UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
September 24, 1999
(Date of earliest
event reported)
PECO ENERGY COMPANY
(Exact name of registrant as specified in its charter)
Pennsylvania 1-1401 23-0970240
(State or other (Commission (IRS Employer
jurisdiction of file number) Identification
incorporation) Number)
230l Market Street, Philadelphia, Pennsylvania 19101
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(215) 841-4000
<PAGE>
Item 5. Other Events
Presentation to Investors regarding Merger Transaction. On September
24, 1999, Unicom Corporation and PECO Energy Company met with investors to
discuss the merger of the two companies. A copy of the presentation materials is
attached to this Current Report on Form 8-K as Exhibit 99.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired. Not applicable.
(b) Pro Forma Financial Information. Not applicable.
(c) Exhibits
99. Presentation to investors, "The Creation of a Preeminent National Energy
Company, September 24, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PECO ENERGY COMPANY
\s\ Jean H. Gibson
-----------------------
Jean H. Gibson
Vice President & Controller
September 27, 1999
Slide 1
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PECO ENERGY [LOGO] Unicom [LOGO]
Slide 2
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PECO ENERGY [LOGO] Unicom [LOGO]
The Creation of a Preeminent National Energy Company
September 24, 1999
Slide 3
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Safe Harbor
This presentation contains certain forward-looking statements within the meaning
of the safe-harbor provisions of the Securities Exchange Act of 1934; these
forward-looking statements are subject to various risks and uncertainties. The
factors that could cause actual results to differ materially from the
projections, forecasts, estimates and expectations discussed herein may include
factors that are beyond the companies' ability to control or estimate precisely,
such as estimates of future market conditions, the behavior of other market
participants and the actions of the Federal and State regulators. Other factors
include, but are not limited to, actions in the financial markets, weather
conditions, economic conditions in the two companies' service territories,
fluctuations in energy-related commodity prices, conversion activity, other
marketing efforts and other uncertainties. Other risk factors are detailed from
time to time in the two companies' SEC reports. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date of this presentation, September 24, 1999. The companies do not
undertake any obligation to publicly release any revisions to these
forward-looking statements to reflect events or circumstances after the date of
this presentation.
<PAGE>
Slide 4
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PECO ENERGY [LOGO] Unicom [LOGO]
Corbin A. McNeill, Jr.
Chairman, CEO and President
PECO Energy Company
John W. Rowe
Chairman, CEO and President
Unicom Corporation
Michael J. Egan
Chief Financial Officer; PECO Energy Company
Chief Intergration Officer
Slide 5
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PECO ENERGY [LOGO] Unicom [LOGO]
Agenda
* Strategic Overview
* The New Company
* Growth Opportunities of Merger
* Terms of the Deal
* Financial Benefits
* Vision for Future
Slide 6
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PECO ENERGY [LOGO] Unicom [LOGO]
Our Shared Vision
Common Ground
* Pursuing bold strategies that capitalize on competitive growth opportunities
* Thriving in early deregulated environments
* Building shareholder value for the long term
* Repurchasing stock
<PAGE>
Slide 7
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PECO ENERGY [LOGO] Unicom [LOGO]
Our Shared Vision
Common Goals
* Accelerating and enhancing our competitive growth strategy
* Adding to near-term earnings
* Achieving a higher earnings growth rate
* Re-deploying capital with a focus on increased returns
Slide 8
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PECO ENERGY [LOGO] Unicom [LOGO]
Delivering On Our Goals
Transaction is immediately accretive
9 -10% expected annual growth in EPS
$1.5B in capital returned to shareholders immediately
Slide 9
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PECO ENERGY [LOGO] Unicom [LOGO]
A Compelling Combination
Creates a preeminent national energy company
* National Generation / Marketing Portfolio
* Largest Nuclear Generation Fleet with 21 plants
Achieves a multi-regional distribution platform
* Largest retail electric utility customer base
* Positioned for further regional consolidation
Financial scale and resources to execute strategy
<PAGE>
Slide 10
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A Strategic Fit
Distribution Generation
Focus Focus
Unicom [LOGO] PECO ENERGY [LOGO]
WITH... WITH...
9,400 MW CAPACITY 1.5 MILLION CUSTOMERS
Two Complementary
Strategies
ONE POWERFUL COMPANY
Slide 11
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Creating a Growth Platform
[GRAPHIC OMITTED - Slide contains a graphic image depicting the Continental
United States and contains the following data.]
Unicom [LOGO]
GWh Sales: 100,000
MWs: 9,400
Customers: 3.5 MM
Revenues: $7.2 B
Market Cap: $8.1 B
PECO ENERGY [LOGO]
GWh Sales: 74,000
MWs: 13,100
Customers: 1.5 MM
Revenues: $5.2 B
Market Cap: $7.1 B
Combined Company
GWh Sales: 174,000
MWs: 22,500
Customers: 5.0 MM
Revenues: $12.4 B
Market Cap: $15.2 B
Slide 12
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PECO ENERGY [LOGO] Unicom [LOGO]
The Generation Story
Accelerating our national growth strategy
* Focus on nuclear operational excellence
* Leverage best practices and operating capabilities
* Capture synergies in operations and supply management
* Continue disciplined acquisition program
<PAGE>
Slide 13
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Top 20
U.S. Electric Generators
[GRAPHIC OMITTED - BAR CHART]
Generation Company Generation Capacity in GWs
AEP/CSR 38.6
Southern Company 37.9
Entergy 23.2
Combined New Company 22.5
FPL Group 21.6
Texas Utilities 21.1
Duke Energy 20.8
NSP/NCE 19.8
Dominion Resources 19.4
Edison International 18.3
Reliant Energy 17.4
PECO Energy 13.1
FirstEnergy 11.8
Ameren 11.4
Cinergy 11.2
PSE&G 11.1
DTE Energy 10.3
Carolina Power & Light 10.0
Unicom 9.4
CMS Energy 9.0
Allegheny 8.1
Slide 14
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PECO ENERGY [LOGO] Unicom [LOGO]
Asset-Based Power Marketing
Extend scale and scope of proven wholesale marketing and trading strategy
* Exploit physical reach of combined portfolio
* Broaden portfolio of custom products
* Enhance position as preferred counter-party
* Balance portfolio through contract positions
Slide 15
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PECO ENERGY [LOGO] Unicom [LOGO]
Distribution
Distribution network serving 5MM customers
* Committed to reliability and customer satisfaction
* Sharing of best practices and systems
* Capture synergies
Grow through strategic acquisitions
<PAGE>
Slide 16
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Top 20 U.S. Electric
Distribution Companies
[GRAPHIC OMITTED - BAR CHART]
Distribution Companies Distribution Customers (000's)
New Company 4948
AEP/CSR 4680
PG&E 4600
Edison International 4270
Southern Company 3794
FPL Group 3700
Unicom 3455
Consolidated Edison 3305
NSP/NCE 3059
Entergy 2500
Texas Utilities 2500
FirstEnergy 2167
DTE Energy 2068
Duke Energy 2000
Dominion Resources 2000
PSE&G 1900
CMS Energy 1640
Reliant Energy 1600
PECO Energy 1493
Ameren 1479
Allegheny Energy 1418
Slide 17
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PECO ENERGY [LOGO] Unicom [LOGO]
Related Growth Opportunities
Broad and complementary portfolios
Flexibility to respond to market opportunities
Portfolio focus
* Infrastructure services
* Energy solutions
* Telecommunications
Slide 18
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PECO ENERGY [LOGO] Unicom [LOGO]
Terms of the Deal
Merger of Equals
Stock for stock exchange ratio
* 1:1 for PECO Energy
* 0.95:1 for Unicom
Purchase accounting
* Annual Goodwill ~ $70MM
$1.69 anticipated annual dividend
$1.5B Dual Cash Election
<PAGE>
Slide 19
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PECO ENERGY [LOGO] Unicom [LOGO]
Dual Cash Election
PECO Unicom
Pre-Closing shares outstanding (est.) 182.4MM 191.3MM
Cash Election
$750MM to PECO Shares (16.7MM)
$750MM to Unicom Shares (17.5MM)
--------- ---------
Shares Remaining 165.7MM 173.8MM
Share Exchange
1:1 PECO Shares 165.7MM
0.95:1 Unicom Shares 165.1MM
Total Shares Outstanding 330.8MM
Slide 20
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PECO ENERGY [LOGO] Unicom [LOGO]
Cost Savings
[GRAPHIC OMITTED - PIE CHART]
Labor 50%
Corporate & Administrative Programs 35%
Fuel & Purchasing 15%
Annual savings
* $100MM year one
* Over $180MM year three
60% Regulated
40% Unregulated
Slide 21
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PECO ENERGY [LOGO] Unicom [LOGO]
Revenue Enhancements
Power Marketing
* Enhanced margins on integrated portfolio
* Improved transmission efficiency
Non-regulated growth opportunities
* Leverage infrastructure services over broader customer base
* Capitalize on telecom (fiber) opportunities
* Energy Solutions: cross-selling opportunities
<PAGE>
Slide 22
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PECO ENERGY [LOGO] Unicom [LOGO]
Game Plan for Approval
No significant regulatory hurdles
* NRC
* SEC: '35 Act Registration
* FERC
* IL Commerce Commission
* PA Public Utility Commission
Timing
* Target closing: ~12 months
Slide 23
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PECO ENERGY [LOGO] Unicom [LOGO]
Transition to Competition
PECO Unicom
Restructuring plans finalized X X
Stranded cost recovery X X
Securitization in-place X X
Retail choice timetable X X
Slide 24
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PECO ENERGY [LOGO] Unicom [LOGO]
Management & Governance
Structure
8 board members from each company
McNeill and Rowe will be Co-CEO's through 12/31/03
McNeill: Chairman for first 18 months
* Responsibilities: generation and marketing
Rowe: Chairman after 18 months
* Responsibilities: transmission, distribution and unregulated growth ventures
<PAGE>
Slide 25
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PECO ENERGY [LOGO] Unicom [LOGO]
Financial Benefits
Accretive to both companies in first year
Positioned for 9 -10% long-term EPS growth
Dividend provides flexibility to execute
growth strategy
Balance sheet supports solid credit ratings
Slide 26
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PECO ENERGY [LOGO] Unicom [LOGO]
Vision for the Future
Scale, scope and resources enable:
* Growth of generation portfolio
* Top-quartile distribution performance - safe, reliable and efficient
* Expansion of related growth businesses
9-10% annual growth in earnings per share
Slide 27
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PECO ENERGY [LOGO] Unicom [LOGO]
Q & A
Slide 28
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PECO ENERGY [LOGO] Unicom [LOGO]
