Exhibit 99.1
[EXELON LOGO]
- --------------------------------------------------------------------------------
News Release
From: Exelon Corporation FOR IMMEDIATE RELEASE
Corporate Communications April 28, 2003
P.O. Box 805379 Chicago, IL 60680-5379
Contact: Linda Marsicano, Media Relations
312.394.3099
Linda Byus, CFA, Investor Relations
312.394.7696
Exelon Announces Strong First Quarter Earnings;
Reaffirms 2003 Earnings Guidance
Chicago (April 28, 2003) - Exelon Corporation (NYSE: EXC) today announced
operating earnings for the first quarter of 2003 of $397 million, or $1.22 per
share (diluted), compared with operating earnings of $250 million, or $0.77 per
share (diluted), for the same period in 2002. The 58% improvement year-over-year
was due primarily to higher weather-related gas and kWh sales, increased CTC
revenue at ComEd, lower depreciation and amortization expense, fewer nuclear
outages and lower interest expense, which more than offset increased operating
expenses including pension and benefit costs.
Reported first quarter 2003 consolidated earnings prepared in accordance with
accounting principles generally accepted in the United States (GAAP) were $361
million, or $1.11 per share (diluted). Reported results for the first quarter
include the $112 million, or $0.34 per share, after-tax gain for the cumulative
effect of adopting SFAS 143, "Accounting for Asset Retirement Obligations."
Reported earnings also include a $17 million, or $0.05 per share, after-tax
charge related to the March 3 ComEd Settlement Agreement discussed below and an
after-tax charge for the impairment of Exelon's investment in Sithe Energies,
Inc. of $130 million, or $0.40 per share. Reported earnings in the first quarter
of 2002 were $8 million, or $0.02 per share (diluted), which included a $230
million, or $0.71 per share, after-tax charge for the cumulative effect of
adopting SFAS 142, an accounting standard for goodwill and intangible assets,
and net pre-tax charges of $10 million, or $0.04 per share, for severance costs.
(Details on the differences between GAAP earnings and operating earnings are
included below, with a tabular reconciliation of these differences included in
the attachments to this release.)
"Our first quarter results provide a solid base to build on in 2003," said John
W. Rowe, Exelon Chairman and CEO. "Through The Exelon Way, we will continue to
improve efficiency and productivity and create even more value for our
investors. We believe The Exelon Way will enable us to meet or exceed 5% annual
earnings growth and provide cash that will increase balance sheet flexibility to
successfully handle the end of the regulatory transition in Illinois in 2007."
2003 Earnings Guidance
Exelon's full year operating earnings are expected to fall within a range of
$4.80 to $5.00 per share. The earnings guidance is based on the assumption of
normal weather for the last three quarters of 2003 and excludes the first
quarter $0.34 per share cumulative effect for the change in accounting
principle, the net $0.05 per share charge related to the March 3 ComEd
settlement agreement and the $0.40 per share impairment of our Sithe Energies
investment. Second quarter operating earnings are expected to represent between
21% and 23% of full year operating earnings.
Adoption of SFAS 143
Exelon adopted SFAS 143 as of January 1, 2003. SFAS 143 provides accounting
requirements for retirement obligations associated with tangible long-lived
assets. The new standard changed the accounting for decommissioning of nuclear
generating plants as well as certain other long-lived assets. Adoption of the
new standard resulted in $112 million of after-tax income reported as a
cumulative effect of a change in accounting principle in the first quarter of
2003. The new standard is not expected to have an impact on ongoing earnings.
Operating Earnings
Operating earnings (pro forma), which generally exclude non-operational items as
well as one-time charges or credits that are not normally associated with our
ongoing operations, are provided as a complement to results provided in
accordance with GAAP. Management uses such pro forma measures internally to
evaluate the company's performance and manage its operations. A reconciliation
of GAAP to operating earnings is included in the attachments to this release.
Operating earnings (pro forma) exclude:
o Cumulative effect of changes in accounting principles
o One-time gains (losses) associated with a regulatory order
o Severance charges or other costs associated with restructuring operations
that are material in magnitude
o Transaction-related gains or losses related to the sale or purchase of an
asset or business, which is not a part of ongoing operations.
First Quarter Highlights
o Nuclear Operations Exelon Generation's nuclear fleet, excluding
AmerGen, produced 29,330 GWhs for the first quarter of 2003, compared
with 27,533 (reflects reallocation) GWhs output for the first quarter
of 2002. The fleet, including AmerGen, achieved a capacity factor of
94.4% for the first quarter of 2003, compared with 90.3% for the first
quarter of 2002. Exelon Generation's nuclear group completed two
planned refueling outages during the first quarter of 2003 compared
with four in the first quarter of 2002. Operating expenses associated
with the planned refueling outages were approximately $32 million lower
in the first quarter of 2003 compared with the prior year.
o ComEd Refinancing Year-to-date, ComEd has completed $1.3 billion of
securities offerings as part of its ongoing refinancing program. On
January 22, 2003, ComEd closed on the sale of $350 million of 3.70%
First Mortgage Bonds, which are due in 2008, and $350 million of 5.875%
First Mortgage Bonds, which are due in 2033. The net proceeds from the
sale of the bonds were used to pay off matured or called debt with
2
interest rates averaging about 6.5%. On March 17, 2003, ComEd closed on
the sale of $200 million of 30-year Trust Preferred Securities. The
securities carry a coupon of 6.35% and will mature in 2033. The purpose
of the issue was to refund an existing ComEd trust preferred issue with
an 8.48% coupon. On April 7, 2003, ComEd closed on the sale of $395
million of First Mortgage Bonds maturing in 2015 with a coupon of
4.70%. The purpose of the issue was to refund debt with an average
interest rate of about 8.2%.
o PECO Energy Refinancing On April 28, 2003, PECO Energy closed on the
sale of $450 million of First Mortgage Bonds. The securities carry a
3.5% coupon and will mature in 2008. Proceeds will be used to fund
maturing debt with an average interest rate of about 6.5%.
o March 3 Settlement Agreement On March 28, 2003, the Illinois Commerce
Commission (ICC) entered final orders for the three docketed cases
included in the March 3 Agreement entered into by ComEd and other
interested parties. The Agreement resolved several regulatory matters,
and provided greater certainty for the balance of ComEd's competitive
transition period through 2006 and setting the stage for the
post-transition period. The three ICC orders established delivery
service rates for retail customers not under the traditional bundled
rates, rejected disallowances proposed by the ICC's auditors and found
ComEd's distribution plant additions to be prudent and used and useful,
established market value energy adders for customers who select an
alternative electricity supplier or the purchase power option and
approved an hourly energy price rate that will be available to certain
delivery service customers. Other provisions of the Agreement not
subject to ICC action include the funding of certain programs for
customer and governmental groups and facilitating the potential
extension of ComEd's full-requirements power purchase agreement with
its generating affiliate through 2006. In the first quarter, ComEd
recorded a $51 million (on a present value basis before income taxes)
charge related to the funding of certain programs for customer and
governmental groups, partially offset by the reversal of a $12 million
(before income taxes) third quarter 2002 potential capital disallowance
reserve and a $10 million (before income taxes) credit also related to
the ICC regulatory order. The net one-time charge for these items is
$17 million (after income taxes).
o Exelon New England Exelon New England's Mystic 8 generating plant began
commercial operation on April 13, 2003. Mystic 8 is an 807-MW gas-fired
combined cycle plant with an estimated 7,000 heat rate located in
Everett, MA (greater Boston area). The Mystic 9 plant is expected to
begin commercial operation in May and ForeRiver in June 2003.
BUSINESS UNIT RESULTS
Exelon Corporation's consolidated net income for the first quarter of 2003 was
$361 million compared with net income of $8 million in the first quarter of
2002. Operating earnings were $397 million in the first quarter of 2003 compared
with operating earnings of $250 million in the first quarter of 2002.
Exelon Energy Delivery consists of the retail electricity transmission and
distribution operations of ComEd and PECO and the natural gas distribution
business of PECO. Energy Delivery's net income in the first quarter of 2003 was
3
$330 million compared with net income of $215 million in the first quarter of
2002. First quarter 2003 net income includes the net $17 million after-tax
charge resulting from the March 3 ComEd Settlement Agreement and income of $5
million for the cumulative effect of adopting SFAS 143. The increase in net
income was primarily due to increased CTC recoveries at ComEd, increased sales
to residential and small commercial and industrial customers, including
weather-related electric and gas sales, lower interest costs and lower
depreciation rates at ComEd.
Heating degree-days for the first quarter of 2003 in the ComEd service territory
were up 17% relative to the same period in 2002 and 3% above normal. In the PECO
service territory, heating degree-days were up 33% compared with 2002 and 8%
above normal. Retail kWh deliveries rose 5.8% for ComEd, with a 7.4% increase in
deliveries to the residential customer class reflecting more heating degree-days
and a follow on to 2002's strong housing market. PECO's retail kWh deliveries
increased 11.5% overall, with residential deliveries up 18.7%. PECO's gas
deliveries increased 26.4% for the quarter and gas revenue increased 38.2% to
$288 million. Energy Delivery's first quarter 2003 revenues were $2,642 million,
up 13% from $2,335 million in 2002. Energy Delivery's first quarter 2003 fuel
and purchased power expense was $1,175 million, up 15% from $1,024 million in
2002. The impact of the colder weather increased Energy Delivery's first quarter
2003 earnings per share by approximately $0.14 relative to 2002, and $0.04
relative to the normal weather that was incorporated in our earnings guidance.
Exelon Generation consists of Exelon's electric generation operations and power
marketing and trading functions. First quarter 2003 reported net income before
cumulative effect of a change in accounting principle (SFAS 143) was a loss of
$52 million and includes the $130 million after-tax impairment of the investment
in Sithe Energies. Net income after the cumulative effect of the change in
accounting principle was $56 million. First quarter 2002 net income and income
before cumulative effect of a change in accounting principle were $79 million
and $66 million, respectively. Income before cumulative effect in 2003 excluding
the $130 million Sithe impact exceeded 2002 by $12 million despite the $31
million (before tax) unrealized mark-to-market loss from non-trading activities
driven by higher power market prices relative to gas and oil market prices.
While the underlying instruments do not qualify for hedge accounting treatment,
they are part of the overall hedge strategy and, as such, we expect the loss to
be essentially offset by resulting physical asset transactions in 2003 and later
years. A $6 million (before tax) mark-to-market gain was recorded in the first
quarter of 2002.
Generation's first quarter 2003 revenue was $1,863 million, compared with first
quarter 2002 revenue of $1,461 million. The revenue increase reflects higher
energy market sales volumes, higher power prices and the 2002 acquisitions of
the New England plants and two Texas plants. Energy sales volumes, exclusive of
trading volumes, totaled 54,409 GWhs in the first quarter of 2003 compared with
48,324 GWhs in first quarter 2002.
Operating and maintenance expenses were up for the quarter as $19 million of
additional expenses resulting from the acquisitions of the New England and Texas
plants, higher pension and post-retirement benefit expense and the effects of
certain new accounting treatments under FAS 143, were partially offset by lower
expenses from fewer planned nuclear outages.
Power Team's revenue net fuel increased by $62 million in first quarter 2003
over first quarter 2002 excluding the mark-to-market impact in both years. The
improvement includes $32 million of margin contribution from the New England and
Texas plants acquired after the first quarter of 2002. The increase was driven
4
by higher wholesale power prices in all regions in which Power Team operates, a
higher average power price to ComEd and higher nuclear generation, offset
partially by higher supply costs, including fuel and purchased power. The
average realized price excluding trading activity in the first quarter of 2003
was $34 per MWh compared with $30 per MWh in 2002. Higher market prices in both
MAIN and PJM, driven by higher market gas and oil prices and cold weather, were
partially offset by our hedged position during the quarter. The same factors,
cold weather and higher gas prices, also resulted in higher supply costs,
including purchased power and fuel costs.
Exelon Enterprises consists of Exelon's competitive retail energy sales, energy
and infrastructure services, venture capital investments and related businesses.
Enterprises' first quarter 2003 net loss and loss before cumulative effect of a
change in accounting principle were $18 million and $17 million, respectively.
The first quarter 2002 net loss and loss before cumulative effect of a change in
accounting principle were $271 million and $28 million, respectively. The
decrease in the first quarter 2003 loss before cumulative effect of a change in
accounting principle of $11 million is primarily the result of a reduction in
operating expenses, reduced costs from the discontinuance of retail sales in the
PJM region and a reduction in equity losses of unconsolidated affiliates.
Despite the continued weak economy, improvements were achieved in most
businesses. However, unplanned losses resulting from Exelon Energy exiting a key
supply agreement in the Northeast ($10.8 million) coupled with a write-down of a
venture capital investment ($3.0 million) contributed to the loss for the
quarter.
Conference call information: Exelon has scheduled a conference call for 9 AM ET
(8 AM CT) on April 29, 2003. The call-in number in the U.S. is 877/715-5317 and
the international call-in number is 973/582-2720. No password is required. Media
representatives are invited to participate on a listen-only basis. The call will
be web-cast and archived on Exelon's web site: www.exeloncorp.com. (Please
select the Investor Relations page.)
Telephone replays will be available until May 16. The U.S. call-in number for
replays is 877/519-4471 and the international call-in number is 973/341-3080.
The confirmation code is 3851095.
================================================================================
Except for the historical information contained herein, certain of the matters
discussed in this news release are 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 the forward-looking statements made by a registrant
include those discussed herein as well as those discussed in Exelon
Corporation's 2002 Annual Report on Form10-K in (a) ITEM 7. Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Business Outlook and the Challenges in Managing Our Business for
Exelon, ComEd, PECO and Generation and (b) ITEM 8. Financial Statements and
Supplementary Data: Exelon--Note 19, ComEd--Note 16, PECO--Note 18 and
Generation--Note 13, and (c) other factors discussed in filings with the
Securities and Exchange Commission (SEC) by Exelon Corporation, Commonwealth
Edison Company, PECO Energy Company and Exelon Generation Company, LLC
(Registrants). Readers are cautioned not to place undue reliance on these
forward-looking statements, which apply only as of the date of this press
release. None of the Registrants undertakes any obligation to publicly release
any revision to its forward-looking statements to reflect events or
circumstances after the date of this press release.
5
###
Exelon Corporation is one of the nation's largest electric utilities with
approximately 5 million customers and $15 billion in annual revenues. The
company has one of the industry's largest portfolios of electricity
generation capacity, with a nationwide reach and strong positions in the
Midwest and Mid-Atlantic. Exelon distributes electricity to approximately
5 million customers in Illinois and Pennsylvania and gas to more than 440,000
customers in the Philadelphia area. Exelon is headquartered in Chicago and
trades on the NYSE under the ticker EXC.
6
EXELON CORPORATION
Consolidated Statements of Income
(unaudited)
(in millions, except per share data)
Three Months Ended March 31, 2003
--------------------------------------------------------------------------
Pro Forma
GAAP (a) Adjustments Pro Forma
----------------- ----------------------- -----------------------
Operating Revenues $ 4,074 $ - $ 4,074
Operating Expenses
Purchased Power 907 - 907
Fuel 830 - 830
Operating and Maintenance 1,093 (41) (b) 1,052
Depreciation and Amortization 290 - 290
Taxes Other Than Income 197 - 197
----------------- ----------------------- -----------------------
Total Operating Expenses 3,317 (41) 3,276
----------------- ----------------------- -----------------------
Operating Income 757 41 798
Other Income and Deductions
Interest Expense (225) - (225)
Distributions on Preferred Securities
of Subsidiaries (12) - (12)
Equity in Earnings of Unconsolidated
Affiliates, net 18 - 18
Impairment of Investment in Sithe Energies, Inc. (200) 200 (c) -
Other, Net 59 (12) (b) 47
----------------- ----------------------- -----------------------
Total Other Income and Deductions (360) 188 (172)
----------------- ----------------------- -----------------------
Income Before Income Taxes and Cumulative
Effect of Changes in Accounting Principles 397 229 626
Income Taxes 148 81 229
----------------- ----------------------- -----------------------
Income Before Cumulative Effect of Changes
in Accounting Principles 249 148 397
Cumulative Effect of Changes in Accounting
Principles, Net of Income Taxes 112 (112) (d) -
----------------- ----------------------- -----------------------
Net Income $ 361 $ 36 $ 397
================= ======================= =======================
Earnings per Average Common Share
Basic:
Income before Cumulative Effect of
Changes in Accounting Principles $ 0.76 $ 0.46 $ 1.22
Cumulative Effect of Changes in
in Accounting Principles 0.35 (0.35) -
----------------- ----------------------- -----------------------
Net Income $ 1.11 $ 0.11 $ 1.22
================= ======================= =======================
Diluted:
Income before Cumulative Effect of
Changes in Accounting Principles $ 0.77 $ 0.45 $ 1.22
Cumulative Effect of Changes
in Accounting Principles 0.34 (0.34) -
----------------- ----------------------- -----------------------
Net Income $ 1.11 $ 0.11 $ 1.22
================= ======================= =======================
Average Common Shares Outstanding
Basic 324
Diluted 326
Effect of Pro Forma Adjustments on Net Income
Recorded in Accordance with GAAP:
Impairment of Sithe Energies, Inc. investment $ (0.40)
Cumulative effect of adopting SFAS 143 0.34
March 3 ComEd Settlement Agreement (0.05)
Employee severance costs -
Cumulative effect of adopting
SFAS 141 and SFAS 142 -
-----------------
Total Pro Forma Adjustments $ (0.11)
=================
Three Months Ended March 31, 2002
--------------------------------------------------------------------------
Pro Forma
GAAP (a) Adjustments Pro Forma
----------------- ----------------------- ------------------------
Operating Revenues $ 3,357 $ - $ 3,357
Operating Expenses
Purchased Power 668 - 668
Fuel 496 - 496
Operating and Maintenance 1,067 (10) (e) 1,057
Depreciation and Amortization 335 - 335
Taxes Other Than Income 186 - 186
----------------- ----------------------- ------------------------
Total Operating Expenses 2,752 (10) 2,742
----------------- ----------------------- ------------------------
Operating Income 605 10 615
Other Income and Deductions
Interest Expense (249) - (249)
Distributions on Preferred Securities
of Subsidiaries (11) - (11)
Equity in Earnings of Unconsolidated
Affiliates, net 13 - 13
Impairment of Investment in Sithe Energies, Inc. - - -
Other, Net 28 - 28
----------------- ----------------------- ------------------------
Total Other Income and Deductions (219) - (219)
----------------- ----------------------- ------------------------
Income Before Income Taxes and Cumulative
Effect of Changes in Accounting Principles 386 10 396
Income Taxes 148 (2) 146
----------------- ----------------------- ------------------------
Income Before Cumulative Effect of Changes
in Accounting Principles 238 12 250
Cumulative Effect of Changes in Accounting
Principles, Net of Income Taxes (230) 230 (f) -
----------------- ----------------------- ------------------------
Net Income $ 8 $ 242 $ 250
================= ======================= ========================
Earnings per Average Common Share
Basic:
Income before Cumulative Effect of
Changes in Accounting Principles $ 0.74 $ 0.04 $ 0.78
Cumulative Effect of Changes in
in Accounting Principles (0.72) 0.72 -
----------------- ----------------------- ------------------------
Net Income $ 0.02 $ 0.76 $ 0.78
================= ======================= ========================
Diluted:
Income before Cumulative Effect of
Changes in Accounting Principles $ 0.73 $ 0.04 $ 0.77
Cumulative Effect of Changes
in Accounting Principles (0.71) 0.71 -
----------------- ----------------------- ------------------------
Net Income $ 0.02 $ 0.75 $ 0.77
================= ======================= ========================
Average Common Shares Outstanding
Basic 321
Diluted 323
Effect of Pro Forma Adjustments on Net Income
Recorded in Accordance with GAAP:
Impairment of Sithe Energies, Inc. investment $ -
Cumulative effect of adopting SFAS 143 -
March 3 ComEd Settlement Agreement -
Employee severance costs (0.04)
Cumulative effect of adopting
SFAS 141 and SFAS 142 (0.71)
-----------------
Total Pro Forma Adjustments $ (0.75)
=================
<FN>
(a) Results reported in accordance with accounting principles generally accepted in the United States (GAAP).
(b) Pro forma adjustment for the March 3 ComEd Settlement Agreement.
(c) Pro forma adjustment for the impairment of Exelon's investment in Sithe Energies, Inc.
(d) Pro forma adjustment for the cumulative effect of adopting SFAS No. 143.
(e) Pro forma adjustment for severance costs of $10 million pre-tax primarily related to executive severance. Not all of the
severance expense is tax deductible.
(f) Pro forma adjustment for the cumulative effect of adopting SFAS No. 141 and SFAS No. 142 related to the impairment of
Enterprises' goodwill and the benefit of AmerGen's negative goodwill.
</FN>
7
EXELON CORPORATION
Earnings Per Diluted Share Reconciliation
First Quarter 2003 vs. First Quarter 2002
2002 Earnings per Diluted Share $ 0.02
2002 Pro Forma Adjustments:
Cumulative Effect of Adopting SFAS 141 and SFAS 142 0.71
Employee Severance Costs (1) 0.04
-------------
2002 Pro Forma Earnings 0.77
Year Over Year Effects on Earnings:
Higher Energy Margins - Weather Impact (2) 0.15
Higher Energy Margins - Rate Changes (3) 0.15
Higher Energy Margins - Other 0.02
Higher Operating and Maintenance Expense (O&M) (4) (0.12)
Lower Nuclear Outage Operating and Maintenance Costs (5) 0.06
Lower Depreciation and Amortization Expense (6) 0.08
Lower Interest Expense (7) 0.04
Higher Investment Income (8) 0.04
Higher Taxes Other Than Income (9) (0.01)
InfraSource and Energy Services (10) 0.01
Other 0.03
-------------
2003 Pro Forma Earnings 1.22
Impairment of Investment in Sithe Energies, Inc. (11) (0.40)
Cumulative Effect of Adopting SFAS 143 0.34
March 3 ComEd Settlement Agreement (12) (0.05)
-------------
2003 Earnings per Diluted Share $ 1.11
=============
<FN>
(1) Executive severance partially offset by favorable adjustments to
previous severance estimates. A portion of the executive severance was
not tax deductible. As a result, the after-tax impact on earnings is
$0.04 per share.
(2) Primarily related to cooler winter weather in 2003 versus 2002. Heating
degree-days in the ComEd and PECO service territories were 17% and 33%
higher, respectively.
(3) Reflects increased CTC collections by ComEd due to an increase in
customer shopping and changes in the wholesale market price of
electricity, net of increased mitigation factors. The decrease in
wholesale prices also resulted in a decrease in revenue from ComEd's
PPO customers.
(4) O&M expense, excluding outage costs, severance costs, InfraSource and
Energy Services O&Ms, and the March 3 ComEd Settlement Agreement,
increased due to the implementation of SFAS 143, the acquisition of two
generating stations in Texas in April 2002, and the acquisition of
Sithe New England assets in November 2002.
(5) Relates to four planned nuclear refueling outages in 2002 as compared
to two refueling outages in 2003.
(6) Depreciation and amortization expense was lower primarily due to lower
depreciation rates and lower recoverable transition cost amortization
at ComEd and lower decommissioning expense at Generation due to the
adoption of SFAS 143, partially offset by increased depreciation
related to higher depreciable plant balances, reflecting Generation's
plant acquisitions in 2002, and higher CTC amortization at PECO.
(7) Reflects less outstanding debt and refinancing of existing debt at
lower interest rates, partially offset by debt related to acquisitions
after the first quarter of 2002.
(8) Primarily reflects higher investment income related to nuclear
decommissioning trust funds.
(9) Taxes Other Than Income was higher due to a favorable 2002 adjustment
to real estate taxes on leased property held by ComEd.
(10) Reflects lower costs at InfraSource and Energy Services, partially
offset by lower revenues.
(11) Impairment of the investment held by Generation in Sithe Energies, Inc.
(12) Agreement reached by ComEd and various Illinois suppliers, customers,
and governmental parties regarding several matters affecting ComEd's
rates for electric service.
</FN>
8
EXELON CORPORATION
Consolidating Statements of Income
(unaudited)
(in millions)
Three Months Ended March 31, 2003
-------------------------------------------------------------------------------
Energy Exelon
Delivery Generation Enterprises Corp/Elim Consolidated
-------------------------------------------------------------------------------
Operating Revenues $ 2,642 $ 1,863 $ 580 $(1,011) $ 4,074
Operating Expenses
Purchased Power 984 841 64 (982) 907
Fuel 191 364 275 -- 830
Operating and Maintenance 400 471 256 (34) 1,093
Depreciation and Amortization 230 45 10 5 290
Taxes Other Than Income 143 48 2 4 197
------- ------- ------- ------- -------
Total Operating Expenses 1,948 1,769 607 (1,007) 3,317
------- ------- ------- ------- -------
Operating Income (Loss) 694 94 (27) (4) 757
Other Income and Deductions
Interest Expense (196) (19) (3) (7) (225)
Distributions on Preferred
Securities of Subsidiaries (12) -- -- -- (12)
Equity in Earnings (Losses) of
Unconsolidated Affiliates, net -- 19 2 (3) 18
Impairment of Investment in Sithe
Energies, Inc. -- (200) -- -- (200)
Other, Net 31 33 (2) (3) 59
------- ------- ------- ------- -------
Total Other Income and Deductions (177) (167) (3) (13) (360)
------- ------- ------- ------- -------
Income (Loss) Before Income Taxes and Cumulative
Effect of a Change in Accounting Principle 517 (73) (30) (17) 397
Income Taxes 192 (21) (13) (10) 148
------- ------- ------- ------- -------
Income (Loss) Before Cumulative Effect of a Change
in Accounting Principle 325 (52) (17) (7) 249
Cumulative Effect of a Change in Accounting
Principle, Net of Income Taxes 5 108 (1) -- 112
------- ------- ------- ------- -------
Net Income (Loss) $ 330 $ 56 $ (18) $ (7) $ 361
======= ======= ======= ======= =======
Three Months Ended March 31, 2002
-------------------------------------------------------------------------------
Energy Exelon
Delivery Generation Enterprises Corp/Elim Consolidated
-------------------------------------------------------------------------------
Operating Revenues $ 2,335 $ 1,461 $ 490 $ (929) $ 3,357
Operating Expenses
Purchased Power 889 619 52 (892) 668
Fuel 135 209 152 -- 496
Operating and Maintenance 373 432 301 (39) 1,067
Depreciation and Amortization 247 63 17 8 335
Taxes Other Than Income 132 49 2 3 186
------- ------- ------- ------- -------
Total Operating Expenses 1,776 1,372 524 (920) 2,752
------- ------- ------- ------- -------
Operating Income (Loss) 559 89 (34) (9) 605
Other Income and Deductions
Interest Expense (221) (17) (5) (6) (249)
Distributions on Preferred Securities
of Subsidiaries (11) -- -- -- (11)
Equity in Earnings (Losses) of
Unconsolidated Affiliates, net -- 23 (7) (3) 13
Other, Net 14 16 (1) (1) 28
------- ------- ------- ------- -------
Total Other Income and Deductions (218) 22 (13) (10) (219)
------- ------- ------- ------- -------
Income (Loss) Before Income Taxes and Cumulative
Effect of a Change in Accounting Principle 341 111 (47) (19) 386
Income Taxes 126 45 (19) (4) 148
------- ------- ------- ------- -------
Income (Loss) Before Cumulative Effect of a
Change in Accounting Principle 215 66 (28) (15) 238
Cumulative Effect of a Change in Accounting
Principle, Net of Income Taxes -- 13 (243) -- (230)
------- ------- ------- ------- -------
Net Income (Loss) $ 215 $ 79 $ (271) $ (15) $ 8
======= ======= ======= ======= =======
9
EXELON CORPORATION
Business Segment Comparative Income Statements
(unaudited)
(in millions)
Energy Delivery
--------------------------------------------------------
Three Months Ended March 31,
---------------------------------------
2003 2002 Variance
------------------ ------------------ ---------------
Operating Revenues $ 2,642 $ 2,335 $ 307
Operating Expenses
Purchased Power 984 889 95
Fuel 191 135 56
Operating and Maintenance 400 373 27
Depreciation and Amortization 230 247 (17)
Taxes Other Than Income 143 132 11
------------------ ------------------ ---------------
Total Operating Expenses 1,948 1,776 172
------------------ ------------------ ---------------
Operating Income 694 559 135
Other Income and Deductions
Interest Expense (196) (221) 25
Distributions on Preferred Securities of Subsidiaries (12) (11) (1)
Other, Net 31 14 17
------------------ ------------------ ---------------
Total Other Income and Deductions (177) (218) 41
------------------ ------------------ ---------------
Income Before Income Taxes and Cumulative Effect
of a Change in Acounting Principle 517 341 176
Income Taxes 192 126 66
------------------ ------------------ ---------------
Income Before Cumulative Effect of a Change in
Accounting Principle 325 215 110
Cumulative Effect of a Change in Accounting
Principle, Net of Income Taxes 5 - 5
------------------ ------------------ ---------------
Net Income $ 330 $ 215 $ 115
================== ================== ===============
Generation
--------------------------------------------------------
Three Months Ended March 31,
---------------------------------------
2003 2002 Variance
------------------ ------------------ ---------------
Operating Revenues $ 1,863 $ 1,461 $ 402
Operating Expenses
Purchased Power 841 619 222
Fuel 364 209 155
Operating and Maintenance 471 432 39
Depreciation and Amortization 45 63 (18)
Taxes Other Than Income 48 49 (1)
------------------ ------------------ ---------------
Total Operating Expenses 1,769 1,372 397
------------------ ------------------ ---------------
Operating Income 94 89 5
Other Income and Deductions
Interest Expense (19) (17) (2)
Equity in Earnings of Unconsolidated Affiliates, net 19 23 (4)
Impairment of Investment in Sithe Energies, Inc. (200) - (200)
Other, Net 33 16 17
------------------ ------------------ ---------------
Total Other Income and Deductions (167) 22 (189)
------------------ ------------------ ---------------
Income (Loss) Before Income Taxes and Cumulative Effect
of Changes in Acounting Principles (73) 111 (184)
Income Taxes (21) 45 (66)
------------------ ------------------ ---------------
Income (Loss) Before Cumulative Effect of Changes in
Accounting Principles (52) 66 (118)
Cumulative Effect of Changes in Accounting
Principles, Net of Income Taxes 108 13 95
------------------ ------------------ ---------------
Net Income $ 56 $ 79 $ (23)
================== ================== ===============
10
EXELON CORPORATION
Business Segment Comparative Income Statements
(unaudited)
(in millions)
Enterprises
------------------------------------------------------
Three Months Ended March 31,
------------------------------------
2003 2002 Variance
---------------- ----------------- ---------------
Operating Revenues $ 580 $ 490 $ 90
Operating Expenses
Purchased Power 64 52 12
Fuel 275 152 123
Operating and Maintenance 256 301 (45)
Depreciation and Amortization 10 17 (7)
Taxes Other Than Income 2 2 -
---------------- ----------------- ---------------
Total Operating Expenses 607 524 83
---------------- ----------------- ---------------
Operating Income (Loss) (27) (34) 7
Other Income and Deductions
Interest Expense (3) (5) 2
Equity in Earnings (Losses) of
Unconsolidated Affiliates, net 2 (7) 9
Other, Net (2) (1) (1)
---------------- ----------------- ---------------
Total Other Income and Deductions (3) (13) 10
---------------- ----------------- ---------------
Income (Loss) Before Income Taxes and Cumulative
Effect of Changes in Acounting Principles (30) (47) 17
Income Taxes (13) (19) 6
---------------- ----------------- ---------------
Income (Loss) Before Cumulative Effect of
Changes in Accounting Principles (17) (28) 11
Cumulative Effect of Changes in Accounting
Principles, Net of Income Taxes (1) (243) 242
---------------- ----------------- ---------------
Net Income (Loss) $ (18) $ (271) $ 253
================ ================= ===============
Corporate and Eliminations
------------------------------------------------------
Three Months Ended March 31,
------------------------------------
2003 2002 Variance
---------------- ----------------- ---------------
Operating Revenues $ (1,011) $ (929) $ (82)
Operating Expenses
Purchased Power (982) (892) (90)
Operating and Maintenance (34) (39) 5
Depreciation and Amortization 5 8 (3)
Taxes Other Than Income 4 3 1
---------------- ----------------- ---------------
Total Operating Expenses (1,007) (920) (87)
---------------- ----------------- ---------------
Operating Income (Loss) (4) (9) 5
Other Income and Deductions
Interest Expense (7) (6) (1)
Equity in Earnings (Losses) of
Unconsolidated Affiliates, net (3) (3) -
Other, Net (3) (1) (2)
---------------- ----------------- ---------------
Total Other Income and Deductions (13) (10) (3)
---------------- ----------------- ---------------
Income (Loss) Before Income Taxes (17) (19) 2
Income Taxes (10) (4) (6)
---------------- ----------------- ---------------
Net Income (Loss) $ (7) $ (15) $ 8
================ ================= ===============
11
EXELON CORPORATION
Consolidated Balance Sheets
(unaudited)
(in millions)
March 31, December 31,
2003 2002
------------------- -------------------
Current Assets
Cash and Cash Equivalents $ 503 $ 469
Restricted Cash 322 396
Accounts Receivable, net
Customers 2,121 2,095
Other 243 265
Receivable from Unconsolidated Affiliate 20 32
Inventories - Fossil Fuel 163 218
Inventories - Materials and Supplies 317 306
Deferred Income Taxes 10 6
Other 625 331
------------------- -------------------
Total Current Assets 4,324 4,118
------------------- -------------------
Property Plant and Equipment, net 20,237 17,134
Deferred Debits and Other Assets
Regulatory Assets 5,459 5,938
Nuclear Decommissioning Trust Funds 3,032 3,053
Investments 1,171 1,393
Goodwill, net 4,788 4,992
Other 890 850
------------------- -------------------
Total Deferred Debits and Other Assets 15,340 16,226
------------------- -------------------
Total Assets $ 39,901 $ 37,478
=================== ===================
Liabilities and Shareholders' Equity
Current Liabilities
Notes Payable $ 900 $ 681
Notes Payable to Unconsolidated Affiliate 534 534
Long-Term Debt Due within One Year 1,147 1,402
Accounts Payable 1,815 1,563
Accrued Expenses 1,182 1,311
Other 481 483
------------------- -------------------
Total Current Liabilities 6,059 5,974
------------------- -------------------
Long-Term Debt 13,368 13,127
Deferred Credits and Other Liabilities
Deferred Income Taxes 3,849 3,702
Unamortized Investment Tax Credits 298 301
Nuclear Decommissioning Liability for Retired Units - 1,395
Asset Retirement Obligation 2,406 -
Pension Obligation 1,848 1,959
Non-Pension Postretirement Benefits Obligation 911 877
Spent Nuclear Fuel Obligation 861 858
Regulatory Liabilities 633 -
Other 976 871
------------------- -------------------
Total Deferred Credits and Other Liabilities 11,782 9,963
------------------- -------------------
Minority Interest of Consolidated Subsidiaries 78 77
Preferred Securities of Subsidiaries 610 595
Shareholders' Equity
Common Stock 7,099 7,059
Deferred Compensation - (1)
Retained Earnings 2,254 2,042
Accumulated Other Comprehensive Income (Loss) (1,349) (1,358)
------------------- -------------------
Total Shareholders' Equity 8,004 7,742
------------------- -------------------
Total Liabilities and Shareholders' Equity $ 39,901 $ 37,478
=================== ===================
12
EXELON CORPORATION
Consolidated Statements of Cash Flows
(unaudited)
(in millions)
Three Months Ended
March 31,
---------------------------
2003 2002
------------- -------------
Cash Flows From Operating Activities
Net Income $ 361 $ 8
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation and Amortization, including nuclear fuel 423 427
Cumulative Effect of a Change in Accounting Principle (net of income taxes) (112) 230
Provision for Uncollectible Accounts 31 29
Deferred Income Taxes (64) 67
Equity in (Earnings) Losses of Unconsolidated Affiliates, net (18) (13)
Impairment of Investment in Sithe Energies, Inc. 200 -
Net Realized Losses on Nuclear Decommissioning Trust Funds (6) 10
Other Operating Activities (11) 10
Changes in Assets and Liabilities:
Accounts Receivable (22) 58
Inventories 43 13
Accounts Payable, Accrued Expenses and Other Current Liabilities (99) (7)
Other Current Assets (262) (134)
Deferred Energy Costs (28) 34
Pension and Non-Pension Postretirement Benefits Obligations (77) (3)
Other Noncurrent Assets and Liabilities 59 97
------------- -------------
Net Cash Flows Provided by Operating Activities 418 826
------------- -------------
Cash Flows From Investing Activities
Capital Expenditures (427) (586)
Proceeds from Nuclear Decommissioning Trust Funds 572 580
Investment in Nuclear Decommissioning Trust Funds (622) (605)
Note Receivable from Unconsolidated Affiliate (35) (46)
Other Investing Activities 20 27
------------- -------------
Net Cash Flows Used in Investing Activities (492) (630)
------------- -------------
Cash Flows From Financing Activities
Issuance of Long-Term Debt 951 408
Retirement of Long-Term Debt (963) (471)
Issuance of Preferred Securities of Subsidiaries 200 -
Retirement of Preferred Securities of Subsidiaries (200) -
Change in Short-Term Debt 219 78
Dividends Paid on Common Stock (145) (141)
Change in Restricted Cash 74 135
Proceeds from Employee Stock Plans 31 18
Other Financing Activities (59) (12)
------------- -------------
Net Cash Flows Provided by Financing Activities 108 15
------------- -------------
Change In Cash and Cash Equivalents 34 211
Cash and Cash Equivalents at Beginning of Period 469 485
------------- -------------
Cash and Cash Equivalents at End of Period $ 503 $ 696
============= =============
13
EXELON CORPORATION
Electric Sales Statistics
Three Months Ended March 31,
---------------------------------------------
(in GWhs) 2003 2002 % Change
- --------------------------------------------------- --------------------- --------------------- ---------------
Supply
Nuclear, excluding AmerGen 29,330 27,533 6.5%
Purchased Power - Generation (a) 20,029 18,093 10.7%
Fossil, excluding Sithe, and Hydro (b) 5,050 2,698 87.2%
--------------------- ---------------------
Power Team Supply 54,409 48,324 (c) 12.6%
Purchased Power - Other 147 - n.m.
--------------------- ---------------------
Total Electric Supply Available for Sale 54,556 48,324 12.9%
Less: Line Loss and Company Use (1,974) (1,867) 5.7%
--------------------- ---------------------
Total Energy Sales 52,582 46,457 13.2%
===================== =====================
Energy Sales
Retail Sales (d) 32,207 29,913 7.7%
Power Team Market Sales (a) 23,815 19,324 23.2%
Interchange Sales and Sales to Other Utilities 698 739 (5.5%)
--------------------- ---------------------
56,720 49,976 13.5%
Less: Distribution Only Sales (4,138) (3,519) 17.6%
--------------------- ---------------------
Total Energy Sales 52,582 46,457 13.2%
===================== =====================
<FN>
(a) Purchased power and market sales do not include trading volume of 9,527 GWhs and 14,239 GWhs for the three months
ended March 31, 2003 and 2002, respectively.
(b) 2003 includes supply from plants acquired from TXU in April 2002 and Sithe Energies in November 2002.
(c) Certain reallocations have been made related to 2002.
(d) Includes Exelon Energy sales of 1,262 GWhs and 1,105 GWhs for the three months ended March 31, 2003 and 2002,
respectively.
n.m. not meaningful.
</FN>
14
EXELON CORPORATION
Energy Delivery Sales Statistics
For the Three Months Ended March 31,
ComEd PECO
-------------------------------------------- -----------------------------------------
Electric Deliveries (MWh) 2003 2002 % Change 2003 2002 % Change
----------------- ------------- ------------ ------------- ---------------- ----------
Bundled Deliveries (a)
Residential 6,886,035 6,408,683 7.4% 3,115,470 2,055,598 51.6%
Small Commercial & Industrial 5,627,359 5,449,634 3.3% 1,780,329 1,757,382 1.3%
Large Commercial & Industrial 1,484,096 1,956,006 (24.1%) 3,481,567 3,351,069 3.9%
Public Authorities & Electric Railroads 1,415,840 1,800,797 (21.4%) 252,783 193,347 30.7%
----------------- ------------- ----------- ----------------
15,413,330 15,615,120 (1.3%) 8,630,149 7,357,396 17.3%
----------------- ------------- ----------- ----------------
Unbundled Deliveries (b)
Alternative Energy Suppliers
Residential (c) n/a 264,122 791,661 (66.6%)
Small Commercial & Industrial 1,348,357 1,003,883 34.3% 201,992 96,522 109.3%
Large Commercial & Industrial 1,832,007 1,385,986 32.2% 209,607 102,828 103.8%
Public Authorities & Electric Railroads 281,714 138,042 104.1% - 46 (100.0%)
----------------- ------------- ----------- ----------------
3,462,078 2,527,911 37.0% 675,721 991,057 (31.8%)
----------------- ------------- ----------- ----------------
PPO (ComEd Only)
Small Commercial & Industrial 793,530 763,224 4.0%
Large Commercial & Industrial 1,432,553 1,311,080 9.3%
Public Authorities & Electric Railroads 537,227 242,325 121.7%
----------------- -------------
2,763,310 2,316,629 19.3%
----------------- -------------
Total Unbundled Deliveries 6,225,388 4,844,540 28.5% 675,721 991,057 (31.8%)
----------------- ------------- ----------- ----------------
Total Retail Deliveries 21,638,718 20,459,660 5.8% 9,305,870 8,348,453 11.5%
================= ============= =========== ================
Gas Deliveries (mmcf) (PECO only) 39,626 31,357 26.4%
=========== ================
Revenue (in thousands)
Bundled Revenue (a)
Residential $ 545,564 $ 517,805 5.4% $ 358,658 $ 243,447 47.3%
Small Commercial & Industrial 397,262 391,085 1.6% 194,043 188,722 2.8%
Large Commercial & Industrial 74,097 102,106 (27.4%) 266,456 244,332 9.1%
Public Authorities & Electric Railroads 83,975 91,656 (8.4%) 21,812 18,152 20.2%
----------------- ------------- ----------- ----------------
1,100,898 1,102,652 (0.2%) 840,969 694,653 21.1%
----------------- ------------- ----------- ----------------
Unbundled Revenue (b)
Alternative Energy Suppliers
Residential (c) n/a 17,496 54,144 (67.7%)
Small Commercial & Industrial 40,738 12,446 227.3% 9,782 4,662 109.8%
Large Commercial & Industrial 48,427 9,656 401.5% 5,867 2,913 101.4%
Public Authorities & Electric Railroads 9,248 1,826 406.5% - 6 (100.0%)
----------------- ------------- ----------- ----------------
98,413 23,928 311.3% 33,145 61,725 (46.3%)
----------------- ------------- ----------- ----------------
PPO (ComEd Only)
Small Commercial & Industrial 49,471 43,060 14.9%
Large Commercial & Industrial 71,847 64,102 12.1%
Public Authorities & Electric Railroads 27,221 12,750 113.5%
----------------- -------------
148,539 119,912 23.9%
----------------- -------------
Total Unbundled Revenue 246,952 143,840 71.7% 33,145 61,725 (46.3%)
----------------- ------------- ----------- ----------------
Total Retail Electric Revenue 1,347,850 1,246,492 8.1% 874,114 756,378 15.6%
Wholesale Electric Revenue 28,880 23,647 22.1% 2,720 985 176.1%
Other Revenue 47,330 45,319 4.4% 52,506 53,801 (2.4%)
Gas Revenue (PECO only) n/a n/a 288,199 208,606 38.2%
----------------- ------------- ------------------ ----------
Total Revenues $ 1,424,060 $ 1,315,458 8.3% $ 1,217,539 $1,019,770 19.4%
================= ============= =============================
Heating Degree-Days 2003 2002 Normal 2003 2002 Normal
----------------- ------------- ---------- --------- ---------------- --------------
Heating Degree-Days 3,366 2,865 3,254 2,752 2,067 2,551
<FN>
(a) Bundled service reflects deliveries to customers taking electric service under tariffed rates, which include
the cost of energy and the delivery cost of the transmission and distribution of the energy. PECO's tariffed
rates also include a CTC charge.
(b) Unbundled service reflects customers electing to receive electric generation service under the ComEd PPO
option or an alternative energy supplier. Revenue from customers choosing the ComEd PPO option includes an
energy charge at market rates, transmission and distribution charge and a CTC charge. Revenue from customers
choosing an alternative energy supplier includes a distribution charge and a CTC charge. Transmission charges
received from alternative energy suppliers are included in wholesale and miscellaneous revenue.
(c) On May 1, 2002, all ComEd residential customers were eligible to choose their supplier of electricity;
however, as of March 31, 2003, no alternative electric supplier has sought approval from the Illinois Commerce
Commission and no electric utilities have chosen to enter the ComEd residential market for the supply of
electricity.
n/a - not applicable
</FN>
15
EXELON CORPORATION
Exelon Generation Power Marketing Statistics
Three Months Ended March 31,
-------------------------------------------
2003 2002
------------------ -------------------
GWh Sales
Energy Delivery 29,346 27,750
Exelon Energy 1,248 1,250
Market Sales 23,815 19,324
------------------ -------------------
Total Sales (a) 54,409 48,324
================== ===================
Average Margin ($/MWh)
Average Realized Revenue
Energy Delivery $ 30.87 $ 29.98
Exelon Energy 43.28 45.60
Market Sales 37.05 28.15
Total Sales - without trading 33.96 29.63
Average Purchased Power and Fuel Cost - without trading $ 21.29 $ 16.74
Average Margin - without trading $ 12.67 $ 12.89
Around-the-clock Market Prices ($/MWh)
PJM $ 49.00 $ 22.00
MAIN 37.00 19.50
- ----------------------------------------------------------------------------------------------
2003 Earnings Guidance - April through December
Around-the-clock Market Prices ($/MWh)
PJM $ 42.50
MAIN 28.00
NEPOOL 51.00
Gas Prices ($/Mmbtu)
Henry Hub $ 5.75
Guidance based on forward prices as of April 15, 2003.
- ----------------------------------------------------------------------------------------------
(a) Total sales do not include trading volume of 9,527 GWhs and 14,239 GWhs
for the three months ended March 31, 2003 and 2002, respectively.
Additionally, 2003 reflects the sale of energy from plants acquired from
TXU in April 2002 and Sithe Energies in November 2002.
16