EX-99.3 4 c88947exv99w3.htm EXELON WAY SAVINGS exv99w3
 

EXHIBIT 99.3

Exelon Way — 2004 September YTD Savings

                 
    2004 Pre-tax O&M
    September YTD Savings
    2003
   2004
($ in millions)                
GAAP Operating and Maintenance Expense (O&M)
   $ 3,362     $ 2,921  
Operating Adjustments:
                
March 3 ComEd Global Settlement Agreement
     (41 )     —  
2004 Financial Impact of Boston Generating (BG)
     —       (57 )
Investments in Synthetic Fuel Producing Facilities
     —       (69 )
Settlement Associated with the Storage of Spent Nuclear Fuel
     —       42  
Exelon Way Severance and Severance-related Charges
     (167 )     (53 )
Impairment of Exelon Enterprises’ InfraSource Investment
     (4 )     —  
 
    
 		      
 		  
Operating O&M
     3,150       2,784  
Exelon Way O&M Adjustments:
                
Remove Net Enterprises and BG (1)
     (740 )     (183 )
Remove Nuclear Decommissioning Accretion Expense and Other SFAS 143 Adjustments (2)
     (86 )     (73 )
Remove 2004 Incremental Impact of Sithe
     —       (41 )
Add AmerGen, net of Accretion and Severance (3)
     268       —  
Normalize Incremental Impact of Nuclear Outages
     —       (48 )
Add Payroll Taxes (4)
     78       77  
 
    
 		      
 		  
Exelon Way O&M
   $ 2,670     $ 2,516  
 
    
 		      
 		  
Year over Year Exelon Way O&M Savings
           $ 154  
 
            
 		  
Program-to-Date O&M Savings
   Pre-tax   After-tax (5)
2003 Ramp-up
   $ 163     $ 101  
2004 September YTD
     154       95  
 
    
 		      
 		  
Total Exelon Way O&M Savings
   $ 317     $ 196  
 
    
 		      
 		  

(1) Excludes corporate costs that will 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%

                 
    2004 CapEx
    September YTD Savings
    2003
   2004
GAAP Capital Expenditures (CapEx) (A)
   $ 1,409     $ 1,295  
Adjustments:
                
Include AmerGen CapEx
     100       —  
Exclude BG CapEx (incl. 2004 credit)
     (5 )     7  
Settlement Associated with the Storage of Spent Nuclear Fuel
     —       18  
 
    
 		      
 		  
Adjusted CapEx
   $ 1,504     $ 1,320  
 
    
 		      
 		  
Year over Year CapEx Savings
           $ 184  
 
            
 		  
Program-to-Date Exelon Way CapEx Savings:
                
2003 Ramp-up
           $ 67  
2004 September YTD
             184  
 
            
 		  
Total Exelon Way CapEx Savings
           $ 251  
 
            
 		  
Total YTD Cash Savings thru September 2004
                
After-tax O&M
           $ 95  
CapEx
             184  
 
            
 		  
Total Exelon Way Cash Savings
           $ 279  
 
            
 		  
Total Program-to-Date Cash Savings
                
After-tax O&M
           $ 196  
CapEx
             251  
 
            
 		  
Total Exelon Way Cash Savings
           $ 447  
 
            
 		  

(A) Net of proceeds from liquidated damages for 2003

 

2003 Ramp-Up Exelon Way Savings

                 
    2003 Pre-tax O&M
    Ramp-up Savings
    2002
   2003
($ in millions)                
GAAP Operating and Maintenance (O&M)
   $ 4,345     $ 4,508  
Operating Adjustments:
                
March 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 decommissioning 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  
 
    
 		      
 		  
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  
 
            
 		  
Total Ramp-up Cash Savings
                
After-tax O&M
           $ 101  
CapEx
             67  
 
            
 		  
Total Exelon Way Cash Savings
           $ 168  
 
            
 		  

(A) Net of proceeds from liquidated damages for 2003

(B) Inflation assumed at 3%