Exelon Corporation · NASDAQ:EXC
Exelon — Edison Electric Institute Financial Conference 2008
84 slides from Exelon's conference presentation, Nov 10, 2008
Slide 1: Exelon Corporation
EXHIBIT 99.1 Exelon Corporation Christopher Crane President and Chief Operating Officer Edison Electric Institute Financial Conference November 10-12, 2008
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, for example, statements regarding benefits of the proposed merger, integration plans and expected syn
Slide 3: Important Additional Information
Important Additional Information This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. This presentation relates to a transaction with NRG proposed by Exelon, which may become the subject of a registra
Slide 4: Exelon Key Messages
Exelon Key Messages • Consistent with Exelon Protect and Grow Strategy Compelling Offer • Earnings and cash accretion for NRG • Clear value creation • Meets NRG’s “Five Imperatives” • 2009 operating guidance of $4.00 - $4.30/share Exelon Financial • Managing costs and driving productivity Outlook •
Slide 5: A Compelling Opportunity for Value Creation
A Compelling Opportunity for Value Creation • Exelon offered to acquire all outstanding common shares of NRG in an all stock transaction – Fixed exchange ratio of 0.485 Exelon share for each NRG common share – Offer represents a 37% premium to October 17th closing price for NRG • Combined Entity Cre
Slide 6: Transaction Is Accretive
Transaction Is Accretive Based on analyst consensus estimates for both companies, the deal will be accretive in the first full year following closing Exelon 3 NRG 3 Pro forma 5 $6.16 $6.43 $5.86 $6.01 $4.42 $4.83 $3.70 Operating Earnings • Synergies $2.91 per share 11 $2.83 • Increased interest expe
Slide 7: Combination Creates Substantial Synergies
Combination Creates Substantial Synergies ($ in Millions) Exelon Operations & Maintenance: $4,289 1 1 NRG Maintenance & Other Opex: $950 General & Admin Expenses: $309 Other COGS: $454 Pro Forma Combined Non-fuel Expenses: $6,002 2 Estimated Annual Cost Savings: $180 - $300 % of Combined Expenses: 3
Slide 8: Clear Value under Multiple Scenarios
Clear Value under Multiple Scenarios We look at fundamental value creation under a wide range of future commodity price scenarios and our analysis suggests $1-3 billion, possibly more Gas Prices $6.50 $7.30 $7.10 $7.30 $8.60 Coal Prices $11.00 $20.00 $20.00 $20.00 $11.00 New Build Costs $1,300 $1,10
Slide 9: Exelon Unlocks NRG Value
Exelon Unlocks NRG Value Price per Kilowatt Comparison for Texas Baseload Generation Even with premium, purchase 3,000 price is 66% of conservative 3,000+ long-term DCF value Less than 45% of 2,000 replacement value 2,050 1,350 1,000 975 0 Without With Conservative Replacement Premium Premium DCF Es
Slide 10: World Class Nuclear & Fossil Operations
World Class Nuclear & Fossil Operations NRG High performing nuclear plant • Top quartile capacity factor – 94.9% • Large, well-maintained, relatively young units Fossil fleet • Half of >500 MW coal units are top quartile capacity factor • 90% of coal fleet lower-cost PRB and lignite Exelon Premier U
Slide 11: Combined Entity Will Continue to Benefit from Low Cost, Low Volatility Fuel Sources
Combined Entity Will Continue to Benefit from Low Cost, Low Volatility Fuel Sources 2009 Historical Forward Coal Prices <1% <1% 6.00 Exelon ~150,000 GWh 1 5.00 Powder River Basin 6% Northern Appalachian Coal 4.00 Central Appalachian 3.00 2.00 93% 1.00 0.00 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2
Slide 12: Largest Fleet, 2nd Lowest Carbon Intensity
Largest Fleet, 2nd Lowest Carbon Intensity CO2 Emissions of Largest US Electricity Generators Top Generators by CO2 Intensity Bubble size represents carbon intensity, expressed in terms of 10 AEP 0.83 metric tons of CO2 per MWh 150 generated NRG 0.80 AEP Southern 9 Southern 0.74 8 Duke 0.66 Duke 7 F
Slide 13: Financing Plan Considerations
Financing Plan Considerations • Negotiated acquisition of NRG would require refinancing of only ~$4B of NRG debt and other credit facilities – Under a negotiated deal with NRG, $4.7B of NRG bonds could remain in place with no change in terms, but with substantially improved credit metrics for those
Slide 14: Premier Balance Sheet and Credit Metrics
Premier Balance Sheet and Credit Metrics Committed to returning Exelon Generation’s senior unsecured debt to strong investment grade within the next 3 years Targeting stronger credit metrics for the combined entity -- 25 - 30% FFO/debt 1 Pay down debt plan will include: NRG balance sheet cash, asset
Slide 15: Principal Regulatory Approvals and Expected Divestitures
Principal Regulatory Approvals and Expected Divestitures • Principal regulatory approvals: – Texas, New York, Pennsylvania, California state regulatory commissions – Hart-Scott-Rodino (DOJ/FTC) – FERC – NRC – Notice filing in Illinois • Limited market power issues – not expected to challenge transac
Slide 16: Exelon More Than Meets the Five Imperatives Outlined by NRG
Exelon More Than Meets the “Five Imperatives” Outlined by NRG on May 28, 2008 Exelon Combination More NRG’s Stated Imperatives than Meets These Imperatives 1. MUST accumulate generation at competitive cost Deal provides NRG stakeholders with significant value and upside and a share of the largest un
Slide 17: Exelon Key Messages
Exelon Key Messages • Consistent with Exelon Protect and Grow Strategy Compelling Offer • Earnings and cash accretion for NRG • Clear value creation • Meets NRG’s “Five Imperatives” • 2009 operating guidance of $4.00 - $4.30/share Exelon Financial • Managing costs and driving productivity Outlook •
Slide 18: Well-Positioned in Near-Term Macroeconomic Uncertainty
Well-Positioned in Near-Term Macroeconomic Uncertainty Investment Criteria Exelon Profile • Nation’s largest nuclear fleet ~140,000 GWhs of annual Market leader production • Nuclear remains a low-cost generation source Basics of business unchanged • Improving utilities’ performance and regulatory en
Slide 19: 2009 Operating Earnings Guidance
2009 Operating Earnings Guidance 2009 Earnings Drivers Exelon $4.15 - $4.30 (1) $4.00 - $4.30 (1) Exelon ComEd $0.30 - $0.35 ComEd distribution revenue $0.45 - $0.55 ComEd $0.45 - $0.50 PECO gas revenue PECO $0.45 - $0.55 PECO O&M and other Inflation Exelon Pension/OPEB Exelon $3.45 - $3.55 $3.10 -
Slide 20: Exelon Cost and Capital Management Initiative
Exelon Cost and Capital Management Initiative Drive productivity and cost reduction (with continued superior operations) • Clearly define governance and oversight model • Optimize the Exelon operational structure to drive efficiency and accountability, reducing complexity and cost • Provide better v
Slide 21: Exelon Key Messages
Exelon Key Messages • Consistent with Exelon Protect and Grow Strategy Compelling Offer • Earnings and cash accretion for NRG • Clear value creation • Meets NRG’s “Five Imperatives” • 2009 operating guidance of $4.00 - $4.30/share Exelon Financial • Managing costs and driving productivity Outlook •
Slide 22: Appendix
Appendix Additional Information regarding Offer for NRG 22
Slide 23: Combination Will Result in Scope, Scale and Financial Strength
Combination Will Result in Scope, Scale and Financial Strength Combined company will have requisite scope, Pro Forma Quick Stats scale and financial strength to succeed in an ($ in millions) increasingly volatile energy market Combined assets (1) $68,900 LTM EBITDA (2) $9,400 $70 Market cap (as of 1
Slide 24: Combination Enables Access to Attractive New Markets
Combination Enables Access to Attractive New Markets Geographically complementary asset base Predominantly located in competitive Attractive new markets for Exelon (NY, NE, markets CA): declining reserve margins, supportive ERCOT portfolio will position Exelon to offer regulatory structures an array
Slide 25: Nuclear Growth Opportunities
Nuclear Growth Opportunities • Texas offers nuclear growth platform • Potential for stretch power uprate (5-7%) on South Texas Project units 1 and 2 • Construction & Operating License and Loan Guarantee applications filed for both STP 3 and 4 and Victoria County • Exelon has the financial strength a
Slide 26: Exelon 2020 and NRG
Exelon 2020 and NRG Options to Evaluate: Reduce or offset our • Expand internal energy efficiency, SF6, footprint by greening vehicle, and supply chain initiatives to NRG our operations portfolio • Offset a portion of NRG’s GHG emissions Help our customers Apply Elements of and the communities • Exp
Slide 27: NRG is Best Investment Available
NRG is Best Investment Available Earnings Yield EBITDA / EV Yield Free Cash Flow 16.0% 25.0% 20.0% Yield 20.1 20.1 15.0% 14.2 20.0% 12.3 11.8 11.9 12.0% 11.4 11.2 11.6 10.7 16.7 17.1 10.2 10.6 16.1 10.0% 15.4 15.0% 14.4 13.7 5.2 7.9 8.1 4.3 8.0% 5.0% 10.0% 0% 4.0% (3.1) 5.0% (5.0%) (6.2) 0% 2 0.0% 2
Slide 28: 2009 Financial Outlook and Operating Data
2009 Financial Outlook and Operating Data 28
Slide 29: The Exelon Companies
The Exelon Companies ‘07 Operating Earnings: $2.9B ‘07 EPS: $4.32 Assets (1) : $45.2B Total Debt (1) : $13.0B Credit Rating (2): BBB- Nuclear, Fossil, Hydro & Renewable Generation Illinois Pennsylvania Power Marketing Utility Utility ’07 Earnings: $2,331M ’07 Earnings: $200M $507M ’07 EPS: $3.45 ’07
Slide 30: Multi-Regional, Diverse Company
Multi-Regional, Diverse Company Electricity Customers: 3.8M Electricity Customers: 1.6M Total Capacity Gas Customers: 0.5M Owned: 24,821 MW Contracted: 6,483 MW Total: 31,304 MW New England Capacity Owned: 194 MW Midwest Capacity Owned: 11,388 MW Contracted: 3,230 MW Mid-Atlantic Capacity Total: 14,
Slide 31: O&M and CapEx Expectations
O&M and CapEx Expectations ($ in Millions) O&M Expense (1) Exelon (3) 2008E $1,100 $750 $2,700 $4,500 2009E $1,050 $700 $2,650 $4,400 2009-2013 CAGR ~4% (2) ~3% (2) ~4% ~4% ($ in Millions) Plant & Nuclear (3) CapEx Other Fuel Exelon 2008E $950 $400 $950 $850 $3,300 2009E $1,000 $400 $1,000 $950 $3,4
Slide 32: 2009 Projected Sources and Uses of Cash
2009 Projected Sources and Uses of Cash ($ in Millions) Exelon (6) Cash Flow from Operations (1) $1,000 $950 $2,800 $4,750 Capital Expenditures (1,000) (400) (1,950) (3,400) Net Financing (excluding Dividend):(2) Planned Debt Issuances 200 200 350 750 Planned Debt Retirements (3) 0 (750) 0 (750) Oth
Slide 33: Pension Benefit Expense
Pension Benefit Expense $800 $113 ($668) $508 Amortization Pension Plan Key $600 Metrics – 12/31/07 (in millions) Interest Expected Assets $9,634 $400 Return on Obligations $10,427 Assets Discount rate 6.20% $200 $130 2008 L-T EROA 8.75% $83 Service Total $0 Note: Excludes settlement charges. Impact
Slide 34: Potential Variability in Future Pension Expense and Contributions
Potential Variability in Future Pension Expense and Contributions Assumptions 2009 2010 2011 Illustrative Scenario Actual Asset Pre-tax Required Pre-tax Required Pre-tax Required Discount Rate Returns expense contribution expense contribution expense contribution -27% in 2008 7.90% as of 1/1/09, 1 8
Slide 35: Sufficient Liquidity
Sufficient Liquidity Available Capacity Under Bank Facility as of October 31, 2008 ($ in Millions) Exelon (3) Aggregate Bank Commitments (1) $952 $574 $4,834 $7,317 Outstanding Facility Draws (90) -- -- (90) Outstanding Letters of Credit (166) (90) (155) (416) Available Capacity Under Facility (2) 6
Slide 36: Large and Diverse Bank Group
Large and Diverse Bank Group Banks Committed to Exelon’s Facilities (1) • Bank of America, N.A. / Merrill Lynch USA (2) • UBS Loan Finance LLC • The Royal Bank of Scotland PLC (RBS) • The Bank of New York / Mellon Bank, N.A. • Barclays Bank PLC • Mizuho Corporate Bank, LTD • JP Morgan Chase Bank, N.
Slide 37: 2009-2013 Debt Maturities
2009-2013 Debt Maturities $1,799 M $750 Total $600 $828 M $615 M Total $450 Total $255 M $300 Total $150 $29 M Total $0 2009 2010 2011 2012 2013 Exelon Corp Exelon Generation ComEd PECO Minimal debt maturities before 2011 Note: Balances shown exclude securitized debt 37
Slide 38: Stable Cash Flows and Commitment to Value Return
Stable Cash Flows and Commitment to Value Return $6,000 $2.50 Sustainable Value $5,000 $2.00 Strong and consistent cash flows from $4,000 operations (1) $1.50 Over 12% compound annual dividend growth $3,000 rate since 2001 $1.00 $2,000 $0.50 $1,000 $0 $0.00 2001 2002 2003 2004 2005 2006 2007 2008E 2
Slide 39: Value Return Framework
Value Return Framework Free Cash Flow before Dividends and CapEx Less Maintenance Capital and Committed Dividends Equals Available Cash and Balance Sheet Capacity (1) Monetize Return Value via Strengthen Balance Sheet / Invest in Growth Share Repurchases, Increase Financial Flexibility Increased Div
Slide 40: Strategic Direction
Strategic Direction Protect Today’s Value + Grow Long-Term Value • Deliver superior operating • Drive the organization to the next performance level of performance • Advance competitive markets • Set the industry standard for low • Protect the value of our generation carbon energy generation and del
Slide 41: Exelon Generation
Exelwn. Generation Exelen. Generation
Slide 42: Exelon Generation 2009 EPS Contribution
Exelon Generation 2009 EPS Contribution $ / Share $3.45 – $3.55 ($0.18) $0.02 ($0.06) $3.10 – $3.35 ($0.01) RNF O&M Other Depreciation Key Items: Discrete 2008 Gains (2) ($0.14) Nuclear Fuel Expense ($0.08) Key Items: Cost Efficiency Initiative $0.06 Nuclear Outages $0.03 Inflation ($0.07) Pension &
Slide 43: Exelon Generation
Exelon Generation Protect Value • Continue to focus on operating excellence, cost management, and market discipline • Execute on power and fuel hedging Value Proposition programs • Large, low-cost, low-emissions, exceptionally well-run nuclear fleet • Support competitive markets • Complementary and
Slide 44: Basics of Business Unchanged
Basics of Business Unchanged U.S. Electricity Production Costs 12.0 (2000-2007) (1) Petroleum 10.0 10.26 8.0 Gas 6.78 6.0 4.0 Coal 2.47 2.0 1.76 Nuclear 0.0 2000 2001 2002 2003 2004 2005 2006 2007 Nuclear remains one of the lowest cost options for electricity production (1) In 2007 Cents/kWh. Source
Slide 45: Lowest Cost Nuclear Fleet Operator
Lowest Cost Nuclear Fleet Operator 2006-2007 Average Production Cost for Major Nuclear Operators (1) Average st nd rd th 1 Quartile 2 Quartile 3 Quartile 4 Quartile Among major nuclear plant fleet operators, Exelon is consistently the lowest-cost producer of electricity in the nation (1) Source: 200
Slide 46: Effectively Managing Nuclear Fuel Costs
Effectively Managing Nuclear Fuel Costs All charts exclude Salem Projected Exelon Uranium Demand Components of Fuel Expense in 2008 2008 – 2011: 100% hedged in volume 2012: ~80% hedged in volume 10.0 2013: ~70% hedged in volume Fabrication 9.0 Enrichment 17% 8.0 38% 7.0 6.0 5.0 4.0 3.0 2.0 Tax/Inter
Slide 47: Uranium Price Volatility
Uranium Price Volatility Eighteen-Month Uranium Price Long-term Uranium Price Trend Trend 160 160 140 140 Early 2006 120 First Cigar Lake flood; 120 Cyclone Monica halts December 2003 ERA / Ranger 100 operations for 100 GNSS/Tenex termination; approximately two ConverDyn UF6 release weeks 80 80 and
Slide 48: World-Class Nuclear Operator
World-Class Nuclear Operator Average Capacity Factor Range of Fleet 2-Yr Avg Capacity Factor (2003-2007) 100% 100 EXC 93.5% 90% 95 90 80% 85 70% 80 60% 75 50% 70 Range 5-Year Average 40% 65 Exelon Industry Operator (# of Reactors) Sustained production excellence Note: Exelon data prior to 2000 repre
Slide 49: Impact of Refueling Outages
Impact of Refueling Outages Refueling Outage Duration 60 Exelon Industry (w/o Exelon) 50 Nuclear Refueling Cycle 40 • 18 or 24 months • Duration: ~24 days 30 20 2008 Refueling Outage Impact 10 • 2008 reflects Salem’s extended 0 steam generator replacement outage. 2000 2001 2002 2003 2004 2005 2006 2
Slide 50: Total Portfolio Characteristics
Total Portfolio Characteristics Expected Total Supply (GWh) Expected Total Sales (GWh) 200,000 200,000 178,300 178,100 178,300 178,100 10,200 10,600 5,200 13,900 23,700 150,000 28,900 28,600 19,500 150,000 41,100 41,800 47,700 47,600 100,000 100,000 50,000 50,000 108,300 102,900 91,500 91,300 0 0 20
Slide 51: Hedging Targets
Hedging Targets Financial Hedging Range (1) Prompt Year Second Year Third Year Power Team utilizes various products and (2009) (2010) (2011) channels to market in order to optimize Target Ranges Exelon Generation’s earnings: 90% - 98% 70% - 90% 60% - 80% • Block product sales in power • Options in p
Slide 52: Financial Swap Agreement with ComEd
Financial Swap Agreement with ComEd • Market-based contract for ATC baseload energy only – Does not include capacity, ancillary services or congestion • Preserves competitive markets • Fits with Exelon Generation’s hedging policy and strategy • Small portion of Exelon Generation’s supply Portion of
Slide 53: Exelon Generation Has Limited Counterparty Exposure
Exelon Generation Has Limited Counterparty Exposure Net Exposure After Credit Collateral (1) Net Exposure by Type of Counterparty (1) (in millions) Investment grade $582 Non-investment grade 59 Coal No external ratings 42 Producers 13% Total $683 Investor-Owned Utilities, Marketers, and Power Produc
Slide 54: Long-Term Investment Thesis
Long-Term Investment Thesis Demand Trends Commodities Demand Profile Changes Natural Gas Off-Peak Usage Coal Lowest-cost, low-emissions nuclear fleet Power Market Fundamentals Environmental Position Reserve Margins Carbon Capacity Prices SO-2, NOX Construction Costs Mercury 54
Slide 55: Positively Exposed to Market Dynamics
Positively Exposed to Market Dynamics Reserve Margins Declining Natural Gas Prices Remaining High $13 30% $12 25% $11 20% PJM West Various NYMEX(1) 15% $10 3rd party ERCOT estimates 10% $9 5% NI-Hub $8 0% $7 -5% $6 PJM-East (1) As of 09/30/08 -10% $5 -15% 2008 2010 2012 2014 2016 2018 2020 2008 2009
Slide 56: Reliability Pricing Model Auction
Reliability Pricing Model Auction PJM RPM Auction ($/MW-day) 2007/2008 197.67 191.32 191.32 2008/2009 174.29 2009/2010 174.29 148.80 2010/2011 111.92 2011/2012 102.04 110.00 40.80 RTO Eastern MAAC MAAC + APS MAAC Exelon Generation Participation within PJM Reliability Pricing Model (1) 2007 / 2008 20
Slide 57: Long-Run Marginal Cost of Electricity
Long-Run Marginal Cost of Electricity 250 Combustion Turbine 200 150 Pulverized Coal 100 CCGT Nuclear 50 0 0 5 10 15 20 25 30 35 40 45 50 CO2 Price ($/Metric Ton) Note: CCGT = Combined Cycle Gas Turbine Excluding energy efficiency, Nuclear is the least expensive generation option in a carbon- constr
Slide 58: Exelon Generation Operating EBITDA
Exelon Generation Operating EBITDA 2008 2009 Open – 2009 (1) 2009 EBITDA Sensitivities (Pre-Tax Impact) (at ~95% financially (at 90%+ financially ~$6,400 +/- $1/MWh PJM W-Hub ATC Price ~$4M hedged) hedged) +/- $1/MWh Ni-Hub ATC Price ~$5M $ Millions 2009 Open 10/31/08 EBITDA (1) Prices Assumptions H
Slide 59: Current Market Prices
Current Market Prices 5 6 6 6 Units 2005 ¹ 2006 1 2007 ¹ 2008 2009 2010 2011 PRICES (as of October 31, 2008) PJM West Hub ATC ($/MWh) 60.92 ² 51.07 ² 59.76 ² 68.77 59.32 62.88 63.21 PJM NiHub ATC ($/MWh) 46.39 ² 41.42 ² 45.47 ² 48.98 42.04 43.10 45.26 2 NEPOOL MASS Hub ATC ($/MWh) 76.65 ² 59.68 66.7
Slide 60: Market Price Snapshot
Market Price Snapshot Rolling 12 months, as of October 31, 2008. Source: OTC quotes and electronic trading system. Quotes are daily. 12 150 Forward NYMEX Natural Gas Forward NYMEX Coal 11.5 140 11 130 10.5 120 10 110 2011 $81.30 9.5 100 9 2011 $8.15 90 8.5 80 8 70 2010 $81.15 7.5 2010 $8.03 60 7 50
Slide 61: Market Price Snapshot
Market Price Snapshot Rolling 12 months, as of October 31, 2008. Source: OTC quotes and electronic trading system. Quotes are daily. 12 100 Houston Ship Channel Natural Gas ERCOT North On-Peak Forward Prices 11.5 Forward Prices 95 11 90 10.5 85 10 9.5 80 2011 $67.88 9 2011 $7.84 75 8.5 70 8 65 2010
Slide 62: Exelon Nuclear Fleet Overview
Exelon Nuclear Fleet Overview Net Annual License Spent Fuel Storage/ Mean Rating Expiration / Date to lose full core Plant, Location Units Type Vendor MW 2008 Status Ownership discharge capacity Braidwood, IL 2 PWR W 1194, 1166 2026, 2027 100% 2013 Byron, IL 2 PWR W 1183, 1153 2024, 2026 100% 2011 C
Slide 63: ComEd. An Exelon Company
ComEd. An Exelon Company 63
Slide 64: ComEd 2009 EPS Contribution
ComEd 2009 EPS Contribution $ / Share $0.25 $0.01 ($0.06) $0.45 - $0.55 O&M $0.01 Depreciation / Interest Amortization Expense Key Items: $0.30 – $0.35 Cost Efficiency Initiative $0.05 Rate Case Disallowance (2) $0.02 Storms $0.01 RNF Energy Efficiency ($0.04) Inflation ($0.03) Pension & OPEB ($0.01
Slide 65: ComEd – Moving Forward
ComEd – Moving Forward Executing Regulatory Average Annual Rate Base (1) Recovery Plan ($ in Billions) Transmission 9.6 • Constructive ComEd rate cases including Distribution the recent final rate order that provides 8.6 for $273.6 million increase in annual 8.1 2.3 distribution revenues 2.1 2.0 • I
Slide 66: ComEd Executing on Regulatory Recovery Plan
ComEd Executing on Regulatory Recovery Plan The ICC issued a final Order in ComEd’s distribution rate case – granting a revenue increase of $273.6 million to take effect on September 16, 2008: ComEd Impact on Original Revenue ($ in millions) Request ICC Order Increase Rate Base $7,071 $6,694 $(43) 1
Slide 67: Illinois Power Agency Proposes ComEd Procurement Plan
Illinois Power Agency Proposes ComEd Procurement Plan In September 2008, the Illinois Power Agency proposed its first ComEd procurement plan, which will provide for energy procurement for up to a three-year period Future Procurement by Illinois Power Agency 3/08 RFP 2009 2010 2011 2012 2009 2010 201
Slide 68: ComEd Load Growth Trends
ComEd Load Growth Trends ComEd Residential Load Growth Statistics 50 8,500 New Customers Avg. Use Per Customer 45 40 38 38 8,400 35 32 33 8,300 30 24 25 8,200 19 20 15 8,100 10 5 8,000 2004 2005 2006 2007 2008E 2009E Key Economic Indicators Estimated Weather-Normalized Chicago US Residential Load Gr
Slide 69: PECO. An Exelon Company
=> PECO. An Exelon Company 69
Slide 70: PECO 2009 EPS Contribution
PECO 2009 EPS Contribution $ / Share $0.04 ($0.10) $0.07 $0.45 – $0.50 O&M $0.45 - $0.55 $0.02 RNF Amortization / Interest Depreciation Expense Key Items: Gas Rate Case $0.07 Key Item: Weather $0.03 Competitive Transition Pricing/Customer Mix ($0.02) Charge (CTC) Amortization ($0.09) Key Items: Bad
Slide 71: PECO – Moving Forward
PECO – Moving Forward Actively Engaged in Transition Average Annual Rate Base (1) ($ in Billions) • Positive outcome of 2008 gas rate case provides for increased gas revenues of Gas CTC $76.5 million Electric Transmission 6.1 Electric Distribution • Developing plans and programs to 5.5 implement ene
Slide 72: PECO Pursuing Regulatory Path
PECO Pursuing Regulatory Path PECO’s procurement plan for obtaining default service Post 2010 Default Service includes a portfolio of full requirements and spot products competitively procured through multiple RFP solicitations Procurement and Mitigation plan includes early staggered procurement, vo
Slide 73: PECO Average Electric Rates
PECO Average Electric Rates PPL Procurement Results Residential Small C&I Round 1, 7/2007 $101.77 $105.11 Projected Rate Increase Based on Round 2, 10/2007 $105.08 $105.75 Electric Restructuring Average PPL Procurement Results Settlement (Illustrative) Round 3, 3/2008 $108.80 $108.76 Round 4, 10/200
Slide 74: Pennsylvania Snapshot
Pennsylvania Snapshot Act 129 (HB 2200) Highlights • Energy Efficiency(EE) and Demand Response (DR) – EE Targets of 1% reduction in consumption by 2011, 3% reduction by 2013 Current Status – DR target of 4.5% reduction in peak demand by 2013 • Governor Rendell’s “Energy Independence Strategy”, intro
Slide 75: PECO Load Growth Trends
PECO Load Growth Trends PECO Residential Load Growth Statistics 10 10,000 New Customers Avg. Use Per Customer 9 8.4 9,900 8 7.7 9,800 7 9,700 6.3 6 5.5 9,600 4.8 4.6 5 9,500 4 9,400 3 9,300 2 9,200 1 9,100 0 9,000 2004 2005 2006 2007 2008E 2009E Key Economic Indicators Estimated Weather-Normalized R
Slide 76: Key Assumptions, Projected 2009 Credit Measures & GAAP Reconciliation
Key Assumptions, Projected 2009 Credit Measures & GAAP Reconciliation 76
Slide 77: Key Assumptions
Key Assumptions 2007 Actual 2008 Est. 2009 Est. (1) Nuclear Capacity Factor (%) 94.5 93.8 93.1 Total Genco Sales Excluding Trading (GWhs) 189,650 178,300 178,100 Total Genco Sales to PECO (GWhs) 41,343 41,100 41,800 (2) Total Genco Market and Retail Sales (GWhs) 148,307 137,200 136,300 Henry Hub Gas
Slide 78: Projected 2009 Key Credit Measures
Projected 2009 Key Credit Measures With PPA & Pension / Without PPA & Moody’s Credit S&P Credit Fitch Credit OPEB (1) Pension / OPEB (2) Ratings (3) Ratings (3) Ratings (3) Exelon FFO / Interest 5.2x 7.0x Baa1 BBB- BBB+ Consolidated: FFO / Debt 25% 39% Rating Agency Debt Ratio 62% 54% ComEd: FFO / I
Slide 79: FFO Calculation and Ratios
FFO Calculation and Ratios FFO Calculation FFO Interest Coverage Net Income FFO + Adjusted Interest Add back non-cash items: Adjusted Interest + Depreciation,amortization(including nucl fuel amortization),AFUDC/Cap. Interest Net Interest Expense (Before AFUDC & Cap. Interest) + Change in Deferred Ta
Slide 80: GAAP Earnings Reconciliation Year Ended December 31, 2007
GAAP Earnings Reconciliation Year Ended December 31, 2007 (in millions) ExGen ComEd PECO Other Exelon 2007 GAAP Reported Earnings $2,029 $165 $507 $35 $2,736 Mark-to-market adjustments from economic hedging activities 104 (3) - - 101 Investments in synthetic fuel-producing facilities - - - (87) (87)
Slide 81: GAAP EPS Reconciliation Year Ended December 31, 2007
GAAP EPS Reconciliation Year Ended December 31, 2007 ExGen (1) ComEd (1) PECO (1) Other (1) Exelon 2007 GAAP Earnings Per Share $3.01 $0.25 $0.75 $0.04 $4.05 Mark-to-market adjustments from economic hedging activities 0.15 - - - 0.15 2007 Illinois electric rate settlement 0.38 0.03 - - 0.41 Investme
Slide 82: 2008/2009 Earnings Outlook
2008/2009 Earnings Outlook • Exelon’s outlook for 2008/2009 adjusted (non-GAAP) operating earnings excludes the earnings impacts of the following: • Mark-to-market adjustments from economic hedging activities • Unrealized gains and losses from nuclear decommissioning trust fund investments primarily
Slide 83: Reconciliation of Net Income to EBITDA
Reconciliation of Net Income to EBITDA Operating net income (loss) +/- Cumulative effect of changes in accounting principle +/- Discontinued operations +/- Minority interest + Income taxes Income (loss) from continuing operations before income taxes and minority interest +/- Total other income and d
Slide 84: Exelon Investor Relations Contacts
Exelon Investor Relations Contacts Inquiries concerning this presentation Investor Relations Contacts: should be directed to: Chaka Patterson, Vice President Exelon Investor Relations 312-394-7234 10 South Dearborn Street Chaka.Patterson@ExelonCorp.com Chicago, Illinois 60603 312-394-2345 Karie Ande
Exelon — Edison Electric Institute Financial Conference 2008 on 6ix