How did Exelon's net income perform in the third quarter and first nine months of 2002?

Exelon reported a substantial increase in net income for the three months ended September 30, 2002, rising by 47% to $551 million, or $1.70 per diluted share. For the nine months ended September 30, 2002, income before the cumulative effect of accounting changes increased by 18% to $1.27 billion, or $3.24 per diluted share, although reported net income decreased due to a $230 million charge related to goodwill impairment from the adoption of SFAS No. 142.

What were the key drivers behind the improved performance in the Energy Delivery segment?

The Energy Delivery segment's performance was boosted by several factors, including warmer summer weather leading to increased retail electricity volumes, lower depreciation expenses resulting from the discontinuation of goodwill amortization (SFAS No. 142), and a reduction in depreciation rates at ComEd effective July 1, 2002. Lower interest expense due to debt reduction and refinancing also contributed to the segment's improved results.

What is the impact of the adoption of SFAS No. 142 (Goodwill and Other Intangible Assets) on Exelon's financial statements?

Exelon adopted SFAS No. 142 effective January 1, 2002. This new standard eliminated the amortization of goodwill. Consequently, Exelon recognized a goodwill impairment loss of $357 million ($243 million net of taxes) in the first quarter of 2002, recorded as a cumulative effect of a change in accounting principle. This adoption also led to lower depreciation and amortization expenses for the company.

How did Exelon Generation Company, LLC's performance change compared to the previous year?

Exelon Generation Company, LLC's net income decreased by 14% to $326 million for the nine months ended September 30, 2002. This decline was primarily due to lower margins on wholesale energy sales resulting from depressed market prices, a reduced supply of lower-cost nuclear generation, and increased operating and maintenance expenses. These factors were partially offset by increased revenues from affiliates, the acquisition of two generating plants, and reduced depreciation and interest expenses.

What are the company's main liquidity sources and capital resources?

Exelon's primary sources of liquidity and capital resources are internally generated cash flows from operations and external financings, including commercial paper issuances. The company also has access to a $1.5 billion revolving credit facility. These resources are used to fund capital requirements, investments, debt repayments, and dividend payments. Exelon's access to capital markets and financing costs are dependent on its credit ratings.

EXC 10-Q Quarterly Report Q3 FY2002 — Revenue, Net Income, EPS

Summary

Exelon Corporation reported a significant increase in net income for the nine months ended September 30, 2002, compared to the same period in 2001, driven by improved performance in its Energy Delivery segment and the sale of its AT&T Wireless interest. The Energy Delivery segment benefited from warmer weather conditions and lower depreciation expenses due to the adoption of SFAS No. 142, which ceased goodwill amortization. Generation's net income saw a decrease due to lower wholesale energy prices and increased operating and maintenance expenses, including higher nuclear refueling outage costs. Financially, Exelon demonstrated solid operating cash flows, though investing activities used more cash due to plant acquisitions. The company also managed its debt effectively through refinancing initiatives. Despite facing some regulatory scrutiny and litigation, including potential disallowances from an audit related to ComEd's delivery service rate case, Exelon's liquidity remains robust. The company continues to focus on operational efficiencies and strategic investments, including ongoing integration efforts and potential acquisitions, which position it for continued performance.

Key Highlights

1Net income increased by 47% to $551 million for the three months ended September 30, 2002, compared to $376 million in the prior year period.
2Energy Delivery segment income rose by 32% to $370 million, driven by warmer weather, lower depreciation, and the discontinuation of goodwill amortization.
3Generation's net income decreased by 14% to $326 million for the nine months ended September 30, 2002, impacted by lower wholesale energy prices and increased O&M expenses.
4Enterprises segment improved significantly, with net income turning positive at $15 million for the three-month period, compared to a loss of $33 million in the prior year, boosted by the sale of AT&T Wireless interest.
5ComEd adopted SFAS No. 142, leading to lower depreciation expenses and an increase in net income.
6PECO Energy Company saw a substantial 52% increase in net income on common stock for the three-month period, driven by higher sales, rate adjustments, and lower expenses.
7Exelon Generation Company, LLC acquired two natural gas and oil-fired plants from TXU Corp. for $443 million.

EXELON CORP Quarterly Report for Q3 Ended Sep 30, 2002

Summary

Key Highlights

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