Exelon’s ability to capture – and share with our stakeholders – the advantages of sustainable business practices is tied inextricably to our economic health. We pursue those practices that improve our financial position while balancing environmental and social needs.
Positioned for Sustained Value
- As of December 31, 2011, our market capitalization was $28.8 billion. Our 10-year total return since 2001 was outstanding—shareholders’ investments increased by approximately 158%, compared to 118% for the Philadelphia Utility Index and 33% for the S&P 500 Index.
The performance graph illustrates a 10-year comparison of cumulative total returns based on an initial investment of $100 in Exelon Corporation common stock, as compared with the S&P 500 Stock Index and the S&P Utilities Index for the period 2002 through 2011.
Expertise in Managing Market Risks
- Our power marketing team has been successful in making the most of Exelon Generation’s outstanding performance, reaping the benefits of a hardheaded approach to risk management. Constellation’s efforts in leveraging markets have been particularly instrumental in securing earnings and cash flow during recent volatile economic times.
- The primary objective of Exelon’s hedging program is to manage market risks and protect the value of our generation and our investment-grade balance sheet while preserving our ability to participate in improving long-term market fundamentals. By design, our hedging program allows us to weather short-term adverse market conditions while positioning us to participate in long-term upside potential.
- Exelon has the best platform for confronting an uncertain future. We have a generation business well positioned to earn a profit even in a difficult and changing market and economic environment, stable and improving delivery businesses and the balance sheet and financial discipline to see us through difficult times. We are committed to preserving and enhancing those advantages to ensure that we protect and grow the value for our customers, employees, investors and the communities we serve.
Constellation is the leading energy industry advocate for competition in the U.S. power and natural gas sectors -- we believe that the demand for and supply of energy are best determined through fair and competitive markets.
Competitive Market Advocacy
Exelon continues to be a vocal advocate for advancing competitive markets which bring benefits for consumers as well as support our strategic direction to grow our long-term value.
- In the electricity industry, the introduction of wholesale competition has dramatically improved the performance of the existing generation fleet. A Navigant Consulting study reported efficiency of baseload coal plants in competitive markets has improved by more than 9%. Nuclear capacity factors in those same markets have increased by 12%.
- Competition will bring the financial discipline of the markets to our investment plans and it will help promote the innovation needed to develop newer, more efficient and low-carbon technologies.
Cost Reduction Efforts
- Exelon is responding to today’s challenging environment by driving productivity and cost management while maintaining superior operations.
- Exelon is on-track to achieve annual run-rate cost synergies of $550 million from the merger starting in 2014.
Strong Balance Sheet / Credit Ratings
- Exelon has one of the largest, most diverse bank groups in the industry, providing the company with more than $8 billion in liquidity.
- Exelon protects value by ensuring investment grade credit ratings to help provide commercial business opportunities, manageable liquidity requirements, efficient capital markets access and business and financial flexibility. A non-investment grade rating would significantly limit our owners, lenders and trading counterparties, as well as our strategic options.
Growing Long-Term Value
Our long-term growth proposition remains the best in the industry. Our nuclear uprate plan provides an attractive growth opportunity, allowing us the potential to add generating output equivalent to one new nuclear unit at about half the cost.
- With the lowest carbon intensity in the sector, Exelon will see an annual upside to revenues from either implementation of climate change legislation or EPA regulation.
- Exelon delivery companies ComEd, PECO and BGE will make investments in smart grid infrastructures in Illinois, Pennsylvania and Maryland over the coming years. These investments offer the opportunity for both a regulated return on our investment and stable earnings growth.