Exelon 2001 Annual Report Download - page 35

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Generation
Components of Variance
Merger Normal
(in millions) 2000 1999 Variance Variance Operations
Operating Revenue $ 3,316 $ 2,411 $ 905 $ 590 $ 315
Operating Expense and Other 2,750 1,907 843 528 315
Depreciation & Amortization 126 125 1 28 (27)
EBIT $ 440 $ 379 $ 61 $ 34 $ 27
Generation’s EBIT increased $61 million for 2000 compared to 1999. The merger accounted for $34 million of the variance. The
remaining $27 million increase resulted primarily from higher margins on market and affiliate wholesale energy sales and
from the abandonment of two information systems implementations in 1999 and a $15 million write-off in 1999 of the
investment in a cogeneration facility in connection with the settlement of litigation. In addition, Generation’s EBIT also
benefited from an increase in equity in earnings of AmerGen of $4 million in 2000 compared to the prior year period. Effective
with the acquisition of Clinton Nuclear Power Station (Clinton) by AmerGen, the management agreement for Clinton was
terminated, resulting in lower revenues of $99 million and lower operation and maintenance expense of $70 million.
Generation’s nuclear fleet, including AmerGen, performed at a weighted average capacity factor of 93.8% for 2000.
Generation’s nuclear fleet production costs for 2000 were $14.65 per MWh.
Enterprises
Components of Variance
Merger Normal
(in millions) 2000 1999 Variance Variance Operations
Operating Revenue $ 1,395 $ 644 $ 751 $ 277 $ 474
Operating Expense and Other 1,500 852 648 278 370
Depreciation & Amortization 35 4 31 3 28
EBIT $ (140) $ (212) $ 72 $ (4) $ 76
Enterprises’EBIT increased $72 million for 2000 compared to 1999. Normal operations contributed $76 million of the variance,
which was partially offset by a $4 million reduction attributable to the Merger. The increase in EBIT from normal operations
primarily reflects a reduction in losses from retail energy sales partially offset by writedowns on communications investments
and losses in communications joint ventures.
Enterprises’ revenues increased $751 million for 2000 compared to 1999. Normal operations contributed $474 million and
the Merger added $277 million. Operating revenues attributable to normal operations increased $530 million as a result of
thirteen infrastructure services company acquisitions in 2000 and 1999, partially offset by reduced retail energy sales.
Enterprises’ operating and other expenses increased $648 million for 2000 compared to 1999. Normal operations
contributed $370 million and the Merger added $278 million. Increased operating expenses from normal operations primarily
related to the thirteen infrastructure services company acquisitions and to writedowns on communication investments and
losses in communications joint ventures, partially offset by reduced retail energy sales.
Enterprises’ depreciation and amortization expense increased primarily as a result of goodwill amortization related
to its infrastructure services businesses acquisitions.
Other Components of Net Income
Interest Charges Interest charges increased $203 million, or 47%, to $632 million in 2000.The increase was primarily attributable
to $156 million from the operations of Unicom since the Merger and interest of $104 million on the transition bonds issued
to securitize PECO’s stranded cost recovery, partially offset by $77 million of lower interest charges as a result of the
reduction of PECO’s long-term debt with the proceeds from the securitization.