Earnings Conference Call 2 Quarter 2008 July 23, 2008 EXHIBIT 99.2 nd |
2 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 statements include those discussed herein as well as those discussed in (1) Exelon’s 2007 Annual Report on Form 10-K in (a) ITEM 1A. Risk Factors, (b) ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) ITEM 8. Financial Statements and Supplementary Data: Note 19; (2) Exelon’s Second Quarter 2008 Quarterly Report on Form 10-Q (to be filed on July 23, 2008) in (a) Part II, Other Information, ITEM 1A. Risk Factors and (b) Part I, Financial Information, ITEM 1. Financial Statements: Note 12; and (3) other factors discussed in filings with the Securities and Exchange Commission by Exelon Corporation, Exelon Generation Company, LLC, Commonwealth Edison Company, and PECO Energy Company (Companies). Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this presentation. None of the Companies undertakes any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this presentation. This presentation includes references to adjusted (non-GAAP) operating earnings that exclude the impact of certain factors. We believe that these adjusted operating earnings are representative of the underlying operational results of the Companies. Please refer to the attachments to the earnings release and the appendix to this presentation for a reconciliation of adjusted (non-GAAP) operating earnings to GAAP earnings. |
3 Protect Today’s Value • Deliver superior operating performance • Advance competitive markets • Protect the value of our generation • Build healthy, self-sustaining delivery companies Grow Long-Term Value • Drive the organization to the next level of performance • Set the industry standard for low carbon energy generation and delivery through reductions, displacement and offsets • Pursue and rigorously evaluate new growth opportunities + Strategic Direction |
4 $1.77 $1.74 $0.33 $0.23 $0.07 $0.12 2007 2008 $0.87 $1.01 $0.14 $0.09 $0.06 $0.05 2007 2008 Exelon Operating EPS $1.13 HoldCo/Other ExGen PECO ComEd 2nd Quarter (Q2) $2.06 $1.03 Year-to-Date (YTD) Exelon’s increase in Q2 2008 earnings was driven by higher earnings at Generation, partially offset by lower earnings at PECO Refer to Earnings Release Attachments for additional details on Q2 earnings and to the Appendix for a reconciliation of adjusted (non-GAAP) operating EPS to GAAP EPS. $1.03 $1.13 $2.05 $2.01 $2.10 GAAP EPS |
5 Exelon Generation Operating EPS Contribution 2Q YTD $0.87 $1.01 $1.74 $1.77 2008 2007 Key Drivers – Q2 ’08 vs. Q2 ’07* Higher nuclear output and wholesale energy margins – $0.09 Proprietary trading activities – $0.04 Uranium contract settlement – $0.04 Inflationary pressures on labor and contracting – ($0.01) Other, including higher depreciation and amortization and interest expense – ($0.02) *Refer to the Earnings Release Attachments for additional details and to the Appendix for a reconciliation of adjusted (non-GAAP) operating EPS to GAAP EPS |
6 6 Market Price Snapshot Rolling 12 months, as of July 18, 2008. Source: OTC quotes and electronic trading system. Quotes are daily. Forward NYMEX Natural Gas PJM-West and Ni-Hub On-Peak Forward Prices Ni-Hub On-Peak Implied Heat Rate 2010 2009 2009 PJM-West 2010 PJM-West 2010 Ni-Hub 2009 Ni-Hub 2009 2010 PJM-West On-Peak Implied Heat Rate 2009 2010 7.7 8.2 8.7 9.2 9.7 10.2 10.7 11.2 11.7 12.2 12.7 7/07 8/07 9/07 10/07 11/07 12/07 1/08 2/08 3/08 4/08 5/08 6/08 7/08 8.8 9 9.2 9.4 9.6 9.8 10 10.2 10.4 7/07 8/07 9/07 10/07 11/07 12/07 1/08 2/08 3/08 4/08 5/08 6/08 7/08 60 70 80 90 100 110 7/07 8/07 9/07 10/07 11/07 12/07 1/08 2/08 3/08 4/08 5/08 6/08 7/08 6 6.5 7 7.5 8 8.5 7/07 8/07 9/07 10/07 11/07 12/07 1/08 2/08 3/08 4/08 5/08 6/08 7/08 |
7 7 Market Price Snapshot 2009 2010 2009 2010 Rolling 12 months, as of July 18, 2008. Source: OTC quotes and electronic trading system. Quotes are daily. 2009 2010 Houston Ship Channel Natural Gas Forward Prices ERCOT North ATC Forward Prices ERCOT North ATC v. Houston Ship Channel Implied Heat Rate 7.5 8 8.5 9 9.5 10 10.5 11 11.5 12 12.5 7/07 8/07 9/07 10/07 11/07 12/07 1/08 2/08 3/08 4/08 5/08 6/08 7/08 60 65 70 75 80 85 90 7/07 8/07 9/07 10/07 11/07 12/07 1/08 2/08 3/08 4/08 5/08 6/08 7/08 6.8 7 7.2 7.4 7.6 7.8 8 8.2 8.4 7/07 8/07 9/07 10/07 11/07 12/07 1/08 2/08 3/08 4/08 5/08 6/08 7/08 |
8 2Q YTD Key Drivers – Q2 ’08 vs. Q2 ’07* Weather – ($0.02) Storm costs – ($0.01) Inflationary pressures on labor and contracting – ($0.01) Transmission revenue – $0.02 Other – $0.01 ComEd Operating EPS Contribution 2008 2007 *Refer to the Earnings Release Attachments for additional details and to the Appendix for a reconciliation of adjusted (non-GAAP) operating EPS to GAAP EPS $0.06 $0.05 $0.12 $0.07 |
9 2Q YTD PECO Operating EPS Contribution Key Drivers – Q2 ’08 vs. Q2 ’07* Uncollectible accounts expense – ($0.05) CTC amortization – ($0.02) Taxes other than income – $0.01 Other – $0.01 2008 2007 *Refer to the Earnings Release Attachments for additional details and to the Appendix for a reconciliation of adjusted (non-GAAP) operating EPS to GAAP EPS $0.14 $0.09 $0.23 $0.33 |
10 Financial Take-Aways from the Quarter Q2 operating results of $1.13/share indicative of strong Generation fundamentals: Exceptional nuclear operations – 95.8% capacity factor Higher average realized energy margins O&M and capital on plan for the year, but facing inflationary pressures Strong cash flows from operations (1) - approximately $5 billion in 2008 Balance sheet and credit ratings are strong – ample liquidity Reaffirming 2008 operating guidance of $4.00-$4.40/share Strong Generation performance expected to offset slower load growth and higher reserves for uncollectible accounts at utilities Expect Q3 2008 to be 26% to 29% of full year earnings Q2 2008 was another solid quarter, keeping us on track for the year Refer to Earnings Release Attachments for additional details on Q2 earnings and to the Appendix for a reconciliation of adjusted (non-GAAP) operating EPS to GAAP EPS. (1) Primarily includes net cash flows provided by operating activities, excluding counterparty collateral activity, and including net cash flows used in investing activities other than capital expenditures. |
11 Appendix |
12 ComEd Rate Case Update Comparison of ComEd’s revenue increase of $345 million (1) to ALJ Proposed Order of $218 million: $218 656 331 356 $6,150 10.30% ROE / 45.04% Equity ALJ Proposed Order (7/10/08) ($23) ($92) $6,951 Rate Base ($2) 358 Depreciation and Amortization ($127) ($2) ($8) Impact on Proposed Revenue Increase $345 Proposed Revenue Increase 658 Other O&M Expenses 339 A&G Expenses 10.75% ROE / 45.04% Equity ROE/Cap Structure ComEd Position (1) ($ in millions) (Docket No. 07-566) ICC decision is expected in mid-September (1) Reflects ComEd position if the Illinois Commerce Commission does not accept the stipulation. |
13 Q2 GAAP EPS Reconciliation $1.03 - $0.14 $0.04 $0.85 Q2 2007 GAAP Earnings (Loss) Per Share $1.03 ($0.04) $0.14 $0.06 $0.87 2007 Adjusted (non-GAAP) Operating Earnings (Loss) Per Share (0.02) - - (0.02) - 2007 Illinois Electric Rate Settlement 0.04 0.04 - - - Investments in synthetic fuel-producing facilities (0.02) - - - (0.02) Mark-to-market adjustments from economic hedging activities Exelon Other PECO ComEd ExGen Three Months Ended June 30, 2007 NOTE: All amounts shown are per Exelon share and represent contributions to Exelon's EPS. $1.13 - $0.09 $0.05 $0.99 Q2 2008 GAAP Earnings (Loss) Per Share $1.13 $(0.02) $0.09 $0.05 $1.01 2008 Adjusted (non-GAAP) Operating Earnings (Loss) Per Share (0.07) - - - (0.07) 2007 Illinois Electric Rate Settlement 0.09 0.02 - - 0.07 Mark-to-market adjustments from economic hedging activities (0.02) - - - (0.02) Unrealized gains and losses related to nuclear decommissioning trust funds Exelon Other PECO ComEd ExGen Three Months Ended June 30, 2008 |
14 YTD GAAP EPS Reconciliation (0.02) - - (0.02) - 2007 Illinois Electric Rate Settlement 0.01 - - - 0.01 Investments in Synthetic Fuel-Producing Facilities $2.05 - $0.33 $0.05 $1.67 YTD 2007 GAAP Earnings (Loss) Per Share $2.10 $(0.07) $0.33 $0.07 $1.77 2007 Adjusted (non-GAAP) Operating Earnings (Loss) Per Share 0.01 - - - 0.01 Sale of Generation's investments in TEG and TEP $0.07 $0.07 - - - Investments in synthetic fuel-producing facilities (0.12) - - - (0.12) Mark-to-market adjustments from economic hedging activities Exelon Other PECO ComEd ExGen Six Months Ended June 30, 2007 NOTE: All amounts shown are per Exelon share and represent contributions to Exelon's EPS. $2.01 $0.01 $0.23 $0.12 $1.65 YTD 2008 GAAP Earnings (Loss) Per Share 2.06 $(0.03) $0.23 $0.12 $1.74 2008 Adjusted (non-GAAP) Operating Earnings (Loss) Per Share (0.14) - - - (0.14) 2007 Illinois Electric Rate Settlement 0.17 0.04 - - 0.13 Mark-to-market adjustments from economic hedging activities (0.08) - - - (0.08) Unrealized gains and losses related to nuclear decommissioning trust funds Exelon Other PECO ComEd ExGen Six Months Ended June 30, 2008 |