Exelon Corporation · NASDAQ:EXC
Exelon — Merger or Acquisition (April 2014)
20 slides from Exelon's merger presentation, Apr 30, 2014
Slide 1: Exelon Announces Acquisition of Pepco Holdings, Inc.
Exhibit 99.2 Exelon Announces Acquisition of Pepco Holdings, Inc. April 30, 2014
Slide 2: Cautionary Statements Regarding Forward-Looking Information
Cautionary Statements Regarding Forward-Looking Information Except for the historical information contained herein, certain of the matters discussed in this communication constitute “forward- looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934
Slide 3: Cautionary Statements Regarding Forward-Looking Information (Continued)
Cautionary Statements Regarding Forward-Looking Information (Continued) (10) the companies may not realize the values expected to be obtained for properties expected or required to be sold; (11) the industry may be subject to future regulatory or legislative actions that could adversely affect the c
Slide 4: Agenda
Agenda Transaction Overview and Exelon Chris Crane Strategic Rationale President and CEO, Exelon Joe Rigby Benefits to PHI Shareholders and Customers Chairman, President and CEO, Pepco Holdings Combined Company Profile Jack Thayer and Financial Summary Executive Vice President and CFO, Exelon Chris
Slide 5: Executive Summary
Executive Summary • A strategic acquisition that creates the leading Mid-Atlanticelectric and gas utility. The combined utility businesses will serve nearly 10 million customers, with a rate base of ~$26 billion. • Purchase price of $27.25 per share. • Earnings composition supports incremental lever
Slide 6: Strategic Rationale
Strategic Rationale Strong geographic fit and operations mix Growing regulated cash flow and earnings while maintaining upside from power price recovery Strong financial fit 5
Slide 7: Expertise in Operating Regulated Utilities in Large Metropolitan Areas
Expertise in Operating Regulated Utilities in Large Metropolitan Areas Operating Statistics Combined Service Territory PA Trenton Commonwealth Edison Potomac Electric Power NJ Customers: 3,800,000 Customers: 801,000 Philadelphia Wilmington Service Territory: 11,400 sq. Service Territory: 640 sq. mil
Slide 8: Transaction Overview
Transaction Overview All-cash transaction Consideration Upfronttransactionpremiumof 24.7% (1) Corporate headquarters: Chicago No change to utilities’headquarters Headquarters Significant employee presence maintained in IL, PA, MD, DC, DE and NJ President and CEO: Chris Crane Governance No change to
Slide 9: Regulatory Approval Timeline
Regulatory Approval Timeline • Applications for approval will be filed as promptly as possible and no later than 60 days from the time of the announcement. • FERC has 180 days to review the transaction and issue an order. We would expect approvals by FERC, Virginia and DOJ within 180 days. • Expect
Slide 10: Delivering Value to PHI's Shareholders, Employees, Customers and Local Communities
Delivering Value to PHI’s Shareholders, Employees, Customers and Local Communities • Attractive 24.7% premium(1) for PHI shares • Commitment to build upon significant improvements in system reliability, customer service and outage restoration • Direct benefits for Atlantic City Electric, Delmarva Po
Slide 11: Financial Overview
Financial Overview
Slide 12: Transaction Economics Are Attractive
Transaction Economics Are Attractive (3) • Significantly earnings accretive starting in first full year after closing. Anticipate run-rate accretion of $0.15-$0.20 per share starting in 2017. • Supports incremental leverage at Exelon and maintains investment grade ratings at Exelon and PHI entities.
Slide 13: Transaction Economics
Transaction Economics Earnings Accretive First Full Year (1) Rate Base Growth ($B)(2) +50% +6% $0.15 - $0.20 $31.8 PHI $30.0 $0.10 - $0.15 Exelon Achieve run-rate $8.8 accretion of $8.3 $20.0 $0.15-$0.20 starting in 2017 $21.7 $23.0 2016 2017 2014 2015 2016 Exelon Consolidated S&P FFO/Debt 2015-2016
Slide 14: Financing Overview
Financing Overview Exelon will use a balanced mix of debt, equity and cash to finance the acquisition in order to maintain current investment grade ratings at all registrants Interim Committed $7.2 billion bridge facility signed and in place to support the Financing contemplated transaction and prov
Slide 15: Closing Comments
Closing Comments • Transaction is another example of our actions to grow our company, our earnings and our returns to our shareholders. • Opportunity to create significant customer savings and build upon existing reliability enhancements. • Tremendous value unlocked through the addition of increment
Slide 16: Appendix
Appendix <= Exelon.
Slide 17: A Compelling Combination – Creates The Premier Mid-Atlantic Utility Franchise
A Compelling Combination – Creates The Premier Mid-Atlantic Utility Franchise Combined Statistics Standalone Pro Forma Exelon PHI DC, DE, IL, MD, NJ, Regulated Jurisdictions IL, MD, PA DC, DE, MD, NJ PA Electric Customers (in M) 6.65 1.85 8.50 Gas Customers (in M) 1.15 0.13 1.28 Total Customers (in
Slide 18: Exelon Utilities: Capital Expenditures and Rate Base
Exelon Utilities: Capital Expenditures and Rate Base(1) (2) Capital Expenditures ($M) Rate Base ($B) $4,725 $31.8 $250 $4,425 $30.0 $2.0 $4,300 $350 $225 $1.8 $275 $27.7 $2.5 $300 $325 $1.7 $2.4 $700 $4.3 $600 $2.3 $550 $4.0 $3.8 $825 $5.3 $800 $5.1 $800 $4.8 $825 $475 $425 $6.1 $5.9 $5.7 $2,025 $1,
Slide 19: Pro Forma Debt Maturity Profile
Pro Forma Debt Maturity Profile(1) 1,975 1,594 1,600 1,557 800 1,433 1,220 523 1,100 912 889 550 1,265 1,340 700 632 600 600 650 250 260 425 250 500 382 190 254 300 310 239 115 102 81 14 12 2014 2015 2016 2017 2018 2019 2020 2021 2022 ExCorp ExGen EXC Regulated PHI Holdco PHI Regulated Ample liquidi
Slide 20: Corporate Structure
Corporate Structure Type Amt ($mm) Exelon Corporation Notes $1,300 Total $1,300 PotomacCapital Investment Corporation Exelon Energy Type Amt ($mm) Type Amt ($mm) Delivery Company Recourse (2) $11 Notes (1) $5,771 Exelon Generation Total $11 Non-Recourse(2) $1,516 Total $7,287 SPE Type Amt ($mm) Note