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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
    ...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...

  • Page 3
    ...฀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...

  • Page 4
    To฀Our฀Shareholders 2008฀was฀an฀extraordinary฀year.฀We฀witnessed฀tremendous฀turmoil฀ some฀of฀our฀...twin฀storms฀that฀capsized฀ did฀the฀same฀to฀several฀companies฀in฀our฀industry.฀Exelon฀did฀not฀go฀ John฀W.฀Rowe Chairman฀and฀Chief฀...

  • Page 5
    ...฀our฀Annual฀Report฀'Sustainable฀Value,'฀a฀play฀on฀words฀reflecting฀not฀only฀our฀strong฀ and฀financial฀performance.฀While฀2008฀tested฀that฀claim,฀the฀year฀demonstrated฀yet฀again฀that฀we฀can฀ deliver฀sustainable฀value. Exelon฀recorded...

  • Page 6
    ...Career."฀ Our฀"Energy฀for฀the฀Community"฀program฀was฀honored฀by฀VolunteerMatch฀as฀the฀Corporate...฀excellence฀of฀Exelon฀Generation.฀In฀2008,฀our฀nuclear฀...฀for฀the฀first฀time฀in฀the฀company's฀history฀and฀set฀a฀new฀record฀for฀ Our...

  • Page 7
    ...fifth฀highest฀electric฀demand฀in฀the฀company's฀history.฀This฀stretch฀was฀immediately฀followed฀by...increase฀for฀electric฀delivery฀service.฀The฀ruling฀will฀ enable... increased฀our฀dividend฀to฀$2.10฀annualized,฀reinforcing฀our฀belief฀in฀the...

  • Page 8
    ...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...our฀offer฀...฀NRG's฀annual฀shareholder฀meeting...

  • Page 9
    ...sustainability฀of฀these฀advantages฀manifested฀itself฀in฀2008.฀Your฀board,฀my฀฀ we฀protect฀and฀grow...company฀remains฀rock฀solid฀and฀our฀commitment฀to฀you฀is฀unwavering. John฀W.฀Rowe Chairman฀and฀Chief฀Executive฀Officer Exelon฀Corporation...

  • Page 10
    ...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฀interior฀space.฀Building...

  • Page 11

  • Page 12
    ...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...

  • Page 13
    ...฀and฀Electric฀Reliability฀Council฀of฀Texas฀(ERCOT)฀markets฀fall.฀ Thanks฀to฀our฀hedging฀strategy...the฀value฀of฀your฀ company฀-฀including฀through฀continued฀investment...to฀you,฀as฀we฀did฀in฀2008฀through฀ our฀$500฀million฀share฀repurchase...

  • Page 14
    ...฀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...

  • Page 15
    ...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...

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

  • Page 17
    ...฀ 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...

  • Page 18
    ...฀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...

  • 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
    ...the฀South฀ Philadelphia฀area.฀ ฀PECO฀...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...

  • Page 21
    ...฀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...

  • Page 22
    ...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...

  • Page 23
    ...฀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

  • Page 24
    ...฀of฀Earnings฀and฀Financial฀Condition Stock฀Performance฀Graph Discussion฀of฀Financial฀Results฀-฀Exelon฀ Discussion฀of฀Financial฀Results฀-฀by...Consolidated฀Statements฀of฀Comprehensive฀Income Management's฀Report฀on฀Internal฀Control฀Over฀Financial...

  • 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฀...

  • Page 26
    Summary฀Annual฀Report Summary฀of฀Earnings฀and฀Financial...liabilities฀and฀shareholders'฀equity฀ in฀millions฀ 2008฀ 2007(b)฀฀ 2006(b)฀฀ 2005(b)฀฀ December฀31,฀...and฀2005,฀respectively.฀ (b)฀ Exelon฀and฀Generation฀retrospectively฀reclassified...

  • 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
    Discussion฀of฀Financial฀Results฀-฀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...

  • Page 29
    ...Settlement);฀increased฀transmission฀and฀delivery฀service฀revenue฀at฀ComEd฀in฀2008฀resulting฀from฀the฀2007฀...;฀the฀impact฀of฀a฀decreased฀ charitable฀ contribution฀ to฀ the฀ Exelon฀ Foundation;฀ and฀ gains฀ related฀ to฀ the฀ settlement...

  • Page 30
    ...by฀ the฀ September฀ 2008฀ Illinois฀ Commerce฀ Commission฀ (ICC)฀ order฀ in฀ ComEd's฀ 2007฀ delivery฀ service฀ rate฀ case;฀ labor...฀in฀Texas;฀decreased฀charitable฀contributions฀to฀the฀Exelon฀Foundation;฀and฀decreased฀stock-based฀compensation...

  • Page 31
    ...฀Financial฀Results฀-฀Exelon Other฀Income฀...del฀Golfo฀and฀Termoeléctrica฀Peñoles;฀ and฀the฀income฀associated฀with฀...rate฀was฀32.6%฀for฀2008฀compared฀to฀34.7%฀for฀2007.฀The฀2008฀rate฀decreased,฀as฀...in฀Sithe฀Energies,฀Inc.฀ ฀ 29

  • Page 32
    ...฀of฀Operations฀by฀Business฀Segment The฀ comparisons฀ of฀ 2008฀ and฀ 2007฀ operating฀ results฀ and฀ other฀ ...Total฀ (a)฀ Other฀primarily฀includes฀corporate฀operations,฀Exelon฀Business฀Service฀Company,฀LLC฀(BSC),฀investments฀in฀synthetic฀fuel...

  • Page 33
    ...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...

  • Page 34
    ...฀ 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...

  • 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
    ...฀of฀Operations Exelon฀Corporation฀and฀Subsidiary฀Companies ฀ Operating฀revenues...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
    ...฀Statements฀of฀Operations Exelon฀Corporation฀and฀Subsidiary฀Companies ฀ Average฀shares฀of฀common฀stock฀outstanding฀ ฀ Basic...179฀through฀367฀of฀Exelon's฀2008฀Form฀10-K฀filed฀with฀the฀Securities฀and฀Exchange฀Commission฀(SEC).฀See฀...

  • Page 38
    ...฀of฀Cash฀Flows Exelon฀Corporation฀and฀Subsidiary฀Companies ฀ Cash฀flows฀... (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฀from฀...฀common฀stock฀ ฀ Proceeds฀from฀employee฀stock฀plans฀฀ ฀ Purchase฀of฀treasury฀stock฀ ฀...of฀Cash฀Flows฀in฀Exelon's฀2008฀Form฀10-K.฀For฀...

  • Page 40
    ...฀of฀Balance฀Sheets Exelon฀Corporation฀and฀Subsidiary฀Companies ฀ Assets฀ Current...฀ ฀ 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
    ...Sheets฀ Exelon฀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...

  • Page 42
    ...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...฀Exelon's฀2008฀...

  • Page 43
    ...Exelon฀Corporation฀and฀Subsidiary฀Companies ฀ Net฀income฀ Other฀comprehensive฀income฀(loss)฀ Pension฀and฀non-pension฀postretirement฀benefit฀plans:฀ Prior฀service...to฀pages฀179฀through฀367฀of฀Exelon's฀2008฀Form฀10-K฀filed฀with฀the฀SEC.฀...

  • Page 44
    ...'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...

  • 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
    ...the฀production฀of฀this฀annual฀report฀is฀฀ manufactured฀by฀Mohawk...prevented฀฀ 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...