-----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, Ey8FzaO/nUWDPYJYJ1JjcTfwjgrzAnC6XTE7NSo5bp7wr58O0NzRFpRfNyNNfKJJ 8mMQ4eif2rzL0vnrUp0A7w== 0000950159-04-000037.txt : 20040113 0000950159-04-000037.hdr.sgml : 20040113 20040113170648 ACCESSION NUMBER: 0000950159-04-000037 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031023 ITEM INFORMATION: FILED AS OF DATE: 20040113 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/A SEC ACT: 1934 Act SEC FILE NUMBER: 333-85496 FILM NUMBER: 04523294 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/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-16844 FILM NUMBER: 04523295 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: 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/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-01839 FILM NUMBER: 04523296 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 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/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-16169 FILM NUMBER: 04523291 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 8-K/A 1 exelon8ka.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 October 23, 2003 (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) 765-6900
Item 12. Results of Operations and Financial Condition This Form 8-K/A is being furnished to revise the manner in which pro forma operating earnings, a non-GAAP financial measure, are presented in (a) Exelon Corporation's (Exelon) press release dated October 23, 2003, in which Exelon announced results for its third quarter ended September 30, 2003 (earnings release), and (b) the attachments to the earnings release that present a detailed reconciliation of pro forma operating earnings to GAAP earnings. No changes to reported GAAP and pro forma earnings are being reported in this Form 8-K/A. The specific areas of the earnings release and the attachments to the earnings release that have been revised are: (1) The term "adjusted (non-GAAP)" immediately precedes the term "operating earnings" throughout the earnings release; (2) A bullet-point presentation of the items excluded from adjusted (non-GAAP) operating earnings now follows the first paragraph of the earnings release; (3) A table of contents has been included for the earnings release attachments; (4) The order of the presentation of the earnings release attachments has been changed; (5) The title of the Consolidated Statements of Income has been changed to "Reconciliation of Adjusted (Non-GAAP) Operating Earnings to Consolidated Statements of Income"; and (6) The title of Earnings Per Diluted Share Reconciliation has been changed to "Reconciliation of Adjusted (Non-GAAP) Operating Earnings Per Diluted Share to GAAP Earnings (Loss) Per Diluted Share." The revised presentation is as follows: Third Quarter Earnings Exelon's adjusted (non-GAAP) operating earnings for the third quarter of 2003 were $535 million, or $1.63 per share (diluted), compared with adjusted (non-GAAP) operating earnings of $551 million, or $1.70 per share (diluted), for the same period in 2002. The 3% decrease in year-over-year adjusted (non-GAAP) operating earnings was due primarily to a weather-related decrease in kWh sales and decreased competitive transition charge (CTC) revenue at Commonwealth Edison (ComEd), which was only partially offset by higher margins at Exelon Generation Company, LLC (Generation) and lower interest expense. Adjusted (non-GAAP) operating earnings is a non-GAAP financial measure. Adjusted (non-GAAP) operating earnings do not include the following items that are included in reported earnings: o A $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. o After-tax severance charges related to The Exelon Way program that reduced reported earnings by $104 million or $0.32 per share. o A $36 million, or $0.11 per share, after-tax charge related to the impairment of Exelon's investment in Sithe Energies, Inc. (Sithe). o 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. o A $47 million after-tax gain, or $0.14 per share, related to the reduction of certain real estate tax reserves. Third quarter adjusted (non-GAAP) 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. Exelon's 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. "I am pleased by all that we accomplished during the third quarter," said John W. Rowe, Exelon Chairman and CEO. "Our adjusted (non-GAAP) 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." 2003 and 2004 Earnings Outlook Rowe added, "We have revised our adjusted (non-GAAP) operating 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." 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 adjusted (non-GAAP) 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. Adjusted (non-GAAP) 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 adjusted (non-GAAP) 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. We are not providing any guidance on forward looking GAAP earnings information comparable to adjusted (non-GAAP) operating earnings because we are unable to estimate our forward-looking GAAP earnings for a number of reasons. These include our inability to predict: (1) the effect of transactions that may occur in future periods of which we are not presently aware, such as dispositions of assets, (2) the results of our annual goodwill impairment analyses under FAS 142 and other asset impairment analyses, and (3) the timing and impact of changes to GAAP standards, among other reasons. The guidance regarding forward looking adjusted (non-GAAP) operating earnings for 2003 and 2004 assumes normal weather and our forecast of wholesale market prices and does not include any earnings or losses from Exelon Boston Generating or the effects of future transactions such as asset dispositions or new accounting standards. Third Quarter Highlights o Nuclear Operations 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. 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, 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 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, Generation notified Midwest Generation (Midwest) of the exercise of its termination options under the existing Collins and Peaking Purchase Power Agreements. 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 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'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 Energy Company (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. Adjusted (non-GAAP) Operating Earnings Adjusted (non-GAAP) operating earnings, 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 adjusted (non-GAAP) operating earnings measures internally to evaluate the company's performance and manage its operations. A reconciliation of GAAP to adjusted (non-GAAP) operating earnings for historical periods is attached as Exhibit 99.1 to this Form 8-K/A. This combined Form 8-K/A is being furnished separately by Exelon, ComEd, PECO and Generation (Registrants). Information contained herein relating to any individual registrant has been filed by such registrant on its own behalf. No registrant makes any representation as to information relating to any other registrant. Except for the historical information contained herein, certain of the matters discussed in this Report 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 (a) the Registrants' 2002 Annual Report on Form 10-K - 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, (b) the Registrants' 2002 Annual Report on Form 10-K - 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 United States Securities and Exchange Commission (SEC) by the Registrants. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this Report. 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 Report. 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 January 13, 2004 EX-99 3 exhibit99.txt EXHIBIT 99 EXELON CORPORATION Earnings Release Attachments Table of Contents
Consolidating Statements of Income - Three Months Ended September 30, 2003 and 2002 1 Consolidating Statements of Income - Nine Months Ended September 30, 2003 and 2002 2 Business Segment Comparative Income Statements - Energy Delivery and Generation 3 Business Segment Comparative Income Statements - Enterprises and Corporate and Eliminations 4 Consolidated Balance Sheets 5 Consolidated Statements of Cash Flows 6 Reconciliation of Adjusted (Non-GAAP) Operating Earnings to Consolidated Statements of Income - Three Months Ended September 30, 2003 and 2002 7 Reconciliation of Adjusted (Non-GAAP) Operating Earnings to Consolidated Statements of Income - Nine Months Ended September 30, 2003 and 2002 8 Reconciliation of Adjusted (Non-GAAP) Operating Earnings Per Diluted Share to GAAP Earnings (Loss) Per Diluted Share 9 Reconciliation of Adjusted (Non-GAAP) Operating Earnings Per Diluted Share to GAAP Earnings Per Diluted Share 10 Electric Sales Statistics 11 Energy Delivery Sales Statistics - Three Months Ended September 30, 2003 and 2002 12 Energy Delivery Sales Statistics - Nine Months Ended September 30, 2003 and 2002 13 Exelon Generation Power Marketing Statistics 14
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 =========== ========== =========== ========== ===============
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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 ========= ============= =========== ========== ============
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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) ======= ======= ======= ======= ======= =======
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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 ======= ======= ======= ======= ======= =======
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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 1,026 978 ------------------- ------------------- Total deferred credits and other liabilities 11,983 10,070 ------------------- ------------------- Minority interest of consolidated subsidiaries 1 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 =================== ===================
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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 ================== ==================
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EXELON CORPORATION Reconciliation of Adjusted (Non-GAAP) Operating Earnings to GAAP Consolidated Statements of Income (unaudited) (in millions, except per share data) Three Months Ended September 30, 2003 Three Months Ended September 30, 2002 ------------------------------------- ------------------------------------- Adjusted Adjusted GAAP (a) Adjustments (Non-GAAP) GAAP (a) Adjustments (Non-GAAP) --------- ----------- ---------- -------- ----------- ---------- 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 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 adjustments $ (1.94) =========== (a) Results reported in accordance with accounting principles generally accepted in the United States (GAAP). (b) Adjustment for the EBG impairment recorded during the third quarter of 2003. (c) Adjustment for the sale of InfraSource to GFI during the third quarter of 2003. (d) Adjustment for severance and severance-related costs recorded during the third quarter of 2003. (e) Adjustment for the reduction of property tax accruals at PECO and Generation recorded during the third quarter of 2003. (f) Adjustment for the impairment of Exelon's investment in Sithe Energies, Inc. recorded during the third quarter of 2003.
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EXELON CORPORATION Reconciliation of Adjusted (Non-GAAP) Operating Earnings to GAAP Consolidated Statements of Income (unaudited) (in millions, except per share data) Nine Months Ended September 30, 2003 Nine Months Ended September 30, 2002 ------------------------------------ ------------------------------------ Adjusted Adjusted GAAP (a) Adjustments (Non-GAAP) GAAP (a) Adjustments (Non-GAAP) -------- ----------- --------- ------- ----------- ---------- 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 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 adjustments $ (2.14) $ (0.39) =========== =========== (a) Results reported in accordance with accounting principles generally accepted in the United States (GAAP). (b) Adjustment for the EBG impairment recorded during the third quarter of 2003. (c) Adjustment for the March 3 ComEd Settlement Agreement. (d) Adjustment for the impairment of Exelon Enterprises' InfraSource goodwill and subsequent gain on the sale of InfraSource to GFI. (e) Adjustment for severance and severance-related costs recorded during the third quarter of 2003. (f) Adjustment for the reduction of property tax accruals at PECO and Generation recorded during the third quarter of 2003. (g) Adjustment for the impairments of Generation's investment in Sithe Energies, Inc. recorded during the first and third quarters of 2003. (h) Adjustment for the cumulative effect of adopting SFAS No. 143. (i) Adjustment for severance costs of $10 million pre-tax primarily related to executive severance. Not all of the severance expense was tax deductible. (j) Adjustment for the sale of investment in AT&T Wireless. (k) 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.
8
EXELON CORPORATION Reconciliation of Adjusted (Non-GAAP) Operating Earnings Per Diluted Share to GAAP Earnings (Loss) Per Diluted Share Three Months Ended September 30, 2003 vs. Three Months Ended September 30, 2002 2002 GAAP 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 Adjusted (Non-GAAP) Operating Earnings 1.63 2003 Adjusted (Non-GAAP) Operating Earnings 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 GAAP 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.
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EXELON CORPORATION Reconciliation of Adjusted (Non-GAAP) Operating Earnings Per Diluted Share to GAAP Earnings Per Diluted Share Nine Months Ended September 30, 2003 vs. Nine Months Ended September 30, 2002 2002 GAAP Earnings per Diluted Share $ 3.22 2002 Adjusted (Non-GAAP) Operating Earnings 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 Adjusted (Non-GAAP) Operating 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 Adjusted (Non-GAAP) Operating Earnings 4.07 2003 Adjusted (Non-GAAP) Operating Earnings 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 GAAP 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.
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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.
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