Slide 1: Exelon Corporation Investor Handout
Exhibit 99.1 Value Driven Exelon Corporation Investor Handout September 18 – 19, 2007
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, that are subject to risks and uncertainties. The factors that could cause actual results to differ materially from these forward-looking statem
Slide 3: The Exelon Story – Value Driven
The Exelon Story – Value Driven • Premier U.S. nuclear generator uniquely positioned to capture market opportunities through operational and commercial excellence • Primary source of Exelon’s value going forward • Completed the transition to a “wires-only” business with a regulatory recovery plan in
Slide 4: The Exelon Companies
The Exelon Companies ‘06 Operating Earnings (1): $2.2B ‘07E Operating Earnings (2): $2.8 - $2.9B ‘07 EPS Guidance (2): $4.15 -$4.30 Assets (12/31/06): $44.3B Total Debt (12/31/06): $13.0B Credit Rating (4): BBB Nuclear, Fossil, Hydro & Renewable Generation Illinois Pennsylvania Power Marketing Utili
Slide 5: Strong Financial Performance
Strong Financial Performance Adjusted (non-GAAP) Operating EPS Total Shareholder Return 10/20/00 – 9/14/07 EXC 220% Assumes dividend reinvestment Source: Bloomberg $4.15 - $4.30 $3.22 $3.10 $2.78 $2.61 $2.41 UTY $2.24 89% $1.93 2000 2001 2002 2003 2004 2005 2006 2007E 10/00 4/01 10/01 4/02 10/02 4/0
Slide 6: Multi-Regional, Diverse Company
Multi-Regional, Diverse Company Generating Plants %MW Nuclear 51 Hydro 5 Electricity Customers: 3.8M Electricity Customers: 1.6M Coal/Oil/Gas Base-load 10 Gas Customers: 0.5M Intermediate 10 Peaker 24 New England Capacity Midwest Capacity Owned: 622MW Owned: 11,389 MW Contracted: 4,791 MW Total: 16,
Slide 7: Revised 2007 Operating Earnings Guidance
Revised 2007 Operating Earnings Guidance Operating EPS (1): $4.15 - $4.30 per share 2007 and Beyond GAAP EPS (2): $3.70 - $4.00 per share Exelon Generation $4.15 - $4.30 ComEd $ / Share $0.20 - $0.25 PECO $0.60 - $0.63 $0.65 - $0.70 $3.22 Earnings Drivers $0.78 ComEd regulatory recovery plan $0.67 I
Slide 8: Disciplined Financial Management
Disciplined Financial Management • In December, the Exelon Board approved a new “Value Return Policy” • The Policy: – Established a base dividend at $1.76/share, growing modestly over time – Returns excess cash and/or balance sheet capacity through share repurchases After funding maintenance capital
Slide 9: 2011 Balance Sheet Capacity (Illustrative)
2011 Balance Sheet Capacity (Illustrative) S&P “BBB” Target Range $14 Potential Uses of $12 Balance Sheet Capacity $10 Acquisitions or other $8 growth opportunities $6 Future unfunded liabilities $4 Buffer against potentially lower $2 commodity prices $0 20% 25% 30% 35% Share repurchases or other 20
Slide 10: Our Strategic Direction
Our Strategic Direction Protect Today’s Value + Grow Long-Term Value • Deliver superior operating performance • Take the organization to the next level of – Keep the lights on performance – Continue nuclear excellence – Foster positive employee relations • Support competitive markets – Require accou
Slide 11: Exelon Generation
_— Exelen. Generation a
Slide 12: Exelon Generation Operating Earnings Drivers: Next Five Years
Exelon Generation Operating Earnings Drivers: Next Five Years Market Sensitivities (1) Exelon Generation’s $2,320M - $2,385M As of 12/31/06 Competitive Position (After-Tax $M) 2007 2011 +/- $1/mmBtu Gas $25 $390 Large, low-cost, low-emissions, +/- 500 Btu/KWh ATC Heat rate $25 $340 exceptionally wel
Slide 13: Premier Nuclear Operator
Premier Nuclear Operator Average Capacity Factor Average Capacity Factor Range of Fleet 2-Yr Avg Capacity Factor (2002-2006) 100 100 EXC 93.2% 90 95 90 80 85 70 80 60 75 50 70 Range 5-Year Average 40 65 Note: Exelon data prior to 2000 represents ComEd-only nuclear fleet Exelon Industry Operator (# o
Slide 14: Nuclear Fuel Costs
Nuclear Fuel Costs Exelon Uranium Cost vs. Market Uranium market prices have increased, but 100 90 Exelon is managing its portfolio 80 • Reduced uranium demand by 25% 70 60 • Contracting strategy protects us and ensures 50 we are significantly below current spot market 40 prices through 2011 30 20 •
Slide 15: Energy Policy Act – Nuclear Incentives
Energy Policy Act – Nuclear Incentives Production Tax Credit (PTC) Regulatory Delay “Backstop” Government Loan Guarantee $18 per MWh, 8 year PTC for “Insurance” protecting against first 6,000 MWe of new capacity regulatory delays in Results in ability to obtain commissioning a completed non-recourse
Slide 16: Portfolio Management
Portfolio Management Target Financial Hedge (1) Range Power Team employs commodity hedging Prompt Year Second Year Third Year strategies to optimize Exelon Generation’s (2008) (2009) (2010) earnings: Maintain length for opportunistic sales 90% - 98% 70% - 90% 50% - 70% Use cross commodity option str
Slide 17: Portfolio Characteristics
Portfolio Characteristics 2007 Expected Total Sales (GWh) 2007 Expected Total Supply (GWh) PECO PPA 22% Nuclear 139,750 Fossil & Hydro 37,500 IL Auction Other Mid- 15% Atlantic Sales Forward & Spot Purchases 7,300 13% Other South Total 184,550 Sales Other Midwest 8% Sales 42% The transition to compe
Slide 18: Fundamentals
Fundamentals Year New Capacity is Needed Cost of New Build Generation Construction (1) Technology EIA ($/KW) S&P ($/KW) 2007 2008 2009 2010 2011 2012 2013 Gas CT 428 CCGT 615 700 MAAC NY ERCOT ECAR Pulverized Coal 1,316 2,438 MRO SPP IGCC 1,581 2,795 – 2,925 MAIN VACAR Nuclear 2,123 4,000 NEPOOL (1)
Slide 19: Full Requirements Cost
Full Requirements Cost New Jersey BGS Auction for PSEG $102.51/MWh $98.88/MWh (36-Month Price) Full-Requirements Costs ($/MWh): (36-Month Price) ~ $35 Transmission and Congestion ~ $41 $15.50 Renewable Load Shape and $1.00 Energy Ancillary Services $1.50 ATC $10.30 Migration Risk Forward $67.20 - $5
Slide 20: PJM RPM 2007/2008 & 2008/2009
PJM RPM 2007/2008 & 2008/2009 Eastern MACC • 2007/2008 RPM auction: $197.67/MW-day • 2008/2009 RPM auction: $148.80/MW-day Rest of Market 2007/2008 System • 2007/2008 RPM auction: Total CTR Value = 4,599 MW $40.80/MW-day 2008/2009 System • 2008/2009 RPM auction: Total CTR Value = 5,128 MW $111.92/MW
Slide 21: Carbon Value
Carbon Value Assumes Open Position at Exelon Generation 40 Carbon Value (2011 Assumptions) 3,000 35 Europe Carbon Trading 2011: $31.50/ton (1) Midwest 2,500 30 ~90,000 GWhs in Midwest nuclear portfolio 25 2,000 ~55% of time coal on the margin EXC Market Sensitivity EIA Carbon Case (2) 20 ~40% of tim
Slide 22: Current Market Prices
Current Market Prices PRICES (as of September 13th, 2007 Units 2004 ¹ 2005 ¹ 2006 ¹ 2007 5 2008 6 2009 6 PJM West Hub ATC ($/MWh) 42.35 ² 60.92 ² 51.07 ² 57.18 60.31 63.35 PJM NiHub ATC ($/MWh) 30.15 ² 46.39 ² 41.42 ² 43.72 45.73 47.52 NEPOOL MASS Hub ATC ($/MWh) 52.13 ² 76.65 ² 59.68 ² 64.89 72.89
Slide 23: Market Price Snapshot
Market Price Snapshot As of September 13, 2007. Source: OTC quotes and electronic trading system. Quotes are daily. 9.4 Forward NYMEX Natural Gas 90 PJM-West and Ni-Hub On-Peak 9.2 Forward Prices 85 9 2009 PJM-West 8.8 80 8.6 2009 75 8.4 2008 PJM-West 70 8.2 2009 Ni-Hub 8 65 7.8 60 7.6 2008 2008 Ni-
Slide 24: Market Price Snapshot
Market Price Snapshot As of September 13, 2007. Source: OTC quotes and electronic trading system. Quotes are daily. 70 PJM-West ATC Forward Prices NIHUB ATC Forward Prices 54 68 66 52 2009 64 50 62 2009 48 60 58 2008 46 56 44 2008 54 42 52 50 40 1/2/07 2/2/07 3/2/07 4/2/07 5/2/07 6/2/07 7/2/07 8/2/0
Slide 25: Market Price Snapshot
Market Price Snapshot As of September 13, 2007. Source: OTC quotes and electronic trading system. Quotes are daily. Houston Ship Channel Natural Gas ERCOT ATC Forward Prices 9 Forward Prices 71 69 8.5 67 2009 65 8 2009 63 61 7.5 2008 59 2008 7 57 1/2/07 2/2/07 3/2/07 4/2/07 5/2/07 6/2/07 7/2/07 8/2/
Slide 26: Market Price Snapshot
Market Price Snapshot As of September 13, 2007. Source: OTC quotes and electronic trading system. Quotes are daily. ERCOT On-Peak Forward Prices 83 81 79 77 75 2009 73 71 69 2008 67 65 1/2/07 2/2/07 3/2/07 4/2/07 5/2/07 6/2/07 7/2/07 8/2/07 9/2/07 26
Slide 27: ComEd – An Exelon Company
_— 7 ComEd. An Exelon Company a
Slide 28: ComEd Operating Earnings: Next Five Years
ComEd Operating Earnings: Next Five Years 2011 Assumptions (1) Rate base: ~$9.6B $528M ComEd Highlights Equity (2): ~45% ROE: ~10% Roll-out of customer rate relief ~$430M programs per the IL Settlement 2007 Assumptions IPA and new procurement process Rate Base: ~$8.1B Regulatory recovery plan Equity
Slide 29: Financial Swap Agreement
Financial Swap Agreement • Financial Swap Agreement between ComEd and Exelon Generation promotes price stability for residential and small business customers • Designed to dovetail with ComEd’s remaining auction contracts for energy, increasing in volume as the auction contracts expire – By June 1,
Slide 30: FERC Transmission Rate Order
FERC Transmission Rate Order FERC approved $116M in ComEd’s formula transmission rate effective as of 5/1/07, subject to refund ($147M originally requested) • Approved 0.50% ROE adder for RTO participation • Approved capital structure of 58% equity / 42% debt • Denied inclusion of CWIP in the formul
Slide 31: State Retail Electric Restructuring Status (2007)
State Retail Electric Restructuring Status (2007) Statewide Electric Restructuring – 100 percent eligibility Retail Restructuring being implemented—partial eligibility 2007 laws approved to re-regulate No Activity Source: KEMA 09/07 31
Slide 32: PECO – An Exelon Company
— => PECO. An Exelon Company a -
Slide 33: PECO Operating Earnings: Next Five Years
PECO Operating Earnings: Next Five Years PECO Highlights Legislative activity: HB 1203 and HB 1530 signed by governor on $435M - $470M 7/17/07 2011 Assumptions (1) Other energy issues are expected to be Rate Base: ~$4.7B addressed in a special legislative session that Equity: ~50% began 9/17/07 ROE:
Slide 34: Legislative Overview
Legislative Overview The Pennsylvania General Assembly introduced four bills that would enable elements of Governor Rendell’s Energy Independence Plan One of the four bills, HB 1203, was passed by the General Assembly and was signed into law on July 17, 2007 • HB 1203 amends the Alternative Energy P
Slide 35: Special Session Agenda
Special Session Agenda Senate has agreed to take up the following topics in the Special Session: • Investment in clean and renewable energy and incentives for conservation without new taxes • Legislation to set standards for liquid fuels Additional legislation supporting the Governor’s Energy Indepe
Slide 36: Governor’s Energy Independence Strategy – Legislative Package
Governor’s Energy Independence Strategy – Legislative Package • Procurement using the portfolio model with “lowest reasonable rates” and prioritizes demand side management and alternative energy resources HB 1201 – PAPUC • Allows for long-term, cost-based rates for larger energy users Statute Bill •
Slide 37: Summary of PAPUC Rulemakings
Summary of PAPUC Rulemakings Rulemaking Description Final Order Effective Date Default Service Addresses issues Issued May 10, 2007 September 15, 2007 Regulations around procurement, rate design, cost recovery, filing requirements Default Service Reflects the PAPUC’s Issued May 10, 2007 May 10, 2007
Slide 38: Default Service Provider Regulations/Policy
Default Service Provider Regulations/Policy • Competitive process but no statewide auction • Utility run RFPs or auctions are preferred; portfolio approach is Procurement allowed • Staggered auctions/RFPs to avoid high market risk • Long term contracts limited to renewable resources • Non-renewable
Slide 39: PECO Post-2010 Strategy
PECO Post-2010 Strategy • PECO to propose an auction approach to conduct multiple Procurement procurements prior to 2011 • May offer 1-year fixed rate for large energy users • Requirement for some spot market purchases • Procurement plan will include early, staggered procurement • Rate increase phas
Slide 40: PECO Average Electric Rates
PECO Average Electric Rates Electric Restructuring Settlement Post-Transition Factors Unit Rates (¢/kWh) (1) CTC terminates at year-end 2010 11.18¢ 11.18¢ +4.8% 10.67¢ Energy / Capacity price is expected to increase; price will reflect associated full requirements costs (including capacity, load sha
Slide 41: Procurement Models
Procurement Models Description Favorable Full Requirements • Descending clock full requirements auction Auction • Limited uneconomic entry Modified Full • Full requirements procurement, but change to RFP/pay as bid Requirements Procurement structure with longer-term contract for differences Horizont
Slide 42: Procurement Models (cont’d)
Procurement Models (cont’d) Horizontal Procurement Vertical Procurement • Upfront regulatory planning process • Full Requirements • Utility procures “standard” products • Product is % of actual load • Contracts are for fixed volume • Suppliers assume all risk • Utility manages risks • Fixed price in
Slide 43: Appendix – Key Assumptions, Projected 2007 Credit Measures & GAAP Reconciliation
Appendix – Key Assumptions, Projected 2007 Credit Measures & GAAP Reconciliation 43
Slide 44: Key Assumptions
Key Assumptions 2005 Actual 2006 Actual 2007 Est. (1) Nuclear Capacity Factor (%) 93.5 93.9 94.0 Total Genco Sales Excluding Trading (GWhs) 194,337 190,680 184,500 (5) Total Genco Sales to Energy Delivery (GWhs) 121,961 119,354 40,500 (2) Total Genco Market and Retail Sales (GWhs) 72,376 71,326 144,
Slide 45: Projected 2007 Key Credit Measures
Projected 2007 Key Credit Measures With PPA & Without PPA & S&P Credit “BBB” Target Pension / OPEB (1) Pension / OPEB Ratings (2) Range (3) Exelon Cons: FFO / Interest 4.6x 5.6x BBB 3.2x – 4.5x FFO / Debt 22% 28% 20% – 30% Rating Agency Debt Ratio 70% 63% 55% – 45% Adjusted Book Debt Ratio: 54% Gene
Slide 46: FFO Calculation and Ratios (updated)
FFO Calculation and Ratios (updated) 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
Slide 47: GAAP EPS Reconciliation 2000-2002
GAAP EPS Reconciliation 2000-2002 2000 GAAP Reported EPS $1.44 Change in common shares (0.53) Extraordinary items (0.04) Cumulative effect of accounting change -- Unicom pre-merger results 0.79 Merger-related costs 0.34 Pro forma merger accounting adjustments (0.07) 2000 Adjusted (non-GAAP) Operatin
Slide 48: GAAP EPS Reconciliation 2003-2005
GAAP EPS Reconciliation 2003-2005 2003 GAAP Reported EPS $1.38 Boston Generating impairment 0.87 Charges associated with investment in Sithe Energies, Inc. 0.27 Employee severance costs 0.24 Cumulative effect of adopting SFAS No. 143 (0.17) Property tax accrual reductions (0.07) Enterprises’ Service
Slide 49: GAAP Earnings Reconciliation Year Ended December 31, 2006
GAAP Earnings Reconciliation Year Ended December 31, 2006 (in millions) ExGen ComEd PECO Other Exelon 2006 GAAP Reported Earnings (Loss) $1,407 $(112) $441 $(144) $1,592 Mark-to-market adjustments from economic hedging activities (61) 3 - - (58) Investments in synthetic fuel-producing facilities - -
Slide 50: GAAP EPS Reconciliation Year Ended December 31, 2006
GAAP EPS Reconciliation Year Ended December 31, 2006 ExGen (1) ComEd (1) PECO (1) Other (1) Exelon 2006 GAAP Reported EPS $2.08 (0.17) 0.65 (0.21) $2.35 Mark-to-market adjustments from economic hedging activities (0.09) - - - (0.09) Investments in synthetic fuel-producing facilities - - - 0.04 0.04
Slide 51: 2007 Earnings Outlook
2007 Earnings Outlook Exelon’s outlook for 2007 adjusted (non-GAAP) operating earnings excludes the earnings impacts of the following: • costs associated with the Illinois electric rate settlement, including ComEd’s previously announced customer Rate Relief and Assistance Initiative • mark-to-market
Slide 52: Reconciliation of Net Income to EBITDA
Reconciliation of Net Income to EBITDA 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 + Interest expense + Interest expense
Slide 53: Exelon Investor Relations Contacts
Exelon Investor Relations Contacts Inquiries concerning this presentation should be directed to: Investor Relations Contacts: Exelon Investor Relations Chaka Patterson, Vice President 10 South Dearborn Street 312-394-7234 Chicago, Illinois 60603 Chaka.Patterson@ExelonCorp.com 312-394-2345 312-394-40