Exelon 2004 Annual Report Download - page 8

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We have steadily improved our balance sheet. Bob Shapard and Barry Mitchell
have overseen the retirement of over $1.2 billion of long-term debt and
preferred stock in 2004, as well as over $700 million in transition debt. We
also made substantial progress in efforts to strengthen ComEd’s balance sheet.
As a consequence, debt as a percentage of total capitalization continues
to decrease, interest coverage continues to strengthen, cash flow continues
to improve and shareholders’ equity increased by over $900 million in 2004.
We also have liquidated most of our unprofitable business ventures.
Thanks to the efforts of George Gilmore and his team, we completed the
sale of substantially all remaining Enterprises businesses. Moreover, we
completed the sale of Boston Generating back to its lenders, which eliminated
approximately $1.0 billion of outstanding debt from our balance sheet, and
completed the sale of most of the remaining Sithe assets to Dynegy at the
end of January 2005.
And finally, we are determined to more effectively engage our employees
in this ongoing effort to make Exelon the best electricity and gas company
in the country. We recognize that our efforts to improve productivity and
financial performance have placed great demands upon our workforce. We
do understand the stress caused by doing more with less. Our employees
participate in a generous compensation system, one that includes annual
bonuses tied to earnings and operating performance. They also enjoy one of
the most competitive benefit programs in the nation, including pension plans
that are being greatly strengthened by almost $2.0 billion in contributions
made possible by our improved financial condition. But if we are to enlist
their active participation, we must also offer them greater consideration,
and more consistent respect, even as we seek to change the work culture.
Gary Snodgrass and his HR team are constantly looking for ways to improve
employee engagement, to give our employees not only a stake, but even
more important a sense of pride, in all that we have accomplished.
making competition work
We remain deeply committed to competitive wholesale markets. Thanks to
the tireless efforts of Betsy Moler and her team, ComEd has now successfully
joined PECO in PJM, the foremost regional transmission organization in the
country. Every month, PJM member companies do in excess of 1 million
wholesale transactions, making PJM the largest market of its kind in the world.
Joining PJM has dramatically enhanced competitive opportunities for our
midwestern generation resources, deepening our trading opportunities and
increasing our control over production costs.
Our PJM membership also has facilitated the development of an effective
procurement strategy for our Illinois residential customers. In 2003, Exelon
attempted to extend Exelon Generation’s role as the sole source provider for
ComEd’s regulated residential customers. That proposal did not succeed, in
part, because competitors and consumer advocates wanted to ensure that
We do not foresee a
clean, or simple future.
But we would not
trade our platform
with any other utility.