Summary
This 8-K filing from Exelon Corporation (EXC) on July 31, 2003, primarily reports on its Second Quarter 2003 Earnings Conference Call and discusses forward-looking financial matters impacting the remainder of 2003 and beyond. Management provided details on factors affecting earnings, including weather impacts, changes in competitive transition charges at Commonwealth Edison (ComEd), increased pension costs, savings from the Midwest Generation contract, and the dilutive impact of Exelon New England operations. The company also updated its outlook for Exelon Enterprises and discussed potential uses of cash, including debt paydown, dividend increases, equity injections into subsidiaries, and long-term share buybacks.
Key Highlights
- 1Exelon's Q2 2003 earnings call reviewed financial results and discussed forward-looking statements.
- 2Third quarter 2002 earnings included a $0.16/share benefit from better-than-normal weather; July 2003 has been cooler than normal.
- 3Changes in ComEd's competitive transition charges and customer switching are expected to decrease ComEd earnings by $0.15/share in H2 2003 vs. 2002.
- 4Full-year 2003 earnings are impacted by approximately $125 million pre-tax in increased pension/post-retirement benefit costs ($0.24/share).
- 5Exercise of options under the Midwest Generation contract is expected to yield $130 million pre-tax in capacity charge savings in 2003 vs. 2002 ($0.25/share after-tax).
- 6Exelon's investment in Sithe Energies and Exelon New England operations will be modestly dilutive in 2003, with about $0.20/share dilution expected, weighted to the second half.
- 7Exelon is now targeting to increase its dividend payout commensurate with total corporate earnings growth, moving from a previous target of 60% of regulated operating earnings.