Peco Energy & Unicom Logo placed on this slide
The Creation of a Preeminent
National Energy Company
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September 24, 1999
Safe Harbor
This presentation contains certain forward-looking statements within the meaning
of the safe-harbor provisions of the Securities Exchange Act of 1934; these
forward-looking statements are subject to various risks and uncertainties. The
factors that could cause actual results to differ materially from the
projections, forecasts, estimates and expectations discussed herein may include
factors that are beyond the companies' ability to control or estimate precisely,
such as estimates of future market conditions, the behavior of other market
participants and the actions of the Federal and State regulators. Other factors
include, but are not limited to, actions in the financial markets, weather
conditions, economic conditions in the two companies' service territories,
fluctuations in energy-related commodity prices, conversion activity, other
marketing efforts and other uncertainties. Other risk factors are detailed from
time to time in the two companies' SEC reports. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date of this presentation, September 24, 1999. The companies do not
undertake any obligation to publicly release any revisions to these forward-
looking statements to reflect events or circumstances after the date of this
presentation.
Corbin A. McNeill, Jr.
Chairman, CEO and President
PECO Energy Company
John W. Rowe
Chairman, CEO and President
Unicom Corporation
Michael J. Egan
Chief Financial Officer; PECO Energy Company
Chief Integration Officer
Agenda
. Strategic Overview
. The New Company
. Growth Opportunities of Merger
. Terms of the Deal
. Financial Benefits
. Vision for Future
Our Shared Vision
Common Ground
. Pursuing bold strategies that capitalize
on competitive growth opportunities
. Thriving in early deregulated environments
. Building shareholder value for
the long term
. Repurchasing stock
Our Shared Vision
Common Goals
. Accelerating and enhancing our
competitive growth strategy
. Adding to near-term earnings
. Achieving a higher earnings growth rate
. Re-deploying capital with a focus on
increased returns
Delivering On Our Goals
Transaction is immediately accretive
9-10% expected annual growth in EPS
$1.5B in capital returned to shareholders
immediately
A Compelling Combination
Creates a preeminent national energy company
. National Generation / Marketing Portfolio
. Largest Nuclear Generation Fleet with 21 plants
Achieves a multi-regional distribution platform
. Largest retail electric utility customer base
. Positioned for further regional consolidation
Financial scale and resources to execute strategy
A Strategic Fit
Distribution Generation
Focus Focus
UNICOM PECO ENERGY(R)
WITH... WITH...
9,400 MW CAPACITY 1.5 MILLION CUSTOMERS
Two Complementary
Strategies
ONE POWERFUL COMPANY
Creating a Growth Platform
Slide 11 Map of U.S. in background
Chicago
Unicom Logo
GWh Sales: 100,000
MWs: 9,400
Customers: 3.5MM
Revenues: $7.2 B
Market Cap: $8.1 B
Philadelphia
Peco Energy(R) Logo
GWh Sales: 74,000
MWs: 13,100
Customers: 1.5MM
Revenues: $5.2 B
Market Cap: $7.1 B
[Combined companies]
GWh Sales: 174,000
MWs: 22,500
Customers: 5.0MM
Revenues: $12.4 B
Market Cap: $15.2 B
The Generation Story
Accelerating our national growth strategy
. Focus on nuclear operational excellence
. Leverage best practices and operating
capabilities
. Capture synergies in operations and
supply management
. Continue disciplined acquisition program
Top 20
U.S. Electric Generators
Slide 13 Bar Chart
Gigawatts
45
40
35
30
25
20
15
10
5
0
[Ranked in descending order of generating
capacity in gigawatts]
AEP / CSR 38.6
Southern Company 37.9
Entergy 23.2
PECO / Unicom Combined * 22.5
FPL Group 21.6
Texas Utilities 21.1
Duke Energy 20.8
NSP / NCE 19.8
Dominion Resources 19.4
Edison International 18.3
Reliant Energy 17.4
PECO Energy* 13.1
FirstEnergy 11.8
Ameren 11.4
Cinergy 11.2
Public Service Enterprise Group 11.1
DTE Energy 10.3
Carolina Power & Light 10
Unicom 9.4
CMS Energy 9
Allegheny Energy 8.1
Asset-Based Power Marketing
Extend scale and scope of proven
wholesale marketing and trading strategy
. Exploit physical reach of combined portfolio
. Broaden portfolio of custom products
. Enhance position as preferred counter-party
. Balance portfolio through contract positions
Distribution
Distribution network serving 5MM customers
. Committed to reliability and customer
satisfaction
. Sharing of best practices and systems
. Capture synergies
Grow through strategic acquisitions
Top 20 U.S. Electric
Distribution Companies
Slide 16 Bar Chart
Customers (millions)
5.0
4.0
3.0
2.0
1.0
0
[Ranked in descending order by number of customers (000 omitted)]
PECO / Unicom Combined 4,948
AEP / CSR 4,680
PG&E 4,600
Edison International 4,270
Southern Company 3,794
FPL Group 3,700
Unicom 3,455
Consolidated Edison 3,305
NSP / NCE 3,059
Entergy 2,500
Texas Utilities 2,500
FirstEnergy 2,167
DTE Energy 2,068
Duke Energy 2,000
Dominion Resources 2,000
Public Service Enterprise Group 1,900
CMS Energy 1,640
Reliant Energy 1,600
PECO Energy 1,493
Ameren 1,479
Allegheny Energy 1,418
Related Growth Opportunities
Broad and complementary portfolios
Flexibility to respond to market opportunities
Portfolio focus
. Infrastructure services
. Energy solutions
. Telecommunications
Terms of the Deal
Merger of Equals
Stock for stock exchange ratio
. 1:1 for PECO Energy
. 0.95:1 for Unicom
Purchase accounting
. Annual Goodwill ~ $70MM
$1.69 anticipated annual dividend
$1.5B Dual Cash Election
Dual Cash Election
PECO Unicom
Pre-Closing shares outstanding (est.) 182.4MM 191.3MM
Cash Election
$750MM to PECO Shares (16.7MM)
$750MM to Unicom Shares (17.5MM)
------- -------
Shares Remaining 165.7MM 173.8MM
Share Exchange
1:1 PECO Shares 165.7MM
0.95:1 Unicom Shares 165.1MM
Total Shares Outstanding 330.8MM
Cost Savings
Annual savings
. $100MM year one
. Over $180MM year three
60% Regulated
40% Unregulated
Slide 20 3-color Pie Chart depicting allocation of savings as follows:
50% Labor
35% Corporate & Administrative Programs
15% Fuel & Purchasing
Revenue Enhancements
Power Marketing
. Enhanced margins on integrated portfolio
. Improved transmission efficiency
Non-regulated growth opportunities
. Leverage infrastructure services over broader customer base
. Capitalize on telecom (fiber) opportunities
. Energy Solutions: cross-selling opportunities
Game Plan for Approval
No significant regulatory hurdles
. NRC
. SEC: '35 Act Registration
. FERC
. IL Commerce Commission
. PA Public Utility Commission
Timing
. Target closing: ~12 months
Transition to Competition
PECO Unicom
Restructuring plans finalized [X] [X]
Stranded cost recovery [X] [X]
Securitization in-place [X] [X]
Retail choice timetable [X] [X]
Management & Governance Structure
8 board members from each company
McNeill and Rowe will be Co-CEO's through 12/31/03
McNeill: Chairman for first 18 months
. Responsibilities: generation and marketing
Rowe: Chairman after 18 months
. Responsibilities: transmission, distribution and
unregulated growth ventures
Financial Benefits
Accretive to both companies in first year
Positioned for 9-10% long-term EPS growth
Dividend provides flexibility to execute
growth strategy
Balance sheet supports solid credit ratings
Vision for the Future
Scale, scope and resources enable:
. Growth of generation portfolio
. Top-quartile distribution performance--
safe, reliable and efficient
. Expansion of related growth businesses
9-10% annual growth in earnings per share
Slide 27
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Unicom Logo placed on this slide
Q&A
Slide 28
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