-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SU9qvAdJjez0YgL8ErgjuzGOaUKrlWkU8WFyeETHjDLCZmejMki7ebzIlfwYi2OI ahOh0se5MFA20MGAaTr61g== 0000950159-02-000580.txt : 20020918 0000950159-02-000580.hdr.sgml : 20020918 20020918111255 ACCESSION NUMBER: 0000950159-02-000580 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020918 ITEM INFORMATION: FILED AS OF DATE: 20020918 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EXELON GENERATION CO LLC CENTRAL INDEX KEY: 0001168165 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 233064219 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-85496 FILM NUMBER: 02766553 MAIL ADDRESS: STREET 1: 10 S DEARBORN STREET STREET 2: 37TH FLOOR CITY: CHICAGO STATE: IL ZIP: 60690 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PECO ENERGY CO CENTRAL INDEX KEY: 0000078100 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 230970240 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-16844 FILM NUMBER: 02766554 BUSINESS ADDRESS: STREET 1: 2301 MARKET ST STREET 2: P O BOX 8699 CITY: PHILADELPHIA STATE: PA ZIP: 19101 BUSINESS PHONE: 2158414000 FORMER COMPANY: FORMER CONFORMED NAME: PHILADELPHIA ELECTRIC CO DATE OF NAME CHANGE: 19920703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EXELON CORP CENTRAL INDEX KEY: 0001109357 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 232990190 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-16169 FILM NUMBER: 02766552 BUSINESS ADDRESS: STREET 1: 10 S DEARBORN ST 37TH FLR STREET 2: PO BOX A-3005 CITY: CHICAGO STATE: IL ZIP: 60690-3005 BUSINESS PHONE: 3123947399 MAIL ADDRESS: STREET 1: P O BOX 767 CITY: CHICAGO STATE: IL ZIP: 60690 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMMONWEALTH EDISON CO CENTRAL INDEX KEY: 0000022606 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 360938600 STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01839 FILM NUMBER: 02766555 BUSINESS ADDRESS: STREET 1: ONE FIRST NATIONAL PLZ 37TH FL STREET 2: P O BOX 767 CITY: CHICAGO STATE: IL ZIP: 60690 BUSINESS PHONE: 3123944321 MAIL ADDRESS: STREET 1: 10 SOUTH DEARBORN STREET STREET 2: 37TH FLOOR CITY: CHICAGO STATE: IL ZIP: 606900767 8-K 1 exelon8k.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 September 18, 2002 (Date of earliest event reported)
Commission File Name of Registrant; State of Incorporation; Address of IRS Employer Number Principal Executive Offices; and Telephone Number Identification Number --------------------- ---------------------------------------------------------- ------------------------ 1-16169 EXELON CORPORATION 23-2990190 (a Pennsylvania corporation) 10 South Dearborn Street - 37th Floor P.O. Box 805379 Chicago, Illinois 60680-5379 (312) 394-7398 1-1839 COMMONWEALTH EDISON COMPANY 36-0938600 (an Illinois corporation) 10 South Dearborn Street - 37th Floor P.O. Box 805379 Chicago, Illinois 60680-5379 (312) 394-4321 1-1401 PECO ENERGY COMPANY 23-0970240 (a Pennsylvania corporation) P.O. Box 8699 2301 Market Street Philadelphia, Pennsylvania 19101-8699 (215) 841-4000 333-85496 EXELON GENERATION COMPANY, LLC 23-3064219 (a Pennsylvania limited liability company) 300 Exelon Way Kennett Square, Pennsylvania 19348 (610) 765-8200
Item 9. Regulation FD On September 18, 2002, John W. Rowe, Chairman and CEO, made a presentation at Merrill Lynch Global Power and Gas Leaders Conference in New York City. The slides used in the presentation are attached to this report as Exhibit 99.1. A brochure, describing Exelon Energy Delivery's vision to become the best and most consistently profitable electricity and gas company in the United States, was made available to those who attended the conference and is attached as Exhibit 99.2 to this report. In addition, the following information was made available during the conference regarding Exelon's Cost Management Initiative (CMI), the Federal Energy Regulatory Commission (FERC) and Securities and Exchange Commission (SEC) inquiry into ComEd's goodwill allocation, the current status of the adoption of Financial Accounting Standards Board Statement No. 143, "Asset Retirement Obligations" (SFAS No. 143) and a 2002 earnings outlook update. Exelon's Cost Management Initiative Mr. Rowe said that actual savings of $168 million through August are ahead of the original $200 million target for the year. Costs savings, representing sustainable savings and excluding one-time gains, of $250 to $275 million could be achieved this year. FERC/SEC Goodwill Issue As previously disclosed, Exelon believes the allocation of goodwill to ComEd's transmission and distribution business is in compliance with Generally Accepted Accounting Principles. Several meetings have been held with the FERC Chairman and Commissioners and accounting staff and the SEC staff. The FERC and the SEC are still reviewing the issue and are aware of the importance of the issue. We hope to hear from the commissions relatively soon. FAS 143 Asset Retirement Obligation Exelon is in the process of evaluating the impact of adopting SFAS 143 on its financial condition. The final determination is in part a function of the timing of adoption of the standard. Based on our current information and assumptions, we estimate that the non-cash impact on 2003 earnings per share (EPS) to be up to a negative ten cents. However, if economic conditions change our assumptions, the EPS impact could be more than ten cents per share. Additionally, the adoption of the standard is expected to result in a large non-cash one-time cumulative effect of a change in accounting principle gain of at least $1.5 billion, after tax. Like the EPS impact, the one-time impact could change with a change in our assumptions or economic conditions. 2002 Earnings Outlook Update We remain confident that we can meet or exceed the current consensus estimate of $4.66 per share. We will provide any update of the $4.55 to $4.85 range during the third quarter earnings call on October 30, 2002. This report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained herein. The forward-looking statements herein include statements about future financial and operating results of Exelon Corporation, Commonwealth Edison Company, PECO Energy Company and Exelon Generation Company, LLC (Registrants). Economic, business, competitive and/or regulatory factors affecting Registrant's businesses generally could cause actual results to differ materially from those described herein. For a discussion of the factors that could cause actual results to differ materially, please see Exelon's filings with the Securities and Exchange Commission, particularly those discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Outlook" in Exelon's 2001 Annual Report and those discussed in "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Exelon Generation Company, LLC's Registration Statement on Form S-4, Reg. No. 333-85496. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Registrants do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this report. EXHIBIT INDEX Exhibit Description 99.1 Presentation Slides 99.2 Exelon Energy Delivery Brochure - Summer 2002 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/ Ruth Ann M. Gillis ------------------------------------ Ruth Ann M. Gillis Senior Vice President Exelon Corporation September 18, 2002 EX-99 3 exhibit99-1.txt EXHIBIT 99.1 Exhibit 99.1 [Exelon Logo] Exelon Corporation - A Measure of Our Strength John W. Rowe Chairman and CEO Merrill Lynch Global Power and Gas Leaders Conference New York City September 18, 2002 [Exelon Logo] Forward-Looking Statements This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained herein. The forward-looking statements herein include statements about future financial and operating results of Exelon. Economic, business, competitive and/or regulatory factors affecting Exelon's businesses generally could cause actual results to differ materially from those described herein. For a discussion of the factors that could cause actual results to differ materially, please see Exelon's filings with the Securities and Exchange Commission, particularly those discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Outlook" in Exelon's 2001 Annual Report and those discussed in "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Exelon Generation Company, LLC's Registration Statement on Form S-4, Reg. No. 333-85496. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. Exelon does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this presentation. [Exelon Logo] What Is Exelon?
- ------------------------------------------------------------------------------------------------------------ US Electric Companies US Companies - ------------------------------------------------------------------------------------------------------------ Retail Electric Customers 5.1 Million 1st - Nuclear Capacity 15K MWs* 1st - US Generating Capacity 41K MWs** 1st - 2001 Revenue $15.1 Billion 9th 135th 2001 Net Income $1.4 Billion 2nd 53rd Market Cap $14.2 Billion (9/12/02) 4th (9/12/02) 106th (8/27/02) - ------------------------------------------------------------------------------------------------------------
* Includes AmerGen investment ** Includes AmerGen and Sithe investments [Exelon Logo] Strategic Initiatives Update - Cost Management Initiative - Sithe Energies Investment - Midwest Generation contract - Provider of Last Resort (POLR) filing - Enterprises Path to Value - FERC Goodwill Issue [Exelon Logo] Exelon Consolidated Financial Outlook --------------------------------------------------------------------- ($ millions) 2001A 2002E --------------------------------------------------------------------- Revenue 15,140 14,200-14,600 Gross Margin (Rev. net Fuel) 9,827 9,300-9,700 Other Operating Exp. 4,922 4,775-4,900 Depr. & Amort. 1,449 1,200-1,250 ------------------------------- EBIT 3,456 3,325-3,550 Interest and Pref. 1,109 930-1,000 Income Taxes 931 925-975 ------------------------------- Net Income before Cum. Effect Chg. in Accounting 1,416 1,470-1,575 Cum. Effect Chg. in Accounting 12 ----------- Net Income* 1,428 Avg. Shares (millions) 322 325 EPS ($) $4.43 $4.55-$4.85 --------------------------------------------------------------------- * Net income as reported for 2001. Net operating income excludes one-time items for 2002. A = Actual; E = Estimate [Exelon Logo] Our Vision = Value Creation - - Capitalize on Strengths - - Focus on Fundamentals and Discipline - - Committed to Performance EX-99 4 exhibit99-2.txt EXHIBIT 99.2 Exhibit 99.2 [Exelon Energy Delivery Brochure - Summer 2002 The brochure is divided into 4 major areas. The first area provides an overview of Exelon Energy Delivery (EED) and general statistical information about Commonwealth Edison Company (ComEd) and PECO Energy Company (PECO). The second area of the brochure is focused on Exelon's vision to become the best and most consistently profitable electricity and gas company in the United States. This area includes current and target statistics for 1999 through 2004 to illustrate our expected progress in achieving this vision by optimizing customer satisfaction, creating a high performing organization and maximizing financial returns. The third area of the brochure outlines regulatory initiatives, including constructive regulatory environments, competition growth and state level developments for Illinois and Pennsylvania. Finally, the last area of the brochure is titled "Energy Delivery - Building for the Future" and addresses EED's commitment to achieve high system reliability by minimizing outage frequency and duration.] [Area 1] [Exelon Logo] Exelon Energy Delivery Exelon strives to build exceptional value - by becoming the best and most consistently profitable electricity and gas company in the United States This vision means that Exelon Energy Delivery (EED) plans to - - Revolutionize the meaning, function and perception of utility service - - Provide increasingly more reliable and affordable services - - Be preferred by customers - - Meet and exceed the expectations of our investors - - Provide extraordinary opportunities for employees with diverse talents and backgrounds Energy Delivery Footprint ComEd 3.6 million electric customers PECO 1.5 million electric customers 0.4 million gas customers Exelon Energy Delivery 5.1 million electric customers 0.4 million gas customers ComEd 2001 Revenues (in millions)................................ $ 6,206 Service area (square miles)........................... 11,300 Electric deliveries (GWhs)............................ 85,606 All-time electric system peak (MWs)................... 21,804 (8-1-02) Electric transmission: Voltage (volts)/Circuit miles......................... 765,000/90 345,000/2,590 138,000/2,110 Electric distribution: Pole-line miles....................................... 40,633 overhead lines Cable miles........................................... 38,798 underground lines Gas deliveries (mmcf)................................. N/A Gas pipeline miles.................................... N/A Employees............................................. 8,000 PECO 2001 Revenues (in millions)................................ $ 3,965 Service area (square miles)........................... 2,100 Electric deliveries (GWhs)............................ 34,866 All-time electric system peak (MWs)................... 8,164(8-14-02) Electric transmission: Voltage (volts)/Circuit miles...... .................. 500,000/891 220,000/1,634 132,000/15 Electric distribution: Pole-line miles....................................... 21,009 overhead lines Cable miles........................................... 21,002 underground lines Gas deliveries (mmcf)................................. 81,528 Gas pipeline miles.................................... 11,401 Employees............................................. 3,000 N/A = Not applicable Strategic focus areas and value drivers Customers o Achieve high system reliability o Optimize customer satisfaction Employees o Maintain a safe environment o Create a high performing organization Shareholders o Maximize financial returns o Build for the future [Area 2] VISION: TO BECOME THE BEST AND MOST CONSISTENTLY PROFITABLE ELECTRICITY AND GAS COMPANY IN THE UNITED STATES Strategic Focus Areas Customers - Employees - Shareholders Optimize Customer Satisfaction Exelon Energy Delivery targets first quartile in customer satisfaction by year end 2004 Customer Satisfaction Index Goal [Bar graph depicting the expected increasing trend in Exelon Energy Deliveries' Customer Satisfaction Index Goal as compared to the 1st Quartile. The graph shows Exelon Energy Deliveries' 2001 Actual Customer Satisfaction Index of 78 and the Customer Satisfaction Index Goal for the years 2002 through 2004 trending upward, reaching the 1st Quartile at 85 in 2004. 2001 actual 2002 goal 2003 goal 2004 goal Index 78 79 83 85 1st quartile = 85 To the right of the graph the following key strategies are noted:] Key Strategies - - Targeted reliability improvements - - Enhanced customer outage communications - - Improved Exelon image - - Customer technology improvements - - High-quality customer interactions ComEd System Performance History - Reliability [Below this header are two charts side by side as described below from left to right. The chart to the left is a line chart showing average interruptions per year for the years 1999 through 2001 with a linear regression line depicting the downward trend of average interruptions per year for the following data points: Avg Year Month Interruptions/Year 1998 Dec 2.21 1999 Jan 2.22 1999 Feb 2.21 1999 Mar 1.82 1999 Apr 1.82 1999 May 1.76 1999 Jun 1.72 1999 Jul 1.83 1999 Aug 1.74 1999 Sep 1.69 1999 Oct 1.66 1999 Nov 1.49 1999 Dec 1.49 2000 Jan 1.41 2000 Feb 1.44 2000 Mar 1.43 2000 Apr 1.48 2000 May 1.6 2000 Jun 1.52 2000 Jul 1.35 2000 Aug 1.4 2000 Sep 1.46 2000 Oct 1.48 2000 Nov 1.47 2000 Dec 1.46 2001 Jan 1.44 2001 Feb 1.38 2001 Mar 1.37 2001 Apr 1.36 2001 May 1.23 2001 Jun 1.24 2001 Jul 1.31 2001 Aug 1.33 2001 Sep 1.29 2001 Oct 1.34 2001 Nov 1.35 2001 Dec 1.32 Across the top center of the chart there is the following wording:] Fewer Interruptions (Frequency) [Above the linear regression line is the following word:] Trend [Along the x-axis of the chart is the following phrase:] 40% Improvement [The chart to the right is a line chart showing minutes per interruption per year for the years 1999 through 2001 with a linear regression line depicting the downward trend of the duration interruptions per year for the following data points: Year Month Minutes/Interruption 1998 Dec 273 1999 Jan 274 1999 Feb 274 1999 Mar 212 1999 Apr 211 1999 May 205 1999 Jun 195 1999 Jul 207 1999 Aug 184 1999 Sep 176 1999 Oct 175 1999 Nov 136 1999 Dec 138 2000 Jan 136 2000 Feb 132 2000 Mar 131 2000 Apr 134 2000 May 158 2000 Jun 154 2000 Jul 129 2000 Aug 139 2000 Sep 141 2000 Oct 144 2000 Nov 144 2000 Dec 145 2001 Jan 145 2001 Feb 148 2001 Mar 148 2001 Apr 144 2001 May 112 2001 Jun 116 2001 Jul 120 2001 Aug 110 2001 Sep 105 2001 Oct 103 2001 Nov 103 2001 Dec 103 Across the top center of the chart there is the following wording:] Shorter Interruptions (Duration) [Above the linear regression line is the following word:] Trend [Along the x-axis of the chart is the following phrase:] 62% Improvement PECO System Performance History - Reliability [Below this header are two charts side by side as described below from left to right. The chart to the left is a line chart showing average interruptions per year for the years 1999 through 2001 with a linear regression line depicting the downward trend of average interruptions per year for the following data points: Avg Year Month Interruptions/Year 1998 Dec 1.4224 1999 Jan 1.523008 1999 Feb 1.501634 1999 Mar 1.61093 1999 Apr 1.594439 1999 May 1.575076 1999 Jun 1.226508 1999 Jul 1.28189 1999 Aug 1.40679 1999 Sep 1.651984 1999 Oct 1.691979 1999 Nov 1.765955 1999 Dec 1.757855 2000 Jan 1.680432 2000 Feb 1.672717 2000 Mar 1.540906 2000 Apr 1.600627 2000 May 1.593041 2000 Jun 1.552052 2000 Jul 1.505015 2000 Aug 1.388201 2000 Sep 1.133981 2000 Oct 1.093353 2000 Nov 1.015979 2000 Dec 1.095504 2001 Jan 1.091026 2001 Feb 1.190618 2001 Mar 1.219503 2001 Apr 1.1909 2001 May 1.159288 2001 Jun 1.213231 2001 Jul 1.20471 2001 Aug 1.31049 2001 Sep 1.290993 2001 Oct 1.292222 2001 Nov 1.291571 2001 Dec 1.261615 Across the top center of the chart there is the following wording:] Fewer Interruptions (Frequency) [Above the linear regression line is the following word:] Trend [Along the x-axis of the chart is the following phrase:] 27% Improvement [The chart to the right is a line chart showing minutes per interruption per year for the years 1999 through 2001 with a linear regression line depicting the downward trend of the duration interruptions per year for the following data points: Year Month Minutes/Interruption 1998 Dec 221.6927 1999 Jan 219.9012 1999 Feb 221.6542 1999 Mar 241.4342 1999 Apr 243.5413 1999 May 236.3867 1999 Jun 149.53 1999 Jul 149.6027 1999 Aug 165.1099 1999 Sep 231.2344 1999 Oct 228.1254 1999 Nov 233.7525 1999 Dec 235.0806 2000 Jan 235.4151 2000 Feb 236.4324 2000 Mar 219.3873 2000 Apr 215.5133 2000 May 215.0856 2000 Jun 218.8437 2000 Jul 217.2127 2000 Aug 206.9334 2000 Sep 108.025 2000 Oct 109.7554 2000 Nov 90.43216 2000 Dec 96.34893 2001 Jan 96.119 2001 Feb 115.9498 2001 Mar 114.636 2001 Apr 113.5501 2001 May 110.919 2001 Jun 113.4934 2001 Jul 115.4725 2001 Aug 121.6979 2001 Sep 120.6055 2001 Oct 119.4027 2001 Nov 119.1776 2001 Dec 112.4264 Across the top center of the chart there is the following wording:] Shorter Interruptions (Duration) [Above the linear regression line is the following word:] Trend [Along the x-axis of the chart is the following phrase:] 60% Improvement [Next Section] Create a High Performing Organization - - Develop leadership skills across the organization - - Establish robust performance management program across the organization Maintain a Safe Environment Exelon Energy Delivery targets first quartile in safety by year end 2004 OSHA Lost Workday Case Rate Targets [Below this header is a bar graph depicting the expected decreasing trend in Exelon Energy Deliveries' Customer Satisfaction Index Goal as compared to the 1st Quartile. The graph shows Exelon Energy Deliveries' 2001 Actual OSHA Lost Workday Case Rate of 2.21 and the OSHA Lost Workday Case Rate Target for the years 2002 through 2004 trending downward, dipping below the 1st Quartile at 0.69 in 2004. 2001 actual 2002 target 2003 target 2004 target Rate 2.21 1.39 1.06 0.69 1st quartile = 0.70 To the right of the graph the following key strategy is noted:] Key Strategy o Increase management's visible involvement and leadership of safety Performance History - Safety [Below this header are two line graphs depicting ComEd and PECO's reduction in OSHA Recordable Incidence Rates and Lost Workday Case Rates from the 1999 through 2001. The rate is defined as the number of incidents per 100 employees.] OSHA Recordable Incidence Rate [ 1999 2000 2001 ComEd 5.66 5.50 3.46 PECO 2.46 2.31 1.48 Below this chart are the following words:] ComEd-38% reduction PECO-40% reduction [Next Section] Lost Workday Case Rate [ 1999 2000 2001 ComEd 4.17 3.92 2.48 PECO 1.27 0.86 0.76 Below this chart are the following words:] ComEd-41% reduction PECO-40% reduction [Next Section] Maximize Financial Returns - - Minimize operating & maintenance costs - - Optimize capital investment - - Grow net operating margin - - Increase earnings per share PECO and ComEd each contribute to the financial success of EED and Exelon. By seeking ways to work more efficiently and to control costs, every employee can help achieve EED and Exelon financial goals. Exelon Energy Delivery targets 2nd quartile in total cost per customer by year end 2004; first quartile by year end 2006 Total Cost per Customer Targets [Below this header is a bar graph depicting the expected decreasing trend in Exelon Energy Deliveries' Total Cost per Customer Targets as compared to the 2nd Quartile. The graph shows Exelon Energy Deliveries' 2001 Actual Total Cost per Customer of $519 and the Total Cost per Customer Targets for the years 2002 through 2004 trending downward, equaling the 2nd Quartile at $424 in 2004. 2001 actual 2002 target 2003 target 2004 target 519 468 439 424 2nd quartile = 424 To the right of the graph the following goals are outlined:] Goal: To reduce O&M expenses $300 million and capital expenses $175 million by year end 2004 O&M and Margin Growth Expenses [Below this header is a bar graph depicting Exelon Energy Deliveries' O&M and Margin Growth Expenses from 2001 through 2004. Margin Growth O&M Expenses are defined as those expenses relating to value-added products/services that are expected to add incremental income.
2001 actual 2002 estimate 2003 estimate 2004 estimate ------------------------------------------------------------------ Total 1.578 1.52 1.52 1.48 ------------------------------------------------------------------ Margin Growth O&M Expenses 0.010 0.03 0.06 0.08 All Other O&M Expenses 1.568 1.49 1.46 1.40
To the right of the graph are the following words:] EED Financial Growth Outlook CAGR 2002-2004E Revenue 1.7-1.9% Gross Margin (Revenue net Fuel) 1.0% EBIT 2.2-2.4% Net Income 5.4-5.6% E=Estimate; CAGR=Compound Annual Growth Rate [Area 3] Regulatory Initiatives Constructive Regulatory Environments Pennsylvania -Unbundled rates, electric choice for all customers since January 2000 -Transmission and Distribution rate cap through 2006 -Generation rate cap, collection of stranded investment through 2010 Illinois -Open access, electric choice for all customers since May 2002 -Bundled rates frozen through 2006 -Transition charges, calculated on "lost revenues" basis, end in 2006 Competition Is Growing Unevenly Pennsylvania Shopping (June 2002) Mass Market - 309,000 customers - 16% of mass market load (MWs) Large Commercial & Industrial (C&I) - 150 customers - 6% of large C&I load (MWs) Illinois Shopping (June 2002) Mass Market - 20,600 customers - 14% of mass market deliveries (KWhs) Large Commercial & Industrial - 1,000 customers - 48% of large C&I deliveries (KWhs) Regulatory Developments - State Level Illinois Provider of Last Resort (POLR) proposal - Offer fixed-price service for mass-market customers - Petitioned Illinois Commerce Commission to declare large C&I class (usage at or above 3 MW) competitive - Implementation would begin June 2003; fully implement June 2006 - Covers about 370 customers representing a 2,500 MW load (about 12% of system peak load) - Free up capacity in Midwest for competitors Pennsylvania switching requirement for 50% of residential/commercial customers by January 2003 - Will request approval to make customers available to interested suppliers to meet one-time requirement [Area 4] Energy Delivery - Building for the Future Achieve High System Reliability Exelon Energy Delivery targets 2nd quartile in outage frequency and duration by year end 2004 o Minimize duration of interruptions o Minimize frequency of interruptions o Implement targeted reliability improvements o Invest in technology improvements such as outage management system (OMS) o Improve distribution circuit and targeted customer programs Safe, Reliable Service + Industry Leading Customer Care + Solid Financial Management + Experienced Management Team - ------------------------------------------ Stable Earnings Contributions Customer Outage Frequency (SAIFI)* Targets [Below this header is a bar graph depicting the expected decreasing trend in Exelon Energy Deliveries' Customer Outage Frequency (SAIFI) Targets and compared to the 2nd Quartile.
2001 actual 2002 target 2003 target 2004 target Index 1.26 1.05 0.97 0.94] 2nd quartile = 1.1
[Below this table are the following words:] * System Average Interruption Frequency Index Customer Outage Duration (CAIDI)* Targets [Below this header is a bar graph depicting the expected decreasing trend in Exelon Energy Deliveries' Customer Outage Duration (CAIDI) Targets and compared to the 2nd Quartile.
2001 actual 2002 target 2003 target 2004 target Minutes 110 98 90 82] 2nd quartile = 82
[Below the table are the following words:] * Customer Average Interruption Duration Index EED Capital Expenditure Program [Below this header is a stacked vertical bar chart showing EED's Capital Expenditure Program in billions of dollars for 2001 actual expenditures and estimated expenditures from 2002 through 2004. The bars are differentiated by Reliability/Maintenance and New Business.
2001 actual 2002 estimate 2003 estimate 2004 estimate $ billions -------------------------------------------------------------------- Total 1.1 1.1 1.0 1.0 ------------------------------------------------------------------- New Business 0.4 0.5 0.4 0.4 Reliability/Maintenance 0.7 0.6 0.6 0.6]
[Next Section] This publication contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained herein. The forward-looking statements herein include statements about future ?nancial and operating results of Exelon. Economic, business, competitive and/or regulatory factors affecting Exelon's businesses generally could cause actual results to differ materially from those described herein. For a discussion of the factors that could cause actual results to differ materially, please see Exelon's ?lings with the Securities and Exchange Commission, particularly those factors discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations-Outlook" in Exelon's 2001 Annual Report. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. Exelon does not undertake any obligation to publicly release any revisions to these forward-looking statements to re?ect events or circumstances after the date of this publication. A publication of the Exelon Investor Relations Department. Linda C. Byus, Vice President; Marybeth M. Flater, Manager; Isabel Fabre, Sr. Analyst; Ronald P. Torres, Sr. Analyst For more information, call 312-394-2345 or fax 312-394-4082. Exelon Corporation 10 S. Dearborn P.O. Box 805379 Chicago, IL 60680-5379 Phone 312-394-7398 www.exeloncorp.com -----END PRIVACY-ENHANCED MESSAGE-----