100% of the paper utilized for the printing of this report is Forest Stewardship Council certified, which promotes environmentally appropriate,
socially beneficial and economically viable management of the world’s forests. All the paper utilized in the production of this annual report is
manufactured by Mohawk Paper and the FSC certified portion of the paper contains 30% pulp derived from post-consumer recycled fiber. The
paper for this report was manufactured entirely with wind-generated electricity. Mohawk has provided the calculations below based on use of
69,000 pounds of Mohawk Options paper.
E
The savings derived from using this paper in lieu of virgin fiber paper is equivalent to:
124 trees
preserved for
the future
357 lbs.
waterborne
waste not created
52,545 gallons
wastewater
flow saved
5,814 lbs.
solid waste
not generated
11,447 lbs.
net greenhouse
gases prevented
87,618,000 BTUs
energy not
consumed
The savings derived from choosing a paper manufactured
using wind-generated electricity:
This amount of wind-generated electricity
is equivalent to:
19,370 lbs.
air emissions
not generated
21
barrels crude
oil unused
2
cars off the road
for one year
1,318
trees
planted
30%
Cert no. SCS-COC-00949
Exelon Corporation
P.O. Box 805398
Chicago, IL 60680-5398
www.exeloncorp.com
©2009 Exelon
Sustainable Advantage
Exelon Corporation 2008 Summary Annual Report
01
02
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Introduction
Letter to Shareholders
Exelon’s Vision Statement
Our Financial Advantage
Our Operating Advantage
Our Environmental Advantage
Our Human Advantage
Exelon at a Glance
Executive Committee
Board of Directors
Financial Section
On the cover: Located on the Susquehanna River in northern Maryland, Conowingo is a “run of the river” hydroelectric plant that has been providing electric power to the regional system
since 1928. Over time, the station has been expanded from seven to 11 turbines and today provides more than 500 MW of clean energy.
Forward-Looking Statements This report includes forward-looking statements including, for example, statements regarding benefits of the proposed merger, integration plans and expected synergies.
There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements made herein. The factors that could cause actual results to differ
materially from these forward-looking statements include Exelon’s ability to achieve the synergies contemplated by the proposed transaction, Exelon’s ability to promptly and effectively integrate the
businesses of NRG and Exelon, and the timing to consummate the proposed transaction and obtain required regulatory approvals as well as those discussed in (1) Exelon’s preliminary prospectus/offer to
exchange that is contained in the Registration Statement on Form S-4, Reg. No. 333-155278, that Exelon has filed with the SEC in connection with the Offer; (2) Exelon’s 2008 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 18; and
(3) other factors discussed in Exelon’s filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this report. Exelon
does not undertake any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this report, except as required by law.
Statements made in connection with the exchange offer are not subject to the safe harbor protections provided to forward-looking statements under the Private Securities Litigation Reform Act of 1995.
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corporate profile
Exelon Corporation is one of the nation’s largest electric utilities with approximately $19 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
5.4 million customers in northern Illinois and southeastern Pennsylvania and natural gas to approximately 485,000 customers in the Philadelphia area. Exelon is
headquartered in Chicago and trades on the NYSE under the ticker EXC.
investor and general information
Corporate Headquarters
Exelon Corporation
P.O. Box 805398
Chicago, IL 60680-5398
Shareholder Services
800.626.8729
Employee Plan Services
888.396.7865
Investor Relations Voice Mailbox
312.394.2345
Independent Public Accountants
PricewaterhouseCoopers LLP
Web site
www.exeloncorp.com
Stock Ticker
EXC
Shareholder Inquiries
Exelon Corporation has appointed BNY Mellon Shareowner Services as its transfer agent, stock registrar, dividend disbursing agent
and dividend reinvestment agent. Should you have questions concerning your registered shareholder account or the payment
or reinvestment of your dividends, or if you wish to make a stock transaction or stock transfer, you may call shareholder services
at BNY Mellon at the toll-free number shown to the left or access their website at www.bnymellon.com/shareowner/isd.
Computershare Trust Company N.A. administers the Employee Stock Purchase Plan (ESPP), the Employee Stock Purchase Plan for
Unincorporated Subsidiaries (ESPPUS), and employee stock options. Should you have any questions concerning your employee
plan shares or wish to make a transaction, you may call the toll-free number for Employee Plan Services shown to the left or
access their web site at www-us.computershare.com/employee.
The Company had approximately 140,000 holders of record of its common stock as of Dec. 31, 2008.
The 2008 Form 10-K Annual Report to the Securities and Exchange Commission was filed on Feb. 6, 2009. To obtain a copy
without charge, write to Katherine K. Combs, Senior Vice President, Corporate Governance, Deputy General Counsel and
Corporate Secretary, Exelon Corporation, Post Office Box 805398, Chicago, Illinois 60680-5398.
The Company maintains a telephone information service, which enables investors to obtain currently available information on
financial performance, company news and to access shareholder services at BNY Mellon. To use this service, please call our
toll-free number, 1.866.530.8108.
Important Additional Information This report relates, in part, to the offer (the “Offer”) by Exelon to exchange each issued and outstanding share of common stock of NRG Energy, Inc. (“NRG”) for 0.485 of a
share of Exelon common stock. This report is for informational purposes only and does not constitute an offer to exchange, or a solicitation of an offer to exchange, NRG shares, nor is it a substitute for the
exchange offer documents previously filed by Exelon with the Securities and Exchange Commission (the “SEC”). The Offer is made only through the exchange offer documents.
Exelon has filed a preliminary proxy statement and other relevant documents with the SEC in connection with the solicitation of proxies for the 2009 annual meeting of NRG stockholders (the “NRG
Meeting”). Exelon will file a proxy statement and other relevant documents with the SEC in connection with its solicitation of proxies for a meeting of Exelon shareholders (the “Exelon Meeting”) to be
called in order to approve the issuance of shares of Exelon common stock pursuant to the Offer.
Investors and security holders are urged to read the NRG Meeting proxy statement, the Exelon Meeting proxy statement, the exchange offer documents referred to above and other relevant materials
as they become available, because they will contain important information. Investors and security holders can obtain copies of the materials described above (and all other related documents filed with the
SEC) at no charge on the SEC’s website: www.sec.gov. Exelon, Exelon Xchange Corporation (“Xchange”) and the individuals nominated by Exelon for election to NRG’s Board of Directors will be participants
in the solicitation of proxies from the NRG stockholders for the NRG Meeting. Exelon and Xchange will be participants in the solicitation of proxies from Exelon shareholders for the Exelon Meeting.
In addition, certain directors and executive officers of Exelon and Xchange may solicit proxies for the Exelon Meeting and the NRG Meeting.
Thomas Edison once said, “Discontent is the first necessity of progress”
Let us hope he was right, for there is great discontent in the world today
The question is whether that discontent will push us forward, or
push us backward
To me, the answer with respect to energy policy is self-evident –
we must push forward
> We must admit the clear and present danger of climate change
> We must seize any opportunity to improve our energy efficiency
> We must pursue renewables and clean coal, ever mindful of
the cost
> We must build the next generation nuclear fleet
> And we must never abandon the discipline and innovative
drive of competitive markets
John W. Rowe / October 6, 2008
To Our Shareholders
2008 was an extraordinary year. We witnessed tremendous turmoil
in the financial and commodities markets, twin storms that capsized
some of our economy’s most venerable financial firms and nearly
did the same to several companies in our industry. Exelon did not go
unscathed, nor did we falter.
2
John W. Rowe
Chairman and Chief Executive Officer
We remain one of the best run and most profitable companies in our industry. We have the best low-cost,
low-carbon generation fleet in the country, which we operate with world-class efficiency. We still enjoy
industry-leading scope and scale, a strong balance sheet and outstanding expertise in managing our
many risks. And we adhere to our Vision to be the best group of electric generation and electric and gas
delivery companies in the United States.
SUSTAINABLE VALUE
Last year we titled our Annual Report ‘Sustainable Value,’ a play on words reflecting not only our strong
environmental performance and low-carbon generating fleet, but also our consistent record of operating
and financial performance. While 2008 tested that claim, the year demonstrated yet again that we can
deliver sustainable value.
Exelon recorded operating (non-GAAP) earnings* of $4.20 per share for the year, comfortably within
our earnings guidance. While less than the $4.32 per share we delivered in 2007, on average Exelon’s
operating earnings have grown by more than 10 percent per year since the PECO-Unicom merger in
2000. Our 2008 GAAP earnings were $4.13 per share, up from $4.05 in 2007.
Our stock price was not immune to the precipitous decline in the overall market during the final
months of 2008. After six consecutive years of increases, our Dec. 31, 2008, closing price of $55.61
reflected nearly a 32 percent decline from the year-end 2007 closing price of $81.64. Our performance
was slightly better than that of the S&P 500, which dropped 38 percent, but slightly worse than that of
the Philadelphia Utility Index, which declined 30 percent. Nevertheless, Exelon remains the most highly
valued company in the industry. Our year-end market capitalization of $36.6 billion was $10 billion
more than our next largest competitor. Our total return since 2000 remains outstanding; your investment
has increased by 139 percent, compared to 47 percent for the Philadelphia Utility Index, and a negative
26 percent for the S&P 500.
Make no mistake. We are not pleased with the closing price of our stock in 2008. But we are proud of
our long-term performance, and we are determined to build upon that record in the years ahead.
* For a reconciliation of adjusted (non-GAAP) operating earnings to GAAP (accounting principles generally accepted in the United States)
see Exelon’s fourth quarter earnings release issued Jan. 22, 2009, posted on the investor relations page at www.exeloncorp.com and
included in the 8-K filed with the SEC on that date.
3
Our accomplishments, financial and otherwise, continue to be noticed. We were again named one of
America’s “Most Admired Companies” by Fortune magazine, and we moved from second to first among
electric and gas utilities. For the third year, we were named to the Dow Jones Sustainability North
America Index. We were again named by BusinessWeek as one of the “Best Places to Launch a Career.”
Our “Energy for the Community” program was honored by VolunteerMatch as the Corporate Volunteer
Program of the Year. Highlighting our commitment to diversity, U.S. Black Engineer & Information
Technology Magazine named ComEd Chairman and CEO Frank Clark and two other ComEd executives
to its annual list of the 100 Most Important Blacks in Technology. And I was personally gratified to be
recognized by the Edison Electric Institute with its inaugural Distinguished Leadership Award in
recognition of my 25 years as a CEO in this industry.
Our success is attributable to the hard work of and collaboration between the Exelon management
team and our employees. Indicative of this collaboration was the five-year agreement we reached
with Illinois Brotherhood of Electrical Workers Local 15, our largest union, which was the product of
great effort from John Samolis and our labor relations group. Throughout 2008, our management and
employees worked hard and remained focused on our Vision. I applaud their dedication and effort.
SUSTAINABLE OPERATIONAL EXCELLENCE
Central to our continuing success is the operating excellence of Exelon Generation. In 2008, our nuclear
fleet turned in another outstanding performance despite an increased number of scheduled refueling
outages. The fleet, led by Chris Crane and Chip Pardee, had an overall capacity factor of 93.9 percent.
This was the sixth straight year our capacity factor exceeded 93 percent. Our fleet completed the
summer period with no outages for the first time in the company’s history and set a new record for
summer capacity factor (98.6 percent). Our nuclear operations are truly world-class.
Our fossil and renewable operations, led by Mark Schiavoni and Doyle Beneby, also performed well.
While we faced maintenance challenges at Eddystone early in the year, our fossil fleet had the best
summer commercial availability factor in five years (94.8 percent). We also commenced operations at
the Exelon-Epuron Solar Energy Center, from which we will purchase power for 20 years. The center
is the nation’s fifth largest solar photovoltaic generation project and the largest on the East Coast.
This agreement and our continued investment in wind reinforce our efforts to become even greener
in our generation business.
Our Vision remains
sound, our company
remains rock solid and
our commitment to
you is unwavering.
4
Our power marketing team again made the most of Generation’s outstanding performance. The benefit
of a hardheaded approach to risk management has never been more evident. Power Team’s hedging
efforts were instrumental in securing our earnings and cash flow in this most volatile of years. We owe
much to Ian McLean, Ken Cornew, Joe Glace and their experienced team for their conservative stewardship.
Our delivery companies kept the lights on and the gas flowing. The death of ComEd’s Alex Collazo after
an underground contact accident reminds us how dangerous this work is and the importance of safety
for our employees and customers. While our outage frequency and customer satisfaction statistics
improved, outage duration performance was less impressive, in part because of a difficult summer
storm season. In June, PECO faced several days of extraordinary heat and humidity that resulted in the
fifth highest electric demand in the company’s history. This stretch was immediately followed by a violent
storm resulting in outages affecting more than 150,000 customers. Thanks to Denis O’Brien’s leadership
and the efforts of hundreds of crews, over 82,000 customers were restored within 10 hours. Similarly,
in August, ComEd experienced the second largest storm of the past 10 years. High winds, more than
85,000 lightning strikes and numerous tornadoes resulted in 520,000 customers losing power. Yet
despite the severity of the storm, ComEd teams restored 87 percent of customers within 24 hours, and
98 percent within 48 hours. Frank Clark, Barry Mitchell and many dedicated employees who labored
around the clock deserve enormous credit.
Our delivery companies also made steady financial progress. PECO secured a fair outcome in its first
gas delivery rate case since 1988. The Pennsylvania Public Utilities Commission unanimously approved
an annual rate increase of $77 million that will help fund both assistance to low-income consumers
and $280 million of system investments over the next five years. In September, the Illinois Commerce
Commission awarded ComEd a $274 million revenue increase for electric delivery service. The ruling will
enable ComEd to continue to underwrite infrastructure improvements and advance efforts to develop
Smart Grid technologies. Anne Pramaggiore and her team have begun the long process of restoring
ComEd to financial health.
Our finance group, under the leadership of Ian McLean and Matt Hilzinger, again delivered the financial
discipline you have come to expect. Following on our $1.25 billion share repurchase in February of 2007,
we executed a $500 million share repurchase in accordance with our Value Return policy. We also
increased our dividend to $2.10 annualized, reinforcing our belief in the sustainability of our financial
and operating performance. We issued or refinanced more than $2.2 billion of long-term debt at very
attractive rates. Our decision in 2006 to secure credit facilities of more than $7 billion proved invaluable
in a year marked by record commodity prices and the failures and near-failures of numerous lenders
and counterparties.
5
Finally, our Business Services Company continued to provide best-in-class professional services at
exceptional value to Exelon’s operating companies. Ruth Ann Gillis and her group deserve great credit
for their accomplishments, particularly our initiative to reduce energy consumption by 25 percent
across our facilities and leading the Electric Utility Industry Sustainable Supply Chain Alliance, which is
committed to improving the environmental performance of electric utility suppliers.
SUSTAINABLE ADVANTAGE
Despite the challenges of 2008, we made substantial progress in turning our sustainable value into
a sustainable advantage. In July, we unveiled Exelon 2020: a low-carbon roadmap. Exelon 2020 is
our comprehensive plan to reduce, displace or offset 15 million metric tons of greenhouse gas (GHG)
emissions – an amount greater than our current annual carbon footprint – each year by 2020. The
principles of the plan are those that I outlined in this space last year: reduce our own GHG emissions,
help our customers reduce their GHG emissions and reduce the overall GHG emissions in the markets
in which we operate. This is a goal uniquely possible for us because 80 percent of our output comes from
nuclear power. But this is not a plan we concocted to get good PR. It is a resource plan for combating
climate change, and a blueprint on how to leverage our current value into a sustainable advantage for
years into the future.
In October, we announced our intention to acquire NRG. We have looked at this transaction from many
perspectives and under many scenarios. Our analysis shows that the combined company would bring
enhanced size, scale and scope, in addition to improved diversity in geography and regulatory environments.
It would create a new model for independent generation, one better able to survive the booms and
busts in economic and commodity cycles. More importantly, it would create real and immediate value
for investors in both Exelon and NRG.
But it will not be easy. The unwillingness of NRG’s management to discuss a merger at a reasonable
price made it necessary for us to take our offer directly to their shareholders. It is our hope that NRG’s
management will be willing to discuss a merger and this transaction will become friendlier than it now
appears. But if not, we are prepared to take our case to NRG’s annual shareholder meeting and take the
steps necessary to elect new, independent directors. We believe our proposition is compelling, and the
fact that almost 46 percent of NRG’s shareholders tendered their shares at the initial January expiration
date offers independent corroboration. I am under no illusions about the difficulty of completing a
transaction such as this. But we are committed to rigorously pursue all opportunities to grow your value.
6
SUSTAINABLE FUTURE
Undoubtedly, we will face continuing challenges in 2009. With a new administration and many new
members of Congress, we believe there will be a serious effort to address climate change. As in all
things, however, the devil will be in the details. If the administration works to pass a carefully crafted
mandatory national program, either a cap and trade system with a cost containment mechanism or a
modest tax, there is reason to believe that we can begin to address climate change without disrupting our
industry or the broader economy. If the administration elects to rely solely on subsidies and mandates
to promote renewable development, however, customers will likely pay too much for too little benefit.
Betsy Moler and her team will have to redouble their efforts to work with policymakers so the resulting
legislation accomplishes its stated objectives.
On a separate front, post-mortems of the recent failure of the financial system will undoubtedly lead
to calls for closer regulation. Some will seek to dismantle competitive markets in our industry, despite
the fact that those markets have undeniably delivered increased operational and economic efficiency.
The challenge will be particularly acute in Pennsylvania as we complete the transition to competitive
markets. We remain convinced that competition is in the best interest of our shareholders and our
customers, and we will be vigilant in our protection of those principles. All of this will unfold against
the backdrop of a weakened and uncertain economic outlook, pressuring the costs of our operations
and benefits upwards and the demand for our product downwards.
2008 has been a challenging and sobering year. In this space two years ago, I noted my belief that
Exelon has “the best platform for confronting an uncertain future.” These words are enduring. We have
a generation business well positioned to make money in any market and economic environment, stable
and improving delivery businesses and the balance sheet and financial discipline to see us through
difficult times. The sustainability of these advantages manifested itself in 2008. Your board, my
management team and I are committed to preserving and enhancing those advantages to ensure that
we protect and grow the value of your investment through an equally uncertain 2009.
Our Vision remains sound, our company remains rock solid and our commitment to you is unwavering.
John W. Rowe
Chairman and Chief Executive Officer
Exelon Corporation
March 6, 2009
7
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 fleet at world-class levels
> Capitalize on environmental leadership and clean nuclear energy
> Create a challenging and rewarding workplace
> Enhance the value of our generation
> Build value through disciplined financial management
our values
Exelon’s Chicago headquarters are located in
Chase Tower. The 10 floors occupied by Exelon
represent the world’s largest Leadership in Energy
and Environmental Design (LEED) Platinum-
certified commercial interior space. Building to
LEED specifications is just one of the many ways
Exelon leads our industry in environmental issues.
Safety – for our employees, our customers and our communities
Integrity – the highest ethical standards in what we say and what we do
Diversity – in ethnicity, gender, experience and thought
Respect – trust and teamwork through open and honest communication
Accountability – for our commitments, actions and results
Continuous improvement– stretch goals and measured results
ComEd’s West Loop station was completed and
brought on-line in 2008. The eight-year, $350 million
initiative provides Chicago substations with
multiple sources of energy supply – substantially
reducing the likelihood of a significant loss of
power downtown and in the surrounding
Chicago neighborhoods.
10
Our Financial Advantage
Exelon’s leadership position in the electric and gas utility industry is made
possible by industry-leading financial discipline, cash flow and risk
management practices
With the decline in the price of natural gas, we have seen power prices
in the PJM and Electric Reliability Council of Texas (ERCOT) markets fall.
Thanks to our hedging strategy and the expertise of Power Team, we are
largely insulated from wild swings in gas prices for the next several years.
Exelon has one of the largest, most diverse bank groups in the industry,
providing the company with more than $7 billion in liquidity.
The combination of our conservative financial and risk management
strategies gives us the strength and flexibility to enhance the value of your
company – including through continued investment in our generation,
transmission and distribution capabilities and our pursuit of NRG. And we
are committed to returning that value to you, as we did in 2008 through
our $500 million share repurchase and dividend increase.
11
Our Operating Advantage
Our superior operating performance allowed us to again keep the lights
on and the gas flowing.
In Generation, our well-planned and executed outages again led to
world-class capacity factors. Our employees and contractors completed
thousands of painstakingly planned tasks, from small adjustments to
valves and pipes to replacement of low-pressure turbines and generators,
to ensure continued safe, efficient, economical power generation.
PECO is making system enhancements to its gas distribution system, such
as pipe replacement and using enhanced line-loss detection equipment
to decrease methane leakage. PECO’s successful rate case will allow for
further investment.
ComEd in June 2008, opened a state-of-the-art substation in Chicago’s
West Loop, an eight-year, $350 million project providing Chicago substations
multiple sources of supply that substantially reduce the likelihood of a
significant loss of power downtown and in Chicago neighborhoods.
Exelon Business Services Company, through our Commercial Operations
Group, is migrating to paperless invoicing and payments with our thousands
of vendors, taking time and cost out of the system and improving our
environmental performance.
12
Eddystone Generating Station is a four-unit
facility located on the Delaware River in
Eddystone, Pa. In 2008, Eddystone underwent
Exelon Power’s largest planned maintenance
outage in recent history, completing 3,600 tasks
in less than two months.
13
Fairless Hills Generating Station, located in
Bucks County, Pa. , opened the Renewable Energy
Education Center in 2008. The purpose of the
education center is to provide the public – mostly
school children – with demonstrations of
sustainable technologies for power generation.
The center was built to LEED standards and in
2008 was awarded LEED-Silver certification.
14
Our Environmental Advantage
Each of the Exelon companies is wholly committed to Exelon 2020, our
comprehensive approach to climate change.
In Generation, a new service building at the Clinton Power Station and
the Renewable Energy Education Center at Fairless Hills are expected to
earn LEED-Silver certification from the U.S. Green Building Council in 2009.
Generation also has identified the potential for approximately 350 MW
of capacity uprates that can reduce annual CO2 emissions by 2 million
metric tons.
ComEd and PECO are working on efforts to reduce the negative impact of
sulfur hexafluoride, an environmentally harmful insulating gas used in
transformers, by more aggressively detecting leaks and replacing equipment.
Our utilities are also incorporating more alternatively-fueled vehicles into
their fleets.
Exelon Business Services Company is leading the way in our efforts to
green our operations. From our facilities to our data centers and desktop
equipment, from our vehicle fleets to publications like this one, we are
reducing our own internal energy consumption with higher standards for
ourselves and our suppliers.
15
Our Human Advantage
Our people drive the successes of Exelon, both inside and outside the company.
In the fall, Exelon’s top executives developed and launched an enhanced
diversity and inclusion strategy – a stronger, more measurable approach
to ensure that we recognize our similarities and embrace our differences.
We have made great strides in our diversity efforts; our continued focus
will accelerate our progress.
Providing value to our customers and communities remains a high priority
and Generation maintains strong relationships with the communities where
our plants are located, lending a hand with funds, services and time.
Company-wide, our employees tracked more than 35,000 hours of volunteer
time in 2008, earning Exelon the 2008 Corporate Volunteer Program of
the Year award from VolunteerMatch.
ComEd and PECO energy-efficiency programs have saved customers millions
of dollars in energy costs. ComEd’s Smart Ideas for Your Home has already
helped customers save more than $44 million by recycling more than
5,000 refrigerators, freezers and window air conditioners and purchasing
more than 1.8 million compact fluorescent bulbs.
16
Boathouse Row in Philadelphia is beautifully lit
by PECO-provided, energy-efficient LED lights.
Another Philadelphia landmark, the Crown
Lights of PECO’s main office building, went dark
on Dec. 31, 2008. The Crown Lights are being
replaced with LED lights and will turn back on
as part of the city’s July 4, 2009, celebration.
17
Exelon at a Glance
comed
peco
The Illinois Commerce Commission (ICC) approved a $274 million rate increase
effective Sept. 16, 2008. ComEd requested this increase in response to higher
costs to modernize and maintain system reliability. The ICC also established
a limited Advanced Metering Infrastructure pilot and a workshop process to
explore Smart Grid technologies. Implementing new technologies and equipment
will dramatically change the nature of service to customers and empower them
to make wiser energy choices, which can lead to lower bills and a reduced
carbon footprint.
ComEd completed the West Loop Project, the largest Transmission & Distribution
project it has ever undertaken. This project improves reliability by expanding the
transmission system in Chicago’s central business district, transforming it from a
radial to a state-of-the-art network system.
Enhanced reliability, consistent service and new business initiatives are paying
off. The year-end Customer Satisfaction Index score of 79.2 was 4.4 percent above
the 2007 score.
ComEd faced significant storm activity in August, which affected nearly 520,000
customers. ComEd crews restored service to 98 percent of customers within
48 hours.
ComEd expanded its energy efficiency initiatives through a three-year portfolio
of programs called Smart Ideas™. The programs are expected to yield more than
$155 million in savings to customers and could result in significantly reduced
carbon emissions.
ComEd earned International Standardization Organization (ISO) 14001 certification
for its Environmental Management System. This certification, recognized as the
gold standard across industries, further solidifies ComEd’s commitment to and
example of environmental leadership.
ComEd and its nearly 5,600 employees are responsible for maintaining more
than 78,000 miles of power lines that make up the electric transmission and
distribution systems in Northern Illinois. ComEd also provides customer opera-
tions for more than 3.8 million customers across the region, or 70 percent of the
state’s population
18
2008 saw PECO achieve top decile industry rating in safety, a 17-percent improvement
in employee engagement and its highest-ever non-storm reliability rating – all
the result of the company’s culture of continuous improvement.
PECO in 2008 invested a record $397 million in its capital plan, a 13 percent
increase over the year before, to further increase reliability in electric and natural
gas systems throughout the region. This included the christening of a $22 million
substation serving industrial, business and residential customers in the South
Philadelphia area.
PECO built on its community partnerships, donating $500,000 to the African-
American Museum in Philadelphia, working with Radio Disney to bring electrical
safety messages to school children, and building, in a single day with more than
200 PECO volunteers working in torrential downpours, a community playground
near Collegeville, Pa., in the name of fallen PECO lineman Michael J. Killian.
The company also continued on its quest to become greener by starting construction
of a “green roof” at the main office building, building an energy-efficient service
building in West Chester, Pa., and forming a partnership with ENERGY STAR®,
promoting energy-efficient appliances to its customers. PECO also attained the
ISO 14001 certification for its environmental management system, and switched
its entire diesel-vehicle fleet over to bio-diesel fuel. All of these initiatives tie in
with Exelon’s overall efforts to reduce greenhouse gas emissions – Exelon 2020: A
Low-Carbon Roadmap.
PECO and its approximately 2,400 employees serve nearly 1.6 million electric
customers and 485,000 natural gas customers in a combined service territory of
approximately 2,100 square miles. PECO’s electric distribution system includes
close to 13,000 circuit miles of overhead lines and more than 15,000 cable miles
of underground line. PECO’s natural gas distribution system includes 29 gate
stations and nearly 13,000 miles of pipeline. PECO delivered 83.7 billion cubic feet
of natural gas and 39.4 billion kilowatt-hours of electricity in 2008.
exelon generation
Exelon Nuclear
Exelon Nuclear, the nation’s largest operator of commercial nuclear reactors,
continued to perform at world-class levels in 2008 as highlighted by its best
year ever in safety performance, which included the lowering of the fleet’s total
industrial safety accident rate by 25 percent. Exelon Nuclear’s 10 generating
stations and 17 reactors in the Midwest and Mid-Atlantic* regions achieved an
average capacity factor of 93.9 percent in 2008, the sixth consecutive year
our capacity factor exceeded 93 percent, and produced about 131.9 million
megawatt-hours of electricity, enough power to steadily supply approximately
15 million modern U.S. homes.
The fleet also achieved its best overall summer performance on record, achieving
a combined 98.6 percent capacity factor, and set new company standards for OSHA
Recordable, Industrial Safety and on-line performance during the three-month
summer period. The company’s 8,500 nuclear professionals also implemented
industry best practices to ensure safe, reliable operation throughout the fleet,
earning numerous industry awards and recognition for their efforts.
Additionally, the company took full control of the security forces protecting its
nuclear facilities – hiring about 1,500 nuclear security employees in 2008; filed
its first ever Combined Construction and Operating License application with the
U.S. Nuclear Regulatory Commission (NRC) to potentially build and operate a new
dual unit nuclear generating facility in Victoria County, Texas; and filed for a
20-year license extension with the NRC for its reactor facility at Three Mile Island
Unit 1 in Pennsylvania. Exelon Nuclear expects a decision on the relicensing of
the Oyster Creek Station in New Jersey in 2009.
Exelon Power
Exelon Power’s fleet of fossil and hydroelectric units in Illinois, Maryland,
Massachusetts, Pennsylvania and Texas provided nearly 11 million megawatt hours
of reliable generation in 2008. With 105 units at 23 different sites, Exelon Power
can provide almost 8,000 megawatts of safe, efficient and environmentally
responsible base load, intermediate and peak power generation. Over the past
few years, Exelon Power has made great strides in optimizing the performance of
its units and maintenance programs while continuing to perform safely to provide
the company with the right power, at the right time, and at the right price.
Exelon Power Team
Exelon Power Team is the power marketing division of Exelon. Its role is to
manage the risk and maximize the economic value associated with Exelon’s
electric generating facilities, power purchase agreements, fuel requirements,
emission credits, transmission contracts and load obligations. Power Team’s
wholesale marketing and transaction efforts are focused on the competitive
electricity markets in several regions of the United States: the Mid-Atlantic,
the Midwest, the Northeast, the Southwest and Texas. Power Team’s trade
floor and headquarters are located in Kennett Square, Pa.
Exelon Energy markets electricity and natural gas to retail customers in the
Midwest. Exelon Energy has offices in Illinois, Ohio and Pennsylvania.
exelon business services company
Exelon Business Services Company (EBSC) is a direct, wholly-owned subsidiary
of Exelon Corporation that serves as a strategic partner to provide quality
products and services at the lowest cost for all Exelon companies. EBSC practice
areas include Communications, Corporate Strategy, Finance, Government
and Environmental Affairs and Public Policy, Human Resources, Information
Technology (IT), Legal and Corporate Governance, Real Estate, Supply, Operational
Governance and Quality Control and Commercial Operations such as accounts
payable and payroll.
EBSC has approximately 1,700 employees in northern Illinois, Pennsylvania and
at virtually every Exelon business location, delivering value by providing cost
and operating efficiencies, high-quality service and developing enterprise-wide
and organization-specific solutions.
In 2008, EBSC improved its overall performance and service levels, including IT
service reliability and client satisfaction. In addition, EBSC helped launch green
initiatives in support of Exelon 2020, notably programs to reduce energy
consumption by 25 percent across our facilities by the end of 2012 and leadership
of the Electric Utility Industry Sustainable Supply Chain Alliance. Importantly, the
Diverse Business Enablement program directed $455 million of Exelon’s spend on
materials and services to minority- and women-owned business enterprises.
* Excluding the Salem Nuclear Generating Station in New Jersey, which is operated by PSEG Nuclear, LLC.
19
Executive Committee
John W. Rowe
Chairman and
Chief Executive Officer
Frank M. Clark
Chairman and CEO,
ComEd
Elizabeth A. Moler
Executive Vice President
Government and Environmental
Affairs and Public Policy,
Exelon
Denis P. O’Brien
Executive Vice President,
Exelon and President and CEO,
PECO
Christopher M. Crane
President and Chief Operating Officer,
Exelon and Chief Operating Officer,
Exelon Generation
William A. Von Hoene, Jr.
Executive Vice President
and General Counsel,
Exelon
Ruth Ann M. Gillis
Executive Vice President,
Exelon and President,
Exelon Business Services Company
Andrea L. Zopp
Executive Vice President and
Chief Human Resources Officer,
Exelon
Ian P. McLean
Executive Vice President,
Finance and Markets,
Exelon
20
Board of Directors
John W. Rowe
Chairman and
Chief Executive Officer
Nelson A. Diaz
Of Counsel,
Cozen O’Connor
John A. Canning, Jr.
Chairman,
Madison Dearborn Partners, LLC
M. Walter D’Alessio
Vice Chairman,
NorthMarq Capital, Inc.
Nicholas DeBenedictis
Chairman, President
and Chief Executive Officer,
Aqua America, Inc.
Sue L. Gin
Chairman and
Chief Executive Officer,
Flying Food Group, LLC
Rosemarie B. Greco
Senior Adviser to the
Governor of Pennsylvania,
Health Care Reform
Paul L. Joskow
President,
Alfred P. Sloan Foundation
William C. Richardson, Ph.D.
President and
Chief Executive Officer Emeritus,
W. K. Kellogg Foundation
Thomas J. Ridge
Former Secretary,
Department of Homeland Security,
Former Governor of Pennsylvania
John W. Rogers, Jr.
Ariel Investments, LLC
Stephen D. Steinour
Chairman, President and
Chief Executive Officer,
Huntington Bancshares Incorporated
Bruce DeMars
Admiral (Retired),
United States Navy
John M. Palms, Ph.D.
Distinguished President Emeritus,
University of South Carolina
Don Thompson
President,
McDonald’s USA
*Richard W. Mies, Admiral (Retired) United States Navy, joined the Exelon Board February 2009
21
Financial Section
23
25
26
30
31
32
33
34
Summary of Earnings and Financial Condition
Stock Performance Graph
Discussion of Financial Results – Exelon
Discussion of Financial Results – by Business Segment
Discussion of Financial Results – Generation
Discussion of Financial Results – ComEd
Discussion of Financial Results – PECO
Condensed Consolidated Financial Statements:
> Consolidated Statements of Operations
> Consolidated Statements of Cash Flows
> Consolidated Balance Sheets
> Consolidated Statements of Changes in Shareholders’ Equity
> Consolidated Statements of Comprehensive Income
42 Management’s Report on Internal Control Over Financial Reporting
in millions, except for per share data
Statement of Operations data:
Operating revenues
Operating income
Income from continuing operations
Income (loss) from discontinued operations
Income before cumulative effect of changes in accounting principles
Cumulative effect of changes in accounting principles
(net of income taxes)
Net income (a)
Earnings per average common share (diluted):
Income from continuing operations
Income (loss) from discontinued operations
Cumulative effect of changes in accounting principles
(net of income taxes)
Net income
Dividends per common share
Average shares of common stock outstanding – diluted
Summary Annual Report
Summary of Earnings and Financial Condition
2008
2007
For the Years Ended December 31,
2004
2005
2006
$
$
$
$
$
$
18,859
5,299
2,717
20
2,737
–
2,737
4.10
0.03
–
4.13
2.03
662
$
$
$
$
$
$
18,916
4,668
2,726
10
2,736
–
2,736
4.03
0.02
–
4.05
1.76
676
$
$
$
$
$
$
15,655
3,521
1,590
2
1,592
–
1,592
2.35
–
–
2.35
1.60
676
$
$
$
$
$
$
15,357
2,724
951
14
965
(42)
923
1.40
0.02
(0.06)
1.36
1.60
676
$
$
$
$
$
$
14,133
3,499
1,870
(29)
1,841
23
1,864
2.79
(0.04)
0.03
2.78
1.26
669
(a) The changes between 2007 and 2006; 2006 and 2005; and 2005 and 2004 were primarily due to the impact of the goodwill impairment charges of $776 million and $1.2 billion in 2006 and 2005, respectively.
23
Summary Annual Report
Summary of Earnings and Financial Condition
in millions
Balance Sheet data:
Current assets
Property, plant and equipment, net
Noncurrent regulatory assets
Goodwill (a)
Other deferred debits and other assets
Total assets
Current liabilities
Long-term debt, including long-term debt to financing trusts
Noncurrent regulatory liabilities
Other deferred credits and other liabilities
Minority interest
Preferred securities of subsidiary
Shareholders’ equity
Total liabilities and shareholders’ equity
2008
2007(b)
2006(b)
2005(b)
December 31,
2004(b)
$
5,368
25,813
5,940
2,625
8,071
$ 47,817
$ 4,080
12,592
2,520
17,491
–
87
11,047
$ 47,817
$
4,580
24,153
5,133
2,625
8,870
$ 45,361
5,629
$
11,965
3,301
14,242
–
87
10,137
$ 45,361
$
4,214
22,775
5,808
2,694
7,974
$ 43,465
4,977
$
11,911
3,025
13,458
–
87
10,007
$ 43,465
$
3,886
21,981
4,734
3,475
7,910
$ 41,986
5,839
$
11,760
2,518
12,656
1
87
9,125
$ 41,986
$
3,578
21,482
5,076
4,705
7,748
$ 42,589
4,522
$
12,148
2,490
13,811
42
87
9,489
$ 42,589
(a) The changes between 2006 and 2005 and between 2005 and 2004 were primarily due to the impact of the goodwill impairment charge of $776 million and $1.2 billion in 2006 and 2005, respectively.
(b) Exelon and Generation retrospectively reclassified certain assets and liabilities in accordance with FIN 39, “Offsetting of Amounts Related to Certain Contracts”, as amended by FSP FIN 39-1, “Amendment of FASB Interpretation No.39.”
24
Stock Performance Graph
The performance graph below illustrates a five year comparison of cumulative total returns based on an initial investment of $100 in Exelon Corporation common stock,
as compared with the Standard & Poor’s (S&P) 500 Stock Index and the S&P Utility Index for the period 2004 through 2008.
This performance chart assumes:
• $100 invested on December 31, 2003 in Exelon Corporation common stock, in the S&P 500 Stock Index and in the S&P Utility Index; and
• All dividends are reinvested.
Comparison of Five-Year Cumulative Return
$350
$300
$250
$200
$150
$100
$50
$0
3
0
/
2
1
4
0
/
3
4
0
/
6
4
0
/
9
4
0
/
2
1
5
0
/
3
5
0
/
6
5
0
/
9
5
0
/
2
1
6
0
/
3
6
0
/
6
6
0
/
9
6
0
/
2
1
7
0
/
3
7
0
/
6
7
0
/
9
7
0
/
2
1
8
0
/
3
8
0
/
6
8
0
/
9
8
0
/
2
1
Exelon Corporation
S&P Utilities
S&P 500
Exelon Corporation
S&P 500
S&P Utilities
2003
$ 100.00
100.00
100.00
$
2004
137.35
110.84
124.24
$
2005
170.89
116.27
144.88
Value of Investment at December 31,
2008
2007
2006
$ 204.60
134.60
175.26
$ 276.34
141.98
209.14
$
193.78
89.53
148.64
25
Discussion of Financial Results - Exelon
Results of Operations
(Dollars in millions, except for per share data, unless otherwise noted)
Operating revenues
Operating expenses
Purchased power and fuel
Operating and maintenance
Depreciation and amortization
Taxes other than income
Total operating expenses
Operating income
Other income and deductions
Interest expense
Interest expense to affiliates, net
Equity in losses of unconsolidated affiliates
Other, net
Total other income and deductions
Income from continuing operations before income taxes
Income taxes
Income from continuing operations
Income from discontinued operations, net of income taxes
Net income
Diluted earnings per share
26
2008
2007
Favorable
(Unfavorable)
Variance
$
18,859
$
18,916
$
(57)
6,582
4,566
1,634
778
13,560
5,299
(699)
(133)
(26)
(407)
(1,265)
4,034
1,317
2,717
20
2,737
4.13
$
$
7,642
4,289
1,520
797
14,248
4,668
(647)
(203)
(106)
460
(496)
4,172
1,446
2,726
10
2,736
4.05
$
$
1,060
(277)
(114)
19
688
631
(52)
70
80
(867)
(769)
(138)
129
(9)
10
1
0.08
$
$
Discussion of Financial Results - Exelon
Net Income. Exelon’s net income for 2008 was consistent compared to 2007. Increases were primarily due to higher average realized margins at Generation, reflecting
higher realized prices on market sales; increased revenue from certain long options in Generation’s proprietary trading portfolio; net mark-to-market gains on economic
hedging activities; the impact of the settlement reached between Generation, ComEd and other generators and utilities in Illinois, and various representatives from the
State of Illinois in 2007 (Illinois Settlement); increased transmission and delivery service revenue at ComEd in 2008 resulting from the 2007 transmission and distribution
rate cases; the impact of a 2007 loss associated with Generation’s tolling agreement with Georgia Power related to the contract with Tenaska; the impact of a decreased
charitable contribution to the Exelon Foundation; and gains related to the settlement of claims related to uranium supply agreements. These increases were offset
by unrealized and realized losses associated with Generation’s nuclear decommissioning trust funds related to the former AmerGen nuclear generating units and its
unregulated portions of the Peach Bottom nuclear generating units (Unregulated Units); increased nuclear fuel costs; decreased nuclear output at Generation reflecting
increased scheduled refueling outage days in 2008; increased operating and maintenance expense related to the higher number of planned nuclear refueling outages;
unfavorable weather conditions in the ComEd and PECO service territories; increased allowance for uncollectible accounts expense at PECO and ComEd as well as the
establishment of a reserve related to Generation’s accounts receivable from Lehman Brothers Holdings, Inc. (Lehman); labor-related inflation; increased scheduled
competitive transition charges (CTC) amortization expense at PECO; impact of a gain realized in 2007 on nuclear decommissioning trust fund investments related to the
Unregulated Units primarily associated with changes in Generation’s investment strategy; realized nuclear decommissioning trust fund losses related to a tax planning
strategy; the impact of the favorable 2007 PJM Interconnection, LLC (PJM) billing settlement with PPL Electric (PPL); the impact of the termination of Generation’s power
purchase agreement (PPA) with State Line in 2007; and income associated with investments in synthetic fuel-producing facilities in 2007.
Operating Revenues. Operating revenues decreased due to lower nuclear output due to more planned refueling outage days in 2008; unfavorable weather conditions in
the ComEd and PECO service territories; the impact of the Illinois Settlement; the reduction in PECO’s distribution rates made to refund the Pennsylvania Public Utility
Realty Tax Act (PURTA) tax settlement to customers (completely offset by the amortization of the regulatory liability reflected in taxes other than income); and the impact
of the termination of Generation’s PPA with State Line in 2007. These decreases were partially offset by higher realized prices on market sales at Generation; increased
transmission and delivery service revenue at ComEd resulting from the 2007 transmission and distribution rate cases; increased delivery volumes, excluding the effects
of weather, at PECO; and increased revenue from certain long options in Generation’s proprietary trading portfolio.
27
Discussion of Financial Results - Exelon
Purchased Power and Fuel Expense. Purchased power and fuel expense decreased due to net mark-to-market gains on economic hedging activities; favorable settlements
reached in 2008 related to uranium supply agreements; unfavorable weather conditions in the ComEd and PECO service territories; and the impact of a 2007 loss
associated with Generation’s tolling agreement with Georgia Power related to a contract with Tenaska. These decreases were partially offset by increased nuclear fuel
costs at Generation; increased transmission expense at PECO; and the impact of the favorable PJM billing dispute settlement with PPL in 2007.
Operating and Maintenance Expense. Operating and maintenance expense increased primarily due to increased allowance for uncollectible accounts expense at PECO
and ComEd as well as the establishment of a reserve related to Generation’s accounts receivable from Lehman; discrete disallowances, net of allowed regulatory assets,
mandated by the September 2008 Illinois Commerce Commission (ICC) order in ComEd’s 2007 delivery service rate case; labor-related inflation; increased expenses
related to a higher number of planned nuclear refueling outages, including planned nuclear refueling outage costs at Salem Generating Station; and decreased nuclear
insurance credits accrued by Generation in 2008. These increases are partially offset by a decrease in costs associated with the evaluation and development of a new
nuclear generating facility in Texas; decreased charitable contributions to the Exelon Foundation; and decreased stock-based compensation costs.
Depreciation and Amortization Expense. Depreciation and amortization expense increased primarily due to increased scheduled CTC amortization expense at PECO and
higher plant balances due to additional plant placed in service across Exelon.
Taxes Other Than Income. Taxes other than income decreased primarily due to an Illinois distribution tax refund received in 2008 and the amortization of the regulatory
liability recorded in connection with the 2007 PURTA settlement, which began in January 2008 and is offset by lower revenues due to a reduction in the distribution rates
to refund the PURTA taxes to customers. These factors are partially offset by the impact of increased property taxes and payroll taxes.
28
Discussion of Financial Results - Exelon
Other Income and Deductions. The change in other income and deductions primarily reflects unrealized and realized losses on Generation’s nuclear decommissioning
trust fund investments of its Unregulated Units; the impact of the 2007 gain from sale of Generation’s investment in Termoeléctrica del Golfo and Termoeléctrica Peñoles;
and the income associated with investments in synthetic fuel-producing facilities that ceased operations at the end of 2007.
Effective Income Tax Rate. The effective income tax rate was 32.6% for 2008 compared to 34.7% for 2007. The 2008 rate decreased, as compared with 2007, primarily due to
the impact of higher marginal tax rates applicable to realized and unrealized losses in the nuclear decommissioning trust funds recorded at Generation, partially offset
by the expiration of synthetic fuel tax credits under Internal Revenue Code Section 45K on December 31, 2007.
Discontinued Operations. Income from discontinued operations related to expiration of tax indemnifications in connection to a prior investment in Sithe Energies, Inc.
29
Discussion of Financial Results - by Business Segment
Results of Operations by Business Segment
The comparisons of 2008 and 2007 operating results and other statistical information set forth below include intercompany transactions, which are eliminated in
Exelon’s consolidated financial statements.
Net Income (Loss) from Continuing Operations by Business Segment
Generation
ComEd
PECO
Other (a)
Total
(a) Other primarily includes corporate operations, Exelon Business Service Company, LLC (BSC), investments in synthetic fuel-producing facilities and intersegment eliminations.
Net Income (Loss) by Business Segment
Generation
ComEd
PECO
Other (a)
Total
(a) Other primarily includes corporate operations, BSC, investments in synthetic fuel-producing facilities and intersegment eliminations.
2008
2,258
201
325
(67)
2,717
2008
2,278
201
325
(67)
2,737
$
$
$
$
$
$
$
$
Favorable
(Unfavorable)
Variance
$
$
233
36
(182)
(96)
(9)
2007
2,025
165
507
29
2,726
Favorable
(Unfavorable)
Variance
$
$
249
36
(182)
(102)
1
2007
2,029
165
507
35
2,736
30
Results of Operations – Generation
(Dollars in millions)
Operating revenues
Operating expenses
Purchased power and fuel
Operating and maintenance
Depreciation and amortization
Taxes other than income
Total operating expenses
Operating income
Other income and deductions
Interest expense
Equity in losses of unconsolidated affiliates
Other, net
Total other income and deductions
Income from continuing operations before income taxes
Income taxes
Income from continuing operations
Discontinued operations
Gain on disposal of discontinued operations
Income from discontinued operations
Net income
Discussion of Financial Results - Generation
2008
2007
Favorable
(Unfavorable)
Variance
$
10,754
$
10,749
$
5
3,572
2,717
274
197
6,760
3,994
(136)
(1)
(469)
(606)
3,388
1,130
2,258
20
20
2,278
$
4,451
2,454
267
185
7,357
3,392
(161)
1
155
(5)
3,387
1,362
2,025
4
4
2,029
$
$
879
(263)
(7)
(12)
597
602
25
(2)
(624)
(601)
1
232
233
16
16
249
Generation’s net income increased primarily due to higher operating revenues, net of purchased power and fuel expense, partially offset by higher operating and
maintenance expenses and unrealized and realized losses in 2008 and realized gains in 2007 related to nuclear decommissioning trust funds associated with the
Unregulated Units. Higher net operating revenues, net of purchased power and fuel expense, reflected higher average realized margins, higher net mark-to-market gains
on economic hedging activities, lower costs incurred in conjunction with the Illinois Settlement, a 2007 loss associated with the tolling agreement with Georgia Power
related to the contract with Tenaska, increased revenue from certain long options in the proprietary trading portfolio and gains related to the settlement of uranium
supply agreements in 2008, partially offset by increased nuclear fuel costs, lower nuclear output reflecting a higher number of scheduled refueling and non-refueling
outage days, the gain on the termination of the State Line PPA in 2007, a favorable PJM billing settlement with PPL in 2007 and impairments of stored oil and gas inventory
in 2008. Higher operating and maintenance expenses included increased wages, salaries and benefits (excluding stock-based compensation), nuclear refueling outage
costs associated with a higher number of planned refueling outages, higher costs associated with nuclear decommissioning-related activities and the establishment
of a reserve related to counterparty exposure to Lehman, partially offset by decreases in contractor expenses, stock-based compensation and costs associated with the
possible construction of a nuclear power plant in Texas. Additional offsets to increased net income in 2008 included decommissioning trust fund activity associated
with the Unregulated Units which reflected unrealized losses in 2008, realized losses related to a tax planning strategy in 2008 and the impact of realized gains in 2007
associated with changes in Generation’s investment strategy.
31
Discussion of Financial Results - ComEd
Results of Operations – ComEd
(Dollars in millions)
Operating revenues
Purchased power expense
Revenue net of purchased power expense
Other operating expenses
Operating and maintenance
Depreciation and amortization
Taxes other than income
Total other operating expenses
Operating income
Other income and deductions
Interest expense, net
Equity in losses of unconsolidated affiliates
Other, net
Total other income and deductions
Income before income taxes
Income taxes
Net income (loss)
2008
6,136
3,582
2,554
1,125
464
298
1,887
667
(348)
(8)
18
(338)
329
128
201
$
$
2007
6,104
3,747
2,357
1,091
440
314
1,845
512
(318)
(7)
58
(267)
245
80
165
$
$
Favorable
(Unfavorable)
Variance
$
$
32
165
197
(34)
(24)
16
(42)
155
(30)
(1)
(40)
(71)
84
(48)
36
ComEd’s net income for 2008 compared to 2007 reflected higher revenue net of purchased power expense, primarily driven by higher transmission rates effective
May 1, 2007 and June 1, 2008 and higher distribution rates effective September 16, 2008. In 2008, ComEd received a refund of Illinois Distribution Tax that also
contributed to the increase in net income. These increases were partially offset by unfavorable weather; higher operating and maintenance expense, principally driven
by disallowances arising from the 2007 Rate Case order, higher storm costs and an increase in the allowance for uncollectible accounts expense; higher depreciation and
amortization expense; and higher interest expense.
32
Results of Operations – PECO
(Dollars in millions)
Operating revenues
Purchased power expense and fuel expense
Revenue net of purchased power expense and fuel expense
Other operating expenses
Operating and maintenance
Depreciation and amortization
Taxes other than income
Total other operating expenses
Operating income
Other income and deductions
Interest expense, net
Equity in losses of unconsolidated affiliates
Other, net
Total other income and deductions
Income before income taxes
Income taxes
Net income
Preferred stock dividends
Net income on common stock
Discussion of Financial Results - PECO
Favorable
(Unfavorable)
Variance
$
$
(46)
(35)
(81)
(101)
(81)
15
(167)
(248)
22
(9)
(27)
(14)
(262)
80
(182)
–
(182)
2007
5,613
2,983
2,630
630
773
280
1,683
947
(248)
(7)
45
(210)
737
230
507
4
503
$
$
2008
5,567
3,018
2,549
731
854
265
1,850
699
(226)
(16)
18
(224)
475
150
325
4
321
$
$
PECO’s net income for 2008 compared to 2007 decreased due to lower operating revenues net of purchased power and fuel expense, reflecting unfavorable weather
conditions, as well as higher operating and maintenance expenses primarily driven by an increase in the allowance for uncollectible accounts expense and increased
scheduled CTC amortization, which was in accordance with the 1998 restructuring settlement mandated by the Competition Act, partially offset by the decrease in
interest expense due to lower long-term debt balances owed to PECO Energy Transition Trust.
33
Consolidated Statements of Operations
Exelon Corporation and Subsidiary Companies
(in millions, except for per share data)
Operating revenues
Operating expenses
Purchased power
Fuel
Operating and maintenance
Impairment of goodwill
Depreciation and amortization
Taxes other than income
Total operating expenses
Operating income
Other income and deductions
Interest expense
Interest expense to affiliates, net
Equity in losses of unconsolidated affiliates
Other, net
Total other income and deductions
Income from continuing operations before income taxes
Income taxes
Income from continuing operations
Discontinued operations
Income (loss) from discontinued operations (net of taxes of $1, $3 and $0,respectively)
Gain on disposal of discontinued operations (net of taxes of $14, $2 and $2,respectively)
Income from discontinued operations
Net income
34
For the Years Ended December 31,
2006
2007
2008
$
18,859
$
18,916
$
15,655
4,270
2,312
4,566
–
1,634
778
13,560
5,299
(699)
(133)
(26)
(407)
(1,265)
4,034
1,317
2,717
(1)
21
20
2,737
$
5,282
2,360
4,289
–
1,520
797
14,248
4,668
(647)
(203)
(106)
460
(496)
4,172
1,446
2,726
6
4
10
2,736
$
2,683
2,549
3,868
776
1,487
771
12,134
3,521
(616)
(264)
(111)
266
(725)
2,796
1,206
1,590
(2)
4
2
1,592
$
(in millions, except for per share data)
Average shares of common stock outstanding
Basic
Diluted
Earnings per average common share – basic:
Income from continuing operations
Income from discontinued operations
Net income
Earnings per average common share – diluted:
Income from continuing operations
Income from discontinued operations
Net income
Dividends per common share
Consolidated Statements of Operations
Exelon Corporation and Subsidiary Companies
For the Years Ended December 31,
2006
2007
2008
658
662
4.13
0.03
4.16
4.10
0.03
4.13
2.03
$
$
$
$
$
670
676
4.06
0.02
4.08
4.03
0.02
4.05
1.76
$
$
$
$
$
670
676
2.37
–
2.37
2.35
–
2.35
1.60
$
$
$
$
$
The information in the Consolidated Statements of Operations shown above is a replication of the information in the Consolidated Statements of Operations in Exelon’s 2008 Form 10-K. For complete consolidated financial statements,
including notes, please refer to pages 179 through 367 of Exelon’s 2008 Form 10-K filed with the Securities and Exchange Commission (SEC). See also management’s discussion and analysis of financial condition and results of operation, which
includes a discussion of critical accounting policies and estimates, on pages 77 through 160 of Exelon’s 2008 Form 10-K filed with the SEC.
35
Consolidated Statements of Cash Flows
Exelon Corporation and Subsidiary Companies
(in millions)
Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation, amortization and accretion, including nuclear fuel
Impairment charges
Deferred income taxes and amortization of investment tax credits
Net realized and unrealized mark-to-market transactions
Other non-cash operating activities
Changes in assets and liabilities:
Accounts receivable
Inventories
Accounts payable, accrued expenses and other current liabilities
Counterparty collateral asset
Counterparty collateral liability
Income taxes
Restricted cash
Pension and non-pension postretirement benefit contributions
Other assets and liabilities
Net cash flows provided by operating activities
Cash flows from investing activities
Capital expenditures
Proceeds from nuclear decommissioning trust fund sales
Investment in nuclear decommissioning trust funds
Proceeds from sales of investments
Change in restricted cash
Other investing activities
Net cash flows used in investing activities
36
For the Years Ended December 31,
2006
2007
2008
$
2,737
$
2,736
$
1,592
2,308
–
374
(515)
1,233
67
(109)
136
670
357
(38)
14
(230)
(453)
6,551
(3,117)
17,202
(17,487)
–
29
(5)
(3,378)
2,183
–
(104)
102
664
(585)
9
330
(246)
(270)
160
(15)
(204)
(264)
4,496
(2,674)
7,312
(7,527)
95
(45)
(70)
(2,909)
2,132
894
73
(83)
197
(62)
(59)
67
259
172
69
–
(180)
(236)
4,835
(2,418)
4,793
(5,081)
2
(9)
(49)
(2,762)
(in millions)
Cash flows from financing activities
Issuance of long-term debt
Retirement of long-term debt
Retirement of long-term debt to financing affiliates
Retirement of short-term debt
Change in short-term debt
Dividends paid on common stock
Proceeds from employee stock plans
Purchase of treasury stock
Purchase of forward contract in relation to certain treasury stock
Other financing activities
Net cash flows used in financing activities
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Consolidated Statements of Cash Flows
Exelon Corporation and Subsidiary Companies
For the Years Ended December 31,
2006
2007
2008
2,265
(1,398)
(1,038)
–
(405)
(1,335)
130
(436)
(64)
68
(2,213)
960
311
1,271
1,621
(262)
(1,020)
–
311
(1,180)
215
(1,208)
(79)
102
(1,500)
87
224
311
1,370
(402)
(910)
(300)
(685)
(1,071)
184
(186)
–
11
(1,989)
84
140
224
$
$
$
The information in the Consolidated Statements of Cash Flows shown above is a replication of the information in the Consolidated Statements of Cash Flows in Exelon’s 2008 Form 10-K. For complete consolidated financial statements,
including notes, please refer to pages 179 through 367 of Exelon’s 2008 Form 10-K filed with the SEC. See also management’s discussion and analysis of financial condition and results of operation, which includes a discussion of critical
accounting policies and estimates, on pages 77 through 160 of Exelon’s 2008 Form 10-K filed with the SEC.
37
Consolidated Statements of Balance Sheets
Exelon Corporation and Subsidiary Companies
(in millions)
Assets
Current assets
Cash and cash equivalents
Restricted cash and investments
Accounts receivable, net
Customer
Other
Mark-to-market derivative assets
Inventories, net, at average cost
Fossil fuel
Materials and supplies
Deferred income taxes
Other
Total current assets
Property, plant and equipment, net
Deferred debits and other assets
Regulatory assets
Nuclear decommissioning trust funds
Investments
Investments in affiliates
Goodwill
Mark-to-market derivative assets
Other
Total deferred debits and other assets
Total assets
2008
December 31,
2007
$
1,271
75
$
311
118
1,928
324
410
315
528
–
517
5,368
25,813
2,041
611
247
252
471
102
427
4,580
24,153
5,940
5,500
670
45
2,625
507
1,349
16,636
$ 47,817
5,133
6,823
668
63
2,625
55
1,261
16,628
$ 45,361
The information in the Consolidated Balance Sheets shown above is a replication of the information in the Consolidated Balance Sheets in Exelon’s 2008 Form 10-K. For complete consolidated financial statements, including notes, please refer
to pages 179 through 367 of Exelon’s 2008 Form 10-K filed with the SEC. See also management’s discussion and analysis of financial condition and results of operation, which includes a discussion of critical accounting policies and estimates,
on pages 77 through 160 of Exelon’s 2008 Form 10-K filed with the SEC.
38
Consolidated Statements of Balance Sheets
Exelon Corporation and Subsidiary Companies
(in millions)
Liabilities and shareholders’ equity
Current liabilities
Short-term borrowings
Long-term debt due within one year
Long-term debt to ComEd Transitional Funding Trust and PECO Energy Transition Trust due within one year
Accounts payable
Mark-to-market derivative liabilities
Accrued expenses
Other
Total current liabilities
Long-term debt
Long-term debt due to ComEd Transitional Funding Trust and PECO Energy Transition Trust
Long-term debt to other financing trusts
Deferred credits and other liabilities
Deferred income taxes and unamortized tax credits
Asset retirement obligations
Pension obligations
Non-pension postretirement benefits obligations
Spent nuclear fuel obligation
Regulatory liabilities
Mark-to-market derivative liabilities
Other
Total deferred credits and other liabilities
Total liabilities
Commitments and contingencies
Preferred securities of subsidiary
Shareholders’ equity
Common stock (No par value, 2,000 shares authorized, 658 and 661 shares outstanding at December 31, 2008 and 2007, respectively)
Treasury stock, at cost (35 and 28 shares held at December 31, 2008 and 2007, respectively)
Retained earnings
Accumulated other comprehensive loss, net
Total shareholders’ equity
Total liabilities and shareholders’ equity
2008
December 31,
2007
$
211
29
319
1,416
214
1,151
740
4,080
11,397
805
390
4,939
3,734
4,111
2,255
1,015
2,520
24
1,413
20,011
36,683
$
616
605
501
1,450
234
1,240
983
5,629
9,915
1,505
545
5,081
3,812
777
1,717
997
3,301
298
1,560
17,543
35,137
87
87
8,816
(2,338)
6,820
(2,251)
11,047
$ 47,817
8,579
(1,838)
4,930
(1,534)
10,137
$45,361
The information in the Consolidated Balance Sheets shown above is a replication of the information in the Consolidated Balance Sheets in Exelon’s 2008 Form 10-K. For complete consolidated financial statements, including notes, please refer
to pages 179 through 367 of Exelon’s 2008 Form 10-K filed with the SEC. See also management’s discussion and analysis of financial condition and results of operation, which includes a discussion of critical accounting policies and estimates,
39
on pages 77 through 160 of Exelon’s 2008 Form 10-K filed with the SEC.
Consolidated Statements of Changes in Shareholders’ Equity
Exelon Corporation and Subsidiary Companies
(Dollars in millions, shares in thousands)
Balance, December 31, 2005
Net income
Long-term incentive plan activity
Employee stock purchase plan issuances
Common stock purchases
Common stock dividends declared
Adjustment to initially apply Statement of Financial
Accounting Standards No. 158 (SFAS No. 158), net of income taxes of $804
Other comprehensive income, net of income taxes of $1,179
Balance, December 31, 2006
Net income
Long-term incentive plan activity
Employee stock purchase plan issuances
Common stock purchases
Common stock dividends declared
Adoption of Financial Accounting Standards Board
Interpretation No. 48 (FIN 48)
Other comprehensive income, net of income taxes of $(290)
Balance, December 31, 2007
Net income
Long-term incentive plan activity
Employee stock purchase plan issuances
Common stock purchases
Common stock dividends declared
Adoption of Financial Accounting Standards Board No. 159 (FAS No. 159),
net of income taxes of $286
Other comprehensive loss, net of income taxes of $(354)
Balance, December 31, 2008
Issues
Shares
Common
Stock
Treasury
Stock
Accumulated
Other
Retained Comprehensive
Loss
Earnings
Total
Shareholders’
Equity
675,809
–
6,385
280
–
–
–
–
682,474
–
6,455
254
–
–
–
–
689,183
–
3,452
318
–
–
–
–
692,953
$
$
7,987
–
313
14
–
–
–
–
8,314
–
328
16
(79)
–
–
–
8,579
–
217
19
1
–
–
–
8,816
$
$
(444)
–
–
–
(186)
–
–
–
(630)
–
–
–
(1,208)
–
–
–
(1,838)
–
–
–
(500)
–
$
3,206
1,592
–
–
–
(1,372)
–
–
3,426
2,736
–
–
–
(1,219)
(13)
–
4,930
2,737
–
–
–
(1,007)
–
–
(2,338)
$
160
–
$ 6,820
$
(1,624)
–
–
–
–
–
(1,268)
1,789
(1,103)
–
–
–
–
–
–
(431)
(1,534)
–
–
–
–
–
(160)
(557)
(2,251)
$
$
9,125
1,592
313
14
(186)
(1,372)
(1,268)
1,789
10,007
2,736
328
16
(1,287)
(1,219)
(13)
(431)
10,137
2,737
217
19
(499)
(1,007)
–
(557)
11,047
The information in the Consolidated Statements of Changes in Shareholders’ Equity shown above is a replication of the information in the Consolidated Statements of Changes in Shareholders’ Equity in Exelon’s 2008 Form 10-K. For complete
consolidated financial statements, including notes, please refer to pages 179 through 367 of Exelon’s 2008 Form 10-K filed with the SEC. See also management’s discussion and analysis of financial condition and results of operation, which
includes a discussion of critical accounting policies and estimates, on pages 77 through 160 of Exelon’s 2008 Form 10-K filed with the SEC.
40
Consolidated Statements of Comprehensive Income
Exelon Corporation and Subsidiary Companies
(in millions)
Net income
Other comprehensive income (loss)
Pension and non-pension postretirement benefit plans:
Prior service (benefit) reclassified to periodic benefit cost, net of income taxes of $(6), $(4), $0
Actuarial loss reclassified to periodic cost, net of income taxes of $52, $57, $0
Transition obligation reclassified to periodic cost, net of income taxes of $2, $2, $0
Pension and non-pension postretirement benefit plans valuation, net of income taxes of $(959), $1, $0
Minimum pension liability, net of income taxes of $0, $0, and $674, respectively
Net unrealized (loss) gain on cash-flow hedges, net of income taxes of $563, $(345) and $368, respectively
Unrealized (loss) gain on marketable securities, net of income taxes of $(6), $(1), and $137, respectively
Other comprehensive (loss) income
Comprehensive income
For the Years Ended December 31,
2006
2007
2008
$
2,737
$
2,736
$
1,592
(9)
60
3
(1,459)
–
855
(7)
(557)
2,180
$
(9)
74
3
19
–
(513)
(5)
(431)
2,305
$
–
–
–
–
1,138
559
92
1,789
3,381
$
The information in the Consolidated Statements of Comprehensive Income shown above is a replication of the information in the Consolidated Statements of Comprehensive Income in Exelon’s 2008 Form 10-K. For complete consolidated
financial statements, including notes, please refer to pages 179 through 367 of Exelon’s 2008 Form 10-K filed with the SEC. See also management’s discussion and analysis of financial condition and results of operation, which includes a
discussion of critical accounting policies and estimates, on pages 77 through 160 of Exelon’s 2008 Form 10-K filed with the SEC.
41
Management’s Report on Internal Control Over Financial Reporting
The management of Exelon Corporation (Exelon) is responsible for establishing and maintaining adequate internal control over financial reporting. Exelon’s internal
control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
Exelon’s management conducted an assessment of the effectiveness of Exelon’s internal control over financial reporting as of December 31, 2008. In making this assessment,
management used the criteria in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Based on this assessment, Exelon’s management concluded that, as of December 31, 2008, Exelon’s internal control over financial reporting was effective.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2008, has been audited by PricewaterhouseCoopers LLP, an independent
registered public accounting firm, as stated in their report.
February 6, 2009
Information Derived from 2008 Form 10-K
We have presented a condensed discussion of financial results, excerpts from our consolidated financial statements and a copy of our Management’s Report on Internal
Control Over Financial Reporting in this summary annual report. A complete discussion of our financial results and our complete consolidated financial statements, including
notes, appears on pages 77 through 367 of our Form 10-K annual report for the year ended December 31, 2008. That annual report was filed with the Securities and Exchange
Commission on February 6, 2009 and can be viewed and retrieved through the Commission’s web site at www.sec.gov or our web site at www.exeloncorp.com.
Our independent registered public accounting firm, PricewaterhouseCoopers LLP, issued a report dated February 6, 2009 on their integrated audit of our consolidated
financial statements and our internal controls over financial reporting. In their report they expressed an unqualified opinion that those consolidated financial statements
present fairly, in all material respects, the financial position of Exelon Corporation and its subsidiaries at December 31, 2008 and 2007 and the results of their operations
and their cash flows for each of the three years in the period ended December 31, 2008 in conformity with accounting principles generally accepted in the United States
of America. They also expressed an unqualified opinion that Exelon’s assessment, included in Management’s Report on Internal Controls Over Financial Reporting, that
Exelon maintained effective internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control – Integrated Framework
issued by COSO, is fairly stated, in all material respects. Furthermore, they expressed an unqualified opinion that Exelon maintained, in all material respects, effective
internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control – Integrated Framework issued by the COSO. The full
text of PricewaterhouseCoopers LLP’s report can be found on page 183 of our 2008 Form 10-K.
Certifications
The CEO of Exelon has made the required annual certifications for 2008 to the New York Stock Exchange and the Philadelphia Stock Exchange that Exelon is in compliance
with the listing standards of those exchanges. The CEO and CFO have filed with the SEC all required certifications under section 302 of the Sarbanes-Oxley Act of 2002.
These certifications are filed as Exhibits 31-1 and 31-2 to Exelon’s 2008 Form 10-K.
42
01
02
08
10
12
14
16
18
20
21
22
Introduction
Letter to Shareholders
Exelon’s Vision Statement
Our Financial Advantage
Our Operating Advantage
Our Environmental Advantage
Our Human Advantage
Exelon at a Glance
Executive Committee
Board of Directors
Financial Section
On the cover: Located on the Susquehanna River in northern Maryland, Conowingo is a “run of the river” hydroelectric plant that has been providing electric power to the regional system
since 1928. Over time, the station has been expanded from seven to 11 turbines and today provides more than 500 MW of clean energy.
Forward-Looking Statements This report includes forward-looking statements including, for example, statements regarding benefits of the proposed merger, integration plans and expected synergies.
There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements made herein. The factors that could cause actual results to differ
materially from these forward-looking statements include Exelon’s ability to achieve the synergies contemplated by the proposed transaction, Exelon’s ability to promptly and effectively integrate the
businesses of NRG and Exelon, and the timing to consummate the proposed transaction and obtain required regulatory approvals as well as those discussed in (1) Exelon’s preliminary prospectus/offer to
exchange that is contained in the Registration Statement on Form S-4, Reg. No. 333-155278, that Exelon has filed with the SEC in connection with the Offer; (2) Exelon’s 2008 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 18; and
(3) other factors discussed in Exelon’s filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this report. Exelon
does not undertake any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this report, except as required by law.
Statements made in connection with the exchange offer are not subject to the safe harbor protections provided to forward-looking statements under the Private Securities Litigation Reform Act of 1995.
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corporate profile
Exelon Corporation is one of the nation’s largest electric utilities with approximately $19 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
5.4 million customers in northern Illinois and southeastern Pennsylvania and natural gas to approximately 485,000 customers in the Philadelphia area. Exelon is
headquartered in Chicago and trades on the NYSE under the ticker EXC.
investor and general information
Corporate Headquarters
Exelon Corporation
P.O. Box 805398
Chicago, IL 60680-5398
Shareholder Services
800.626.8729
Employee Plan Services
888.396.7865
Investor Relations Voice Mailbox
312.394.2345
Independent Public Accountants
PricewaterhouseCoopers LLP
Web site
www.exeloncorp.com
Stock Ticker
EXC
Shareholder Inquiries
Exelon Corporation has appointed BNY Mellon Shareowner Services as its transfer agent, stock registrar, dividend disbursing agent
and dividend reinvestment agent. Should you have questions concerning your registered shareholder account or the payment
or reinvestment of your dividends, or if you wish to make a stock transaction or stock transfer, you may call shareholder services
at BNY Mellon at the toll-free number shown to the left or access their website at www.bnymellon.com/shareowner/isd.
Computershare Trust Company N.A. administers the Employee Stock Purchase Plan (ESPP), the Employee Stock Purchase Plan for
Unincorporated Subsidiaries (ESPPUS), and employee stock options. Should you have any questions concerning your employee
plan shares or wish to make a transaction, you may call the toll-free number for Employee Plan Services shown to the left or
access their web site at www-us.computershare.com/employee.
The Company had approximately 140,000 holders of record of its common stock as of Dec. 31, 2008.
The 2008 Form 10-K Annual Report to the Securities and Exchange Commission was filed on Feb. 6, 2009. To obtain a copy
without charge, write to Katherine K. Combs, Senior Vice President, Corporate Governance, Deputy General Counsel and
Corporate Secretary, Exelon Corporation, Post Office Box 805398, Chicago, Illinois 60680-5398.
The Company maintains a telephone information service, which enables investors to obtain currently available information on
financial performance, company news and to access shareholder services at BNY Mellon. To use this service, please call our
toll-free number, 1.866.530.8108.
Important Additional Information This report relates, in part, to the offer (the “Offer”) by Exelon to exchange each issued and outstanding share of common stock of NRG Energy, Inc. (“NRG”) for 0.485 of a
share of Exelon common stock. This report is for informational purposes only and does not constitute an offer to exchange, or a solicitation of an offer to exchange, NRG shares, nor is it a substitute for the
exchange offer documents previously filed by Exelon with the Securities and Exchange Commission (the “SEC”). The Offer is made only through the exchange offer documents.
Exelon has filed a preliminary proxy statement and other relevant documents with the SEC in connection with the solicitation of proxies for the 2009 annual meeting of NRG stockholders (the “NRG
Meeting”). Exelon will file a proxy statement and other relevant documents with the SEC in connection with its solicitation of proxies for a meeting of Exelon shareholders (the “Exelon Meeting”) to be
called in order to approve the issuance of shares of Exelon common stock pursuant to the Offer.
Investors and security holders are urged to read the NRG Meeting proxy statement, the Exelon Meeting proxy statement, the exchange offer documents referred to above and other relevant materials
as they become available, because they will contain important information. Investors and security holders can obtain copies of the materials described above (and all other related documents filed with the
SEC) at no charge on the SEC’s website: www.sec.gov. Exelon, Exelon Xchange Corporation (“Xchange”) and the individuals nominated by Exelon for election to NRG’s Board of Directors will be participants
in the solicitation of proxies from the NRG stockholders for the NRG Meeting. Exelon and Xchange will be participants in the solicitation of proxies from Exelon shareholders for the Exelon Meeting.
In addition, certain directors and executive officers of Exelon and Xchange may solicit proxies for the Exelon Meeting and the NRG Meeting.
100% of the paper utilized for the printing of this report is Forest Stewardship Council certified, which promotes environmentally appropriate,
socially beneficial and economically viable management of the world’s forests. All the paper utilized in the production of this annual report is
manufactured by Mohawk Paper and the FSC certified portion of the paper contains 30% pulp derived from post-consumer recycled fiber. The
paper for this report was manufactured entirely with wind-generated electricity. Mohawk has provided the calculations below based on use of
69,000 pounds of Mohawk Options paper.
E
The savings derived from using this paper in lieu of virgin fiber paper is equivalent to:
124 trees
preserved for
the future
357 lbs.
waterborne
waste not created
52,545 gallons
wastewater
flow saved
5,814 lbs.
solid waste
not generated
11,447 lbs.
net greenhouse
gases prevented
87,618,000 BTUs
energy not
consumed
The savings derived from choosing a paper manufactured
using wind-generated electricity:
This amount of wind-generated electricity
is equivalent to:
19,370 lbs.
air emissions
not generated
21
barrels crude
oil unused
2
cars off the road
for one year
1,318
trees
planted
30%
Cert no. SCS-COC-00949
Exelon Corporation
P.O. Box 805398
Chicago, IL 60680-5398
www.exeloncorp.com
©2009 Exelon
Sustainable Advantage
Exelon Corporation 2008 Summary Annual Report