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 17, 2002
(Date of earliest
event reported)
Commission File Name of Registrant; State of Incorporation; Address of IRS Employer
Number Principal Executive Offices; 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
1-1839 COMMONWEALTH EDISON COMPANY 36-0938600
(an Illinois corporation)
10 South Dearborn Street - 37th Floor
P.O. Box 805379
Chicago, Illinois 60680-5379
(312) 394-4321
Item 5. Other Events
On May 17, 2002 Exelon Corporation issued a press release regarding
Commonwealth Edison's resolution of a FERC reporting issue with Illinois
Regulators, which is attached as exhibit 99.
The press release included as exhibit 99 contains certain forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. These statements are based on management's current expectations and are
subject to uncertainty and changes in circumstances. Actual results may vary
materially from the expectations contained herein. The forward-looking
statements herein include statements about future financial and operating
results of Exelon. Economic, business, competitive and/or regulatory factors
affecting Exelon's businesses generally could cause actual results to differ
materially from those described herein. For a discussion of the factors that
could cause actual results to differ materially, please see Exelon's filings
with the Securities and Exchange Commission, particularly those discussed in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations-- Outlook" in Exelon's 2001 Annual Report. Readers are cautioned not
to place undue reliance on these forward-looking statements, which speak only as
of the date of this press release. Exelon does not undertake any obligation to
publicly release any revisions to these 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
COMMONWEALTH EDISON COMPANY
/S/ Ruth Ann Gillis
-----------------------------------
Ruth Ann Gillis
Senior Vice President and Chief Financial Officer
Exelon Corporation
May 22, 2002
EXHIBIT 99
[EXELON LOGO]
News Release
From: Exelon FOR IMMEDIATE RELEASE
---------------------
Corporate Communications May 17, 2002
P.O. Box 805379
Chicago, IL 60680-5379
Contact: John Hatfield, Media Relations
312.394.4214
Linda Byus, CFA, Investor Relations
312.394.7696
Exelon Corporation Resolves FERC Reporting Issue with Illinois Regulators
Exelon Corporation (NYSE: EXC) today announced that its Chicago-based
Commonwealth Edison subsidiary would comply with a request from the Illinois
Commerce Commission (ICC) and amend the way it reports an intercompany asset on
a standard federal form. ComEd will record a $937 million receivable from its
Exelon parent as contra-equity, instead of as an asset, on the Federal Energy
Regulatory Commission's (FERC) Form 1, a routine annual report filed by all
utilities. This report will conform to the company's presentation of the asset
in its previously-filed financial statements to the Securities and Exchange
Commission.
Exelon still believes it prepared Form 1 report in accordance with FERC's
published reporting rules, but other issues led the company to reconsider its
position. "Frankly, the current environment for the reputation of utility
companies became a factor," said ComEd Chief Financial Officer Robert E.
Berdelle. "Our good reputation with customers, shareholders and regulators is
priceless." Berdelle said the decision has no impact on the company's 2001
earnings, and that based on current forecasts the company anticipates no effect
on earnings through 2004.
ComEd understood that the ICC disagreed with the company's interpretation of
FERC reporting rules regarding this receivable, but originally decided that the
best course of action would be to let FERC decide the issue. The company
acknowledged it was a complex transaction, and that different interpretations
were possible. "We felt this was an issue FERC should resolve, just as it does
with literally hundreds of accounting issues each year," said Berdelle.
Berdelle said that ComEd filed its original FERC report on April 30, 2002, after
conferring with the ICC, FERC and the company's accountants at
PricewaterhouseCoopers. "We have been open and forthright with everyone involved
in this issue, at every step of the way," said Berdelle. On May 15, the ICC
filed a petition with FERC formally requesting a review.
The ICC itself acknowledges that the issue has no bearing on ComEd's 2001
finances. In its petition to FERC, the Commission noted:
Based upon ICC Staff calculations made both with and without the inclusion
of the $937 million Exelon receivable described above, it does not appear
that ComEd's earnings during calendar year 2001 either would qualify it to
request rate relief during calendar 2002 under Section 16-111(d) of the
Illinois Act, or would require it to share excess earnings by means of the
customer credit mandated by Section 16-111(e) of the Illinois Act.
Page 2
ComEd had already indicated it would accept FERC's determination without appeal.
Now, the company says it will take immediate measures to amend and refile all
appropriate regulatory reports. Exelon's financial statements filed with the
Securities and Exchange Commission will not be impacted by the amended FERC
filing.
The receivable in question stems from January of 2001, when ComEd received a
$1.062 billion non-interest bearing receivable from its parent Exelon
Corporation. The intercompany receivable represents a cash obligation from
Exelon to ComEd. This receivable was transferred in recognition of the fact
that, due to Exelon's corporate restructuring in January 2001 and the associated
transfer of certain ComEd operations, assets, and liabilities to Exelon
Generation Company and Exelon Business Services Company, ComEd's revenue stream
has been reduced.
Despite this reduction in revenue, ComEd retains the significant financial
obligation for the scheduled maturities on $3.4 billion of transitional trust
notes ComEd issued in December 1998 in conjunction with the Restructuring Act.
The after-tax cash flow available to ComEd through the instrument funding charge
(IFC) mechanism (the mechanism designed to fund this obligation through an
identified portion of ComEd's rates) would be less than the cash required to
fund the transition bond requirements. Thus, each year over the eight-year life
of the notes, Exelon is scheduled to make a payment to ComEd to cover the
difference.
###
Exelon Corporation is one of the nation's largest electric utilities with
approximately 5 million customers and more than $15 billion in annual
revenues. The company has one of the industry's largest portfolios of
electricity generation capacity, with a nationwide reach and strong positions
in the Midwest and Mid-Atlantic. Exelon distributes electricity to
approximately 5 million customers in Illinois and Pennsylvania and gas to more
than 440,000 customers in the Philadelphia area. The company also has holdings
in such competitive businesses as energy, infrastructure services, energy
services and telecommunications. Exelon is headquartered in Chicago and
trades on the NYSE under the ticker EXC.