SEC Filing | Exelon Corporation

View:

Download DOC

Download PDF

Download XLS

e8vk

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

May 25, 2004
(Date of earliest event reported)


	Name of Registrant; State of Incorporation;
Commission File	Address of Principal Executive Offices;	IRS Employer
Number	and Telephone Number	Identification Number
1-16169	EXELON CORPORATION	23-2990190
	(a Pennsylvania corporation)
	10 South Dearborn Street – 37th Floor
	P.O. Box 805379
	Chicago, Illinois 60680-5379
	(312) 394-7398
333-85496	EXELON GENERATION COMPANY, LLC	23-3064219
	(a Pennsylvania limited liability company)
	300 Exelon Way
	Kennett Square, Pennsylvania 19348
	(610) 765-6900

TABLE OF CONTENTS


	Item 2. Acquisition or Disposition of Assets
	Item 7. Financial Statements and Exhibits
SIGNATURES

Item 2. Acquisition or Disposition of Assets

As previously disclosed, on May 25, 2004, Exelon Corporation (Exelon) and Exelon Generation Company, LLC (Generation) completed the sale, transfer and assignment of ownership of Boston Generating, LLC (BG) to a special purpose entity owned by the lenders under BG’s $1.25 billion credit facility.

The transfer of ownership of BG was completed pursuant to a settlement agreement reached with BG’s lenders on February 23, 2004. The Federal Energy Regulatory Commission (FERC) approved the sale of BG on May 10, 2004. Responsibility for plant operations and power marketing activities will be transferred to the lenders’ special purpose entity at a later date. Certain aspects of the transfer of operations and marketing are also subject to approval of the FERC. The parties expect to file an application with the FERC within the next several weeks for an order authorizing the transfer of responsibility for plant operations and power marketing, and the parties expect to complete that transfer during the third quarter of 2004. Pending completion of the transfer of operation and marketing activities, Generation affiliates will continue to operate and market power from the plants on behalf of the owners.

Item 7. Financial Statements and Exhibits

(b) Pro forma financial information

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

Pursuant to SEC regulations, unaudited pro forma combined financial statements for Exelon and Generation are included below, giving effect to the disposition of BG. The unaudited pro forma combined statements of income for the three months ended March 31, 2004 and for the year ended December 31, 2003 have been prepared as if the disposition had been completed on January 1, 2003. The unaudited pro forma combined balance sheet as of March 31, 2004 has been prepared as if the disposition had occurred as of that date.

The unaudited pro forma combined financial statements do not give effect to the cost, if any, for procurement of replacement power by Exelon and Generation if the companies had not purchased power from BG to supply Exelon and Generation’s power sales contracts.

The unaudited pro forma combined financial statements do not reflect the effects of recording the fair value of the guarantee issued by Exelon New England, LLC, a subsidiary of Generation, for performance under long-term gas supply agreements with Distrigas of Massachusetts, LLC as the provisions of FASB Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others were not applicable for modifications of guarantees prior to February 1, 2003. In addition, the unaudited pro forma combined financial statements do not reflect operating fees, if any, which may be earned by Exelon and Generation in the transition period between the sale of BG and the ultimate transfer of the plant operations and power marketing activities to the lenders’ special purpose entity.

The unaudited pro forma combined financial statements are for illustrative purposes only. They are not necessarily indicative of the financial position or operating results that would have occurred had these transactions been completed on January 1, 2003 or March 31, 2004, as assumed above, nor is the information necessarily indicative of future financial position or operating results.

Unaudited Pro Forma Combined Statement of Income
For the three months ended March 31, 2004


				Boston
	Exelon			Generating, LLC			Pro Forma			Exelon
	as filed			Historical			Adjustments			Pro Forma
(in millions, except per share data)
Operating revenues	$	3,722		$	159					$	3,563
Operating expenses
Purchased power		562			(14	)	$	(2	)(a)		574
Fuel		836			163						673
Operating and maintenance		1,115			26			(1	)(b)		1,088
Depreciation and amortization		301			4						297
Taxes other than income		192			6						186

Total operating expenses		3,006			185			(3	)		2,818

Operating income (loss)		716			(26	)		3			745
Other income and deductions
Interest expense		(130	)		(4	)					(126	)
Interest expense to affiliates		(93	)								(93	)
Distributions on preferred securities of subsidiaries		(1	)								(1	)
Equity in earnings (losses) of unconsolidated affiliates		(24	)								(24	)
Other, net		55			5						50

Total other income and deductions		(193	)		1						(194	)

Income (loss) before income taxes		523			(25	)		3			551
Income taxes		149		(10)				1			160

Income (loss) before cumulative effect of change in accounting principles	$	374		$	(15	)	$	2		$	391

Average shares of common stock outstanding- Basic		659									659

Average shares of common stock outstanding- Diluted		665									665

Income before cumulative effect of change in accounting principles per share, basic	$	0.57								$	0.59

Income before cumulative effect of change in accounting principles per share, diluted	$	0.56								$	0.59

Unaudited Pro Forma Combined Balance Sheet
As of March 31, 2004


			Boston					Exelon
	Exelon		Generating, LLC			Pro Forma		Pro Forma
(in millions)	as filed		Historical			Adjustments		Balance Sheet
ASSETS
Current assets
Cash and cash equivalents	$	499						$	499
Restricted cash and investments		149							149
Accounts receivable, net
Customer		1,601							1,601
Other		333	$	33					300
Mark-to-market derivative assets-energy		399							399
Inventories, at average cost
Fossil fuel		120							120
Materials and supplies		306							306
Deferred income taxes		650							650
Assets held for sale		1,309		994	(d)				315
Other		614							614

Total current assets		5,980		1,027		$	—		4,953

Property, plant and equipment, net		20,133							20,133
Deferred debits and other assets
Regulatory assets		5,118							5,118
Nuclear decommissioning trust funds		4,890							4,890
Investments		964							964
Goodwill		4,714							4,714
Mark-to-market derivative assets- energy		375							375
Other		1,385							1,385

Total deferred debits and other assets		17,446		—			—		17,446

Total assets	$	43,559	$	1,027		$	—	$	42,532

Unaudited Pro Forma Combined Balance Sheet
As of March 31, 2004


				Boston					Exelon
	Exelon			Generating, LLC			Pro Forma		Pro Forma
	as filed			Historical			Adjustments		Balance Sheet
(in millions)
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Commercial paper	$	316							$	316
Long-term debt due within one year		215								215
Long-term debt to ComEd Transitional Funding Trust and PECO Energy Transition Trust due within one year		561								561
Accounts payable		1,125								1,125
Mark-to-market derivative liabilities-energy		811								811
Accrued expenses		1,244								1,244
Liabilities held for sale		1,356		$	1,173	(d)				183
Other		288								288

Total current liabilities		5,916			1,173		$	—		4,743

Long-term debt		8,696								8,696
Long-term debt to ComEd Transitional Funding Trust and PECO Energy Transition Trust		4,783								4,783
Long-term debt to other financing trusts		545								545
Deferred credits and other liabilities
Deferred income taxes		4,701								4,701
Unamortized investment tax credits		284								284
Asset retirement obligation		3,050								3,050
Pension obligation		1,556								1,556
Non-pension postretirement benefits obligation		1,080								1,080
Spent nuclear fuel obligation		869								869
Regulatory liabilities		1,960								1,960
Mark-to-market derivatives liabilities-energy		390								390
Other		886								886

Total deferred credits and other liabilities		14,776			—			—		14,776

Total liabilities		34,716			1,173			—		33,543

Commitments and contingencies
Minority interest of consolidated subsidiaries		57								57
Preferred securities of subsidiaries		87								87
Shareholders’ equity
Common stock		7,421								7,421
Retained earnings (deficit)		2,544			(146	)				2,690
Accumulated other comprehensive income (loss)		(1,266	)							(1,266	)

Total shareholders’ equity (deficit)		8,699			(146	)		—		8,845

Total liabilities and shareholders’ equity (deficit)	$	43,559		$	1,027		$	—	$	42,532

Unaudited Pro Forma Combined Statement of Income
For the year ended December 31, 2003


				Boston
	Exelon			Generating, LLC			Pro Forma			Exelon
	as filed			Historical			Adjustments			Pro Forma
(in millions, except per share data)
Operating revenues	$	15,812		$	618					$	15,194
Operating expenses
Purchased power		3,459					$	(17	)(a)		3,442
Purchased power from AmerGen Energy Company, LLC		382									382
Fuel		2,534			516						2,018
Impairment of Boston Generating, LLC long-lived assets		945			945	(e)					—
Operating and maintenance		4,587			104			17	(c)		4,500
Depreciation and amortization		1,126			16						1,110
Taxes other than income		581									581

Total operating expenses		13,614			1,581			—			12,033

Operating income (loss)		2,198			(963	)		—			3,161
Other income and deductions
Interest expense, net of amounts capitalized		(881	)		(17	)					(864	)
Distributions on preferred securities of subsidiaries		(39	)								(39	)
Equity in earnings of unconsolidated affiliates		33									33
Other, net		(187	)								(187	)

Total other income and deductions		(1,074	)		(17	)		—			(1,057	)

Income (loss) before income taxes		1,124			(980	)					2,104
Income taxes		331			(127	)					458

Income (loss) before cumulative effect of change in accounting principles	$	793		$	(853	)	$	—		$	1,646

Average shares of common stock outstanding- Basic		651									651

Average shares of common stock outstanding- Diluted		657									657

Income before cumulative effect of change in accounting principles per share, basic	$	1.22								$	2.53

Income before cumulative effect of change in accounting principles per share, diluted	$	1.21								$	2.50

Unaudited Pro Forma Combined Statement of Income
For the three months ended March 31, 2004


	Exelon			Boston						Exelon
	Generation			Generating, LLC			Pro Forma			Generation
	as filed			Historical			Adjustments			Pro Forma
(in millions)
Operating revenues
Operating revenues	$	1,074		$	159					$	915
Operating revenues from affiliates		879									879

Total operating revenues		1,953			159						1,794

Operating expenses
Purchased power		519			(14	)	$	(2	)(a)		531
Fuel		586			163						423
Operating and maintenance		587			26			(1	)(b)		560
Operating and maintenance from affiliates		65			—						65
Depreciation and amortization		55			4						51
Taxes other than income		47			6						41

Total operating expense		1,859			185			(3	)		1,671

Operating income (loss)		94			(26	)		3			123
Other income and deductions
Interest expense		(25	)		(4	)					(21	)
Interest expense to affiliates		(1	)								(1	)
Equity in earnings (losses) of unconsolidated affiliates		(2	)								(2	)
Other, net		47			5						42

Total other income and deductions		19			1						18

Income (loss) before income taxes		113			(25	)		3			141
Income taxes		46			(10	)		1			57

Income (loss) before cumulative effect of change in accounting principles	$	67		$	(15	)	$	2		$	84

Unaudited Pro Forma Combined Balance Sheet
As of March 31, 2004


								Exelon
	Exelon		Boston					Generation
	Generation		Generating, LLC			Pro Forma		Pro Forma
(in millions)	as filed		Historical			Adjustments		Balance Sheet
ASSETS
Current assets
Cash and cash equivalents	$	100						$	100
Restricted cash		144							144
Accounts receivable, net
Customer		535							535
Other		290							290
Mark-to-market derivative assets-energy		399							399
Receivables from affiliates		285	$	33					252
Inventories, at average cost
Fossil fuel		91							91
Materials and supplies		256							256
Notes receivable		25							25
Deferred income taxes		559							559
Assets held for sale		1,154		994	(d)				160
Other		209							209

Total current assets		4,047		1,027		$	—		3,020

Property, plant and equipment, net		6,514							6,514
Deferred debits and other assets
Nuclear decommissioning trust funds		4,890							4,890
Investments		97							97
Receivable from affiliate		22							22
Pension asset		125							125
Mark-to-market derivative assets- energy		375							375
Other		493							493

Total deferred debits and other assets		6,002		—			—		6,002

Total assets	$	16,563	$	1,027		$	—	$	15,536

Unaudited Pro Forma Combined Balance Sheet
As of March 31, 2004


									Exelon
	Exelon			Boston					Generation
	Generation			Generating, LLC			Pro Forma		Pro Forma
	as filed			Historical			Adjustments		Balance Sheet
(in millions)
Liabilities and member’s equity (deficit)
Current liabilities
Long-term debt due within one year	$	61							$	61
Commercial paper		165								165
Accounts payable		784								784
Mark-to-market derivative liabilities-energy		811								811
Payables to affiliates		62								62
Notes payable to affiliate		226								226
Accrued expenses		429								429
Liabilities held for sale		1,316		$	1,173	(d)				143
Other		95								95

Total current liabilities		3,949			1,173		$	—		2,776

Long-term debt		2,467								2,467
Deferred credits and other liabilities
Deferred income taxes		543								543
Unamortized investment tax credits		216								216
Asset retirement obligation		3,048								3,048
Pension obligation		21								21
Non-pension postretirement benefits obligation		576								576
Spent nuclear fuel obligation		869								869
Payable to affiliates		1,267								1,267
Mark-to-market derivatives liabilities-energy		390								390
Other		316								316

Total deferred credits and other liabilities		7,246			—			—		7,246

Total liabilities		13,662			1,173			—		12,489

Commitments and contingencies
Minority interest of consolidated subsidiary		59								59
Member’s equity
Membership interest		2,489			740					1,749
Undistributed earnings (loss)		647			(870	)				1,517
Accumulated other comprehensive (loss)		(294	)		(16	)				(278	)

Total member’s equity (deficit)		2,842			(146	)		—		2,988

Total liabilities and member’s equity (deficit)	$	16,563		$	1,027		$	—	$	15,536

Unaudited Pro Forma Combined Statement of Income
For the year ended December 31, 2003


	Exelon			Boston						Exelon
	Generation			Generating, LLC			Pro Forma			Generation
	as filed			Historical			Adjustments			Pro Forma
(in millions)
Operating revenues
Operating revenues	$	4,010		$	618					$	3,392
Operating revenues from affiliates		4,125									4,125

Total operating revenues		8,135			618			—			7,517

Operating expenses
Purchased power		3,587					$	(17	)(a)		3,570
Fuel		1,533			516						1,017
Impairment of Boston Generating, LLC long-lived assets		945			945	(e)					—
Operating and maintenance		1,796			104			17	(c)		1,709
Operating and maintenance from affiliates		149									149
Depreciation and amortization		199			16						183
Taxes other than income		120									120

Total operating expense		8,329			1,581			—			6,748

Operating income (loss)		(194	)		(963	)					769
Other income and deductions
Interest expense		(75	)		(17	)					(58	)
Interest expense from affiliates		(13	)								(13	)
Equity in earnings of unconsolidated affiliates		49									49
Interest income from affiliates		1									1
Other, net		(188	)								(188	)

Total other income and deductions		(226	)		(17	)		—			(209	)

Income (loss) before income taxes		(420	)		(980	)		—			560
Income taxes		(179	)		(127	)					(52	)

Income (loss) before cumulative effect of change in accounting principles	$	(241	)	$	(853	)	$	—		$	612

Notes to Unaudited Pro Forma Combined Financial Statements

	(a)		Represents the mark-to-market gain (loss) related to Exelon and Generation’s power marketing arrangements with BG that was recorded in Generation’s Power Team unit and not reflected in the historical financial statements of BG.

	(b)		Represents the impact of an additional reserve recorded for environmental matters that was not reflected in BG’s standalone financial statements for the period.

	(c)		Represents the amount of a marketing and procurement fee that was charged to BG as an allocation of Generation’s power marketing cost during the period for services provided to BG in 2003. There was no charge allocated to BG during 2004 for this service.

	(d)		At March 31, 2004, in anticipation of the sale of BG, the assets and liabilities of BG were classified as assets and liabilities held for sale, respectively, on Exelon and Generation’s reported balance sheet.

	(e)		In fiscal 2003, as a result of Exelon and Generation’s continuing evaluation of BG and discussions with the lenders under the BG Credit Facility, Exelon and Generation commenced an orderly transition out of the ownership of BG. In connection with this decision, Exelon and Generation recorded an impairment charge of $945 million ($573 million, net of taxes) relating to the long-lived assets of BG pursuant to SFAS No. 144 in operating expenses within the Consolidated Statements of Income and Comprehensive Income during the third quarter of 2003. Refer to Note 2 in Exelon’s and Generation’s Annual Report on Form 10-K for further information.

*****

This combined Form 8-K is being filed separately by Exelon and Generation (Registrants). Information contained herein relating to any individual registrant has been filed by such registrant on its own behalf. No registrant makes any representation as to information relating to any other registrant.

Certain of the matters discussed in this Report are forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that are subject to risks and uncertainties. The factors that could cause actual results to differ materially from the forward-looking statements made by a registrant include those factors discussed herein, as well as the items discussed in (a) the Registrants’ 2003 Annual Report on Form 10-K—ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Business Outlook and the Challenges in Managing Our Business for each of Exelon, Commonwealth Edison Company (ComEd), PECO Energy Company (PECO) and Generation, (b) the Registrants’ 2003 Annual Report on Form 10-K—ITEM 8. Financial Statements and Supplementary Data: Exelon—Note 19, ComEd—Note 15, PECO—Note 14 and Generation—Note 13 and (c) other factors discussed in filings with the United States Securities and Exchange Commission (SEC) by the Registrants. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this Report. None of the Registrants undertakes any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this Report.

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.


		EXELON CORPORATION EXELON GENERATION COMPANY, LLC

		/s/ Robert S. Shapard

		Robert S. Shapard
		Executive Vice President and Chief Financial Officer Exelon Corporation
June 9, 2004

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents