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Exelon฀Corporation฀2008฀Summary฀Annual฀Report฀
Sustainable฀Advantage
Exelon฀Corporation
P.O.฀Box฀805398
Chicago,฀IL฀60680-5398
www.exeloncorp.com
©2009฀Exelon
฀The฀savings฀derived฀from฀using฀this฀paper฀in฀lieu฀of฀virgin฀fiber฀paper฀is฀equivalent฀to:
฀ ฀ 124฀trees฀ 357฀lbs.฀ 52,545฀gallons฀ 5,814฀lbs.฀ 11,447฀lbs.฀ 87,618,000฀BTUs฀
฀ ฀ preserved฀for฀฀ waterborne฀ wastewater฀ solid฀waste฀ net฀greenhouse฀ energy฀not฀
฀ ฀ the฀future฀ waste฀not฀created฀฀ flow฀saved฀ not฀generated฀ gases฀prevented฀฀ consumed
฀ The฀savings฀derived฀from฀choosing฀a฀paper฀manufactured฀฀ This฀amount฀of฀wind-generated฀electricity฀฀
฀ using฀wind-generated฀electricity:฀฀ ฀ ฀ is฀equivalent฀to:฀
฀฀
฀ ฀ 19,370฀lbs.฀ 21฀฀ ฀ 2฀ 1,318฀
฀฀air฀emissions฀฀ barrels฀crude฀ ฀ cars฀off฀the฀road฀ trees฀ ฀
฀ ฀ not฀generated฀ oil฀unused฀฀ ฀ for฀one฀year฀ planted
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

Table of contents

  • Page 1
    Exelon฀Corporation฀2008฀Summary฀Annual฀Report฀ Sustainable฀Advantage

  • Page 2
    ...MW฀of฀clean฀energy. ฀ Forward-Looking฀Statements฀This฀report฀includes฀forward-...'s฀ability฀to฀achieve฀the฀synergies฀contemplated฀by฀the฀proposed฀transaction...connection฀with฀the฀Offer;฀(2)฀Exelon's฀2008฀Annual฀Report฀on฀Form฀10-K฀in฀ (a)฀...

  • Page 3
    ...right,฀for฀there฀is฀great฀discontent฀in฀the฀world฀today฀ The฀question฀is฀whether฀that฀discontent฀... To฀me,฀the฀answer฀with฀respect฀to฀energy฀policy฀is฀self-evident฀-฀฀ we฀must฀push...฀฀ ฀ ฀ John฀W.฀Rowe฀/฀October฀6,฀2008

  • Page 4
    To฀Our฀Shareholders 2008฀was฀an฀extraordinary฀year.฀We฀witnessed฀tremendous฀turmoil฀ some฀of฀our฀economy's฀most฀venerable฀financial฀firms฀and฀nearly฀ unscathed,฀nor฀did฀we฀falter.฀฀ in฀the฀...

  • Page 5
    ...฀operate฀with฀world-class฀efficiency.฀...Annual฀Report฀'Sustainable฀Value,'฀a฀play฀on฀words฀reflecting฀not฀only฀our฀strong฀ and฀financial฀performance.฀While฀2008...฀largest฀competitor.฀Our฀...฀price฀of฀our฀stock฀in฀2008.฀But฀we฀are฀proud...

  • Page 6
    ...฀to฀first฀among฀ 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...

  • Page 7
    ...฀the฀gas฀flowing.฀The฀death฀of฀ComEd's฀Alex฀Collazo฀after฀ for฀our฀employees...฀electric฀demand฀in฀the฀company's฀history.฀This฀stretch฀was฀immediately฀followed฀by...outcome฀in฀its฀first฀ an฀annual฀rate฀increase฀of฀$77฀million฀that฀...

  • Page 8
    ...initiative฀to฀reduce฀energy฀consumption฀by฀25...฀the฀challenges฀of฀2008,฀we฀made฀substantial฀...greater฀than฀our฀current฀annual฀carbon฀footprint฀-฀each฀year฀by฀2020...80฀percent฀of฀our฀output฀comes฀from฀ climate฀change,฀and฀a฀blueprint...

  • Page 9
    ...to฀address฀climate฀change.฀As฀in฀all฀ things,฀however,฀the฀devil฀will฀be฀in฀the฀details...฀of฀these฀advantages฀manifested฀itself฀in฀2008.฀Your฀board,฀my฀฀ we฀protect฀and...฀Chief฀Executive฀Officer Exelon฀Corporation March฀6,฀2009 7

  • Page 10
    ...our฀customers฀and฀our฀communities 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)฀Platinumcertified฀commercial...

  • Page 11

  • Page 12
    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฀...

  • Page 13
    ...฀prices฀ in฀the฀PJM฀and฀Electric฀Reliability฀Council฀of฀Texas฀(ERCOT)฀markets฀fall.฀ Thanks฀to฀our฀hedging฀strategy฀and฀...returning฀that฀value฀to฀you,฀as฀we฀did฀in฀2008฀through฀ our฀$500฀million฀share฀repurchase฀and฀dividend฀...

  • Page 14
    ...฀well-planned฀and฀executed฀outages฀again฀led฀to฀฀ world-class฀capacity฀factors.฀Our฀employees฀and฀contractors฀completed฀...rate฀case฀will฀allow฀for฀฀ further฀investment. ComEd฀in฀June฀2008,฀opened฀a฀state-of-the-art฀substation฀in฀Chicago...

  • Page 15
    ...฀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

  • Page 16
    ...฀ Bucks฀County,฀Pa.฀,฀opened฀the฀Renewable฀Energy฀ Education฀Center฀in฀2008.฀The฀purpose฀of฀the฀ education฀center฀is...฀power฀generation.฀ The฀center฀was฀built฀to฀LEED฀standards฀and฀in฀ 2008฀was฀awarded฀LEED-Silver฀certification. 14

  • Page 17
    ...at฀the฀Clinton฀Power฀Station฀and฀฀ the฀Renewable฀Energy฀Education฀Center฀at฀Fairless฀Hills฀are฀expected฀to฀...of฀capacity฀uprates฀that฀can฀reduce฀annual฀CO2฀emissions฀by฀2฀million฀ metric฀tons. ComEd฀and฀PECO฀are฀working฀on฀...

  • Page 18
    ...฀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...

  • Page 19
    ...฀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...

  • Page 20
    ...make฀wiser฀energy฀choices,฀which฀can฀lead฀to฀lower฀bills฀and฀a฀reduced฀฀ carbon฀footprint. ComEd฀completed฀the฀...of฀the฀ state's฀population฀ peco 2008฀saw฀PECO฀achieve฀top฀decile฀industry฀rating฀in฀safety,฀a฀17-percent฀improvement฀...

  • Page 21
    ...to฀perform฀at฀world-class฀levels฀in฀2008฀as฀highlighted฀...฀purchase฀agreements,฀fuel฀...Texas.฀Power฀Team's฀trade฀฀ floor฀and฀headquarters฀are฀located฀in฀Kennett฀Square,฀Pa. Exelon฀Energy...include฀Communications,฀Corporate฀Strategy,฀Finance,฀...

  • Page 22
    ...฀President Government฀and฀Environmental฀ Affairs฀and฀Public฀Policy,฀฀ Exelon Frank฀M.฀Clark Chairman฀and฀CEO,฀฀ ComEd Denis฀P.฀O'Brien Executive฀Vice฀President,฀฀ Exelon฀and฀President฀and฀CEO,฀ PECO Christopher฀M.฀Crane President฀and...

  • Page 23
    ...President฀฀ and฀Chief฀Executive฀Officer,฀฀ Aqua฀America,฀Inc. Paul฀L.฀Joskow President, Alfred฀P.฀Sloan฀...University฀of฀South฀Carolina Don฀Thompson฀ President, McDonald's฀USA *Richard฀W.฀Mies,฀Admiral฀(Retired)฀United฀States฀Navy,฀joined฀...

  • Page 24
    ...฀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...Report...

  • Page 25
    ...of฀Earnings฀and฀Financial฀Condition Summary฀Annual฀Report Statement฀of฀Operations฀data:฀ Operating฀...share฀ Average฀shares฀of฀common฀stock฀outstanding฀-฀diluted฀ in฀millions,฀except฀for฀per฀share฀data฀ 2008฀ 2007฀฀ 2006฀฀ For฀the...

  • Page 26
    Summary฀Annual฀Report Summary฀of฀Earnings฀and฀Financial฀Condition Balance฀Sheet฀data: Current฀...'฀equity฀ Total฀liabilities฀and฀shareholders'฀equity฀ in฀millions฀ 2008฀ 2007(b)฀฀ 2006(b)฀฀ 2005(b)฀฀ December฀31,฀ 2004(b)฀ 5,368...

  • Page 27
    ...฀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...

  • Page 28
    ...฀-฀Exelon Results฀of฀Operations ฀ (Dollars฀in฀millions,฀except฀for฀per฀share฀data,฀unless฀otherwise฀noted 2008฀ 2007฀฀ Favorable (Unfavorable) Variance Operating฀revenues฀฀ Operating฀expenses฀ ฀ Purchased฀power฀and฀fuel฀ ฀ Operating฀and...

  • Page 29
    ...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...

  • Page 30
    ...settlements฀ reached฀ in฀ 2008฀ related฀ to฀ uranium฀ supply฀ agreements;฀ unfavorable฀ weather฀ conditions฀ in฀ the฀ ComEd฀ and฀ PECO฀ ...฀in฀Texas;฀decreased฀charitable฀contributions฀to฀the฀Exelon฀Foundation;฀and฀decreased฀stock-based฀...

  • Page 31
    ...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฀...of฀tax฀indemnifications฀in฀connection฀to฀a฀prior฀investment฀in฀Sithe฀Energies,฀Inc.฀ ฀ 29

  • Page 32
    ...฀ ฀ 2008฀ ฀ 2,025฀ 165฀ 507฀ 29฀ 2,726฀ 2007฀฀ Favorable (Unfavorable) Variance 233 36 (182) (96) (9) Net฀Income฀(Loss)฀by฀Business฀Segment฀ ฀ ฀ Generation฀ ComEd฀ PECO฀ Other฀(a)฀ Total฀ (a)฀ Other฀primarily฀includes฀corporate...

  • Page 33
    ...฀of฀uranium฀ supply฀agreements฀in฀2008,฀partially฀offset฀by฀increased...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...

  • Page 34
    ... 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...

  • Page 35
    ...฀ Net฀income฀ Preferred฀stock฀dividends฀ Net฀income฀on฀common฀stock฀ 5,567฀ 3,018฀...262) 80 (182) - (182) PECO's฀net฀income฀for฀2008฀compared฀to฀2007฀decreased฀due฀to฀lower฀operating฀revenues฀net฀of฀...PECO฀Energy฀Transition฀Trust. 33

  • Page 36
    ...฀Statements฀of฀Operations Exelon฀Corporation฀and฀Subsidiary฀Companies ฀ Operating...(1,265)฀ ฀ 4,034฀ ฀ 1,317฀ ฀ 2,717 1)฀ ฀ 21฀ ฀ 20฀ $฀ 2,737฀ 2008฀ For฀the฀Years฀Ended฀December฀31, 2007฀฀ 2006 $฀ 18,916฀ $฀ 15,655 2,683 2,549...

  • Page 37
    ... Exelon฀Corporation฀and฀Subsidiary฀Companies ฀ Average฀shares฀of฀common฀stock฀outstanding฀...฀ ฀฀ 4.13฀ 0.03฀ 4.16฀ ฀฀ 4.10฀ 0.03฀ 4.13฀ 2.03฀ 2008฀ For฀the฀Years฀Ended฀December฀31, 2007฀฀ 2006 670฀ 676฀ 4.06฀ 0.02฀...

  • Page 38
    ...฀Statements฀of฀Cash฀Flows Exelon฀Corporation฀and฀Subsidiary฀Companies ฀ Cash฀... (3,117)฀ ฀ 17,202฀ ฀ (17,487)฀ ฀ -฀ ฀ 29฀ ฀ (5)฀ ฀ (3,378)฀ 2008฀ For฀the฀Years฀Ended฀December฀31, 2007฀฀ 2006 ฀ $฀ 2,736฀ ฀ ฀ 2,183฀ ฀ -฀...

  • Page 39
    ...฀Statements฀of฀Cash฀Flows฀ Exelon฀Corporation฀and฀Subsidiary฀Companies ฀ Cash฀flows...฀common฀stock฀ ฀ Proceeds฀from฀employee฀stock฀plans฀฀ ฀ Purchase฀of฀treasury฀stock฀ ฀...฀Cash฀Flows฀in฀Exelon's฀2008฀Form฀10-K.฀For฀complete...

  • Page 40
    ...Statements฀of฀Balance฀Sheets Exelon฀Corporation฀and฀Subsidiary฀Companies ฀ Assets฀...฀ ฀ 670฀ ฀ 45฀ ฀ 2,625฀ ฀ 507฀ ฀ 1,349฀ ฀ 16,636฀ $฀ 47,817฀ 2008฀฀ ฀ December฀31, 2007 311 118 2,041 611 247 252 471 102 427 4,580 24,153 ฀ 5,133 ...

  • Page 41
    ...฀Corporation฀and฀Subsidiary฀Companies ฀ 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...

  • Page 42
    ...฀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...

  • Page 43
    Consolidated฀Statements฀of฀Comprehensive฀Income Exelon฀Corporation฀and฀Subsidiary฀Companies ฀ Net฀income฀ Other฀...the฀Consolidated฀Statements฀of฀Comprehensive฀Income฀in฀Exelon's฀2008฀Form฀10-K.฀For฀complete฀consolidated฀ financial฀statements,฀...

  • Page 44
    ...฀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...

  • Page 45
    ... 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...

  • Page 46
    ...world's฀forests.฀All฀the฀paper฀utilized฀in฀the฀production฀of฀this฀annual฀report... 87,618,000฀BTUs฀ energy฀not฀ consumed The฀savings฀derived...30% Cert no. SCS-COC-00949 Exelon฀Corporation P.O.฀Box฀805398 Chicago,฀IL฀60680-5398 www.exeloncorp.com ©2009...