UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
October 23, 2001
(Date of earliest
event reported)
Commission File Name of Registrant; State of Incorporation; Address of IRS Employer
Number Principal Executive Offices; and Telephone Number Identification Number
--------------------- --------------------------------------------------------- -------------------------
1-16169 EXELON CORPORATION 23-2990190
(a Pennsylvania corporation)
10 South Dearborn Street - 37th Floor
P.O. Box 805379
Chicago, Illinois 60680-5379
(312) 394-4321
1-1839 COMMONWEALTH EDISON COMPANY 36-0938600
(an Illinois corporation)
10 South Dearborn Street - 37th Floor
P.O. Box 805379
Chicago, Illinois 60680-5379
(312) 394-4321
1-1401 PECO ENERGY COMPANY 23-0970240
(a Pennsylvania corporation)
P.O. Box 8699
2301 Market Street
Philadelphia, Pennsylvania 19101-8699
(215) 841-4000
Item 5. Other Events.
On October 23, 2001, Exelon Corporation issued the following press release.
EXELON [LOGO]
--------------------------------------------------------------------------------
News Release
From: Exelon Corporation FOR IMMEDIATE RELEASE
Corporate Communications ---------------------
P.O. Box 805379 October 23, 2001
Chicago, IL 60680-5379
Contact: Linda Marsicano
312.394.3099
Linda Byus, CFA
312.394.7696
Eunice Collins
312.394.8354
Exelon Reports Third Quarter Earnings of $1.25 Per Diluted Share
Chicago (October 23, 2001) Exelon Corporation today announced reported earnings
of $403 million or $1.25 per diluted share for the third quarter of 2001. The
reported $1.25 per diluted share exceeds the high end of our recent guidance due
to higher estimates for unbilled revenue than were used in developing the
guidance. Reported results include three non-recurring items that lowered
reported earnings by $0.16 per share. Exelon's reported earnings for the third
quarter of 2000 were $232 million or $1.35 per diluted share, which represent
the results of PECO Energy and do not reflect the effects of the October 20,
2000 merger with Unicom Corporation. On a pro forma basis assuming the merger of
PECO Energy and Unicom Corporation occurred on January 1, 2000, third quarter
2000 earnings were $1.27 per diluted share.
On September 27, Exelon lowered its 2001 earnings guidance to a range of $4.30
to $4.45 per diluted share down from the original $4.50. This guidance, which
remains our best judgment, represents reported earnings without adjustment for
any one-time items incurred during the year. The forecasted earnings range
represents an 11% to 15% increase over pro forma earnings for the year 2000 of
$3.86.
The company is in the process of finalizing its budget and earnings models for
2002. Our current outlook for 2002 is a range of $4.45 to $4.85 per diluted
share, which reflects the national economic slowdown and wholesale price
volatility.
Third Quarter Highlights:
Factors influencing third quarter results are as follows:
Page 2
o Energy sales by Exelon Generation totaled 54,342 GWhs, a 7% increase over
pro forma third quarter 2000 energy sales of 50,733 GWhs. Approximately 64%
of third quarter 2001 energy sales were to affiliates.
o Lower energy-market prices adversely affected Exelon Generation's Power
Team performance in the third quarter compared with expectations. Wholesale
margins realized were lower than originally incorporated in the third
quarter earnings outlook.
o Exelon Generation's nuclear fleet continues to operate above target with:
o 95.0% nuclear capacity factor for the third quarter
o 95.1% year-to-date through September 30
o Exelon Generation's fossil operations continue their strong performance
with:
o 98% on time delivery
o 94.3% dispatch availability
o ComEd continues to improve the reliability and efficiency of its delivery
operations in a summer in which two new all-time peaks were set. On August
9, ComEd set a new all-time peak load of 21,574 MW.
Non-recurring Items: Third quarter 2001 reported earnings of $1.25 per diluted
share include the effects of the following non-recurring charges:
o Employee severance costs of $31 million ($0.06 per share) related to
approximately 500 additional positions identified to be eliminated as a
result of the 2000 merger of PECO Energy and Unicom.
o A $36 million ($0.07 per share) writedown of its investment in Corvis, a
telecommunications equipment manufacturer.
o A $14 million ($0.03 per share) increase in reserves in conjunction with a
tentative settlement of litigation involving PECO Energy's decision not to
proceed with the proposed purchase of a minority interest in the River Bend
generating facility. The settlement should be finalized shortly.
Exelon's Co-CEO and Chairman, Corbin A. McNeill Jr., said that, "Demand and
prices did not materialize to the extent we planned this summer, and we learned
a good deal about how to prepare for next year. The market decline was
especially frustrating given the very strong operating performance in
Generation. Since the end of June, Exelon Nuclear completed another power uprate
project, two refuelings, and remained on track towards its all-in cost goal of 2
cents/kWh. In early August, during the one summer heat wave, every one of our
fossil plants ran flat out and was available for dispatch over 94% of the time."
John W. Rowe, Co-CEO and President, said, "In the first real test of the
infrastructure improvements we've been making for the past two years, the ComEd
distribution system performed superbly. The turn-around in performance is clear,
real and we intend to make it permanent. In the long run, it's our ability to
generate low-cost power and deliver it reliably that will be the basis for
Exelon's ability to deliver shareholder value."
Page 3
CORPORATE ISSUES
Third quarter earnings reflect goodwill amortization of $37 million or $0.12 per
share. Goodwill amortization is expected to total $151 million, or $0.47 per
share, in 2001. Consistent with the recently issued accounting standard for
goodwill, Exelon expects to discontinue amortization of goodwill, effective
January 1, 2002. Goodwill will be reviewed for impairment and possible
adjustment.
Merger-related synergies continue to be realized and Exelon expects to achieve
its target of $148 million this year.
BUSINESS UNIT RESULTS
Performance of Exelon's business segments--Energy Delivery, Generation and
Enterprises--is reported on the basis of earnings before interest and income
taxes (EBIT). Exelon's EBIT for the third quarter of 2001 was $931 million
compared to pro forma EBIT of $920 million in the third quarter of 2000.
Exelon Energy Delivery consists of the retail electricity transmission and
distribution operations of ComEd and PECO Energy and the natural gas
distribution business of PECO Energy. Energy Delivery's EBIT of $704 million in
the third quarter of 2001 compares to pro forma EBIT of $685 million in the
prior-year period. The segment benefited from increased deliveries to
residential customers during the quarter as a result of warmer summer weather
compared to last year, but experienced declines in deliveries to large
commercial and industrial customers as a result of a slowing economy.
Exelon Generation consists of Exelon's electric generation operations and power
marketing and trading functions. Generation's third quarter 2001 EBIT was $278
million, compared to pro forma EBIT of $300 million last year. Generation
experienced increased sales volumes and continued strong nuclear and fossil
station performance, but overall margins were adversely affected by lower
wholesale electricity market prices. Generation's third quarter 2001 EBIT
includes a $14 million charge for litigation settlement costs.
Exelon Enterprises consists of competitive retail energy sales, energy and
infrastructure services, communications and related investments. Enterprises'
EBIT for the third quarter of 2001 was a loss of $44 million compared to third
quarter 2000 pro forma loss of $67 million. The third quarter EBIT improvement
reflects improved margins and a reduction of operating expenses at Exelon
Energy. The third quarter 2001 results include the $36 million writedown of an
investment in Corvis.
Conference call information:
Exelon has scheduled a Third Quarter Earnings Conference Call for 3 PM EDT (2 PM
CDT) on October 23. The call in number in the US is 877/780-2271; the
international call in number is 973/872-3462. No password is required. Media
representatives are invited to participate on a listen- only basis. The call
will be audio web-cast and archived on Exelon's web site: www.exeloncorp.com.
(Please choose the Investor Relations page.)
Page 4
Telephone replays will be available after 4 PM on October 23 through October 31.
The U.S. call-in number is 877/519-4471; the international call-in number is
973/341-3080. The confirmation code is 2894650.
This press release contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements are based on management's current expectations and are subject to
uncertainty and changes in circumstances. Actual results may vary materially
from the expectations contained herein. The forward-looking statements herein
include statements about future financial and operating results of Exelon.
Economic, business, competitive and/or regulatory factors affecting Exelon's
businesses generally could cause actual results to differ materially from those
described herein. For a discussion of the factors that could cause actual
results to differ materially, please see Exelon's filings with the Securities
and Exchange Commission, particularly those factors discussed in "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Outlook" in Exelon's 2000 Annual Report. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date of this press release. Exelon does not undertake any obligation to publicly
release any revisions to these forward-looking statements to reflect events or
circumstances after the date of this press release.
###
Exelon Corporation is one of the nation's largest electric utilities with
approximately five million customers and more than $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
five million customers in Illinois and Pennsylvania and gas to 425,000 customers
in the Philadelphia area. The company also has holdings in such competitive
businesses as energy, infrastructure services and energy services. Exelon is
headquartered in Chicago and trades on the NYSE under the ticker EXC.
EXELON CORPORATION
Unaudited Income Statement
(in millions, except per share data)
Three Months Ended Nine Months Ended
September 30 September 30
--------------------------- ----------------------------
2001 2000 (1) 2001 2000 (1)
----------- ----------- ------------- -----------
Operating Revenues $ 4,285 $ 1,629 $ 11,759 $ 4,366
Operating Expenses
Fuel and Purchased Power $ 1,731 $ 576 $ 4,271 $ 1,515
Operating and Maintenance 1,101 457 3,293 1,304
Depreciation and Amortization 369 83 1,109 244
Taxes Other Than Income 172 67 493 197
----------- ----------- ------------- -----------
Total Operating Expenses $ 3,373 $ 1,183 $ 9,166 $ 3,260
----------- ----------- ------------- -----------
Operating Income $ 912 $ 446 $ 2,593 $ 1,106
Other Income and Deductions
Interest Expense & Preferred Dividends (295) (118) (901) (348)
Other, net 54 46 180 78
Income Taxes (268) (141) (767) (316)
Extraordinary Item, Net of Income Taxes - (1) - (4)
Cumulative Effect of Change in Accounting
Principle, Net of Income Taxes - - 12 24
----------- ----------- ------------- -----------
Net Income $ 403 $ 232 $ 1,117 $ 540
=========== =========== ============= ===========
Average Common Shares Outstanding
Basic: 321 170 320 175
Diluted: 323 172 323 176
Earnings Per Common Share - Reported
Basic: $ 1.26 $ 1.37 $ 3.49 $ 3.09
=========== =========== ============= ===========
Diluted: $ 1.25 $ 1.35 $ 3.46 $ 3.07
=========== =========== ============= ===========
Nonrecurring Items included in
Diluted EPS - gains/(losses):
Litigation reserves $(0.03) $ - $ (0.03) $ -
Employee severance charge (0.06) - (0.06) -
Gains and losses on investments (0.07) - (0.02) -
Implementation of FAS 133 - - 0.04 -
Settlement of Transition Bond swap - - 0.01 -
Wholesale rate settlement - - 0.01 -
CTC prepayment - - 0.02 -
Cumulative effect of change in accounting
method for nuclear outages - - - 0.14
Premiums paid to reacquire debt - (0.01) - (0.02)
Merger costs - (0.04) - (0.12)
----------- ----------- ------------- -----------
Total Nonrecurring Items $(0.16) $(0.05) $ (0.03) $ -
=========== =========== ============= ===========
Earnings Per Common Share - Proforma for
merger as of 1/1/2000
Diluted: $ 1.27 $ 3.20
=========== ===========
(1) Restated to reflect change in accounting method for nuclear outage costs.
EXELON CORPORATION
Business Segment Results
(in millions)
Three Months Ended Nine Months Ended
September 30 September 30
-------------------------------------------------------------------------------------
Pro Forma Pro Forma
2001 2000 (1) 2000 (2) 2001 2000 (1) 2000 (2)
--------- ------------ ------------ ---------- ------------ -------------
Revenue
Energy Delivery $ 2,970 $ 877 $ 2,808 $ 7,903 $ 2,496 $ 7,351
Generation 2,291 927 2,067 5,537 2,087 4,703
Enterprises 529 283 468 1,742 801 1,225
Corporate/Intercompany Elimination (1,505) (458) (1,498) (3,423) (1,018) (3,246)
--------- ------------ ------------ ---------- ------------ ------------
Total Exelon $ 4,285 $ 1,629 $ 3,845 $ 11,759 $ 4,366 $ 10,033
========= ============ ============ ========== ============ ============
Earnings Before Interest and IncomeTaxes
Energy Delivery $ 704 $ 260 $ 685 $ 2,091 $ 856 $ 1,957
Generation 278 292 300 697 401 488
Enterprises (44) (55) (67) (80) (86) (110)
Corporate/Intercompany Elimination (7) (15) 2 (19) (23) (7)
--------- ------------ ------------ ---------- ------------ ------------
Total Exelon $ 931 $ 482 $ 920 $ 2,689 $ 1,148 $ 2,328
========= ============ ============ ========== ============ ============
(1) Restated to reflect change in accounting method for nuclear outage costs.
(2) Pro forma 2000 data reflects operations as if the merger occurred on January
1, 2000.
EXELON
Retail Electric Sales Statistics
For the Three Months Ended September 30
ComEd PECO
------------------------------------------- ---------------------------------------
MWH Deliveries 2001 2000 % Change 2001 2000 % Change
-------------- ------------- ---------- ------------ ------------ ------------
Residential 8,397,985 7,141,346 17.6% 3,164,661 3,011,238 5.1%
Small Commercial & Industrial 8,033,041 7,875,596 2.0% 2,089,306 1,955,308 6.9%
Large Commercial & Industrial 5,501,301 6,253,874 (12.0%) 4,083,355 4,154,974 (1.7%)
Public Authorities & Electric Railroads 2,346,693 2,301,035 2.0% 194,112 192,727 0.7%
-------------- ------------- ------------ ------------
Total Sales to Ultimate Customers 24,279,020 23,571,851 3.0% 9,531,434 9,314,247 2.3%
============== ============= ============ ============
Heating Degree Days 133 121 50 77
Cooling Degree Days 615 551 956 695
Revenue (in thousands) 2001 2000 % Change 2001 2000 % Change
---------------------- -------------- ------------- ---------- ------------ ------------ ------------
Residential $ 816,048 $ 708,107 15.2% $ 385,420 $367,017 5.0%
Small Commercial & Industrial 617,599 609,551 1.3% 241,906 162,601 48.8%
Large Commercial & Industrial 257,795 302,628 (14.8%) 288,793 204,390 41.3%
Public Authorities & Electric Railroads 133,576 130,687 2.2% 18,914 16,892 12.0%
-------------- ------------- ------------ ------------
Total Sales to Ultimate Customers $1,825,018 $1,750,973 4.2% $ 935,033 $750,900 24.5%
============== ============= ============ ============
Cents / kWh 2001 2000 % Change 2001 2000 % Change
----------- -------------- ------------- ---------- ------------ ------------ ------------
Residential $ 0.097 $ 0.099 (2.0%) $ 0.122 $ 0.122 0.0%
Small Commercial & Industrial $ 0.077 $ 0.077 0.0% $ 0.116 $ 0.083 39.8%
Large Commercial & Industrial $ 0.047 $ 0.048 (2.1%) $ 0.071 $ 0.049 44.9%
Public Authorities & Electric Railroad $ 0.057 $ 0.057 0.0% $ 0.097 $ 0.088 10.2%
Total Sales to Ultimate Customers $ 0.075 $ 0.074 1.4% $ 0.098 $ 0.081 21.0%
EXELON
Retail Electric Sales Statistics
For the Nine Months Ended September 30
ComEd PECO
---------------------------------------------- -----------------------------------------
MWH Deliveries 2001 2000 % Change 2001 2000 % Change
-------------- -------------- -------------- ------------ ------------- -------------- ----------
Residential 19,936,277 18,204,564 9.5% 8,671,808 8,472,099 2.4%
Small Commercial & Industrial 22,439,309 21,782,688 3.0% 5,818,577 5,589,735 4.1%
Large Commercial & Industrial 16,429,691 18,254,430 (10.0%) 11,707,138 11,952,613 (2.1%)
Public Authorities & Electric Railroads 6,968,051 6,799,768 2.5% 575,011 591,402 (2.8%)
-------------- -------------- ------------- --------------
Total Sales to Ultimate Customers 65,773,328 65,041,450 1.1% 26,772,534 26,605,849 0.6%
============== ============== ============= ==============
Heating Degree Days 4,081 3,610 2,982 2,888
Cooling Degree Days 848 748 1,366 1,038
Revenue (in thousands) 2001 2000 % Change 2001 2000 % Change
---------------------- -------------- -------------- ------------ ------------- -------------- ----------
Residential $ 1,851,856 $1,724,095 7.4% $ 990,910 $ 955,680 3.7%
Small Commercial & Industrial 1,613,971 1,597,885 1.0% 573,534 443,860 29.2%
Large Commercial & Industrial 732,175 848,786 (13.7%) 750,079 524,696 43.0%
Public Authorities & Electric Railroads 382,235 372,143 2.7% 54,142 41,211 31.4%
-------------- -------------- ------------- --------------
Total Sales to Ultimate Customers $ 4,580,237 $4,542,909 0.8% $ 2,368,665 $ 1,965,447 20.5%
============== ============== ============= ==============
Cents / kWh 2001 2000 % Change 2001 2000 % Change
----------- ------------- ------------- ------------ ------------ -------------- ----------
Residential $ 0.093 $ 0.095 (2.1%) $ 0.114 $ 0.113 0.9%
Small Commercial & Industrial $ 0.072 $ 0.073 (1.4%) $ 0.099 $ 0.079 25.3%
Large Commercial & Industrial $ 0.045 $ 0.046 (2.2%) $ 0.064 $ 0.044 45.5%
Public Authorities & Electric Railroad $ 0.055 $ 0.055 0.0% $ 0.094 $ 0.070 34.3%
Total Sales to Ultimate Customers $ 0.070 $ 0.070 0.0% $ 0.088 $ 0.074 18.9%
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Exelon Corporation
Commonwealth Edison Company
PECO Energy Company
/S/ Ruth Ann M. Gillis
-----------------------------------
Ruth Ann M. Gillis
Senior Vice President and Chief Financial Officer
Exelon Corporation
October 23, 2001