Exelon Corporation · NASDAQ:EXC
Exelon — Goldman Sachs Annual Power and Utility Conference 2007
42 slides from Exelon's conference presentation, May 10, 2007
Slide 1: Value Driven - Goldman Sachs Annual Power and Utility Conference
Value Driven Goldman Sachs Annual Power and Utility Conference New York City May 10, 2007
Slide 2: Exelon Investor Relations Contacts
Exelon Investor Relations Contacts Inquiries concerning this presentation should be directed to: Exelon Investor Relations 10 South Dearborn Street Chicago, Illinois 60603 312-394-2345 312-394-4082 (Fax) For copies of other presentations, annual/quarterly reports, or to be added to our email distrib
Slide 3: 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 4: 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 ~9% annual operating EPS growth since inception Continued strong growth trend through 2011 S
Slide 5: The Exelon Companies
'06 Earnings(1): $1,275M '07E Earnings(3): $2,280 - $2,420M '06 EPS(1): $1.88 '07 EPS Guidance(3): $3.40 - $3.60 Total Debt(4): $1.8B Credit Rating(5): BBB+ The Exelon Companies Pennsylvania Utility Illinois Utility Nuclear, Fossil, Hydro & Renewable Generation Power Marketing '06 Earnings(1): $528M
Slide 6: Q1 2007 Highlights
Q1 2007 Highlights Strong financial and operating results Higher generation margins Increased nuclear output with fewer outage days Offset by lower ComEd results and higher O&M costs across Exelon ComEd completed transition to wires-only business Implemented customer rate relief programs, including
Slide 7: 2007 Quarterly EPS Profile
2007 Quarterly EPS Profile Q1 Q2 Q3 Q4 2003-2006 Average 22% 25% 31% 22% 2006 Actual 19% 27% 32% 22% 2007 Consensus (1) 24% 24% 28% 24% 2007 Estimated 25-27%(2) 21-24% 26-29% 23-26% Quarterly Operating EPS by Percentage of Full Year: Starting this year, Exelon's earnings will have a slightly differe
Slide 8: ComEd
— ComEd. An Exelon Company ff
Slide 9: ComEd 2007 Operating EPS
ComEd 2007 Operating EPS As a "wires-only" company, ComEd is expected to earn less on an operating basis in 2007 than in prior years due to the end of the transition period in Illinois and related transition revenues. The unfavorable ICC Order in the Distribution Case and continued regulatory lag fu
Slide 10: ICC Rate Design Docket (No. 07-0166)
ICC Rate Design Docket (No. 07-0166) Key Dates Docket Initiation - March 2 Status Hearing - March 14 ComEd Informational Testimony - April 3 Ameren Informational Testimony - April 3 Workshops - Ameren - 11 a.m. April 11 (Springfield Location) Workshops - ComEd - 11 a.m. April 12 (Chicago Location) S
Slide 11: PECO
— => PECO. An Exelon Company ff
Slide 12: PECO 2007 Operating EPS
PECO's operating earnings are expected to decrease slightly from 2006 to 2007 primarily due to increasing CTC amortization 2006 Actual (2) 2007 Guidance (2) $0.67 $451M $(0.07) $0.04 $0.00 $(0.07) $0.60 - $0.65 $400M - $420M RNF O&M CTC Amortization / Depreciation Other PECO 2007 Operating EPS NOTE:
Slide 13: PECO Operating Earnings: Next Five Years
PECO Operating Earnings: Next Five Years 2011 (1) 2011 Assumptions (1) Rate Base: ~$4.7B Equity: ~50% ROE: ~10% 2007 Guidance $400M - $420M PECO is expected to provide a predictable source of earnings to Exelon through the remainder of the transition period ~$235M NOTE: See "Key Assumptions" slide i
Slide 14: PECO Average Electric Rates
PECO Average Electric Rates Energy / Capacity Competitive Transition Charge Transmission Distribution 10.67¢ 11.18¢ 11.18¢ Unit Rates (¢/kWh) (1) (1) Rates increased from original settlement by 1.6% to reflect the roll-in of increased Gross Receipts Tax and $0.02/kWh for Universal Service Fund Charg
Slide 15: Exelon Generation
Exelon Exelwn. Generation ee
Slide 16: Exelon Generation 2007 Operating EPS
Exelon Generation 2007 Operating EPS Earnings growth is driven by the expiration of the below-market ComEd PPA, favorable market conditions, and a contractual price increase in the PECO PPA 2006 Actual 2007 Guidance $1.88 $1,275M $1.73 $(0.13) $0.07 $3.40 - $3.60 $2,280M - $2,420M RNF O&M Other NOTE
Slide 17: Valuing Exelon Generation
Valuing Exelon Generation $ Millions Revenue Net Fuel (2) O&M and Other Expenses EBITDA (3) - Hedged EBITDA (3) - Un-Hedged Hedged - 2007 Un-Hedged - 2007 (1) Mid- Atlantic $2,650 $6,700 Midwest $4,050 ($2,600) $4,100 $4,700 Un-hedged ("Open") EBITDA plus upside from unique competitive position driv
Slide 18: Exelon Generation Operating Earnings Drivers: Next Five Years
Exelon Generation Operating Earnings Drivers: Next Five Years Exelon Generation is poised for earnings growth over the next five years driven by the end of the IL and PA transition periods and its unique competitive position 2007 Guidance NOTE: See "Key Assumptions" slide in Appendix (1) Differences
Slide 19: New Jersey BGS Auction Results
New Jersey BGS Auction Results(1) ATC Forward Energy Price (2) Full-Requirements Costs ($/MWh): Higher full-requirements component due to increases in costs associated with capacity and congestion (1) For PSE&G (2) Range of forward market prices that traded during the 2006 and 2007 auctions. The 200
Slide 20: Carbon Value
Carbon Value Climate change legislation is expected to drive substantial gross margin expansion at Exelon Generation (1) The Energy Information Administration (EIA) valuation of the McCain Lieberman Bill, EIA report number SR/OIAF/2003-02 (2) The EIA Carbon Stabilization Case (Case 4) dated March 20
Slide 21: Nuclear Performance - Fuel Costs
Nuclear Performance - Fuel Costs Uranium market prices have increased, but Exelon is managing its portfolio Reduced uranium demand by 25% Contracting strategy protects us and ensures we are significantly below current spot market prices through 2011 Uranium is small component of total production cos
Slide 22: Current Market Prices
Current Market Prices 2004, 2005 and 2006 are actual settled prices Real Time LMP (Locational Marginal Price) Next day over-the-counter market Average NYMEX settled prices 2007 information is a combination of actual prices through 4/30/07 and market prices for the balance of the year 2008 is forward
Slide 23: Exelon
Exelwn. ff
Slide 24: Earnings Guidance 2007 - 2011
$3.22 $0.78 $0.67 $1.88 $0.60 - $0.65 $3.40 - $3.60 $4.00 - $4.30 $0.10 - $0.20 2006 Operating EPS Actual 2007 Operating EPS Guidance (1) $ / Share ComEd PECO ExGen HoldCo/Other $0.60 - $0.63 NOTE: See "Key Assumptions" slide in Appendix Earnings Guidance 2007 - 2011 Exelon Generation ComEd PECO Exe
Slide 25: 2011 Balance Sheet Capacity (Illustrative)
2011 Balance Sheet Capacity (Illustrative) Exelon expects to create substantial incremental balance sheet capacity over the next five years, based on planning assumptions Potential Uses of Balance Sheet Capacity Acquisitions or other growth opportunities Future unfunded liabilities Buffer against po
Slide 26: Projected 2007 Key Credit Measures
Projected 2007 Key Credit Measures With PPA & Pension / OPEB (1) Without PPA & Pension / OPEB S&P Credit Ratings (2) "BBB" Target Range (3) Exelon Cons: FFO / Interest 4.8x 6.2x BBB 3.2x - 4.5x FFO / Debt 24% 32% 20% - 30% Rating Agency Debt Ratio Adjusted Book Debt Ratio: 58% 74% 68% 55% - 45% Gene
Slide 27: Strategic Direction - Protect Today's Value
Strategic Direction - Protect Today's Value Competition has significantly reduced wholesale prices, improved operating performance and spurred growth in energy supply Deliver superior operating performance Keep the lights on Continue nuclear excellence Support competitive markets Maintain/bolster PJ
Slide 28: And Grow Long-Term Value
And Grow Long-Term Value Exelon is finding ways to advance an environmental strategy that also complements our business strategy Take the organization to the next level of performance Foster positive employee relations Require accountability for results and values Acquire, develop and retain key tal
Slide 29: Our Vision, Goals and Values
Exelun. our vision Exelon will be the best group of electric generation and electric and gas delivery companies in the United States - providing superior value for our customers, employees, investors and the communities we serve. our goals > Keep the lights on and the gas flowing > Run the nuclear f
Slide 30: Appendix - Financial and Operational Statistics
Appendix - Financial and Operational Statistics
Slide 31: Key Assumptions
Key Assumptions 2005 Actual 2006 Actual 2007 Est. Nuclear Capacity Factor (%)(1) 93.5 93.9 94.0 Total Genco Sales Excluding Trading (GWhs) 194,337 190,680 184,500 Total Genco Sales to Energy Delivery (GWhs) 121,961 119,354 40,500 (5) Total Genco Market and Retail Sales (GWhs)(2) 72,376 71,326 144,00
Slide 32: FFO Calculation and Ratios
FFO Calculation and Ratios FFO Calculation Net Income Add back non-cash items: + Depreciation, amortization (including nucl fuel amortization), AFUDC/Cap. Interest + Change in Deferred Taxes + Gain on Sale and Extraordinary Items - Transition Bond Principal Paydown = FFO FFO Interest Coverage FFO +
Slide 33: Energy Policy Act - Nuclear Incentives
Energy Policy Act - Nuclear Incentives Production Tax Credit (PTC) $18 per MWh, 8 year PTC for first 6,000 MWe of new capacity Cap of $125M per 1,000 MWe of capacity per year Protects against a decrease in market prices and revenues earned Significantly improves EPS Benefit will be allocated/ prorat
Slide 34: 2007 Exelon IR Calendar
2007 Exelon IR Calendar Second Quarter April 25: 1Q Earnings Release May: EEI Finance Committee Meeting Highlighted Topics 1Q performance Operating Company updates Market fundamentals IL update Third Quarter July: 2Q Earnings Release Fourth Quarter October: 3Q Earnings Release November: EEI Financia
Slide 35: Appendix - GAAP Reconciliation
Appendix - GAAP Reconciliation
Slide 36: GAAP EPS Reconciliation 2000-2002
GAAP EPS Reconciliation 2000-2002
Slide 37: GAAP EPS Reconciliation 2003-2005
GAAP EPS Reconciliation 2003-2005
Slide 38: 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 (61) 3 - - (58) Investments in synthetic fuel-producing facilities - - - 24 24 Charges associated with now terminat
Slide 39: 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 (0.09) - - - (0.09) Investments in synthetic fuel-producing facilities - - - 0.04 0.04 Charges related to proposed now terminated me
Slide 40: GAAP EPS Reconciliation Months Ended March 31, 2006 and 07
GAAP EPS Reconciliation 3 Months Ended March 31, 2006 and 2007 Exelon 2006 GAAP Reported EPS $0.59 Mark-to-market 0.03 Investments in synthetic fuel-producing facilities (0.02) Charges related to now terminated merger with PSEG 0.01 Settlement of a tax matter at Generation related to Sithe 0.01 2006
Slide 41: 2007 Earnings Outlook
2007 Earnings Outlook Exelon's outlook for 2007 adjusted (non-GAAP) operating earnings excludes the earnings impacts of the following: mark-to-market adjustments from economic hedging activities investments in synthetic fuel-producing facilities significant impairments of intangible assets, includin
Slide 42: 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 to affiliates - Interest income from af
Exelon — Goldman Sachs Annual Power and Utility Conference 2007 on 6ix