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
July 29, 2003
(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
333-85496 EXELON GENERATION COMPANY, LLC 23-3064219
(a Pennsylvania limited liability company)
300 Exelon Way
Kennett Square, Pennsylvania 19348
(610) 765-6900
Item 5. Other Events.
As previously disclosed, Exelon Boston Generating, LLC (EBG), an indirect
subsidiary of Exelon Corporation (Exelon) and Exelon Generation Company, LLC
(Generation), has approximately $1.1 billion of debt outstanding under a $1.25
billion credit facility (EBG Facility). The EBG Facility was entered into
primarily to finance the construction of the Mystic 8 and 9 and Fore River
generating units. The EBG Facility requires that all of the projects achieve
"Project Completion," as defined in the EBG Facility (Project Completion), by
June 12, 2003. On June 11, 2003, EBG negotiated an extension of the Project
Completion date to July 11, 2003. On July 3, 2003, the lenders under the EBG
Facility and EBG executed a letter agreement as a result of which the lenders
are precluded during the period July 11, 2003 through August 29, 2003 from
exercising any remedies resulting from the failure of all of the projects to
achieve Project Completion. At that time, EBG stated that it would continue to
monitor the projects, assess all of its options relating to the projects, and
continue discussions with the lenders. Mystic 8 and 9 are in commercial
operation, although construction has not progressed to the point of Project
Completion. Construction of Fore River is substantially complete and the unit is
currently undergoing testing. EBG does not anticipate that the projects will
achieve Project Completion by August 29, 2003. The EBG Facility is non-recourse
to Exelon and Generation and an event of default under the EBG Facility does not
constitute an event of default under any other debt instruments of Exelon or its
subsidiaries.
As a result of Exelon's continuing evaluation of the projects and discussions
with the lenders over the past few weeks, Exelon has commenced the process of an
orderly transition out of the ownership of EBG and the projects. The transition
will take place in a manner that complies with applicable regulatory
requirements. For a period of time, Exelon expects to continue to provide
administrative and operational services to EBG in its operation of the projects.
Exelon informed the lenders of Exelon's decision to exit and that it will not
provide additional funding to the projects beyond its existing contractual
obligations. Exelon cannot predict the timing of the transition.
Exelon expects Generation will incur an impairment of its EBG related assets,
which, in aggregate, could reach approximately $550 million after income taxes.
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.
Except for the historical information contained herein, 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' 2002 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, ComEd,
PECO and Generation, (b) the Registrants' 2002 Annual Report on Form 10-K - ITEM
8. Financial Statements and Supplementary Data: Exelon - Note 19, ComEd - Note
16, PECO - Note 18 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
July 29, 2003
