
------------------- -------------------
Total current assets 4,169 4,125
------------------- -------------------
Property, plant and equipment, net 19,476 17,126
Deferred debits and other assets
Regulatory assets 5,304 5,993
Nuclear decommissioning trust funds 3,404 3,053
Investments 1,198 1,403
Goodwill 4,734 4,992
Other 859 793
------------------- -------------------
Total deferred debits and other assets 15,499 16,234
------------------- -------------------
Total assets $ 39,144 $ 37,485
=================== ===================
Liabilities and shareholders' equity
Current liabilities
Notes payable $ 82 $ 681
Notes payable to unconsolidated affiliate 326 534
Long-term debt due within one year 2,067 1,402
Accounts payable 1,692 1,607
Accrued expenses 1,242 1,354
Other 287 296
Liabilities held for sale 57 -
------------------- -------------------
Total current liabilities 5,753 5,874
------------------- -------------------
Long-term debt 12,468 13,127
Long-term debt to affiliate 103 -
Mandatorily redeemable preferred securities 422 -
Deferred credits and other liabilities
Deferred income taxes 3,798 3,702
Unamortized investment tax credits 291 301
Nuclear decommissioning liability for retired plants - 1,395
Asset retirement obligation 2,481 -
Pension obligation 1,609 1,959
Non-pension postretirement benefits obligation 1,033 877
Spent nuclear fuel obligation 865 858
Regulatory liabilities 880 -
Other 974 978
------------------- -------------------
-
Total deferred credits and other liabilities 11,931 10,070
------------------- -------------------
Minority interest of consolidated subsidiaries 53 77
Preferred securities of subsidiaries 87 595
Shareholders' equity
Common stock 7,226 7,059
Deferred compensation - (1)
Retained earnings 2,210 2,042
Accumulated other comprehensive income (loss) (1,109) (1,358)
------------------- -------------------
Total shareholders' equity 8,327 7,742
------------------- -------------------
Total liabilities and shareholders' equity $ 39,144 $ 37,485
=================== ===================
9
EXELON CORPORATION
Consolidated Statements of Cash Flows
(unaudited)
(in millions)
Nine Months Ended
September 30,
-------------------------------------
2003 2002
------------------ ------------------
Cash flows from operating activities
Net income $ 631 $ 1,043
Adjustments to reconcile net income to net cash flows
provided by operating activities:
Depreciation, amortization and accretion, including nuclear fuel 1,290 1,284
Cumulative effect of changes in accounting principles (net of income taxes) (112) 230
Gain on sale of investments - (199)
Provision for uncollectible accounts 72 107
Deferred income taxes (363) 293
Equity in earnings of unconsolidated affiliates (82) (114)
Impairment of investments 295 46
Impairment of goodwill and long-lived assets 950 -
Employee severance related expenses 152 -
Pension and non-pension postretirement curtailment costs 26 -
Net realized (gains) losses on nuclear decommissioning trust funds (9) 32
Other operating activities 91 56
Changes in assets and liabilities:
Accounts receivable (19) (358)
Inventories (55) (25)
Accounts payable, accrued expenses and other current liabilities 50 1
Changes in payables and receivables from unconsolidated affiliates 18 46
Other current assets (100) 68
Pension and non-pension postretirement benefits obligations (241) 22
Other noncurrent assets and liabilities (41) 131
------------------ ------------------
Net cash flows provided by operating activities 2,553 2,663
------------------ ------------------
Cash flows from investing activities
Capital expenditures (1,501) (1,534)
Proceeds from liquidated damages 92 -
Proceeds from nuclear decommissioning trust funds 1,880 1,184
Investment in nuclear decommissioning trust funds (2,043) (1,330)
Note receivable from unconsolidated affiliate 35 (42)
Proceeds from sale of investments 186 287
Acquisition of generating plants - (443)
Other investing activities 50 19
------------------ ------------------
Net cash flows used in investing activities (1,301) (1,859)
------------------ ------------------
Cash flows from financing activities
Issuance of long-term debt 2,105 956
Retirement of long-term debt (2,075) (1,946)
Change in short-term debt (599) 428
Issuance of debt to affiliate 103 -
Issuance of mandatorily redeemable preferred securities 200 -
Retirement of mandatorily redeemable preferred securities (250) (18)
Retirement of preferred stock (50) -
Dividends paid on common stock (461) (420)
Payment on acquisition note payable to Sithe Energies, Inc. (210) -
Proceeds from employee stock plans 139 64
Contribution from minority interest of consolidated subsidiary - 43
Change in restricted cash 78 81
Other financing activities (85) (16)
------------------ ------------------
Net cash flows used in financing activities (1,105) (828)
------------------ ------------------
Increase (decrease) in cash and cash equivalents 147 (24)
Cash and cash equivalents at beginning of period 469 485
------------------ ------------------
Cash and cash equivalents including cash classified as held for sale 616 461
Cash classified as held for sale on the consolidated balance sheet (12) -
------------------ ------------------
Cash and cash equivalents at end of period $ 604 $ 461
================== ==================
10
EXELON CORPORATION
Electric Sales Statistics
Three Months Ended September 30,
---------------------------------------------
(in GWhs) 2003 2002 % Change
- ------------------------------------------------------ --------------------- --------------------- ---------------
Supply
Nuclear, excluding AmerGen 30,152 29,817 1.1%
Purchased Power - Generation (a) 24,062 23,425 2.7%
Fossil, excluding Sithe Energies, and Hydro (b) 7,636 3,931 94.3%
--------------------- ---------------------
Power Team Supply 61,850 57,173 (c) 8.2%
Purchased Power - Other 691 304 127.3%
--------------------- ---------------------
Total Electric Supply Available for Sale 62,541 57,477 8.8%
Less: Line Loss and Company Use (2,221) (2,697) (17.6%)
--------------------- ---------------------
Total Supply 60,320 54,780 10.1%
===================== =====================
Energy Sales
Retail Sales (d) 35,925 37,498 (4.2%)
Power Team Market Sales (a) 29,613 21,177 39.8%
Interchange Sales and Sales to Other Utilities 849 997 (14.8%)
--------------------- ---------------------
66,387 59,672 11.3%
Less: Distribution Only Sales (6,067) (4,892) 24.0%
--------------------- ---------------------
Total Energy Sales 60,320 54,780 10.1%
===================== =====================
Nine Months Ended September 30,
---------------------------------------------
(in GWhs) 2003 2002 % Change
- ------------------------------------------------------ --------------------- --------------------- ---------------
Supply
Nuclear, excluding AmerGen 89,101 86,127 3.5%
Purchased Power - Generation (a) 63,435 59,496 6.6%
Fossil, excluding Sithe Energies, and Hydro (b) 18,041 10,112 78.4%
--------------------- ---------------------
Power Team Supply 170,577 155,735 (c) 9.5%
Purchased Power - Other 1,242 403 n.m.
--------------------- ---------------------
Total Electric Supply Available for Sale 171,819 156,138 10.0%
Less: Line Loss and Company Use (6,008) (6,875) (12.6%)
--------------------- ---------------------
Total Supply 165,811 149,263 11.1%
===================== =====================
Energy Sales
Retail Sales (d) 97,392 97,917 (0.5%)
Power Team Market Sales (a) 80,877 61,089 32.4%
Interchange Sales and Sales to Other Utilities 2,079 2,221 (6.4%)
--------------------- ---------------------
180,348 161,227 11.9%
Less: Distribution Only Sales (14,537) (11,964) 21.5%
--------------------- ---------------------
Total Energy Sales 165,811 149,263 11.1%
===================== =====================
(a) Purchased power and market sales do not include trading volume of 11,086 GWhs and 28,455 GWhs for the three months
ended September 30, 2003 and 2002, respectively, and 28,532 GWhs and 51,260 GWhs for the nine months ended
September 30, 2003 and 2002, respectively.
(b) Includes supply from the acquisition of Exelon New England in November 2002 and plants acquired from TXU in April
2002.
(c) Certain reallocations have been made.
(d) Includes Exelon Energy sales of 1,580 GWhs and 1,678 GWhs for the three months ended September 30, 2003 and 2002,
respectively, and 4,036 GWhs and 3,839 GWhs for the nine months ended September 30, 2003 and 2002, respectively.
n.m. - not meaningful
11
EXELON CORPORATION
Energy Delivery Sales Statistics
For the Three Months Ended September 30,
ComEd PECO
--------------------------------- ---------------------------------------
Electric Deliveries (GWh) 2003 2002 % Change 2003 2002 % Change
--------------------------------- ---------------------------------------
Bundled Deliveries (a)
Residential 8,197 9,121 (10.1%) 3,333 3,422 (2.6%)
Small Commercial & Industrial 5,749 6,029 (4.6%) 1,753 2,066 (15.2%)
Large Commercial & Industrial 1,539 2,073 (25.8%) 4,013 4,006 0.2%
Public Authorities & Electric Railroads 1,269 1,612 (21.3%) 217 224 (3.1%)
---------------------- -------------------------
Total Bundled Deliveries 16,754 18,835 (11.0%) 9,316 9,718 (4.1%)
---------------------- -------------------------
Unbundled Deliveries (b)
Alternative Energy Suppliers
Residential (c) (c) 258 371 (30.5%)
Small Commercial & Industrial 1,721 1,640 4.9% 520 154 n.m.
Large Commercial & Industrial 2,934 2,192 33.9% 208 236 (11.9%)
Public Authorities & Electric Railroads 426 299 42.5% - -
---------------------- -------------------------
5,081 4,131 23.0% 986 761 29.6%
---------------------- -------------------------
PPO (ComEd Only)
Small Commercial & Industrial 884 782 13.0%
Large Commercial & Industrial 896 1,249 (28.3%)
Public Authorities & Electric Railroads 428 345 24.1%
----------------------
2,208 2,376 (7.1%)
---------------------- -------------------------
Total Unbundled Deliveries 7,289 6,507 12.0% 986 761 29.6%
---------------------- -------------------------
Total Retail Deliveries 24,043 25,342 (5.1%) 10,302 10,479 (1.7%)
====================== =========================
Gas Deliveries (mmcf) (PECO only) 9,510 11,347 (16.2%)
=========================
Revenue (in millions)
Bundled Electric Revenue (a)
Residential $ 760.0 $ 839.7 (9.5%) $ 466.3 $ 477.8 (2.4%)
Small Commercial & Industrial 487.1 506.7 (3.9%) 210.6 251.3 (16.2%)
Large Commercial & Industrial 81.6 106.1 (23.1%) 291.6 295.8 (1.4%)
Public Authorities & Electric Railroads 82.2 103.6 (20.7%) 19.4 21.4 (9.3%)
---------------------- -------------------------
Total Bundled Electric Revenue 1,410.9 1,556.1 (9.3%) 987.9 1,046.3 (5.6%)
---------------------- -------------------------
Unbundled Electric Revenue (b)
Alternative Energy Suppliers
Residential (c) (c) 20.4 32.5 (37.2%)
Small Commercial & Industrial 33.9 51.1 (33.7%) 27.6 8.5 n.m.
Large Commercial & Industrial 41.3 60.1 (31.3%) 5.4 6.5 (16.9%)
Public Authorities & Electric Railroads 8.1 10.4 (22.1%) - -
---------------------- -------------------------
83.3 121.6 (31.5%) 53.4 47.5 12.4%
---------------------- -------------------------
PPO (ComEd Only)
Small Commercial & Industrial 65.3 57.0 14.6%
Large Commercial & Industrial 55.6 74.2 (25.1%)
Public Authorities & Electric Railroads 25.8 18.6 38.7%
----------------------
146.7 149.8 (2.1%)
---------------------- -------------------------
Total Unbundled Electric Revenue 230.0 271.4 (15.3%) 53.4 47.5 12.4%
---------------------- -------------------------
Total Retail Electric Revenue 1,640.9 1,827.5 (10.2%) 1,041.3 1,093.8 (4.8%)
Wholesale Electric Revenue 39.1 42.7 (8.4%) 3.1 8.2 (62.2%)
Other Revenue 56.8 67.5 (15.9%) 51.6 55.1 (6.4%)
Gas Revenue (PECO only) n/a n/a 53.0 67.0 (20.9%)
---------------------- -------------------------
Total Revenues $ 1,736.8 $ 1,937.7 (10.4%) $ 1,149.0 $ 1,224.1 (6.1%)
====================== =========================
Heating and Cooling Degree-Days 2003 2002 Normal 2003 2002 Normal
-------------------------------- ---------------------------------------
Heating Degree-Days 117 58 127 12 4 38
Cooling Degree-Days 582 776 603 1,019 1,144 900
(a) Bundled service reflects deliveries to customers taking electric service under tariffed rates, which include the
cost of energy and the delivery cost of the transmission and distribution of the energy. PECO's tariffed rates also
include a CTC charge.
(b) Unbundled service reflects customers electing to receive electric generation service under the ComEd PPO option or
from an alternative energy supplier. Revenue from customers choosing the ComEd PPO option includes an energy charge
at market rates, transmission and distribution charge and a CTC charge. Revenue from customers choosing an
alternative energy supplier includes a distribution charge and a CTC charge. Transmission charges received from
alternative energy suppliers are included in wholesale and miscellaneous revenue.
(c) On May 1, 2002, all ComEd residential customers were eligible to choose their supplier of electricity; however, as
of September 30, 2003, no alternative electric supplier has sought approval from the Illinois Commerce Commission
and no electric utilities have chosen to enter the ComEd residential market for the supply of electricity.
n/a - not applicable
n.m. - not meaningful
12
EXELON CORPORATION
Energy Delivery Sales Statistics
For the Nine Months Ended September 30,
ComEd PECO
----------------------------------------- -------------------------------------------
Electric Deliveries (GWh) 2003 2002 % Change 2003 2002 % Change
----------------------------------------- -------------------------------------------
Bundled Deliveries (a)
Residential 20,246 21,392 (5.4%) 8,723 7,592 14.9%
Small Commercial & Industrial 16,490 17,078 (3.4%) 5,065 5,704 (11.2%)
Large Commercial & Industrial 4,706 6,151 (23.5%) 11,190 11,285 (0.8%)
Public Authorities & Electric Railroads 4,018 5,097 (21.2%) 692 617 12.2%
-------------- -------------- ----------- -------------
Total Bundled Deliveries 45,460 49,718 (8.6%) 25,670 25,198 1.9%
-------------- -------------- ----------- -------------
Unbundled Deliveries (b)
Alternative Energy Suppliers
Residential (c) (c) 708 1,720 (58.8%)
Small Commercial & Industrial 4,327 3,822 13.2% 1,044 253 n.m.
Large Commercial & Industrial 6,894 5,200 32.6% 610 351 73.8%
Public Authorities & Electric Railroads 954 618 54.4% - -
-------------- -------------- ----------- -------------
12,175 9,640 26.3% 2,362 2,324 1.6%
-------------- -------------- ----------- -------------
PPO (ComEd Only)
Small Commercial & Industrial 2,546 2,384 6.8%
Large Commercial & Industrial 3,646 3,952 (7.7%)
Public Authorities & Electric Railroads 1,497 861 73.9%
-------------- --------------
7,689 7,197 6.8%
-------------- -------------- ----------- -------------
Total Unbundled Deliveries 19,864 16,837 18.0% 2,362 2,324 1.6%
-------------- -------------- ----------- -------------
Total Retail Deliveries 65,324 66,555 (1.8%) 28,032 27,522 1.9%
============== ============== =========== =============
Gas Deliveries (mmcf) (PECO only) 64,137 56,990 12.5%
=========== =============
Revenue (in millions)
Bundled Electric Revenue (a)
Residential $ 1,777.3 $ 1,881.0 (5.5%) $ 1,121.7 $ 999.3 12.2%
Small Commercial & Industrial 1,289.3 1,342.9 (4.0%) 584.9 664.1 (11.9%)
Large Commercial & Industrial 239.8 323.8 (25.9%) 825.1 828.3 (0.4%)
Public Authorities & Electric Railroads 247.2 296.9 (16.7%) 61.8 58.5 5.6%
-------------- -------------- ----------- -------------
Total Bundled Electric Revenue 3,553.6 3,844.6 (7.6%) 2,593.5 2,550.2 1.7%
-------------- -------------- ----------- -------------
Unbundled Electric Revenue (b)
Alternative Energy Suppliers
Residential (c) (c) 51.8 128.6 (59.7%)
Small Commercial & Industrial 106.5 93.8 13.5% 54.3 13.4 n.m.
Large Commercial & Industrial 133.0 101.5 31.0% 16.3 9.7 68.0%
Public Authorities & Electric Railroads 24.8 17.6 40.9% - -
-------------- -------------- ----------- -------------
264.3 212.9 24.1% 122.4 151.7 (19.3%)
-------------- -------------- ----------- -------------
PPO (ComEd Only)
Small Commercial & Industrial 173.7 155.0 12.1%
Large Commercial & Industrial 199.7 214.3 (6.8%)
Public Authorities & Electric Railroads 81.1 47.8 69.7%
-------------- --------------
454.5 417.1 9.0%
-------------- -------------- ----------- -------------
Total Unbundled Electric Revenue 718.8 630.0 14.1% 122.4 151.7 (19.3%)
-------------- -------------- ----------- -------------
Total Retail Electric Revenue 4,272.4 4,474.6 (4.5%) 2,715.9 2,701.9 0.5%
Wholesale Electric Revenue 89.6 92.9 (3.6%) 8.6 15.1 (43.0%)
Other Revenue 159.9 166.6 (4.0%) 154.7 164.0 (5.7%)
Gas Revenue (PECO only) n/a n/a 448.3 358.0 25.2%
-------------- -------------- ----------- -------------
Total Revenues $ 4,521.9 $ 4,734.1 (4.5%) $ 3,327.5 $ 3,239.0 2.7%
============== ============== =========== =============
Heating and Cooling Degree-Days 2003 2002 Normal 2003 2002 Normal
-------------- -------------- ------------ --------------- --------------------------
Heating Degree-Days 4,331 3,778 4,187 3,348 2,489 3,078
Cooling Degree-Days 693 1,077 820 1,269 1,560 1,216
(a) Bundled service reflects deliveries to customers taking electric service under tariffed rates, which include the cost of energy
and the delivery cost of the transmission and distribution of the energy. PECO's tariffed rates also include a CTC charge.
(b) Unbundled service reflects customers electing to receive electric generation service under the ComEd PPO option or from an
alternative energy supplier. Revenue from customers choosing the ComEd PPO option includes an energy charge at market rates,
transmission and distribution charge and a CTC charge. Revenue from customers choosing an alternative energy supplier includes
a distribution charge and a CTC charge. Transmission charges received from alternative energy suppliers are included in
wholesale and miscellaneous revenue.
(c) On May 1, 2002, all ComEd residential customers were eligible to choose their supplier of electricity; however, as of September
30, 2003, no alternative electric supplier has sought approval from the Illinois Commerce Commission and no electric utilities
have chosen to enter the ComEd residential market for the supply of electricity.
n/a - not applicable
n.m. - not meaningful
13
EXELON CORPORATION
Exelon Generation Power Marketing Statistics
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2003 2002 2003 2002
------------- ----------- ------------ ------------
GWh Sales
Energy Delivery and Exelon Energy 32,237 35,996 89,700 94,646
Market Sales 29,613 21,177 80,877 61,089
------------- ----------- ------------ ------------
Total Sales (a) 61,850 57,173 170,577 155,735
============= =========== ============ ============
Average Margin ($/MWh)
Average Realized Revenue
Energy Delivery and Exelon Energy $ 41.51 $ 40.56 $ 35.45 $ 34.86
Market Sales 38.43 35.50 37.11 31.55
Total Sales - without trading 40.03 38.69 36.24 33.56
Average Purchased Power and Fuel Cost - without trading $ 27.31 $ 26.66 $ 23.67 $ 21.04
Average Margin - without trading $ 12.72 $ 12.04 $ 12.57 $ 12.52
Around-the-clock Market Prices ($/MWh)
PJM $ 38.99 $ 34.50 $ 40.39 $ 27.00
MAIN 29.24 27.00 30.07 24.00
- ------------------------------------------------------------
2003 Earnings Guidance - October through December
Around-the-clock Market Prices ($/MWh)
PJM $ 30.50
MAIN 21.00
NEPOOL 44.50
Gas Prices ($/Mmbtu)
Henry Hub $ 4.78
- ------------------------------------------------------------
(a) Total sales do not include trading volume of 11,086 GWhs and 28,455 GWhs for the three months ended September 30,
2003 and 2002, respectively, and 28,532 GWhs and 51,260 GWhs for the nine months ended September 30, 2003 and 2002,
respectively. Additionally, total sales include supply from the acquisition of Exelon New England in November 2002
and plants acquired from TXU in April 2002.
14
