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
August 13, 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
On August 13, 2003, Exelon Corporation (Exelon) issued a note to its financial
community in which Exelon Generation Company, LLC (Generation) announced an
agreement with entities controlled by Reservoir Capital Group (Reservoir) to
sell 50% of Sithe Energies, Inc. (Sithe), after closing on a call transaction
announced in May 2003. In a separate transaction, Sithe has entered into an
agreement with Reservoir to sell entities holding six U.S. generating facilities
and an entity holding Sithe's Canadian assets. This note to Exelon's financial
community and a listing of Sithe's principal assets as of December 31, 2002 are
attached to this Report as exhibits.
Exhibit Index
Exhibit No. Description
99.1 Note to Exelon's Financial Community
99.2 Listing of Sithe's Principal Assets as of December 31, 2002
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
August 13, 2003
Exhibit 99.1
[EXELON LOGO]
- --------------------------------------------------------------------------------
Exelon Corporation www.exeloncorp.com
P.O. Box 805379
Chicago, IL 60680-5379
August 13, 2003
Note to Exelon's Financial Community:
Exelon Generation Announces the Sale of 50% of Sithe Energies Investment
On August 13, 2003, Exelon Generation announced an agreement with entities
controlled by Reservoir Capital Group (Reservoir), a private investment firm, to
sell 50% of Sithe Energies, Inc. (Sithe) in exchange for $75.8 million in cash.
This sale will occur after Exelon Generation closes on the Call Transaction
announced in May 2003. In that transaction, Exelon Fossil Holdings, Inc., a
wholly owned subsidiary of Exelon Generation, issued an irrevocable call notice
for the 35.2% interest in Sithe owned by Apollo Energy, LLC and the 14.9%
interest owned by subsidiaries of Marubeni Corporation. The total call price is
estimated at $650 million, and the transaction is expected to close in the
fourth quarter 2003 after receiving required approvals. At the closing of the
Call Transaction, Exelon expects Sithe to distribute to Exelon in excess of $600
million of cash available for distribution.
Both Exelon's and Reservoir's 50% interest in Sithe will be subject to Put and
Call Options that could result in either party owning 100% of Sithe. While
Exelon's intent is to fully divest Sithe by the end of 2004, the timing of the
Put and Call Options vary by acquirer and can extend through March 2006. The
pricing of the Put and Call Options is dependent on numerous factors such as the
acquirer, date of acquisition and assets owned by Sithe at the time of exercise.
The sale requires FERC approval, a Hart Scott Rodino filing and filing with the
state regulatory commission in New York, which have been made. The sale is
expected to close in the fourth quarter 2003.
In a separate transaction, Sithe has entered into an agreement with Reservoir to
sell entities holding six U.S. generating facilities, each a Qualifying Facility
(see attached list) under the Public Utility Regulatory Policies Act, and an
entity holding Sithe's Canadian assets in exchange for $46.2 million ($26.2
million in cash and a $20 million two-year note). The sale requires approvals
from Sithe's board of directors and shareholders and regulatory filings in New
Jersey and Canada, which have been made. The sale is also expected to close in
the fourth quarter 2003. This sale is not contingent on the sale of Exelon's 50%
interest in Sithe to Reservoir. Sithe's remaining assets are shown on the
attached list.
At the end of the first quarter of 2003, Exelon Generation recorded a $200
million impairment charge ($130 million after-tax) related to its 49.9%
investment in Sithe.
Exelon is evaluating whether any further charges are required as a result of the
50% sale to Reservoir. However, the transaction is not expected to have an
impact on the ongoing operating earnings of Exelon Generation.
Exelon will use the proceeds from a permanent financing, expected in the fall of
2003, to fund its outstanding obligations under these and other transactions as
well as for other corporate purposes.
Credit Suisse First Boston acted as financial advisor to Exelon. For additional
information please contact me at (312) 394-7696 or Marybeth Flater at (312)
394-8354.
Sincerely,
Linda C. Byus, CFA
Vice President Investor Relations
================================================================================
Except for the historical information contained herein, certain of the matters
discussed in this note 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 discussed
herein as well as those discussed in Exelon Corporation's 2002 Annual Report on
Form10-K in (a) ITEM 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations--Business Outlook and the Challenges in
Managing Our Business for Exelon, ComEd, PECO and Generation and (b) 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 Securities and Exchange Commission (SEC) by Exelon Corporation,
Commonwealth Edison Company, PECO Energy Company and Exelon Generation Company,
LLC (Registrants). Readers are cautioned not to place undue reliance on these
forward-looking statements, which apply only as of the date of this note. 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 note.
###
Exelon Corporation is one of the nation's largest electric utilities with
approximately 5 million customers and $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 approximately 450,000
customers in the Philadelphia area. Exelon is headquartered in Chicago and
trades on the NYSE under the ticker EXC.
Exhibit 99.2
SITHE ASSETS
The following table shows Sithe's principal assets as of December 31, 2002:
Net
No. of Generation
Type of Plant Station Location Units Fuel Dispatch Type Capacity (MW)
================================== ======================= =============== ========== ======== =============== =================
Assets pending sale to Reservoir:
Qualifying Facilities Greeley Colorado 1 Gas Base-load 49
Kenilworth New Jersey 1 Gas Base-load 26
Naval Station California 1 Gas/Oil Base-load 47
Naval Training Center California 1 Gas/Oil Base-load 22
North Island California 1 Gas/Oil Base-load 34
Oxnard California 1 Gas Base-load 48
Merchant Plants Cardinal Canada 1 Gas Base-load 157
---------- -------
Total 7 383
========== =======
Assets remaining at Sithe:
Merchant Plants Batavia New York 1 Gas Intermediate 51
Massena New York 1 Gas/Oil Intermediate 68
Ogdensburg New York 1 Gas/Oil Intermediate 71
---------- -------
3 190
---------- -------
Qualifying Facilities Allegheny 5, 6, 8, 9 Pennsylvania 4 Hydro Intermediate 50
Bypass Idaho 1 Hydro Base-load 10
Elk Creek Idaho 1 Hydro Base-load 2
Hazelton Idaho 1 Hydro Base-load 9
Independence New York 1 Gas Base-load 617
Ivy River North Carolina 1 Hydro Base-load 1
Montgomery Creek California 1 Hydro Base-load 3
Rock Creek California 1 Hydro Base-load 4
Sterling New York 1 Gas Intermediate 55
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12 751
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Under Construction TEG 1, 2 Mexico 2 Coke Base-load 228
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Total 17 1,169
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