EX-99.3 4 c91389exv99w3.htm EXELON WAY SAVINGS exv99w3
 

EXHIBIT 99.3

December YTD Year-over-Year Exelon Way Savings

                 
    Pre-tax O&M  
($ in millions)   December YTD Savings  
    2004     2003  
GAAP Operating and Maintenance Expense (O&M)
   $ 3,976     $ 4,508  
 
                
Operating Adjustments:
                
March 3 ComEd Global Settlement Agreement
     —       (41 )
Charges associated with Generation’s investment in Sithe Energies, Inc.
     (8 )     —  
Settlement Associated with the Storage of Spent Nuclear Fuel
     42       —  
Charges associated with Exelon’s anticipated merger with Public Service Enterprise Group Inc.
     (7 )     —  
2004 Financial Impact of Boston Generating (BG)
     (62 )     —  
Investments in Synthetic Fuel Producing Facilities
     (89 )     —  
Exelon Way Severance and Severance-related Charges
     (83 )     (256 )
Impairment of Exelon Enterprises’ InfraSource Investment
     —       (53 )
 
            
Operating O&M
     3,769       4,158  
 
                
Exelon Way O&M Adjustments:
                
Remove Net Enterprises and BG (1)
     (204 )     (903 )
Remove Nuclear Decommissioning Accretion Expense and Other SFAS 143 Adjustments (2)
     (129 )     (118 )
Remove 2004 Incremental Impact of Sithe
     (60 )     —  
Add AmerGen, net of Accretion and Severance (3)
     —       393  
Normalize Incremental Impact of Nuclear Outages
     (18 )     —  
Other
     (7 )     —  
Add Payroll Taxes (4)
     94       91  
 
            
Exelon Way O&M
   $ 3,445     $ 3,621  
 
            
 
                
Year-over-Year Exelon Way O&M Savings
   $ 176          
 
              
                 
Program-to-Date O&M Savings   Pre-tax     After-tax (5)  
2003 Ramp-up
   $ 163     $ 101  
2004 December YTD
     176       109  
 
            
Exelon Way 2004 O&M Savings
   $ 339     $ 210  
 
            

(1) Excludes corporate costs that remain within Exelon and is net of intercompany impact. Enterprises excludes Exelon Energy in 2003; in 2004 Exelon Energy is included in Generation.

(2) Accretion expense and other SFAS 143 adjustments are non-cash expenses related to nuclear decommissioning and are not included in Exelon Way expenditures.

(3) Normalize to 100% in 2003; in 2003, AmerGen was included in Equity in Earnings of Unconsolidated Affiliates

(4) Includes AmerGen and excludes Enterprises.

(5) Tax rate is 38%.

                 
    CapEx  
    December YTD Savings  
    2004     2003  
GAAP Capital Expenditures (CapEx) (A)
   $ 1,921     $ 1,862  
 
                
Adjustments:
                
Include AmerGen CapEx
     —       171  
Other
     11       20  
 
            
Exelon Way CapEx
   $ 1,932     $ 2,053  
 
            
Year-over-Year CapEx Savings
   $ 121          
 
              
Program-to-Date Exelon Way CapEx Savings:
                
2003 Ramp-up
   $ 67          
2004 December YTD
     121          
 
              
Exelon Way 2004 CapEx Savings
   $ 188          
 
              

(A) Net of proceeds from liquidated damages for 2003.

 
         
Exelon Way 2004 O&M Cash Savings   Total  
After-tax O&M
   $ 210  
CapEx
     188  
 
      
Total Exelon Way Cash Savings
   $ 398  
 
      

 

2003 Ramp-Up Exelon Way Savings

                 
    2003 Pre-tax O&M  
($ in millions)   Ramp-up Savings  
    2002     2003  
 
                
GAAP Operating and Maintenance (O&M)
   $ 4,345     $ 4,508  
 
                
Operating Adjustments:
                
March 3, 2003 ComEd Settlement Agreement
     —       (41 )
Severance
     (10 )     (256 )
Enterprises goodwill impairment and impairments due to anticipated sales
     —       (53 )
 
            
Operating O&M
     4,335       4,158  
 
                
Exelon Way O&M Adjustments:
                
Remove Enterprises and Boston Generating (BG) (1)
     (1,212 )     (903 )
Add incremental impact of Texas Plants
     10       —  
Remove nuclear decommissioning accretion expense and Other SFAS 143 Adjustments (2)
     —       (118 )
Add 2002 incremental impact of Exelon New England
     50       —  
Normalize incremental impact of nuclear outages
     (24 )     —  
Add AmerGen, net of decommissioning accretion (3)
     412       393  
Add Payroll Taxes (4)
     95       91  
 
            
Exelon Way O&M
   $ 3,666     $ 3,621  
 
            
 
                
Exelon Way O&M Savings:
                
Difference between 2002 and 2003 Exelon Way O&M
           $ 45  
2003 inflationary impact (5)
             107  
Pension and post-retirement increase (6)
             103  
 
              
Calculated 2003 Savings
           $ 255  
Exclude savings from prior cost management initiatives (e.g., CMI)
             (92 )
 
              
Exelon Way O&M Savings - Pre-tax
           $ 163  
 
              
 
                
After-tax O&M Savings (7)
           $ 101  
 
              

(1) Excludes corporate costs that will remain within Exelon and is net of intercompany impact. Enterprises excludes Exelon Energy.

(2) Accretion expense and other SFAS 143 adjustments are non-cash expenses related to nuclear decomissioning and are not included in Exelon Way expenditures.
(3) Normalized to 100% of AmerGen in 2002 and 2003; in 2002 and 2003, AmerGen was included in Equity in Earnings of Unconsolidated Affiliates.
(4) Includes AmerGen and excludes Enterprises.
(5) 2002 base excluding pension and post-retirement expenses of $103m, inflated at 3%.
(6) Pension and post-retirement expense increase.
(7) Tax rate is 38%.
                 
    2003 Cap Ex  
    Ramp-up Savings  
    2002     2003  
 
                
GAAP Capital Expenditures (CapEx) (A)
   $ 2,150     $ 1,862  
 
                
Adjustments:
                
 
                
Exclude net impact of Boston Generating (A)
     —       20  
Include AmerGen
     155       171  
 
            
Exelon Way Adjusted CapEx
   $ 2,305     $ 2,053  
 
            
 
                
Year-over-year CapEx Savings
           $ 252  
 
              
 
                
Exelon Way CapEx Savings:
                
 
                
Difference between 2002 and 2003 Exelon Way CapEx
           $ 252  
2003 inflationary impact (B)
             69  
 
              
Calculated 2003 Savings
           $ 321  
Exclude savings from prior cost management initiatives (e.g., CMI)
             (254 )
 
              
Exelon Way Savings - 2003 Ramp-up
           $ 67  
 
              

(A) Net of proceeds from liquidated damages for 2003.
(B) Inflation assumed at 3%.

         
Total Ramp-up Cash Savings        
After-tax O&M
   $ 101  
CapEx
     67  
Total Exelon Way Cash Savings
   $ 168