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Exelon Corporation 2010 Summary Annual Report
Smart Investment

Table of contents

  • Page 1
    Smart Investment Exelon Corporation 2010 Summary Annual Report

  • Page 2
    ... Operating Excellence Environmental Leadership Talented Employees Exelon at a Glance Executive Committee Board of Directors Financial Section On the cover: A view through the Quad Cities Unit 2 generator during that nuclear power station's low-pressure turbine replacement and refueling outage...

  • Page 3
    ... and natural gas in plentiful supply, markets can guide us to efficient supplies of cleaner energy. Exelon will be at the table, protecting the electricity markets and seeking to capitalize on the nation's cleanest large-scale generation fleet. John W. Rowe, Chairman and Chief Executive Officer

  • Page 4
    To Our Shareholders In 2010 we witnessed the beginnings of an economic recovery, but electricity demand remained flat and electricity prices remained low. Nonetheless, Exelon delivered another strong year, with operating earnings of $2.7 billion. We are acting to protect and grow our future upside,...

  • Page 5
    3

  • Page 6
    ... gas or power prices and the coming economic recovery. Since the merger that created Exelon, our total return - measured as stock price appreciation plus reinvested dividends - has been 97.5 percent. This compares to total returns of 73.1 percent and 9 percent for the Philadelphia Utility Index...

  • Page 7
    ... secure our earnings and cash flow and protect our investment-grade credit ratings. We realized average margins at Exelon Generation of $37.62 per megawatt-hour in 2010 despite lower power prices. Our hedges contributed to the $5.24 billion we generated in cash from operations across the businesses...

  • Page 8
    ... our key markets. Exelon Business Services Company continued to provide best-in-class professional services, including legal, information technology, supply and human resources, adding great value to Exelon's operating companies. SMART INVESTMENT FOR THE FUTURE In 2010, we continued to execute our...

  • Page 9
    ... are most costly. The Exelon 2020 business strategy cements Exelon's value as the premier low-emission company in the U.S. utility industry. In sum, Exelon produced strong financial results for its shareholders in 2010 despite the challenges of the slow economic recovery and poor electricity market...

  • Page 10
    ... thb acquisition of John Dbbrb Rbnbwablbs in 2010 Exblon addbd 36 wind projbcts with 735 mbgawatts of clban gbnbration to its portfolio, including this sitb in Tiskilwa, Ill. Exblon Wind, a division of Exblon Powbr, managbs thb company's nbwly acquirbd wind assbts; approximatbly 75 pbrcbnt of Exblon...

  • Page 11
    ... 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...

  • Page 12
    ... evident in several critical areas of our business. Our nuclear uprates program has already netted the company 101 additional megawatts of power from our existing nuclear fleet. This approach gives us new clean energy at a fraction of the cost of building a new nuclear plant. In addition, our recent...

  • Page 13
    From thb tradb floor in Kbnnbtt Squarb, Pa., Powbr Tbam managbs thb intbraction bbtwbbn thb gbnbration portfolio and thb wholbsalb and rbtail markbts in ordbr to rbducb risk, crbatb opportunity and optimizb thb valub of Exblon's gbnbration. 11

  • Page 14
    ... facilities of 96.8 percent. Exelon Business Services Company provided world-class, cost-effective support to our operating companies, including the launch of myHR, which includes a website and service center that have dramatically improved human resources service levels for our employees...

  • Page 15
    Both ComEd and PECO kbpt thb lights on and thb gas flowing dbspitb numbrous sbvbrb storms throughout thb ybar. This PECO linb bmploybb works to safbly rbmovb fallbn branchbs from powbr linbs aftbr a summbr storm. 13

  • Page 16
    ... our customers, shareholders and the economy - and that is why we are following this advice ourselves. Exelon is now nearly three years into Exelon 2020: a low-carbon roammap, our plan to reduce, offset or displace our company's 2001 carbon footprint. By following this business strategy, Exelon has...

  • Page 17
    Exblon Powbr's Handlby Station is a natural gas-burning gbnbrating facility in Ft. Worth, Tbxas, with thrbb units capablb of gbnbrating 1,265 mbgawatts whbn nbbdbd. Nbw natural gas discovbribs promisb a morb abundant supply of this critical low-carbon fubl. Thb chbapbst way to mbbt nbw dbmand for ...

  • Page 18
    ... and businesses in the regions where we operate. ComEd and PECO together cover more than 13,000 square miles and serve nearly 6 million electricity and gas customers - a tremendous responsibility that our people take very seriously. For that reason, the safety of our employees and our customers is...

  • Page 19
    In hblicoptbrs and buckbt trucks, at powbr plants and warbhousbs, at substations and in commbrcial locations, bmploybbs likb this ComEd undbrground cablb splicbr pbrform tasks rbquiring skill, collaboration, bxcbllbncb and a commitmbnt to safbty. 17

  • Page 20
    ...the United States. The Power Team trade floor and headquarters are located in Kennett Square, Pa. Exelon Energy is the retail marketing arm of Exelon. It markets electricity to customers in Illinois and Pennsylvania, and natural gas to customers in Illinois, Michigan and Ohio. Exelon Energy provides...

  • Page 21
    ... Controls, Commercial Operations Group (which includes accounts payable and payroll), Communications and Public Affairs, Corporate Strategy and Exelon 2020, Development, Finance, Government Affairs and Public Policy, Human Resources, Information Technology (which includes Cyber & Physical Security...

  • Page 22
    ..., Exelon Generation Frank M. Clark Chairman and Chief Executive Officer, ComEd Kenneth W. Cornew Senior Vice President, Exelon and President, Power Team Joseph Dominguez Senior Vice President, Federal Regulatory Affairs, Public Policy and Communications, Exelon and Senior Vice President, State...

  • Page 23
    ...Retired), United States Navy John M. Palms, Ph.D. Distinguished President Emeritus, University of South Carolina 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...

  • Page 24
    ... Condensed Consolidated Financial Statements: > Consolidated Statements of Operations and Comprehensive Income > Consolidated Statements of Cash Flows > Consolidated Balance Sheets > Consolidated Statements of Changes in Shareholders' Equity 39 Management's Report on Internal Control Over Financial...

  • Page 25
    Summary Annual Report Summary of Earnings and Financial Condition (Dollars in millions, except for per share data) 2010 2009 2008 For the years ended Dec. 31, 2007 2006 Statement of operations data: Operating revenues Operating income Income from continuing operations Income from discontinued ...

  • Page 26
    Summary Annual Report Summary of Earnings and Financial Condition (Dollars in millions) 2010 2009 2008(a) For the years ended Dec. 31, 2007(a),(b) 2006(a),(b) Balance sheet data: Current assets Property, plant and equipment, net Noncurrent regulatory assets Goodwill Other deferred debits and ...

  • Page 27
    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 common stock, as compared with the S&P 500 Stock Index and the S&P Utility Index for the period 2006 through 2010. This performance ...

  • Page 28
    ... of Operatiocs (Dollars in millions, except for per share data) 2010 2009 Favorable (Unfavorable) Variance Operating revenues Operating expenses Purchased power and fuel expense Operating and maintenance Operating and maintenance for regulatory required programs Depreciation and amortization...

  • Page 29
    ... at Generation. Further, revenues at the utility companies increased by $92 million to recover the costs of regulatory required programs, which are offset in operating expenses, and ComEd recognized recovery of $59 million from customers associated with its uncollectible accounts rider mechanism...

  • Page 30
    ... Iccome (Loss) by Busicess Segmect Favorable (Unfavorable) 2010 vs. 2009 Variance (Dollars in millions) 2010 2009 Generation ComEd PECO Other (a) Total (a) Other primarily includes corporate operations, Exelon Business Service Company, LLC (EBSC) and intersegment eliminations. $ $ 1,972 337...

  • Page 31
    ... margins realized on market and affiliate power sales primarily due to unfavorable market conditions, lower mark-to-market gains on economic hedging activities and increased nuclear fuel costs. These were partially offset by higher capacity revenues, including under the Reliability Pricing Model, in...

  • Page 32
    ... by the Illinois Commerce Commission of ComEd's uncollectible accounts expense rider mechanism, the reduction of ComEd's asset retirement obligation in 2010, and a charge in 2009 for severance expense incurred as a cost to achieve savings under Exelon's 2009 company-wide cost savings initiative...

  • Page 33
    ...increase in operating expense reflected higher incremental storm costs and increased scheduled amortization of competitive transition charges. Electric revenues net of purchased power expense increased as a result of favorable weather conditions and increased competitive transition charge recoveries...

  • Page 34
    ... and Comprehensive Income Exelon Corporation and Subsidiary Companies (Dollars in millions, except for per share data) 2010 For the years ended Dec. 31, 2009 2008 Operating revenues Operating expenses Purchased power Fuel Operating and maintenance Operating and maintenance for regulatory...

  • Page 35
    ... Income Exelon Corporation and Subsidiary Companies (Dollars in millions, except for per share data) 2010 For the years ended Dec. 31, 2009 2008 Other comprehensive income (loss) Pension and non-pension postretirement benefit plans: Prior service benefit reclassified to periodic costs, net...

  • Page 36
    ... of Cash Flows Exelon Corporation and Subsidiary Companies (Dollars in millions) 2010 For the years ended Dec. 31, 2009 2008 Cash flows from operating activities Net income Adjustments to reconcile net income to net cash flows provided by operating activities: Depreciation, amortization...

  • Page 37
    ... 150 through 331 of Exelon's 2010 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 63 through 133 of Exelon's 2010 Form 10-K filed with the...

  • Page 38
    Consolidated Balance Sheets Exelon Corporation and Subsidiary Companies (Dollars in millions) For the years ended Dec. 31, 2010 2009 Assets Current assets Cash and cash equivalents Restricted cash and investments Accounts receivable, net Customer ($346 gross accounts receivable pledged as ...

  • Page 39
    ... Balance Sheets Exelon Corporation and Subsidiary Companies (Dollars in millions) For the years ended Dec. 31, 2010 2009 Liabilities and shareholders' equity Current liabilities Short-term borrowings Short-term notes payable-accounts receivable agreement Long-term debt due within one year...

  • Page 40
    ...of Changes in Shareholders' Equity Exelon Corporation and Subsidiary Companies (Dollars in millions, shares in thousands) Issued Shares Common Stock Treasury Stock Accumulated Other Retained Comprehensive Earnings Loss Noncontrolling Interest Total Shareholders' Equity Balance, Dec. 31, 2007...

  • Page 41
    ...of our Form 10-K annual report for the year ended Dec. 31, 2010. That annual report was filed with the Securities and Exchange Commission on Feb. 10, 2011, and can be viewed and retrieved through the Commission's website at www.sec.gov or our website at www.exeloncorp.com. Our independent registered...

  • Page 42
    ...2010. The 2010 Form 10-K Annual Report to the Securities and Exchange Commission was filed on Feb. 10, 2011. To obtain a copy without charge, write to Bruce G. Wilson, Senior Vice President, Deputy General Counsel and Corporate Secretary, Exelon Corporation, Post Office Box 805379, Chicago, Illinois...

  • Page 43
    ... Exelon Media Productions / CEO and Executive Committee photos: Ron Wu / printing: Lithographix This piece was printed on Opus Sheets manufactured by Sappi Fine Paper North America with 10% PCW and FSC Chain of Custody Certification. 100% of the electricity used to manufacture Opus Sheets is Green...

  • Page 44
    Exelon Corporation P.O. Box 805379 Chicago, IL 60680-5379 www.exeloncorp.com ©2011 Exelon