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As Of Filer Filing For·On·As Docs:Size Issuer Agent 4/26/05 Exelon Corp 10-Q 3/31/05 20:1.7M Bowne Boc/FA Peco Energy Co Commonwealth Edison Co Exelon Generation Co LLC |
Document/Exhibit Description Pages Size 1: 10-Q Quarterly Report HTML 1.28M 2: EX-4.3.1 Supplemental Indentures to Commonwealth Edison HTML 105K Mortgage 3: EX-31.1 Certification by John W. Rowe for Exelon HTML 16K Corporation 4: EX-31.2 Certification by John F. Young for Exelon HTML 17K Corporation 5: EX-31.3 Certification by J. Barry Mitchell for Exelon HTML 17K Corporation 6: EX-31.4 Certification by John L. Skolds for Commonwealth HTML 16K Edison Company 7: EX-31.5 Certification by J. Barry Mitchell for HTML 16K Commonwealth Edison Company 8: EX-31.6 Certification by John L. Skolds for Peco Energy HTML 16K Company 9: EX-31.7 Certification by J. Barry Mitchell for Peco Energy HTML 16K Company 10: EX-31.8 Certification by John L. Skolds for Exelon HTML 16K Generation Company, LLC 11: EX-31.9 Certification by J. Barry Mitchell for Exelon HTML 16K Generation Company, LLC 12: EX-32.1 Certification by John W. Rowe for Exelon HTML 12K Corporation 13: EX-32.2 Certification by John F. Young for Exelon HTML 12K Corporation 14: EX-32.3 Certification by J. Barry Mitchell for Exelon HTML 12K Corporation 15: EX-32.4 Certification by John L. Skolds for Commonwealth HTML 12K Edison Company 16: EX-32.5 Certification by J. Barry Mitchell for HTML 12K Commonwealth Edison Company 17: EX-32.6 Certification by John L. Skolds for Peco Energy HTML 12K Company 18: EX-32.7 Certification by J. Barry Mitchell for Peco Energy HTML 12K Company 19: EX-32.8 Certification by John L. Skolds for Exelon HTML 12K Generation Company, LLC 20: EX-32.9 Certification by J. Barry Mitchell for Exelon HTML 12K Generation Company, LLC
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the Quarterly Period Ended March 31, 2005 | ||
or | ||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Name of Registrant; State of Incorporation; | IRS Employer | |||||||
Commission | Address of Principal Executive Offices; and | Identification | ||||||
File Number | Telephone Number | Number | ||||||
1-16169 |
EXELON CORPORATION (a Pennsylvania corporation) 10 South Dearborn Street – 37th Floor P.O. Box 805379 Chicago, Illinois 60680-5379 (312) 394-7398 |
23-2990190 | ||||||
1-1839 |
COMMONWEALTH EDISON COMPANY (an Illinois corporation) 10 South Dearborn Street – 37th Floor P.O. Box 805379 Chicago, Illinois 60680-5379 (312) 394-4321 |
36-0938600 | ||||||
1-1401 |
PECO ENERGY COMPANY (a Pennsylvania corporation) P.O. Box 8699 2301 Market Street Philadelphia, Pennsylvania 19101-8699 (215) 841-4000 |
23-0970240 | ||||||
333-85496 |
EXELON GENERATION COMPANY, LLC (a Pennsylvania limited liability company) 300 Exelon Way Kennett Square, Pennsylvania 19348 (610) 765-6900 |
23-3064219 |
Exelon Corporation Common Stock, without par value
|
668,505,172 | |
Commonwealth Edison Company Common Stock, $12.50 par value
|
127,016,502 | |
PECO Energy Company Common Stock, without par value
|
170,478,507 | |
Exelon Generation Company, LLC
|
not applicable |
1
2
3
4
5
Three Months | ||||||||||
Ended | ||||||||||
March 31, | ||||||||||
2005 | 2004 | |||||||||
(In millions, except per share data) | ||||||||||
Operating revenues
|
$ | 3,561 | $ | 3,635 | ||||||
Operating expenses
|
||||||||||
Purchased power
|
568 | 573 | ||||||||
Fuel
|
622 | 822 | ||||||||
Operating and maintenance
|
949 | 979 | ||||||||
Depreciation and amortization
|
319 | 301 | ||||||||
Taxes other than income
|
172 | 189 | ||||||||
Total operating expenses
|
2,630 | 2,864 | ||||||||
Operating income
|
931 | 771 | ||||||||
Other income and deductions
|
||||||||||
Interest expense
|
(106 | ) | (128 | ) | ||||||
Interest expense to affiliates
|
(84 | ) | (93 | ) | ||||||
Distributions on preferred securities of subsidiaries
|
(1 | ) | (1 | ) | ||||||
Equity in losses of unconsolidated affiliates
|
(36 | ) | (24 | ) | ||||||
Other, net
|
30 | 32 | ||||||||
Total other income and deductions
|
(197 | ) | (214 | ) | ||||||
Income from continuing operations before income taxes and
minority interest
|
734 | 557 | ||||||||
Income taxes
|
227 | 159 | ||||||||
Income from continuing operations before minority interest
|
507 | 398 | ||||||||
Minority interest
|
— | (1 | ) | |||||||
Income from continuing operations
|
507 | 397 | ||||||||
Discontinued operations
|
||||||||||
Loss from discontinued operations (net of income taxes of ($1)
and ($8), respectively)
|
(1 | ) | (14 | ) | ||||||
Gain (loss) on disposal of discontinued operations (net of
income taxes of $4 and ($2), respectively)
|
15 | (3 | ) | |||||||
Income (loss) on discontinued operations
|
14 | (17 | ) | |||||||
Income before cumulative effect of a change in accounting
principle
|
521 | 380 | ||||||||
Cumulative effect of a change in accounting principle (net of
income taxes of $22)
|
— | 32 | ||||||||
Net income
|
521 | 412 | ||||||||
Other comprehensive loss, net of income taxes
|
||||||||||
Minimum pension liability
|
2 | — | ||||||||
Change in net unrealized loss on cash-flow hedges
|
(101 | ) | (193 | ) | ||||||
Foreign currency translation adjustment
|
(1 | ) | 2 | |||||||
Unrealized loss (gain) on marketable securities
|
(15 | ) | 40 | |||||||
Total other comprehensive loss
|
(115 | ) | (151 | ) | ||||||
Total comprehensive income
|
$ | 406 | $ | 261 | ||||||
Average shares of common stock outstanding —
Basic
|
666 | 659 | ||||||||
Average shares of common stock outstanding —
Diluted
|
675 | 665 | ||||||||
Earnings per average common share — Basic:
|
||||||||||
Income from continuing operations
|
$ | 0.76 | $ | 0.60 | ||||||
Discontinued operations
|
0.02 | (0.02 | ) | |||||||
Income before cumulative effect of a change in accounting
principle
|
0.78 | 0.58 | ||||||||
Cumulative effect of a change in accounting principle
|
— | 0.05 | ||||||||
Net income
|
$ | 0.78 | $ | 0.63 | ||||||
Earnings per average common share — Diluted:
|
||||||||||
Income from continuing operations
|
$ | 0.75 | $ | 0.59 | ||||||
Discontinued operations
|
0.02 | (0.02 | ) | |||||||
Income before cumulative effect of a change in accounting
principle
|
0.77 | 0.57 | ||||||||
Cumulative effect of a change in accounting principle
|
— | 0.05 | ||||||||
Net income
|
$ | 0.77 | $ | 0.62 | ||||||
Dividends per common share
|
$ | 0.400 | $ | 0.275 | ||||||
6
Three Months | |||||||||||
Ended | |||||||||||
March 31, | |||||||||||
2005 | 2004 | ||||||||||
(In millions) | |||||||||||
Cash flows from operating activities
|
|||||||||||
Net income
|
$ | 521 | $ | 412 | |||||||
Adjustments to reconcile net income to net cash flows (used in)
provided by operating activities:
|
|||||||||||
Depreciation, amortization and accretion, including nuclear fuel
|
478 | 445 | |||||||||
Other decommissioning-related activities
|
(13 | ) | 13 | ||||||||
Cumulative effect of a change in accounting principle (net of
income taxes)
|
— | (32 | ) | ||||||||
Deferred income taxes and amortization of investment tax credits
|
634 | 40 | |||||||||
Provision for uncollectible accounts
|
12 | 23 | |||||||||
Equity in losses of unconsolidated affiliates
|
36 | 24 | |||||||||
Loss (gain) on sales of investments and wholly owned
subsidiaries
|
(19 | ) | 3 | ||||||||
Net realized gains on nuclear decommissioning trust funds
|
(1 | ) | (3 | ) | |||||||
Other non-cash operating activities
|
(2 | ) | (7 | ) | |||||||
Changes in assets and liabilities:
|
|||||||||||
Accounts receivable
|
101 | 50 | |||||||||
Inventories
|
74 | 71 | |||||||||
Other current assets
|
(201 | ) | (113 | ) | |||||||
Accounts payable, accrued expenses and other current liabilities
|
(230 | ) | (174 | ) | |||||||
Income taxes
|
(344 | ) | 180 | ||||||||
Net realized and unrealized mark-to-market and hedging
transactions
|
(83 | ) | 34 | ||||||||
Pension and non-pension postretirement benefits obligations
|
(1,962 | ) | (93 | ) | |||||||
Other noncurrent assets and liabilities
|
(10 | ) | (24 | ) | |||||||
Net cash flows (used in) provided by operating activities
|
(1,009 | ) | 849 | ||||||||
Cash flows from investing activities
|
|||||||||||
Capital expenditures
|
(489 | ) | (437 | ) | |||||||
Proceeds from nuclear decommissioning trust fund sales
|
782 | 307 | |||||||||
Investment in nuclear decommissioning trust funds
|
(834 | ) | (378 | ) | |||||||
Proceeds from sales of investments and wholly owned
subsidiaries, net of $32 of cash sold during the three months
ended March 31, 2005
|
103 | 5 | |||||||||
Proceeds from sales of long-lived assets
|
2 | 48 | |||||||||
Acquisition of businesses
|
(97 | ) | — | ||||||||
Investment in synthetic fuel-producing facilities
|
(28 | ) | (8 | ) | |||||||
Change in restricted cash
|
(8 | ) | 70 | ||||||||
Net cash increase from consolidation of Sithe Energies,
Inc.
|
— | 19 | |||||||||
Other investing activities
|
3 | 3 | |||||||||
Net cash flows used in investing activities
|
(566 | ) | (371 | ) | |||||||
Cash flows from financing activities
|
|||||||||||
Issuance of long-term debt
|
91 | — | |||||||||
Retirement of long-term debt
|
(111 | ) | (182 | ) | |||||||
Retirement of long-term debt to financing affiliates
|
(205 | ) | (181 | ) | |||||||
Change in short-term debt
|
1,836 | (10 | ) | ||||||||
Payment on acquisition note payable to Sithe Energies, Inc.
|
— | (27 | ) | ||||||||
Dividends paid on common stock
|
(267 | ) | (181 | ) | |||||||
Proceeds from employee stock plans
|
103 | 106 | |||||||||
Purchase of treasury stock
|
(8 | ) | — | ||||||||
Other financing activities
|
(3 | ) | 3 | ||||||||
Net cash flows provided by (used in) financing activities
|
1,436 | (472 | ) | ||||||||
Increase (decrease) in cash and cash equivalents
|
(139 | ) | 6 | ||||||||
Cash and cash equivalents at beginning of period
|
499 | 493 | |||||||||
Cash and cash equivalents at end of period
|
$ | 360 | $ | 499 | |||||||
Supplemental cash flow information — Noncash investing
and financing activities:
|
|||||||||||
Consolidation of Sithe Energies, Inc. pursuant to FASB
Interpretation No. 46-R, “Consolidation of Variable
Interest Entities”
|
$ | — | $ | 85 |
7
March 31, | December 31, | |||||||||
2005 | 2004 | |||||||||
(In millions) | ||||||||||
ASSETS | ||||||||||
Current assets
|
||||||||||
Cash and cash equivalents
|
$ | 360 | $ | 499 | ||||||
Restricted cash and investments
|
78 | 60 | ||||||||
Accounts receivable, net
|
||||||||||
Customer
|
1,533 | 1,649 | ||||||||
Other
|
752 | 409 | ||||||||
Mark-to-market derivative assets
|
579 | 403 | ||||||||
Inventories, at average cost
|
||||||||||
Fossil fuel
|
155 | 230 | ||||||||
Materials and supplies
|
313 | 312 | ||||||||
Deferred income taxes
|
99 | 68 | ||||||||
Other
|
473 | 296 | ||||||||
Total current assets
|
4,342 | 3,926 | ||||||||
Property, plant and equipment, net
|
21,413 | 21,482 | ||||||||
Deferred debits and other assets
|
||||||||||
Regulatory assets
|
4,702 | 4,790 | ||||||||
Nuclear decommissioning trust funds
|
5,207 | 5,262 | ||||||||
Investments
|
808 | 804 | ||||||||
Goodwill
|
4,696 | 4,705 | ||||||||
Mark-to-market derivative assets
|
359 | 383 | ||||||||
Other
|
881 | 1,418 | ||||||||
Total deferred debits and other assets
|
16,653 | 17,362 | ||||||||
Total assets
|
$ | 42,408 | $ | 42,770 | ||||||
8
March 31, | December 31, | |||||||||
2005 | 2004 | |||||||||
(In millions) | ||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
Current liabilities
|
||||||||||
Notes payable
|
$ | 2,326 | $ | 490 | ||||||
Long-term debt due within one year
|
389 | 427 | ||||||||
Long-term debt to ComEd Transitional Funding Trust and PECO
Energy Transition Trust due within one year
|
622 | 486 | ||||||||
Accounts payable
|
1,235 | 1,255 | ||||||||
Mark-to-market derivative liabilities
|
865 | 598 | ||||||||
Accrued expenses
|
907 | 1,143 | ||||||||
Other
|
496 | 483 | ||||||||
Total current liabilities
|
6,840 | 4,882 | ||||||||
Long-term debt
|
6,482 | 7,292 | ||||||||
Long-term debt to ComEd Transitional Funding Trust and PECO
Energy Transition Trust
|
3,970 | 4,311 | ||||||||
Long-term debt to other financing trusts
|
545 | 545 | ||||||||
Deferred credits and other liabilities
|
||||||||||
Deferred income taxes
|
4,971 | 4,488 | ||||||||
Unamortized investment tax credits
|
272 | 275 | ||||||||
Asset retirement obligation
|
4,039 | 3,981 | ||||||||
Pension obligations
|
7 | 1,993 | ||||||||
Non-pension postretirement benefits obligations
|
1,089 | 1,065 | ||||||||
Spent nuclear fuel obligation
|
884 | 878 | ||||||||
Regulatory liabilities
|
2,167 | 2,204 | ||||||||
Mark-to-market derivative liabilities
|
411 | 323 | ||||||||
Other
|
930 | 981 | ||||||||
Total deferred credits and other liabilities
|
14,770 | 16,188 | ||||||||
Total liabilities
|
32,607 | 33,218 | ||||||||
Commitments and contingencies
|
||||||||||
Minority interest of consolidated subsidiaries
|
1 | 42 | ||||||||
Preferred securities of subsidiaries
|
87 | 87 | ||||||||
Shareholders’ equity
|
||||||||||
Common stock
|
7,757 | 7,598 | ||||||||
Treasury stock, at cost
|
(90 | ) | (82 | ) | ||||||
Retained earnings
|
3,607 | 3,353 | ||||||||
Accumulated other comprehensive loss
|
(1,561 | ) | (1,446 | ) | ||||||
Total shareholders’ equity
|
9,713 | 9,423 | ||||||||
Total liabilities and shareholders’ equity
|
$ | 42,408 | $ | 42,770 | ||||||
9
Accumulated | ||||||||||||||||||||||||
Other | Total | |||||||||||||||||||||||
Issued | Common | Treasury | Retained | Comprehensive | Shareholders’ | |||||||||||||||||||
(Dollars in millions, | Shares | Stock | Stock | Earnings | Loss | Equity | ||||||||||||||||||
shares in thousands) | ||||||||||||||||||||||||
Balance, December 31, 2004
|
666,688 | $ | 7,598 | $ | (82 | ) | $ | 3,353 | $ | (1,446 | ) | $ | 9,423 | |||||||||||
Net income
|
— | — | — | 521 | — | 521 | ||||||||||||||||||
Long-term incentive plan activity
|
4,504 | 159 | — | — | — | 159 | ||||||||||||||||||
Common stock purchases
|
— | — | (8 | ) | — | — | (8 | ) | ||||||||||||||||
Common stock dividends declared
|
— | — | — | (267 | ) | — | (267 | ) | ||||||||||||||||
Other comprehensive loss, net of income taxes of $(30)
|
— | — | — | — | (115 | ) | (115 | ) | ||||||||||||||||
Balance, March 31, 2005
|
671,192 | $ | 7,757 | $ | (90 | ) | $ | 3,607 | $ | (1,561 | ) | $ | 9,713 | |||||||||||
10
Three Months | ||||||||||
Ended | ||||||||||
March 31, | ||||||||||
2005 | 2004 | |||||||||
(In millions) | ||||||||||
Operating revenues
|
||||||||||
Operating revenues
|
$ | 1,383 | $ | 1,325 | ||||||
Operating revenues from affiliates
|
3 | 11 | ||||||||
Total operating revenues
|
1,386 | 1,336 | ||||||||
Operating expenses
|
||||||||||
Purchased power
|
67 | 3 | ||||||||
Purchased power from affiliate
|
753 | 530 | ||||||||
Operating and maintenance
|
159 | 170 | ||||||||
Operating and maintenance from affiliates
|
44 | 45 | ||||||||
Depreciation and amortization
|
97 | 102 | ||||||||
Taxes other than income
|
78 | 79 | ||||||||
Total operating expenses
|
1,198 | 929 | ||||||||
Operating income
|
188 | 407 | ||||||||
Other income and deductions
|
||||||||||
Interest expense
|
(49 | ) | (76 | ) | ||||||
Interest expense to affiliates
|
(25 | ) | (30 | ) | ||||||
Equity in losses of unconsolidated affiliates
|
(4 | ) | (3 | ) | ||||||
Interest income from affiliates
|
2 | 6 | ||||||||
Other, net
|
4 | 3 | ||||||||
Total other income and deductions
|
(72 | ) | (100 | ) | ||||||
Income before income taxes
|
116 | 307 | ||||||||
Income taxes
|
46 | 123 | ||||||||
Net income
|
70 | 184 | ||||||||
Other comprehensive loss, net of income taxes
|
||||||||||
Change in net unrealized loss on cash-flow hedges
|
(2 | ) | — | |||||||
Total other comprehensive loss
|
(2 | ) | — | |||||||
Total comprehensive income
|
$ | 68 | $ | 184 | ||||||
11
Three Months | |||||||||||
Ended | |||||||||||
March 31, | |||||||||||
2005 | 2004 | ||||||||||
(In millions) | |||||||||||
Cash flows from operating activities
|
|||||||||||
Net income
|
$ | 70 | $ | 184 | |||||||
Adjustments to reconcile net income to net cash flows (used in)
provided by operating activities:
|
|||||||||||
Depreciation and amortization
|
97 | 102 | |||||||||
Deferred income taxes and amortization of investment tax credits
|
257 | 27 | |||||||||
Provision for uncollectible accounts
|
6 | 10 | |||||||||
Equity in losses of unconsolidated affiliates
|
4 | 3 | |||||||||
Other non-cash operating activities
|
11 | 7 | |||||||||
Changes in assets and liabilities:
|
|||||||||||
Accounts receivable
|
18 | 24 | |||||||||
Inventories
|
(1 | ) | (1 | ) | |||||||
Other current assets
|
(4 | ) | 5 | ||||||||
Accounts payable, accrued expenses and other current liabilities
|
(43 | ) | (18 | ) | |||||||
Changes in receivables and payables to affiliates
|
47 | (14 | ) | ||||||||
Income taxes
|
(211 | ) | 32 | ||||||||
Pension asset and non-pension postretirement benefits obligation
|
(785 | ) | (48 | ) | |||||||
Other noncurrent assets and liabilities
|
(9 | ) | (15 | ) | |||||||
Net cash flows (used in) provided by operating activities
|
(543 | ) | 298 | ||||||||
Cash flows from investing activities
|
|||||||||||
Capital expenditures
|
(184 | ) | (177 | ) | |||||||
Changes in Exelon intercompany money pool contributions
|
207 | 179 | |||||||||
Change in restricted cash
|
(2 | ) | 17 | ||||||||
Other investing activities
|
— | 6 | |||||||||
Net cash flows provided by investing activities
|
21 | 25 | |||||||||
Cash flows from financing activities
|
|||||||||||
Issuance of long-term debt
|
91 | — | |||||||||
Retirement of long-term debt
|
(91 | ) | (176 | ) | |||||||
Retirement of long-term debt to ComEd Transitional Funding Trust
|
(97 | ) | (93 | ) | |||||||
Dividends paid on common stock
|
(138 | ) | (103 | ) | |||||||
Contributions from parent
|
834 | 31 | |||||||||
Other financing activities
|
(2 | ) | — | ||||||||
Net cash flows provided by (used in) financing activities
|
597 | (341 | ) | ||||||||
Increase (decrease) in cash and cash equivalents
|
75 | (18 | ) | ||||||||
Cash and cash equivalents at beginning of period
|
30 | 34 | |||||||||
Cash and cash equivalents at end of period
|
$ | 105 | $ | 16 | |||||||
12
March 31, | December 31, | |||||||||
2005 | 2004 | |||||||||
(In millions) | ||||||||||
ASSETS | ||||||||||
Current assets
|
||||||||||
Cash and cash equivalents
|
$ | 105 | $ | 30 | ||||||
Restricted cash
|
2 | — | ||||||||
Accounts receivable, net
|
||||||||||
Customer
|
671 | 726 | ||||||||
Other
|
153 | 50 | ||||||||
Inventories, at average cost
|
50 | 48 | ||||||||
Deferred income taxes
|
15 | — | ||||||||
Receivables from affiliates
|
12 | 10 | ||||||||
Contributions to Exelon intercompany money pool
|
101 | 308 | ||||||||
Other
|
28 | 24 | ||||||||
Total current assets
|
1,137 | 1,196 | ||||||||
Property, plant and equipment, net
|
9,563 | 9,463 | ||||||||
Deferred debits and other assets
|
||||||||||
Investments
|
38 | 39 | ||||||||
Investment in affiliates
|
48 | 52 | ||||||||
Goodwill
|
4,696 | 4,705 | ||||||||
Receivables from affiliates
|
1,393 | 1,443 | ||||||||
Pension asset
|
949 | 156 | ||||||||
Other
|
379 | 387 | ||||||||
Total deferred debits and other assets
|
7,503 | 6,782 | ||||||||
Total assets
|
$ | 18,203 | $ | 17,441 | ||||||
13
March 31, | December 31, | |||||||||
2005 | 2004 | |||||||||
(In millions) | ||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
Current liabilities
|
||||||||||
Long-term debt due within one year
|
$ | 272 | $ | 272 | ||||||
Long-term debt to ComEd Transitional Funding Trust due within
one year
|
312 | 321 | ||||||||
Accounts payable
|
211 | 196 | ||||||||
Accrued expenses
|
395 | 589 | ||||||||
Payable to affiliates
|
275 | 227 | ||||||||
Customer deposits
|
99 | 93 | ||||||||
Deferred income taxes
|
— | 17 | ||||||||
Other
|
37 | 49 | ||||||||
Total current liabilities
|
1,601 | 1,764 | ||||||||
Long-term debt
|
2,892 | 2,901 | ||||||||
Long-term debt to ComEd Transitional Funding Trust
|
932 | 1,020 | ||||||||
Long-term debt to other financing trusts
|
361 | 361 | ||||||||
Deferred credits and other liabilities
|
||||||||||
Deferred income taxes
|
2,183 | 1,890 | ||||||||
Unamortized investment tax credits
|
45 | 45 | ||||||||
Non-pension postretirement benefits obligation
|
203 | 195 | ||||||||
Payables to affiliates
|
19 | 17 | ||||||||
Regulatory liabilities
|
2,167 | 2,204 | ||||||||
Other
|
296 | 304 | ||||||||
Total deferred credits and other liabilities
|
4,913 | 4,655 | ||||||||
Total liabilities
|
10,699 | 10,701 | ||||||||
Commitments and contingencies
|
||||||||||
Shareholders’ equity
|
||||||||||
Common stock
|
1,588 | 1,588 | ||||||||
Preference stock
|
7 | 7 | ||||||||
Other paid in capital
|
4,877 | 4,168 | ||||||||
Receivable from parent
|
— | (125 | ) | |||||||
Retained earnings
|
1,034 | 1,102 | ||||||||
Accumulated other comprehensive loss
|
(2 | ) | — | |||||||
Total shareholders’ equity
|
7,504 | 6,740 | ||||||||
Total liabilities and shareholders’ equity
|
$ | 18,203 | $ | 17,441 | ||||||
14
Preferred | Accumulated | |||||||||||||||||||||||||||||||
and | Other | Receivable | Retained | Retained | Other | Total | ||||||||||||||||||||||||||
Common | Preference | Paid-In | from | Earnings | Earnings | Comprehensive | Shareholders’ | |||||||||||||||||||||||||
Stock | Stock | Capital | Parent | Unappropriated | Appropriated | Loss | Equity | |||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||
Balance, December 31, 2004
|
$ | 1,588 | $ | 7 | $ | 4,168 | $ | (125 | ) | $ | — | $ | 1,102 | $ | — | $ | 6,740 | |||||||||||||||
Net income
|
— | — | — | — | 70 | — | — | 70 | ||||||||||||||||||||||||
Repayment of receivable from parent
|
— | — | — | 125 | — | — | — | 125 | ||||||||||||||||||||||||
Capital contribution from parent
|
— | — | 709 | — | — | — | — | 709 | ||||||||||||||||||||||||
Appropriation of Retained Earnings for future dividends
|
— | — | — | — | (70 | ) | 70 | — | — | |||||||||||||||||||||||
Common stock dividends
|
— | — | — | — | — | (138 | ) | — | (138 | ) | ||||||||||||||||||||||
Other comprehensive income, net of income taxes of $2
|
— | — | — | — | — | — | (2 | ) | (2 | ) | ||||||||||||||||||||||
Balance, March 31, 2005
|
$ | 1,588 | $ | 7 | $ | 4,877 | $ | — | $ | — | $ | 1,034 | $ | (2 | ) | $ | 7,504 | |||||||||||||||
15
Three Months | |||||||||||
Ended | |||||||||||
March 31, | |||||||||||
2005 | 2004 | ||||||||||
(In millions) | |||||||||||
Operating revenues
|
|||||||||||
Operating revenues
|
$ | 1,291 | $ | 1,235 | |||||||
Operating revenues from affiliates
|
4 | 4 | |||||||||
Total operating revenues
|
1,295 | 1,239 | |||||||||
Operating expenses
|
|||||||||||
Purchased power
|
51 | 47 | |||||||||
Purchased power from affiliate
|
381 | 349 | |||||||||
Fuel
|
264 | 250 | |||||||||
Fuel from affiliate
|
1 | — | |||||||||
Operating and maintenance
|
109 | 111 | |||||||||
Operating and maintenance from affiliates
|
25 | 23 | |||||||||
Depreciation and amortization
|
136 | 125 | |||||||||
Taxes other than income
|
54 | 58 | |||||||||
Total operating expenses
|
1,021 | 963 | |||||||||
Operating income
|
274 | 276 | |||||||||
Other income and deductions
|
|||||||||||
Interest expense
|
(13 | ) | (14 | ) | |||||||
Interest expense to affiliates
|
(59 | ) | (63 | ) | |||||||
Equity in losses of unconsolidated affiliates
|
(4 | ) | (7 | ) | |||||||
Interest income from affiliates
|
1 | — | |||||||||
Other, net
|
1 | 2 | |||||||||
Total other income and deductions
|
(74 | ) | (82 | ) | |||||||
Income before income taxes
|
200 | 194 | |||||||||
Income taxes
|
71 | 62 | |||||||||
Net income
|
129 | 132 | |||||||||
Preferred stock dividends
|
1 | 1 | |||||||||
Net income on common stock
|
$ | 128 | $ | 131 | |||||||
Other comprehensive income, net of income taxes
|
|||||||||||
Net income
|
$ | 129 | $ | 132 | |||||||
Other comprehensive income (net of income taxes):
|
|||||||||||
Change in net unrealized gain on cash-flow hedges
|
— | 1 | |||||||||
Unrealized gain on marketable securities
|
— | 1 | |||||||||
Total other comprehensive income
|
— | 2 | |||||||||
Total comprehensive income
|
$ | 129 | $ | 134 | |||||||
16
Three Months | |||||||||||
Ended March 31, | |||||||||||
2005 | 2004 | ||||||||||
(In millions) | |||||||||||
Cash flows from operating activities
|
|||||||||||
Net income
|
$ | 129 | $ | 132 | |||||||
Adjustments to reconcile net income to net cash flows provided
by operating activities:
|
|||||||||||
Depreciation and amortization
|
136 | 125 | |||||||||
Deferred income taxes and amortization of investment tax credits
|
(19 | ) | (31 | ) | |||||||
Provision for uncollectible accounts
|
6 | 10 | |||||||||
Equity in losses of unconsolidated affiliates
|
4 | 7 | |||||||||
Other non-cash operating activities
|
(3 | ) | (4 | ) | |||||||
Changes in assets and liabilities:
|
|||||||||||
Accounts receivable
|
(20 | ) | (7 | ) | |||||||
Inventories
|
74 | 70 | |||||||||
Deferred energy costs
|
35 | 30 | |||||||||
Prepaid taxes
|
(158 | ) | (141 | ) | |||||||
Other current assets
|
4 | (3 | ) | ||||||||
Accounts payable, accrued expenses and other current liabilities
|
(66 | ) | (40 | ) | |||||||
Change in receivables and payables to affiliates, net
|
10 | (6 | ) | ||||||||
Income taxes
|
82 | 82 | |||||||||
Pension asset and non-pension postretirement benefits obligation
|
(141 | ) | 6 | ||||||||
Other noncurrent assets and liabilities
|
(1 | ) | (13 | ) | |||||||
Net cash flows provided by operating activities
|
72 | 217 | |||||||||
Cash flows from investing activities
|
|||||||||||
Capital expenditures
|
(56 | ) | (47 | ) | |||||||
Changes in Exelon intercompany money pool contributions
|
34 | — | |||||||||
Change in restricted cash
|
(4 | ) | (1 | ) | |||||||
Other investing activities
|
3 | — | |||||||||
Net cash flows used in investing activities
|
(23 | ) | (48 | ) | |||||||
Cash flows from financing activities
|
|||||||||||
Retirement of long-term debt
|
(4 | ) | — | ||||||||
Retirement of long-term debt to PECO Energy Transitional Trust
|
(108 | ) | (88 | ) | |||||||
Change in short-term debt
|
36 | 35 | |||||||||
Dividends paid on preferred and common stock
|
(116 | ) | (91 | ) | |||||||
Contribution from parent
|
144 | 35 | |||||||||
Other financing activities
|
— | 2 | |||||||||
Net cash flows used in financing activities
|
(48 | ) | (107 | ) | |||||||
Increase in cash and cash equivalents
|
1 | 62 | |||||||||
Cash and cash equivalents at beginning of period
|
74 | 18 | |||||||||
Cash and cash equivalents at end of period
|
$ | 75 | $ | 80 | |||||||
17
March 31, | December 31, | |||||||||
2005 | 2004 | |||||||||
(In millions) | ||||||||||
ASSETS | ||||||||||
Current assets
|
||||||||||
Cash and cash equivalents
|
$ | 75 | $ | 74 | ||||||
Restricted cash
|
33 | 29 | ||||||||
Accounts receivable, net
|
||||||||||
Customer
|
386 | 368 | ||||||||
Other
|
30 | 34 | ||||||||
Inventories, at average cost
|
||||||||||
Gas
|
44 | 117 | ||||||||
Materials and supplies
|
9 | 10 | ||||||||
Contributions to Exelon intercompany money pool
|
— | 34 | ||||||||
Deferred income taxes
|
28 | 24 | ||||||||
Deferred energy costs
|
36 | 71 | ||||||||
Prepaid taxes
|
159 | 1 | ||||||||
Other
|
7 | 11 | ||||||||
Total current assets
|
807 | 773 | ||||||||
Property, plant and equipment, net
|
4,345 | 4,329 | ||||||||
Deferred debits and other assets
|
||||||||||
Regulatory assets
|
4,702 | 4,790 | ||||||||
Investments
|
22 | 22 | ||||||||
Investment in affiliates
|
84 | 87 | ||||||||
Receivables from affiliates
|
35 | 46 | ||||||||
Pension asset
|
190 | 77 | ||||||||
Other
|
6 | 9 | ||||||||
Total deferred debits and other assets
|
5,039 | 5,031 | ||||||||
Total assets
|
$ | 10,191 | $ | 10,133 | ||||||
18
March 31, | December 31, | |||||||||
2005 | 2004 | |||||||||
(In millions) | ||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
Current liabilities
|
||||||||||
Commercial paper
|
$ | 36 | $ | — | ||||||
Long-term debt due within one year
|
42 | 46 | ||||||||
Long-term debt to PECO Energy Transition Trust due within one
year
|
310 | 165 | ||||||||
Accounts payable
|
105 | 121 | ||||||||
Accrued expenses
|
297 | 263 | ||||||||
Payables to affiliates
|
156 | 146 | ||||||||
Customer deposits
|
46 | 42 | ||||||||
Other
|
5 | 11 | ||||||||
Total current liabilities
|
997 | 794 | ||||||||
Long-term debt
|
1,153 | 1,153 | ||||||||
Long-term debt to PECO Energy Transition Trust
|
3,038 | 3,291 | ||||||||
Long-term debt to other financing trusts
|
184 | 184 | ||||||||
Deferred credits and other liabilities
|
||||||||||
Deferred income taxes
|
2,817 | 2,834 | ||||||||
Unamortized investment tax credits
|
19 | 19 | ||||||||
Non-pension postretirement benefits obligation
|
291 | 319 | ||||||||
Other
|
137 | 141 | ||||||||
Total deferred credits and other liabilities
|
3,264 | 3,313 | ||||||||
Total liabilities
|
8,636 | 8,735 | ||||||||
Commitments and contingencies
|
||||||||||
Shareholders’ equity
|
||||||||||
Common stock
|
2,176 | 2,176 | ||||||||
Preferred stock
|
87 | 87 | ||||||||
Receivable from parent
|
(1,338 | ) | (1,482 | ) | ||||||
Retained earnings
|
620 | 607 | ||||||||
Accumulated other comprehensive income
|
10 | 10 | ||||||||
Total shareholders’ equity
|
1,555 | 1,398 | ||||||||
Total liabilities and shareholders’ equity
|
$ | 10,191 | $ | 10,133 | ||||||
19
Accumulated | ||||||||||||||||||||||||
Receivable | Other | Total | ||||||||||||||||||||||
Common | Preferred | from | Retained | Comprehensive | Shareholders’ | |||||||||||||||||||
Stock | Stock | Parent | Earnings | Income | Equity | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Balance, December 31, 2004
|
$ | 2,176 | $ | 87 | $ | (1,482 | ) | $ | 607 | $ | 10 | $ | 1,398 | |||||||||||
Net income
|
— | — | — | 129 | — | 129 | ||||||||||||||||||
Common stock dividends
|
— | — | — | (115 | ) | — | (115 | ) | ||||||||||||||||
Preferred stock dividends
|
— | — | — | (1 | ) | — | (1 | ) | ||||||||||||||||
Repayment of receivable from parent
|
— | — | 144 | — | — | 144 | ||||||||||||||||||
Other comprehensive income, net of income taxes of $(1)
|
— | — | — | — | — | — | ||||||||||||||||||
Balance, March 31, 2005
|
$ | 2,176 | $ | 87 | $ | (1,338 | ) | $ | 620 | $ | 10 | $ | 1,555 | |||||||||||
20
Three Months | |||||||||||
Ended | |||||||||||
March 31, | |||||||||||
2005 | 2004 | ||||||||||
(In millions) | |||||||||||
Operating revenues
|
|||||||||||
Operating revenues
|
$ | 885 | $ | 1,067 | |||||||
Operating revenues from affiliates
|
1,135 | 879 | |||||||||
Total operating revenues
|
2,020 | 1,946 | |||||||||
Operating expenses
|
|||||||||||
Purchased power
|
450 | 522 | |||||||||
Purchased power from affiliates
|
— | 8 | |||||||||
Fuel
|
358 | 568 | |||||||||
Operating and maintenance
|
541 | 553 | |||||||||
Operating and maintenance from affiliates
|
68 | 65 | |||||||||
Depreciation and amortization
|
62 | 55 | |||||||||
Taxes other than income
|
35 | 47 | |||||||||
Total operating expenses
|
1,514 | 1,818 | |||||||||
Operating income
|
506 | 128 | |||||||||
Other income and deductions
|
|||||||||||
Interest expense
|
(27 | ) | (25 | ) | |||||||
Interest expense to affiliates
|
(2 | ) | (1 | ) | |||||||
Equity in losses of unconsolidated affiliates
|
— | (2 | ) | ||||||||
Other, net
|
18 | 19 | |||||||||
Total other income and deductions
|
(11 | ) | (9 | ) | |||||||
Income from continuing operations before income taxes and
minority interest
|
495 | 119 | |||||||||
Income taxes
|
191 | 46 | |||||||||
Income from continuing operations before minority interest
|
304 | 73 | |||||||||
Minority interest
|
— | (2 | ) | ||||||||
Income from continuing operations
|
304 | 71 | |||||||||
Discontinued operations
|
|||||||||||
Loss from discontinued operations (net of income taxes of ($1)
|
— | (1 | ) | ||||||||
Gain on disposal of discontinued operations (net of income taxes
of $5)
|
16 | — | |||||||||
Income (loss) on discontinued operations
|
16 | (1 | ) | ||||||||
Income before cumulative effect of a change in accounting
principle
|
320 | 70 | |||||||||
Cumulative effect of a change in accounting principle (net of
income taxes of $22)
|
— | 32 | |||||||||
Net income
|
320 | 102 | |||||||||
Other comprehensive loss, net of income taxes
|
|||||||||||
Change in net unrealized loss on cash-flow hedges
|
(124 | ) | (195 | ) | |||||||
Unrealized gain (loss) on marketable securities
|
(15 | ) | 39 | ||||||||
Foreign currency translation adjustment
|
— | 2 | |||||||||
Total other comprehensive loss
|
(139 | ) | (154 | ) | |||||||
Total comprehensive income (loss)
|
$ | 181 | $ | (52 | ) | ||||||
21
Three Months | ||||||||||||
Ended | ||||||||||||
March 31, | ||||||||||||
2005 | 2004 | |||||||||||
(In millions) | ||||||||||||
Cash flows from operating activities
|
||||||||||||
Net income
|
$ | 320 | $ | 102 | ||||||||
Adjustments to reconcile net income to net cash flows (used in)
provided by operating activities:
|
||||||||||||
Depreciation, amortization and accretion, including nuclear fuel
|
220 | 199 | ||||||||||
Cumulative effect of a change in accounting principle (net of
income taxes)
|
— | (32 | ) | |||||||||
Other decommissioning-related activities
|
(5 | ) | 13 | |||||||||
Gain on sale of investments
|
(21 | ) | — | |||||||||
Deferred income taxes and amortization of investment tax credits
|
363 | 29 | ||||||||||
Equity in losses of unconsolidated affiliates
|
— | 2 | ||||||||||
Net realized gains on nuclear decommissioning trust funds
|
(1 | ) | (3 | ) | ||||||||
Other non-cash operating activities
|
(7 | ) | (8 | ) | ||||||||
Changes in assets and liabilities:
|
||||||||||||
Accounts receivable
|
59 | (37 | ) | |||||||||
Receivables and payables to affiliates, net
|
(58 | ) | 46 | |||||||||
Inventories
|
4 | — | ||||||||||
Other current assets
|
(52 | ) | 21 | |||||||||
Accounts payable, accrued expenses and other current liabilities
|
(58 | ) | (133 | ) | ||||||||
Income taxes
|
(66 | ) | 8 | |||||||||
Net realized and unrealized mark-to-market and hedging
transactions
|
(77 | ) | 28 | |||||||||
Pension asset and non-pension postretirement benefits obligation
|
(855 | ) | (29 | ) | ||||||||
Other noncurrent assets and liabilities
|
(4 | ) | (4 | ) | ||||||||
Net cash flows (used in) provided by operating activities
|
(238 | ) | 202 | |||||||||
Cash flows from investing activities
|
||||||||||||
Capital expenditures
|
(247 | ) | (213 | ) | ||||||||
Proceeds from nuclear decommissioning trust fund sales
|
782 | 307 | ||||||||||
Investment in nuclear decommissioning trust funds
|
(834 | ) | (378 | ) | ||||||||
Acquisition of business
|
(97 | ) | — | |||||||||
Proceeds from sale of wholly owned subsidiaries, net of $32 of
cash sold
|
103 | — | ||||||||||
Net cash increase from consolidation of Sithe Energies, Inc. and
Exelon Energy Company
|
— | 24 | ||||||||||
Change in restricted cash
|
(2 | ) | 53 | |||||||||
Other investing activities
|
(3 | ) | 55 | |||||||||
Net cash flows used in investing activities
|
(298 | ) | (152 | ) | ||||||||
Cash flows from financing activities
|
||||||||||||
Retirement of long-term debt
|
(1 | ) | — | |||||||||
Change in short-term debt
|
— | 165 | ||||||||||
Payment on acquisition note payable to Sithe Energies, Inc.
|
— | (27 | ) | |||||||||
Changes in Exelon intercompany money pool borrowings
|
(246 | ) | (190 | ) | ||||||||
Distribution to member
|
(239 | ) | (54 | ) | ||||||||
Contribution from member
|
843 | — | ||||||||||
Other financing activities
|
— | (2 | ) | |||||||||
Net cash flows provided by (used in) financing activities
|
357 | (108 | ) | |||||||||
Decrease in cash and cash equivalents
|
(179 | ) | (58 | ) | ||||||||
Cash and cash equivalents at beginning of period
|
263 | 158 | ||||||||||
Cash and cash equivalents at end of period
|
$ | 84 | $ | 100 | ||||||||
Supplemental cash flow information — Noncash
investing and financing activities:
|
||||||||||||
Consolidation of Sithe Energies, Inc. pursuant to FASB
Interpretation No. 46-R, “Consolidation of Variable
Interest Entities”
|
$ | — | $ | 85 | ||||||||
Contribution of Exelon Energy Company from Exelon Corporation
|
— | (9 | ) |
22
March 31, | December 31, | |||||||||
2005 | 2004 | |||||||||
(In millions) | ||||||||||
ASSETS | ||||||||||
Current assets
|
||||||||||
Cash and cash equivalents
|
$ | 84 | $ | 263 | ||||||
Restricted cash and investments
|
4 | 26 | ||||||||
Accounts receivable, net
|
||||||||||
Customer
|
455 | 525 | ||||||||
Other
|
273 | 209 | ||||||||
Mark-to-market derivative assets
|
579 | 403 | ||||||||
Receivables from affiliates
|
386 | 332 | ||||||||
Inventories, at average cost
|
||||||||||
Fossil fuel
|
111 | 112 | ||||||||
Materials and supplies
|
253 | 255 | ||||||||
Deferred income taxes
|
42 | 48 | ||||||||
Other
|
197 | 148 | ||||||||
Total current assets
|
2,384 | 2,321 | ||||||||
Property, plant and equipment, net
|
7,357 | 7,536 | ||||||||
Deferred debits and other assets
|
||||||||||
Nuclear decommissioning trust funds
|
5,207 | 5,262 | ||||||||
Investments
|
111 | 103 | ||||||||
Receivable from affiliate
|
11 | 11 | ||||||||
Pension asset
|
1,022 | 199 | ||||||||
Mark-to-market derivative assets
|
316 | 373 | ||||||||
Other
|
111 | 633 | ||||||||
Total deferred debits and other assets
|
6,778 | 6,581 | ||||||||
Total assets
|
$ | 16,519 | $ | 16,438 | ||||||
23
March 31, | December 31, | |||||||||
2005 | 2004 | |||||||||
(In millions) | ||||||||||
LIABILITIES AND MEMBER’S EQUITY | ||||||||||
Current liabilities
|
||||||||||
Long-term debt due within one year
|
$ | 12 | $ | 47 | ||||||
Accounts payable
|
844 | 856 | ||||||||
Mark-to-market derivative liabilities
|
865 | 598 | ||||||||
Payables to affiliates
|
38 | 42 | ||||||||
Notes payable to affiliates
|
37 | 283 | ||||||||
Accrued expenses
|
294 | 367 | ||||||||
Other
|
253 | 223 | ||||||||
Total current liabilities
|
2,343 | 2,416 | ||||||||
Long-term debt
|
1,798 | 2,583 | ||||||||
Deferred credits and other liabilities
|
||||||||||
Asset retirement obligation
|
4,038 | 3,980 | ||||||||
Pension obligation
|
7 | 21 | ||||||||
Non-pension postretirement benefits obligation
|
566 | 584 | ||||||||
Spent nuclear fuel obligation
|
884 | 878 | ||||||||
Deferred income taxes
|
663 | 506 | ||||||||
Unamortized investment tax credits
|
208 | 210 | ||||||||
Payable to affiliates
|
1,417 | 1,479 | ||||||||
Mark-to-market derivative liabilities
|
407 | 323 | ||||||||
Other
|
362 | 375 | ||||||||
Total deferred credits and other liabilities
|
8,552 | 8,356 | ||||||||
Total liabilities
|
12,693 | 13,355 | ||||||||
Commitments and contingencies
|
||||||||||
Minority interest of consolidated subsidiary
|
2 | 44 | ||||||||
Member’s equity
|
||||||||||
Membership interest
|
3,204 | 2,361 | ||||||||
Undistributed earnings
|
842 | 761 | ||||||||
Accumulated other comprehensive loss
|
(222 | ) | (83 | ) | ||||||
Total Member’s equity
|
3,824 | 3,039 | ||||||||
Total liabilities and Member’s equity
|
$ | 16,519 | $ | 16,438 | ||||||
24
Accumulated | ||||||||||||||||
Other | Total | |||||||||||||||
Membership | Undistributed | Comprehensive | Member’s | |||||||||||||
Interest | Earnings | Loss | Equity | |||||||||||||
(In millions) | ||||||||||||||||
Balance, December 31, 2004
|
$ | 2,361 | $ | 761 | $ | (83 | ) | $ | 3,039 | |||||||
Net income
|
— | 320 | — | 320 | ||||||||||||
Distribution to Member
|
— | (239 | ) | — | (239 | ) | ||||||||||
Contribution from Member
|
843 | — | — | 843 | ||||||||||||
Other comprehensive loss, net of income tax benefit of $41
|
— | — | (139 | ) | (139 | ) | ||||||||||
Balance, March 31, 2005
|
$ | 3,204 | $ | 842 | $ | (222 | ) | $ | 3,824 | |||||||
25
1. | Basis of Presentation (Exelon, ComEd, PECO and Generation) |
26
2. | Discontinued Operations (Exelon and Generation) |
Three Months Ended March 31, 2005 | Sithe(a) | Enterprises(b) | Total | |||||||||
Total operating revenues
|
$ | 30 | $ | 4 | $ | 34 | ||||||
Operating income (loss)
|
5 | (2 | ) | 3 | ||||||||
Income (loss) before income taxes and minority interest(c)
|
20 | (4 | ) | 16 |
(a) | Includes Sithe’s results of operations from January 1, 2005 through January 31, 2005, which was the date of the sale. See Note 4 — Acquisitions and Dispositions for further information regarding the sale of Sithe. |
(b) | Excludes certain investments. | |
(c) | Sithe includes a pre-tax gain on sale of $21 million. |
Three Months Ended March 31, 2004 | Enterprises(a) | AllEnergy | Total(b) | |||||||||
Total operating revenues
|
$ | 90 | $ | 6 | $ | 96 | ||||||
Operating loss
|
(19 | ) | (1 | ) | (20 | ) | ||||||
Loss before income taxes and minority interest
|
(25 | ) | (1 | ) | (26 | ) |
(a) | Excludes certain investments. |
(b) | In accordance with FIN 46-R, Exelon and Generation consolidated Sithe, formerly a 50% owned subsidiary of Generation, as of March 31, 2004. As Sithe was a nonconsolidated subsidiary during the three months ended March 31, 2004, Sithe’s results of operations were not included in discontinued operations for that period. See Note 1 of Exelon’s Notes to Consolidated Financial Statements within Exelon’s 2004 Form 10-K for further information regarding the adoption of FIN 46-R and resulting consolidation of Sithe. |
27
3. | New Accounting Principles (Exelon, ComEd, PECO and Generation) |
EITF 03-1 |
SFAS No. 151 |
SFAS No. 123-R |
28
Three Months | |||||||||
Ended | |||||||||
March 31, | |||||||||
2005 | 2004 | ||||||||
Net income — as reported
|
$ | 521 | $ | 412 | |||||
Add: Stock-based compensation expense included in reported net
income, net of income taxes
|
8 | 9 | |||||||
Deduct: Total stock-based compensation expense determined under
fair-value method for all awards, net of income taxes
|
(12 | ) | (14 | ) | |||||
Pro forma net income(a)
|
$ | 517 | $ | 407 | |||||
Earnings per share:
|
|||||||||
Basic earnings — as reported
|
$ | 0.78 | $ | 0.63 | |||||
Basic earnings — pro forma
|
$ | 0.78 | $ | 0.62 | |||||
Diluted earnings — as reported
|
$ | 0.77 | $ | 0.62 | |||||
Diluted earnings — pro forma
|
$ | 0.77 | $ | 0.61 |
(a) | The fair value of options granted was estimated using a Black-Scholes option pricing model. |
SFAS No. 153 |
29
FIN 47 |
4. | Acquisitions and Dispositions (Exelon and Generation) |
Proposed Merger with PSEG (Exelon) |
Sithe (Exelon and Generation) |
30
Three Months | Three Months | |||||||
Ended | Ended | |||||||
March 31, 2005 | March 31, 2004(a) | |||||||
Operating revenues
|
$ | 30 | $ | — | ||||
Operating income
|
5 | — | ||||||
Net income (loss)
|
16 | (2 | ) |
(a) | Results during the three months ended March 31, 2004 represent Generation’s equity-method losses from Sithe prior to its consolidation on March 31, 2004. These equity-method losses are presented within income from continuing operations on the Consolidated Statements of Income and Comprehensive Income of Exelon and Generation |
Sale of Ownership Interest in Boston Generating, LLC (Exelon and Generation) |
31
Three Months | ||||
Ended | ||||
March 31, 2004 | ||||
Operating revenues
|
$ | 159 | ||
Operating loss
|
(31 | ) | ||
Net loss
|
(18 | ) |
5. | Regulatory Issues (Exelon, ComEd and PECO) |
Exelon, ComEd and PECO |
32
6. | Intangible Assets (Exelon, ComEd and Generation) |
Goodwill (Exelon and ComEd) |
Balance as of January 1, 2005(a)
|
$ | 4,705 | ||
Resolution of certain tax matters(b)
|
(9 | ) | ||
Balance as of March 31, 2005(a)
|
$ | 4,696 | ||
(a) | Exelon’s goodwill balance at January 1 and March 31, 2005 is held at ComEd, which is included in the Energy Delivery segment. See Note 15 — Segment Information for further information regarding Exelon’s segments. |
(b) | Adjustment related to income tax refund claims and interest thereon. See Note 13 — Commitments and Contingencies for further information. |
33
Other Intangible Assets (Exelon and Generation) |
March 31, 2005 | December 31, 2004 | ||||||||||||||||||||||||
Accumulated | Accumulated | ||||||||||||||||||||||||
Gross | Amortization | Net | Gross | Amortization | Net | ||||||||||||||||||||
Generation amortized intangible assets:
|
|||||||||||||||||||||||||
Energy purchase agreement(a)
|
$ | — | $ | — | $ | — | $ | 384 | $ | (27 | ) | $ | 357 | ||||||||||||
Tolling agreement(a)
|
— | — | — | 73 | (5 | ) | 68 | ||||||||||||||||||
Other
|
— | — | — | 6 | (6 | ) | — | ||||||||||||||||||
Total Generation amortized intangible assets
|
— | — | — | 463 | (38 | ) | 425 | ||||||||||||||||||
Exelon amortized intangible assets:
|
|||||||||||||||||||||||||
Synthetic fuel investments(b)
|
264 | (72 | ) | 192 | 264 | (56 | ) | 208 | |||||||||||||||||
Total Exelon amortized intangible assets
|
264 | (72 | ) | 192 | 727 | (94 | ) | 633 | |||||||||||||||||
Exelon other intangible assets:
|
|||||||||||||||||||||||||
Intangible pension asset
|
171 | — | 171 | 171 | — | 171 | |||||||||||||||||||
Total Exelon intangible assets
|
$ | 435 | $ | (72 | ) | $ | 363 | $ | 898 | $ | (94 | ) | $ | 804 | |||||||||||
(a) | See Note 3 of Exelon’s Notes to Consolidated Financial Statements within Exelon’s 2004 Form 10-K for a description of Sithe’s intangible assets. These intangible assets were eliminated from the Consolidated Balance Sheets of Exelon and Generation upon the sale of Sithe on January 31, 2005. See Note 4 — Acquisitions and Dispositions for further information regarding the sale of Sithe. |
(b) | See Note 2 of Exelon’s Notes to Consolidated Financial Statements within Exelon’s 2004 Form 10-K for a description of Exelon’s right to acquire tax credits through investments in synthetic fuel-producing facilities. In addition, see Note 10 — Income Taxes. |
34
7. | Debt (Exelon, ComEd, PECO and Generation) |
Commercial Paper |
Borrower | March 31, 2005 | December 31, 2004 | ||||||
Exelon Corporate
|
$ | 290 | $ | 490 | ||||
ComEd
|
— | — | ||||||
PECO
|
36 | — | ||||||
Generation
|
— | — |
Issuance of Short-Term Debt |
Issuance of Long-Term Debt |
Interest | ||||||||||||||||
Company | Type | Rate | Maturity | Amount | ||||||||||||
ComEd
|
Pollution Control Revenue Bonds | Variable | March 1, 2017 | $ | 91 |
35
Debt Retirements and Redemptions |
Company | Type | Interest Rate | Maturity | Amount | ||||||||||
ComEd
|
Pollution Control Revenue Bonds | 6.75 | % | March 1, 2015 | $ | 91 | ||||||||
Exelon
|
Notes payable for investment in synthetic fuel-producing facilities | 6.00 to 8.00 | % | January 2008 | 15 | |||||||||
Other
|
5 | |||||||||||||
Total retirements
|
$ | 111 | ||||||||||||
Interest-Rate Swaps |
Notional | March 31, 2005 | December 31, 2004 | ||||||||||||||||||
Company | Amount | Company Pays | Counterparty Pays | Fair Value | Fair Value | |||||||||||||||
Fair-Value Hedges
|
||||||||||||||||||||
ComEd
|
$ | 240 | 3 Month LIBOR | |||||||||||||||||
plus 1.12% – 1.60% | 6.15% | $ | — | $ | 9 | |||||||||||||||
Cash-Flow Hedges
|
||||||||||||||||||||
Exelon
|
1,200 | 4.51% – 5.1% | 3 Month LIBOR | 42 | 2 | |||||||||||||||
ComEd
|
280 | 5.35% – 5.43% | 3 Month LIBOR | (3 | ) | — | ||||||||||||||
Net deferred gains
|
$ | 39 | $ | 11 | ||||||||||||||||
8. | Severance Benefits (Exelon, ComEd, PECO and Generation) |
36
Exelon | ||||||||||||||||
ComEd | PECO | Generation | Consolidated | |||||||||||||
Net change in positions expected to be eliminated during the
three months ended March 31, 2005
|
(15 | ) | 8 | (17 | ) | (17 | ) | |||||||||
Net change in positions expected to be eliminated during the
three months ended March 31, 2004
|
9 | 32 | 63 | 46 | ||||||||||||
Positions identified for elimination not eliminated as of
March 31, 2005
|
199 | 17 | 61 | 331 |
Energy | Exelon | |||||||||||||||||||||||
Salary Continuance Severance | ComEd | PECO | Delivery | Generation | Other | Consolidated | ||||||||||||||||||
$ | (1 | ) | $ | 1 | $ | — | $ | (1 | ) | $ | (1 | ) | $ | (2 | ) | |||||||||
— | 5 | 5 | (6 | ) | 2 | 1 |
Exelon | ||||||||||||||||
Salary Continuance Obligations | ComEd | PECO | Generation | Consolidated | ||||||||||||
Balance at January 1, 2005
|
$ | 28 | $ | 7 | $ | 16 | $ | 69 | ||||||||
Severance (benefits) charges recorded
|
(1 | ) | 1 | (1 | ) | (2 | ) | |||||||||
Cash payments
|
(4 | ) | (3 | ) | (2 | ) | (13 | ) | ||||||||
Balance at March 31, 2005
|
$ | 23 | $ | 5 | $ | 13 | $ | 54 | ||||||||
9. | Retirement Benefits (Exelon, ComEd, PECO and Generation) |
37
Other | |||||||||||||||||
Postretirement | |||||||||||||||||
Pension Benefits | Benefits Three | ||||||||||||||||
Three Months Ended | Months Ended | ||||||||||||||||
March 31, | March 31, | ||||||||||||||||
2005 | 2004 | 2005 | 2004(a) | ||||||||||||||
Service cost
|
$ | 38 | $ | 33 | $ | 23 | $ | 20 | |||||||||
Interest cost
|
139 | 134 | 43 | 45 | |||||||||||||
Expected return on assets
|
(192 | )(b) | (154 | ) | (24 | ) | (23 | ) | |||||||||
Amortization of:
|
|||||||||||||||||
Transition obligation (asset)
|
(1 | ) | (1 | ) | 2 | 2 | |||||||||||
Prior service cost (benefit)
|
4 | 4 | (22 | ) | (19 | ) | |||||||||||
Actuarial loss
|
30 | 15 | 17 | 15 | |||||||||||||
Net periodic benefit cost
|
$ | 18 | $ | 31 | $ | 39 | $ | 40 | |||||||||
(a) | Amounts have been restated to account for the reduction in net periodic postretirement benefit cost resulting from the adoption of FSP FAS 106-2. See Note 1 — Basis of Presentation for further information regarding the adoption of FSP FAS 106-2. |
(b) | Increase in expected return on pension assets for the three months ended March 31, 2005 compared to 2004 was primarily attributable to discretionary pension contributions of $2 billion made during the first quarter of 2005. |
38
Three Months | ||||||||
Ended | ||||||||
March 31, | ||||||||
Pension and Postretirement Benefit Costs(a) | 2005 | 2004(b) | ||||||
ComEd
|
$ | 19 | $ | 24 | ||||
PECO
|
6 | 8 | ||||||
Generation
|
24 | 31 |
(a) | Includes capital and operating and maintenance expense. |
(b) | Amounts have been restated to account for the reduction in net periodic postretirement benefit cost resulting from the adoption of FSP FAS 106-2. See Note 1 — Basis of Presentation for further information regarding the adoption of FSP FAS 106-2. |
Three Months | ||||||||
Ended | ||||||||
March 31, | ||||||||
Savings Plan Matching Contributions | 2005 | 2004 | ||||||
Exelon
|
$ | 14 | $ | 14 | ||||
ComEd
|
4 | 4 | ||||||
PECO
|
2 | 2 | ||||||
Generation
|
7 | 7 |
39
10. | Income Taxes (Exelon, ComEd, PECO and Generation) |
Exelon |
Three Months | |||||||||
Ended | |||||||||
March 31, | |||||||||
2005 | 2004 | ||||||||
U.S. Federal statutory rate
|
35.0 | % | 35.0 | % | |||||
Increase (decrease) due to:
|
|||||||||
State income taxes, net of Federal income tax benefit
|
3.9 | 2.7 | |||||||
Synthetic fuel-producing facilities credit(a)
|
(7.4 | ) | (7.8 | ) | |||||
Low-income housing credit
|
— | (0.6 | ) | ||||||
Amortization of investment tax credit
|
(0.4 | ) | (0.5 | ) | |||||
Tax-exempt income
|
(0.4 | ) | (0.5 | ) | |||||
Qualified nuclear decommissioning trust fund income
|
0.4 | 0.8 | |||||||
Nontaxable employee benefits
|
(0.4 | ) | (0.4 | )(b) | |||||
Other
|
0.2 | (0.2 | ) | ||||||
Effective income tax rate
|
30.9 | % | 28.5 | % | |||||
(a) | See Note 2 of Exelon’s Notes to Consolidated Financial Statements within Exelon’s 2004 Form 10-K for further information regarding investments in synthetic fuel-producing facilities. |
(b) | Amounts have been restated to account for the reduction in net periodic postretirement benefit cost resulting from the adoption of FSP FAS 106-2. See Note 1 — Basis of Presentation for further information regarding the adoption of FSP FAS 106-2. |
ComEd |
Three Months | |||||||||
Ended | |||||||||
March 31, | |||||||||
2005 | 2004 | ||||||||
U.S. Federal statutory rate
|
35.0 | % | 35.0 | % | |||||
Increase (decrease) due to:
|
|||||||||
State income taxes, net of Federal income tax benefit
|
4.8 | 4.8 | |||||||
Amortization of regulatory asset
|
0.7 | 0.5 | |||||||
Amortization of investment tax credit
|
(0.7 | ) | (0.2 | ) | |||||
Nontaxable employee benefits
|
(0.6 | ) | (0.1 | )(a) | |||||
Other
|
0.5 | 0.1 | |||||||
Effective income tax rate
|
39.7 | % | 40.1 | % | |||||
(a) | Amounts have been restated to account for the reduction in net periodic postretirement benefit cost resulting from the adoption of FSP FAS 106-2. See Note 1 — Basis of Presentation for further information regarding the adoption of FSP FAS 106-2. |
40
PECO |
Three Months | |||||||||
Ended | |||||||||
March 31, | |||||||||
2005 | 2004 | ||||||||
U.S. Federal statutory rate
|
35.0 | % | 35.0 | % | |||||
Increase (decrease) due to:
|
|||||||||
State income taxes, net of Federal income tax benefit
|
0.8 | 0.7 | |||||||
Plant basis differences
|
0.3 | (1.0 | ) | ||||||
Amortization of investment tax credit
|
(0.3 | ) | (0.3 | ) | |||||
Nontaxable employee benefits
|
(0.2 | ) | (0.2 | )(a) | |||||
Other
|
(0.2 | ) | (2.3 | ) | |||||
Effective income tax rate
|
35.4 | % | 31.9 | % | |||||
(a) | Amounts have been restated to account for the reduction in net periodic postretirement benefit cost resulting from the adoption of FSP FAS 106-2. See Note 1 — Basis of Presentation for further information regarding the adoption of FSP FAS 106-2. |
Generation |
Three Months | |||||||||
Ended | |||||||||
March 31, | |||||||||
2005 | 2004 | ||||||||
U.S. Federal statutory rate
|
35.0 | % | 35.0 | % | |||||
Increase (decrease) due to:
|
|||||||||
State income taxes, net of Federal income tax benefit
|
4.9 | 4.5 | |||||||
Tax-exempt income
|
(0.5 | ) | (2.1 | ) | |||||
Qualified nuclear decommissioning trust income
|
0.5 | 3.4 | |||||||
Amortization of investment tax credit
|
(0.3 | ) | (1.0 | ) | |||||
Nontaxable employee benefits
|
(0.2 | ) | (0.9 | )(a) | |||||
Other
|
(0.8 | ) | (0.2 | ) | |||||
Effective income tax rate
|
38.6 | % | 38.7 | % | |||||
(a) | Amounts have been restated to account for the reduction in net periodic postretirement benefit cost resulting from the adoption of FSP FAS 106-2. See Note 1 — Basis of Presentation for further information regarding the adoption of FSP FAS 106-2. |
41
42
11. | Nuclear Decommissioning and Nuclear Decommissioning Trust Fund Investments (Exelon and Generation) |
Nuclear Decommissioning |
Generation | Exelon | |||||||
Asset retirement obligation at January 1, 2005
|
$ | 3,980 | $ | 3,981 | ||||
Liabilities disposed(a)
|
(3 | ) | (3 | ) | ||||
Accretion expense
|
64 | 64 | ||||||
Payments to decommission retired plants
|
(3 | ) | (3 | ) | ||||
Asset retirement obligation at March 31, 2005
|
$ | 4,038 | $ | 4,039 | ||||
(a) | The ARO of Sithe was removed from the balance sheet upon its sale on January 31, 2005. |
Nuclear Decommissioning Trust Fund Investments |
12. | Earnings Per Share and Shareholders’ Equity (Exelon) |
Stock Split |
43
Share Repurchases |
Earnings per Share |
Three Months | |||||||||
Ended | |||||||||
March 31, | |||||||||
2005 | 2004 | ||||||||
Income from continuing operations
|
$ | 507 | 397 | ||||||
Discontinued operations
|
14 | (17 | ) | ||||||
Income before cumulative effect of a change in accounting
principle
|
521 | 380 | |||||||
Cumulative effect of a change in accounting principle
|
— | 32 | |||||||
Net income
|
$ | 521 | $ | 412 | |||||
Average common shares outstanding — basic
|
666 | 659 | |||||||
Assumed exercise of stock options
|
9 | 6 | |||||||
Average common shares outstanding — diluted
|
675 | 665 | |||||||
Earnings per average common share — Basic:
|
|||||||||
Income from continuing operations
|
$ | 0.76 | $ | 0.60 | |||||
Discontinued operations
|
0.02 | (0.02 | ) | ||||||
Income before cumulative effect of a change in accounting
principle
|
$ | 0.78 | $ | 0.58 | |||||
Cumulative effect of a change in accounting principle
|
— | 0.05 | |||||||
Net income
|
$ | 0.78 | $ | 0.63 | |||||
Earnings per average common share — Diluted:
|
|||||||||
Income from continuing operations
|
$ | 0.75 | $ | 0.59 | |||||
Discontinued operations
|
0.02 | (0.02 | ) | ||||||
Income before cumulative effect of a change in accounting
principle
|
$ | 0.77 | $ | 0.57 | |||||
Cumulative effect of a change in accounting principle
|
— | 0.05 | |||||||
Net income
|
$ | 0.77 | $ | 0.62 | |||||
44
13. | Commitments and Contingencies (Exelon, ComEd, PECO and Generation) |
Energy Commitments |
• | Power-only sales commitments of $395 million and minimum fuel purchase commitments of $217 million were eliminated after the sale of Sithe on January 31, 2005. |
Commercial Commitments |
• | Letters of credit decreased $86 million, primarily as a result of the sale of Sithe. See Note 4 — Acquisitions and Dispositions for further discussion. Guarantees decreased $66 million, primarily as a result of the wind-down of Enterprises’ operations. |
Environmental Liabilities |
Total | ||||||||
Environmental | ||||||||
Investigation and | Portion of Total Related | |||||||
Remediation | to MGP Investigation | |||||||
March 31, 2005 | Reserve | and Remediation(a) | ||||||
Exelon
|
$ | 123 | $ | 95 | ||||
ComEd
|
60 | 54 | ||||||
PECO
|
47 | 41 | ||||||
Generation
|
16 | — |
(a) | Discounted. |
45
Total | ||||||||
Environmental | ||||||||
Investigation and | Portion of Total Related | |||||||
Remediation | to MGP Investigation | |||||||
December 31, 2004 | Reserve | and Remediation(a) | ||||||
Exelon
|
$ | 124 | $ | 96 | ||||
ComEd
|
61 | 55 | ||||||
PECO
|
47 | 41 | ||||||
Generation
|
16 | — |
(a) | Discounted. |
Litigation |
Exelon |
ComEd |
46
PECO and Generation |
Exelon, ComEd, PECO and Generation |
Income Tax Refund Claims |
47
Jointly Owned Electric Utility Plant |
48
14. | Supplemental Financial Information (Exelon, ComEd, PECO and Generation) |
Supplemental Income Statement Information |
Three Months | |||||||||
Ended | |||||||||
March 31, | |||||||||
Exelon | 2005 | 2004 | |||||||
Investment income
|
$ | 3 | $ | 2 | |||||
Gain on disposition of assets and investments, net(a)
|
2 | 2 | |||||||
Decommissioning-related activities:
|
|||||||||
Decommissioning trust fund income(b)
|
28 | 30 | |||||||
Decommissioning trust fund income — AmerGen(b)
|
13 | 11 | |||||||
Other-than-temporary impairment of decommissioning trust funds(c)
|
(7 | ) | — | ||||||
Other-than-temporary impairment of decommissioning trust
funds — AmerGen
|
(1 | ) | — | ||||||
Regulatory offset to non-operating decommissioning-related
activities(d)
|
(21 | ) | (30 | ) | |||||
Net direct financing lease income
|
5 | 5 | |||||||
Allowance for funds used during construction (AFUDC), equity
|
1 | — | |||||||
Other
|
7 | 12 | |||||||
Other, net
|
$ | 30 | $ | 32 | |||||
(a) | See Note 4 — Acquisitions and Dispositions for further discussion. Excludes gains (losses) related to Sithe and certain components of Enterprises as they are classified as discontinued operations. |
(b) | Includes investment income and realized gains and losses. | |
(c) | As both realized and unrealized losses are included as a reduction in the fair value of the investments and in the fair value of the regulatory liability, the realization of these losses associated with the former ComEd plants had no impact on Exelon’s or Generation’s results of operations or financial position. | |
(d) | Includes the elimination of non-operating decommissioning-related activity for those units that are subject to regulatory accounting, including the elimination of decommissioning trust fund income and other-than-temporary impairments for certain nuclear units. See Notes 14 and 16 of Exelon’s Notes to Consolidated Financial Statements within Exelon’s 2004 Form 10-K for more information regarding the regulatory accounting applied for certain nuclear units. |
Three Months | ||||||||
Ended | ||||||||
March 31, | ||||||||
ComEd | 2005 | 2004 | ||||||
Investment income
|
$ | 1 | $ | 1 | ||||
Gain on disposition of assets and investments, net
|
3 | 2 | ||||||
AFUDC, equity
|
1 | — | ||||||
Other
|
(1 | ) | — | |||||
Other, net
|
$ | 4 | $ | 3 | ||||
49
Three Months | ||||||||
Ended | ||||||||
March 31, | ||||||||
PECO | 2005 | 2004 | ||||||
Investment income
|
$ | 2 | $ | 1 | ||||
Other
|
(1 | ) | 1 | |||||
Other, net
|
$ | 1 | $ | 2 | ||||
Three Months | |||||||||
Ended | |||||||||
March 31, | |||||||||
Generation | 2005 | 2004 | |||||||
Decommissioning-related activities:
|
|||||||||
Decommissioning trust fund income(a)
|
$ | 28 | $ | 30 | |||||
Decommissioning trust fund income — AmerGen(a)
|
13 | 11 | |||||||
Other-than-temporary impairment of decommissioning trust funds(b)
|
(7 | ) | — | ||||||
Other-than-temporary impairment of decommissioning trust
funds — AmerGen
|
(1 | ) | — | ||||||
Regulatory offset to non-operating decommissioning-related
activities(c)
|
(21 | ) | (30 | ) | |||||
Other
|
6 | 8 | |||||||
Other, net
|
$ | 18 | $ | 19 | |||||
(a) | Includes investment income and realized gains and losses. |
(b) | As both realized and unrealized losses are included as a reduction in the fair value of the investments and in the fair value of the regulatory liability, the realization of these losses associated with the former ComEd plants had no impact on Exelon’s or Generation’s results of operations or financial position. | |
(c) | Includes the elimination of non-operating decommissioning-related activity for those units that are subject to contractual obligation accounting, including the elimination of decommissioning trust fund income including realized and unrealized gains and losses and other-than-temporary impairments for certain nuclear units. See Notes 13 and 15 of Generation’s Notes to Consolidated Financial Statements within Generation’s 2004 Form 10-K for more information regarding the contractual accounting applied for certain nuclear units. |
50
Supplemental Balance Sheet Information |
March 31, | December 31, | |||||||
ComEd | 2005 | 2004 | ||||||
Regulatory assets (liabilities)
|
||||||||
Nuclear decommissioning
|
$ | (1,382 | ) | $ | (1,433 | ) | ||
Removal costs
|
(1,022 | ) | (1,011 | ) | ||||
Reacquired debt costs and interest-rate swap settlements
|
119 | 118 | ||||||
Recoverable transition costs
|
81 | 87 | ||||||
Deferred income taxes
|
6 | 4 | ||||||
Other
|
31 | 31 | ||||||
Total
|
$ | (2,167 | ) | $ | (2,204 | ) | ||
March 31, | December 31, | |||||||
PECO | 2005 | 2004 | ||||||
Regulatory assets (liabilities)
|
||||||||
Competitive transition charge
|
$ | 3,840 | $ | 3,936 | ||||
Deferred income taxes
|
746 | 747 | ||||||
Non-pension postretirement benefits
|
50 | 52 | ||||||
Reacquired debt costs
|
40 | 42 | ||||||
MGP regulatory asset(a)
|
29 | 32 | ||||||
U.S. Department of Energy facility decommissioning
|
18 | 19 | ||||||
Nuclear decommissioning
|
(35 | ) | (46 | ) | ||||
Other
|
14 | 8 | ||||||
Long-term regulatory assets
|
4,702 | 4,790 | ||||||
Deferred energy costs (current asset)
|
36 | 71 | ||||||
Total
|
$ | 4,738 | $ | 4,861 | ||||
(a) | See Note 13 — Commitments and Contingencies for further information. |
March 31, 2005 | Exelon | ComEd | PECO | Generation | |||||||||||||
Property, plant and equipment:
|
|||||||||||||||||
Accumulated depreciation
|
$ | 7,424 | $ | 1,046 | $ | 2,148 | $ | 4,123 | |||||||||
Accounts receivable:
|
|||||||||||||||||
Allowance for uncollectible accounts
|
83 | 16 | 45 | 17 |
51
December 31, 2004 | Exelon | ComEd | PECO | Generation | ||||||||||||||
Property, plant and equipment:
|
||||||||||||||||||
Accumulated depreciation
|
$ | 7,229 | $ | 1,008 | $ | 2,165 | $ | 3,949 | ||||||||||
Accounts receivable:
|
||||||||||||||||||
Allowance for uncollectible accounts
|
93 | 16 | 52 | 19 |
15. | Segment Information (Exelon, ComEd, PECO and Generation) |
52
Three Months Ended March 31, 2005 and 2004 |
Energy | Intersegment | |||||||||||||||||||
Delivery | Generation | Other(a) | Eliminations | Consolidated | ||||||||||||||||
Total revenues:(b)
|
||||||||||||||||||||
2005
|
$ | 2,681 | $ | 2,020 | $ | 168 | $ | (1,308 | ) | $ | 3,561 | |||||||||
2004
|
2,575 | 1,946 | 161 | (1,047 | ) | 3,635 | ||||||||||||||
Intersegment revenues: | ||||||||||||||||||||
2005
|
$ | 4 | $ | 1,135 | $ | 169 | $ | (1,308 | ) | $ | — | |||||||||
2004
|
13 | 879 | 155 | (1,047 | ) | — | ||||||||||||||
Income from continuing operations before income taxes and minority interest: | ||||||||||||||||||||
2005
|
$ | 315 | $ | 495 | $ | (76 | ) | $ | — | $ | 734 | |||||||||
2004
|
500 | 119 | (62 | ) | — | 557 | ||||||||||||||
Income taxes: | ||||||||||||||||||||
2005
|
$ | 117 | $ | 191 | $ | (81 | ) | $ | — | $ | 227 | |||||||||
2004
|
185 | 46 | (72 | ) | — | 159 | ||||||||||||||
Income from continuing operations: | ||||||||||||||||||||
2005
|
$ | 198 | $ | 304 | $ | 5 | $ | — | $ | 507 | ||||||||||
2004
|
315 | 71 | 11 | — | 397 | |||||||||||||||
Discontinued operations: | ||||||||||||||||||||
2005
|
$ | — | $ | 16 | $ | (2 | ) | $ | — | $ | 14 | |||||||||
2004
|
— | (1 | ) | (16 | ) | — | (17 | ) | ||||||||||||
Cumulative effect of a change in accounting principle: | ||||||||||||||||||||
2005
|
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
2004
|
— | 32 | — | — | 32 | |||||||||||||||
Net income (loss): | ||||||||||||||||||||
2005
|
$ | 198 | $ | 320 | $ | 3 | $ | — | $ | 521 | ||||||||||
2004
|
315 | 102 | (5 | ) | — | 412 | ||||||||||||||
Total Assets: | ||||||||||||||||||||
$ | 28,394 | $ | 16,519 | $ | 13,893 | $ | (16,398 | ) | $ | 42,408 | ||||||||||
27,574 | 16,438 | 13,268 | (14,510 | ) | 42,770 |
(a) | Other consists of corporate operations, including Exelon Business Services Company (BSC), Enterprises and investments in synthetic fuel-producing facilities. |
(b) | $63 million and $62 million in utility taxes are included in the revenues and expenses for the three months ended March 31, 2005 and 2004, respectively for ComEd. $52 million and $50 million in utility taxes are included in the revenues and expenses for the three months ended March 31, 2005 and 2004, respectively, for PECO. |
53
16. | Related-Party Transactions (Exelon, ComEd, PECO and Generation) |
Exelon and ComEd |
Three Months Ended | |||||||||
March 31, | |||||||||
2005 | 2004 | ||||||||
Operating revenues from ComEd Transitional Funding Trust
|
$ | 1 | $ | — | |||||
Interest expense to financing affiliates
|
|||||||||
ComEd Transitional Funding Trust
|
19 | 24 | |||||||
ComEd Financing II
|
3 | 3 | |||||||
ComEd Financing III
|
3 | 3 | |||||||
Equity in losses from unconsolidated affiliates
|
|||||||||
ComEd Funding LLC
|
(4 | ) | (3 | ) |
March 31, | December 31, | ||||||||
2005 | 2004 | ||||||||
Receivables from affiliates (current)
|
|||||||||
ComEd Transitional Funding Trust
|
$ | 11 | $ | 9 | |||||
Investment in affiliates
|
|||||||||
ComEd Funding LLC
|
32 | 36 | |||||||
ComEd Financing II
|
10 | 10 | |||||||
ComEd Financing III
|
6 | 6 | |||||||
Receivable from affiliates (noncurrent)
|
|||||||||
ComEd Transitional Funding Trust
|
11 | 10 | |||||||
Payables to affiliates (current)
|
|||||||||
ComEd Financing II
|
3 | 6 | |||||||
ComEd Financing III
|
— | 4 | |||||||
Long-term debt to financing trusts (including due within one
year)
|
|||||||||
ComEd Transitional Funding Trust
|
1,244 | 1,341 | |||||||
ComEd Financing II
|
155 | 155 | |||||||
ComEd Financing III
|
206 | 206 |
54
Three Months Ended | |||||||||
March 31, | |||||||||
2005 | 2004 | ||||||||
Operating revenues from affiliates
|
|||||||||
Generation(a)
|
$ | 2 | $ | 10 | |||||
Enterprises(a)
|
— | 1 | |||||||
Purchased power from affiliate
|
|||||||||
PPA with Generation(b)
|
753 | 530 | |||||||
Operations & maintenance from affiliates
|
|||||||||
BSC(c)
|
44 | 41 | |||||||
Enterprises(d)
|
— | 4 | |||||||
Interest income from affiliates
|
|||||||||
UII(e)
|
— | 4 | |||||||
Exelon intercompany money pool(f)
|
2 | 1 | |||||||
Other
|
— | 1 | |||||||
Capitalized costs
|
|||||||||
BSC(c)
|
14 | 13 | |||||||
Cash dividends paid to parent
|
138 | 103 |
March 31, | December 31, | ||||||||
2005 | 2004 | ||||||||
Receivables from affiliates (current)
|
|||||||||
Exelon intercompany money pool(f)
|
$ | 101 | $ | 308 | |||||
Other
|
1 | 1 | |||||||
Receivables from affiliates (noncurrent)
|
|||||||||
Generation(g)
|
1,382 | 1,433 | |||||||
Payables to affiliates (current)
|
|||||||||
Generation decommissioning(h)
|
11 | 11 | |||||||
Generation (a, b)
|
244 | 189 | |||||||
BSC(c)
|
17 | 17 | |||||||
Payables to affiliates (noncurrent)
|
|||||||||
Generation decommissioning(h)
|
11 | 11 | |||||||
Other
|
8 | 6 | |||||||
Shareholders’ equity — receivable from parent(i)
|
— | 125 |
(a) | ComEd provides retail electric and ancillary services to Generation. ComEd provided electric and ancillary services to certain Enterprises companies which were sold in 2004. Prior to joining PJM on May 1, 2004, ComEd also provided transmission services to Generation and Enterprises. |
55
(b) | ComEd has entered into a full-requirements purchase power agreement (PPA), as amended, with Generation. See Note 15 of ComEd’s Notes to Consolidated Financial Statements within ComEd’s 2004 Form 10-K for more information regarding the PPA. | |
(c) | ComEd receives a variety of corporate support services from BSC, including legal, human resources, financial, information technology, supply management services, planning and engineering of delivery systems, management of construction, maintenance and operations of the transmission and delivery systems and management of other support services. All services are provided at cost, including applicable overhead. A portion of such services is capitalized. | |
(d) | ComEd had contracted with a subsidiary of Exelon Services (an Enterprises company) to provide energy conservation services to ComEd customers. The subsidiary was sold by Exelon in 2004. | |
(e) | ComEd had a note and interest receivable with a variable rate of the one month forward LIBOR rate plus 50 basis points from UII, LLC (successor to Unicom Investments Inc.) relating to ComEd’s December 1999 fossil plant sale. The note was paid in full during 2004. | |
(f) | ComEd participates in Exelon’s intercompany money pool. ComEd earns interest on its contributions to the money pool and pays interest on its borrowings from the money pool at a market rate of interest. | |
(g) | ComEd has a long-term receivable from Generation as a result of the nuclear decommissioning contractual construct whereby, to the extent the assets associated with decommissioning are greater than the applicable ARO at the end of decommissioning, such amounts are due back to ComEd for payment to ComEd’s customers. For further information see Note 10 of ComEd’s Notes to Consolidated Financial Statements within ComEd’s 2004 Form 10-K. | |
(h) | ComEd had a short-term and long-term payable to Generation, primarily representing ComEd’s legal requirements to remit collections of nuclear decommissioning costs from its customers to Generation. | |
(i) | ComEd had a non-interest bearing receivable from Exelon related to a corporate restructuring in 2001. The receivable was settled in 2005. |
Exelon and PECO |
Three Months Ended | |||||||||
March 31, | |||||||||
2005 | 2004 | ||||||||
Operating revenues from affiliate
|
|||||||||
PETT(a)
|
$ | 2 | $ | 2 | |||||
Interest expense to financing affiliates
|
|||||||||
PETT
|
56 | 60 | |||||||
PECO Trust III
|
2 | 2 | |||||||
PECO Trust IV
|
1 | 1 | |||||||
Equity in losses from unconsolidated affiliates
|
|||||||||
PETT
|
4 | 7 |
56
March 31, | December 31, | ||||||||
2005 | 2004 | ||||||||
Investment in affiliates
|
|||||||||
PETT
|
$ | 74 | $ | 77 | |||||
PECO Energy Capital Corp
|
4 | 4 | |||||||
PECO Trust IV
|
6 | 6 | |||||||
Payables to affiliates (current)
|
|||||||||
PECO Trust III
|
2 | 1 | |||||||
PECO Trust IV
|
2 | — | |||||||
Long-term debt to financing trusts (including due within one
year)
|
|||||||||
PETT
|
3,348 | 3,456 | |||||||
PECO Trust III
|
81 | 81 | |||||||
PECO Trust IV
|
103 | 103 |
(a) | PECO received a monthly service fee from PETT based on a percentage of the outstanding balance of all series of transition bonds. |
Three Months Ended | |||||||||
March 31, | |||||||||
2005 | 2004 | ||||||||
Operating revenues from affiliate
|
|||||||||
Generation(a)
|
$ | 2 | $ | 2 | |||||
Purchased power from affiliate
|
|||||||||
Generation(b)
|
381 | 349 | |||||||
Fuel from affiliate
|
|||||||||
Generation(c)
|
1 | — | |||||||
Operating and maintenance from affiliates
|
|||||||||
BSC(d)
|
25 | 23 | |||||||
Interest income from affiliates
|
|||||||||
Other
|
1 | — | |||||||
Capitalized costs
|
|||||||||
BSC(d)
|
6 | 4 | |||||||
Cash dividends paid to parent
|
115 | 90 |
57
March 31, | December 31, | ||||||||
2005 | 2004 | ||||||||
Receivable from affiliate (current)
|
|||||||||
Exelon intercompany money pool(e)
|
$ | — | $ | 34 | |||||
Receivable from affiliate (noncurrent)
|
|||||||||
Generation decommissioning(f)
|
35 | 46 | |||||||
Payables to affiliates (current)
|
|||||||||
Generation(b, c)
|
130 | 125 | |||||||
BSC(d)
|
21 | 20 | |||||||
Other
|
1 | — | |||||||
Shareholder’s equity — receivable from parent(g)
|
1,338 | 1,482 |
(a) | PECO provides energy to Generation for Generation’s own use. |
(b) | PECO has entered into a PPA with Generation. See Note 14 of PECO’s Notes to Consolidated Financial Statements within PECO’s 2004 Form 10-K for more information regarding the PPA. | |
(c) | Effective April 1, 2004, PECO entered into a one-year gas procurement agreement with Generation. | |
(d) | PECO receives a variety of corporate support services from BSC, including legal, human resources, financial, information technology, supply management services, planning and engineering of delivery systems, management of construction, maintenance and operations of the transmission and delivery systems and management of other support services. All services are provided at cost, including applicable overhead. A portion of such services is capitalized. | |
(e) | PECO participates in Exelon’s intercompany money pool. PECO earns interest on its contributions to the money pool at a market rate of interest. | |
(f) | PECO has a long-term receivable from Generation as a result of the nuclear decommissioning contractual construct, whereby, to the extent the assets associated with decommissioning are greater than the applicable ARO at the end of decommissioning, such amounts are due back to PECO for payment to PECO’s customers. See Note 9 of PECO’s Notes to Consolidated Financial Statements within Exelon’s 2004 Form 10-K. | |
(g) | PECO has a non-interest bearing receivable from Exelon related to the 2001 corporate restructuring. The receivable is expected to be settled over the years 2005 through 2010. |
58
Generation |
Three Months Ended | |||||||||
March 31, | |||||||||
2005 | 2004 | ||||||||
Operating revenues from affiliates
|
|||||||||
ComEd(a)
|
$ | 753 | $ | 530 | |||||
PECO(a)
|
382 | 349 | |||||||
Purchased power from affiliates
|
|||||||||
ComEd(a)
|
— | 8 | |||||||
Operating and maintenance from affiliates
|
|||||||||
ComEd(a)
|
2 | 2 | |||||||
PECO(a)
|
2 | 2 | |||||||
BSC(b)
|
64 | 61 | |||||||
Interest expense to affiliates
|
|||||||||
Exelon intercompany money pool(c)
|
2 | 1 | |||||||
Cash distribution paid to member
|
239 | 54 | |||||||
Cash contribution received from member
|
843 | — |
March 31, | December 31, | ||||||||
2005 | 2004 | ||||||||
Receivables from affiliates (current)
|
|||||||||
ComEd(a)
|
$ | 244 | $ | 189 | |||||
ComEd decommissioning(d)
|
11 | 11 | |||||||
PECO(a)
|
130 | 125 | |||||||
BSC(b)
|
1 | 7 | |||||||
Note receivable from affiliate (noncurrent)
|
|||||||||
ComEd decommissioning(d)
|
11 | 11 | |||||||
Payables to affiliates (current)
|
|||||||||
Exelon(c)
|
38 | 42 | |||||||
Notes payable to affiliates (current)
|
|||||||||
Exelon intercompany money pool(c)
|
37 | 283 | |||||||
Payables to affiliates (noncurrent)
|
|||||||||
ComEd decommissioning(e)
|
1,382 | 1,433 | |||||||
PECO decommissioning(e)
|
35 | 46 |
(a) | Generation has entered into PPAs with ComEd and PECO, as amended, to provide the full energy requirements of ComEd and PECO. Effective April 1, 2004, Generation entered into a one-year gas supply agreement with PECO. Generation purchases electric and ancillary services from ComEd and buys energy from PECO for Generation’s own use. In order to facilitate payment processing, ComEd processes certain invoice payments on behalf of Generation. |
59
Prior to joining PJM on May 1, 2004, ComEd also provided transmission services to Generation. Amounts charged by PECO and ComEd to Generation for transmission have been recorded as intercompany purchased power by Generation. |
(b) | Generation receives a variety of corporate support services from BSC, including legal, human resources, financial, information technology and supply management services. All services are provided at cost, including applicable overhead. A portion of such services is capitalized. Some third-party reimbursements due Generation are recovered through BSC. | |
(c) | Represents the outstanding balance of amounts invested in or borrowed under the intercompany money pool and other short-term obligations payable to Exelon. In order to facilitate payment processing, Exelon processes certain invoice payments on behalf of Generation. | |
(d) | Generation has a short-term and a long-term receivable from ComEd, primarily representing ComEd’s legal requirements to remit collections of nuclear decommissioning costs from its customers to Generation resulting from the 2001 corporate restructuring. | |
(e) | Generation has long-term payables to ComEd and PECO as a result of the nuclear decommissioning contractual construct whereby, to the extent the assets associated with decommissioning are greater than the applicable ARO, such amounts are due back to ComEd and PECO, as applicable, for payment to their respective customers. |
17. | Derivative Financial Instruments (Generation) |
60
Cash-Flow | Other | Proprietary | ||||||||||||||
Hedges | Derivatives | Trading | Total | |||||||||||||
Current assets
|
$ | 372 | $ | 193 | $ | 14 | $ | 579 | ||||||||
Noncurrent assets
|
140 | 35 | 141 | 316 | ||||||||||||
Total mark-to-market energy contract assets
|
$ | 512 | $ | 228 | $ | 155 | $ | 895 | ||||||||
Current liabilities
|
$ | (700 | ) | $ | (151 | ) | $ | (14 | ) | $ | (865 | ) | ||||
Noncurrent liabilities
|
(240 | ) | (30 | ) | (137 | ) | (407 | ) | ||||||||
Total mark-to-market energy contract liabilities
|
$ | (940 | ) | $ | (181 | ) | $ | (151 | ) | $ | (1,272 | ) | ||||
Total mark-to-market energy contract net assets (liabilities)
|
$ | (428 | ) | $ | 47 | $ | 4 | $ | (377 | ) | ||||||
Cash-Flow Hedges |
Total Cash-Flow | ||||
Hedge OCI Activity, | ||||
Net of Income Tax | ||||
Accumulated OCI derivative loss at January 1, 2005
|
$ | (137 | ) | |
Changes in fair value
|
(176 | ) | ||
Reclassifications from OCI to net income
|
54 | |||
Accumulated OCI derivative loss at March 31, 2005
|
$ | (259 | ) | |
61
Total Cash-Flow | ||||
Hedge OCI Activity, | ||||
Net of Income Tax | ||||
Accumulated OCI derivative loss at January 1, 2004
|
$ | (133 | ) | |
Changes in fair value
|
(266 | ) | ||
Reclassifications from OCI to net income
|
75 | |||
Exelon Energy opening balance
|
2 | |||
Accumulated OCI derivative loss at March 31, 2004
|
$ | (322 | ) | |
Other Derivatives Mark-to-Market |
62
18. | Subsequent Events (Exelon) |
63
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operation |
• | Energy Delivery, whose businesses include the purchase and regulated retail sale of electricity and distribution and transmission services by Commonwealth Edison Company (ComEd) in northern Illinois and PECO Energy Company (PECO) in southeastern Pennsylvania and the purchase and retail sale of natural gas and distribution services by PECO in the Pennsylvania counties surrounding the City of Philadelphia. | |
• | Generation, consists principally of the electric generating facilities and wholesale energy marketing operations of Exelon Generation Company, LLC (Generation), the competitive retail sales business of Exelon Energy Company and certain other generation projects. |
64
• | Proposed Merger with PSEG — On December 20, 2004, Exelon entered into an Agreement and Plan of Merger (Merger Agreement) with Public Service Enterprise Group Incorporated (PSEG), a holding company engaged through its subsidiaries in electric and gas utility businesses primarily located and serving customers in New Jersey, whereby PSEG will be merged with and into Exelon (Merger). See Note 2 of Exelon’s Notes to Consolidated Financial Statements within Exelon’s 2004 Form 10-K for further information. |
• | Sale of Sithe — On January 31, 2005, subsidiaries of Generation completed a series of transactions that resulted in Generation’s sale of its investment in Sithe. Specifically, subsidiaries of Generation closed on the acquisition of Reservoir Capital Group’s 50% interest in Sithe and the sale of 100% of Sithe to Dynegy, Inc. (Dynegy). Prior to closing on the sale to Dynegy, subsidiaries of Generation received from Sithe approximately $65 million in cash distributions. As a result of the sale, Exelon and Generation deconsolidated from their balance sheets approximately $820 million of debt and were released from approximately $125 million of credit support. Dynegy acquired $32 million of cash as part of the sale of Sithe. Additionally, Exelon has recorded $53 million of liabilities related to certain indemnifications provided to Dynegy and other liabilities directly resulting from the transaction. These liabilities were taken into account in the final determination of the net gain on sale of $21 million (before income taxes). See Note 4 of the Combined Notes to Consolidated Financial Statements for further information regarding the sale of Generation’s investment in Sithe. |
65
• | On March 7, 2005, Exelon entered into a $2 billion term loan agreement to fund pension contributions in the first quarter of 2005. Exelon expects to repay the amount outstanding primarily with the proceeds from long-term debt financing that Exelon expects will be issued later this year. See liquidity and capital resources section below for additional discussion related to the $2 billion term loan. |
• | On March 17, 2005, ComEd issued $91 million of tax-exempt long-term debt that was used to retire an equivalent amount of higher coupon tax-exempt debt. |
66
• | Exelon’s interests in synthetic fuel-producing facilities increased Exelon’s net income by $16 million and $14 million in the first quarters of 2005 and 2004, respectively. Tax credits generated by the production of synthetic fuel are subject to a phase-out provision that gradually reduces tax credits as the annual average wellhead price per barrel of domestic crude oil increases into an inflation-adjusted phase-out range. For 2004, the tax credit would have begun to phase-out when the annual average wellhead price per barrel of domestic crude oil exceeded $51.35 per barrel and would have been completely phased out when the annual average wellhead price per barrel of domestic crude oil reached $64.47 per barrel. The 2005 phase-out range will be calculated using inflation rates published in 2006 by the Internal Revenue Service. If domestic crude oil prices remain high in 2005, the tax credits and net income generated by the investments may be reduced substantially and could result in an estimated after-tax non-operating loss of $70 million in the event the tax credits are completely phased out. In the first quarter of 2005, Generation entered into certain derivatives to hedge a portion of this commodity exposure in the normal course of its trading operations. In addition, Exelon has recorded an intangible asset related to its investments in these facilities with a net carrying value of $192 million at March 31, 2005 that could become impaired if domestic crude oil prices continue to increase in the future. The subsidiaries of Exelon that hold interests in the synthetic fuel-producing facilities are subject to debt obligations related to the purchase of the facilities that have a principal balance of $205 million as of March 31, 2005. The performance of those subsidiaries with respect to these debt obligations is not guaranteed by Exelon. |
Three Months Ended March 31, 2005 Compared To Three Months Ended March 31, 2004 |
Three Months | ||||||||||||
Ended | ||||||||||||
March 31, | Favorable | |||||||||||
(Unfavorable) | ||||||||||||
2005 | 2004 | Variance | ||||||||||
Operating revenues
|
$ | 3,561 | $ | 3,635 | $ | (74 | ) | |||||
Purchased power and fuel expense
|
1,190 | 1,395 | 205 | |||||||||
Operating and maintenance expense(a)
|
949 | 979 | 30 | |||||||||
Depreciation and amortization
|
319 | 301 | (18 | ) | ||||||||
Operating income
|
931 | 771 | 160 | |||||||||
Other income and deductions
|
(197 | ) | (214 | ) | 17 | |||||||
Income from continuing operations before income taxes and
minority interest
|
734 | 557 | 177 | |||||||||
Income from continuing operations
|
507 | 397 | 110 | |||||||||
Income (loss) from discontinued operations
|
14 | (17 | ) | 31 | ||||||||
Income before cumulative effect of a change in accounting
principle
|
521 | 380 | 141 | |||||||||
Net income
|
521 | 412 | 109 | |||||||||
Diluted earnings per share
|
0.77 | 0.62 | 0.15 |
(a) | Operating and maintenance expense for the three months ended March 31, 2004 has been adjusted to reflect a reduction in net periodic postretirement benefit cost of $6 million due to the adoption of FSP FAS 106-2. See Note 1 of the Combined Notes to Consolidated Financial Statements for additional information. |
67
68
Results of Operations by Business Segment |
Net Income from Continuing Operations by Business Segment |
Three Months | ||||||||||||
Ended | ||||||||||||
March 31, | Favorable | |||||||||||
(Unfavorable) | ||||||||||||
2005 | 2004 | Variance | ||||||||||
Energy Delivery
|
$ | 198 | $ | 315 | $ | (117 | ) | |||||
Generation
|
304 | 71 | 233 | |||||||||
Other(a)
|
5 | 11 | (6 | ) | ||||||||
Total
|
$ | 507 | $ | 397 | $ | 110 | ||||||
(a) | Other consists of corporate operations, including BSC, Enterprises, investments in synthetic fuel-producing facilities and intersegment eliminations. |
Net Income (Loss) by Business Segment |
Three Months | ||||||||||||
Ended | ||||||||||||
March 31, | Favorable | |||||||||||
(Unfavorable) | ||||||||||||
2005 | 2004 | Variance | ||||||||||
Energy Delivery
|
$ | 198 | $ | 315 | $ | (117 | ) | |||||
Generation
|
320 | 102 | 218 | |||||||||
Other(a)
|
3 | (5 | ) | 8 | ||||||||
Total
|
$ | 521 | $ | 412 | $ | 109 | ||||||
(a) | Other consists of corporate operations, including BSC, Enterprises, investments in synthetic fuel-producing facilities and intersegment eliminations. |
69
Results of Operations — Energy Delivery |
Three Months | ||||||||||||||
Ended | ||||||||||||||
March 31, | Favorable | |||||||||||||
(Unfavorable) | ||||||||||||||
2005 | 2004 | Variance | ||||||||||||
Operating revenues
|
$ | 2,681 | $ | 2,575 | $ | 106 | ||||||||
Operating expenses
|
||||||||||||||
Purchased power and fuel expense
|
1,517 | 1,179 | (338 | ) | ||||||||||
Operating and maintenance(a)
|
337 | 349 | 12 | |||||||||||
Depreciation and amortization
|
233 | 227 | (6 | ) | ||||||||||
Taxes other than income
|
132 | 137 | 5 | |||||||||||
Total operating expense
|
2,219 | 1,892 | (327 | ) | ||||||||||
Operating income
|
462 | 683 | (221 | ) | ||||||||||
Other income and deductions
|
||||||||||||||
Interest expense
|
(146 | ) | (183 | ) | 37 | |||||||||
Distributions on preferred securities of subsidiaries
|
(1 | ) | (1 | ) | — | |||||||||
Equity in losses of unconsolidated affiliates
|
(8 | ) | (10 | ) | 2 | |||||||||
Other, net
|
8 | 11 | (3 | ) | ||||||||||
Total other income and deductions
|
(147 | ) | (183 | ) | 36 | |||||||||
Income before income taxes
|
315 | 500 | (185 | ) | ||||||||||
Income taxes
|
117 | 185 | 68 | |||||||||||
Net income
|
$ | 198 | $ | 315 | $ | (117 | ) | |||||||
(a) | Operating and maintenance expense for the three months ended March 31, 2004 has been adjusted to reflect a reduction in net periodic postretirement benefit cost of $3 million due to the adoption of FSP FAS 106-2. See Note 1 of the Combined Notes to Consolidated Financial Statements for additional information. |
Total | |||||||||||||||||||||
ComEd | PECO | Total | PECO | Increase | |||||||||||||||||
Electric | Electric | Electric | Gas | (Decrease) | |||||||||||||||||
Customer choice
|
$ | 14 | $ | 21 | $ | 35 | $ | — | $ | 35 | |||||||||||
Volume
|
6 | 13 | 19 | 5 | 24 | ||||||||||||||||
Rate changes and mix
|
(5 | ) | 11 | 6 | 18 | 24 | |||||||||||||||
Weather
|
(4 | ) | (8 | ) | (12 | ) | (1 | ) | (13 | ) | |||||||||||
Other
|
1 | — | 1 | — | 1 | ||||||||||||||||
Retail revenue
|
12 | 37 | 49 | 22 | 71 | ||||||||||||||||
PJM transmission
|
53 | (2 | ) | 51 | — | 51 | |||||||||||||||
T&O/ SECA rates
|
(16 | ) | 1 | (15 | ) | — | (15 | ) | |||||||||||||
Other
|
1 | 4 | 5 | (6 | ) | (1 | ) | ||||||||||||||
Wholesale and miscellaneous revenues
|
38 | 3 | 41 | (6 | ) | 35 | |||||||||||||||
Increase in operating revenues
|
$ | 50 | $ | 40 | $ | 90 | $ | 16 | $ | 106 | |||||||||||
70
ComEd | PECO | ||||||||||||||||
Three Months | Three Months | ||||||||||||||||
Ended | Ended | ||||||||||||||||
March 31, | March 31, | ||||||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||||||
Retail customers purchasing energy from an alternative electric
supplier:
|
|||||||||||||||||
Volume (GWhs)
|
4,826 | 5,200 | 687 | 1,156 | |||||||||||||
Percentage of total retail deliveries
|
22 | % | 24 | % | 7 | % | 12 | % | |||||||||
Retail customers purchasing energy from an alternative electric
supplier or the ComEd PPO:
|
|||||||||||||||||
Number of customers
|
21,300 | 20,200 | 77,800 | 302,000 | |||||||||||||
Percentage of total retail customers
|
(a | ) | (a | ) | 5 | % | 20 | % | |||||||||
Volume (GWhs)
|
7,336 | 7,112 | 687 | 1,156 | |||||||||||||
Percentage of total retail deliveries
|
34 | % | 33 | % | 7 | % | 12 | % |
(a) | Less than one percent. |
71
Total | ||||||||||||||||||||
ComEd | PECO | Total | PECO | Increase | ||||||||||||||||
Electric | Electric | Electric | Gas | (Decrease) | ||||||||||||||||
Prices
|
$ | 231 | $ | 11 | $ | 242 | $ | 18 | $ | 260 | ||||||||||
PJM transmission
|
53 | 2 | 55 | — | 55 | |||||||||||||||
Customer choice
|
9 | 21 | 30 | — | 30 | |||||||||||||||
Volume
|
7 | 3 | 10 | 4 | 14 | |||||||||||||||
PJM administrative fees
|
5 | — | 5 | — | 5 | |||||||||||||||
T&O/ SECA rates
|
(13 | ) | 3 | (10 | ) | — | (10 | ) | ||||||||||||
Weather
|
(2 | ) | (4 | ) | (6 | ) | (1 | ) | (7 | ) | ||||||||||
Other
|
(3 | ) | — | (3 | ) | (6 | ) | (9 | ) | |||||||||||
Increase in purchased power and fuel expense
|
$ | 287 | $ | 36 | $ | 323 | $ | 15 | $ | 338 | ||||||||||
72
Total | ||||||||||||
Increase | ||||||||||||
ComEd | PECO | (Decrease) | ||||||||||
Employee fringe benefits(a)
|
$ | (11 | ) | $ | (1 | ) | $ | (12 | ) | |||
Allowance for uncollectible accounts
|
(4 | ) | (4 | ) | (8 | ) | ||||||
Severance-related expenses
|
(2 | ) | (4 | ) | (6 | ) | ||||||
Pension expense(b)
|
(2 | ) | (2 | ) | (4 | ) | ||||||
Contractors
|
7 | 3 | 10 | |||||||||
Professional fees related to income tax refund claim(c)
|
2 | 9 | 11 | |||||||||
Other
|
(2 | ) | (1 | ) | (3 | ) | ||||||
Decrease in operating and maintenance expense
|
$ | (12 | ) | $ | — | $ | (12 | ) | ||||
(a) | Excludes severance-related expenses and pension expense. Reflects fewer employees compared to prior year and an adjustment in 2005 related to medical plan fees. |
(b) | Pension expense in 2005 is expected to be lower than in 2004 due in large part to significant pension plan contributions made in the first quarter of 2005. See Note 9 of the Combined Notes to Consolidated Financial Statements for additional information. | |
(c) | See Note 13 of the Combined Notes to Consolidated Financial Statements for additional information. |
73
Total | ||||||||||||
Increase | ||||||||||||
ComEd | PECO | (Decrease) | ||||||||||
Depreciation expense
|
$ | 4 | $ | 1 | $ | 5 | ||||||
Recoverable transition costs/ CTC amortization
|
(5 | ) | 9 | 4 | ||||||||
Accelerated amortization on PECO billing system
|
— | 3 | 3 | |||||||||
Other amortization expense
|
(4 | ) | (2 | ) | (6 | ) | ||||||
Increase (decrease) in depreciation and amortization expense
|
$ | (5 | ) | $ | 11 | $ | 6 | |||||
Total | ||||||||||||
Increase | ||||||||||||
ComEd | PECO | (Decrease) | ||||||||||
Reduction in real estate tax accrual in 2005(a)
|
$ | — | $ | (6 | ) | $ | (6 | ) | ||||
Other
|
(1 | ) | 2 | 1 | ||||||||
Decrease in taxes other than income
|
$ | (1 | ) | $ | (4 | ) | $ | (5 | ) | |||
(a) | Represents a $6 million reduction of a real estate tax accrual in March 2005 following the approval of a settlement between PECO and various taxing authorities related to prior year tax assessments. See Note 13 of the Combined Notes to the Financial Statements for additional information. |
74
Total | ||||||||||||
Increase | ||||||||||||
ComEd | PECO | (Decrease) | ||||||||||
Interest income on long-term receivable from UII, LLC(a)
|
$ | (4 | ) | $ | — | $ | (4 | ) | ||||
Other
|
1 | — | 1 | |||||||||
Decrease in other, net
|
$ | (3 | ) | $ | — | $ | (3 | ) | ||||
(a) | The decrease in interest income on the long-term receivable from UII, LLC resulted from this receivable being repaid near the end of 2004. |
Energy Delivery Operating Statistics and Revenue Detail |
Three Months | |||||||||||||||||
Ended | |||||||||||||||||
March 31, | |||||||||||||||||
Retail Deliveries — (in gigawatthours (GWhs))(a) | 2005 | 2004 | Variance | % Change | |||||||||||||
Full service(b)
|
|||||||||||||||||
Residential
|
10,379 | 9,757 | 622 | 6.4 | % | ||||||||||||
Small commercial & industrial
|
6,840 | 7,375 | (535 | ) | (7.3 | )% | |||||||||||
Large commercial & industrial
|
5,290 | 5,088 | 202 | 4.0 | % | ||||||||||||
Public authorities & electric railroads
|
757 | 785 | (28 | ) | (3.6 | )% | |||||||||||
Total full service
|
23,266 | 23,005 | 261 | 1.1 | % | ||||||||||||
PPO (ComEd only)
|
|||||||||||||||||
Small commercial & industrial
|
1,025 | 769 | 256 | 33.3 | % | ||||||||||||
Large commercial & industrial
|
1,485 | 1,143 | 342 | 29.9 | % | ||||||||||||
2,510 | 1,912 | 598 | 31.3 | % | |||||||||||||
Delivery only(c)
|
|||||||||||||||||
Residential
|
104 | 582 | (478 | ) | (82.1 | )% | |||||||||||
Small commercial & industrial
|
2,065 | 1,952 | 113 | 5.8 | % | ||||||||||||
Large commercial & industrial
|
3,344 | 3,822 | (478 | ) | (12.5 | )% | |||||||||||
5,513 | 6,356 | (843 | ) | (13.3 | )% | ||||||||||||
Total PPO and delivery only
|
8,023 | 8,268 | (245 | ) | (3.0 | )% | |||||||||||
Total retail deliveries
|
31,289 | 31,273 | 16 | 0.1 | % | ||||||||||||
(a) | One GWh is the equivalent of one million kilowatthours (kWh). |
(b) | Full service reflects deliveries to customers taking generation service under tariffed rates. | |
(c) | Delivery only service reflects customers electing to receive generation service from an alternative electric supplier. |
75
Three Months | |||||||||||||||||
Ended | |||||||||||||||||
March 31, | |||||||||||||||||
Electric Revenue | 2005 | 2004 | Variance | % Change | |||||||||||||
Full service(a)
|
|||||||||||||||||
Residential
|
$ | 951 | $ | 874 | $ | 77 | 8.8 | % | |||||||||
Small commercial & industrial
|
555 | 564 | (9 | ) | (1.6 | )% | |||||||||||
Large commercial & industrial
|
351 | 353 | (2 | ) | (0.6 | )% | |||||||||||
Public authorities & electric railroads
|
53 | 55 | (2 | ) | (3.6 | )% | |||||||||||
Total full service
|
1,910 | 1,846 | 64 | 3.5 | % | ||||||||||||
PPO (ComEd only)(b)
|
|||||||||||||||||
Small commercial & industrial
|
65 | 51 | 14 | 27.5 | % | ||||||||||||
Large commercial & industrial
|
79 | 61 | 18 | 29.5 | % | ||||||||||||
144 | 112 | 32 | 28.6 | % | |||||||||||||
Delivery only(c)
|
|||||||||||||||||
Residential
|
7 | 42 | (35 | ) | (83.3 | )% | |||||||||||
Small commercial & industrial
|
50 | 54 | (4 | ) | (7.4 | )% | |||||||||||
Large commercial & industrial
|
43 | 51 | (8 | ) | (15.7 | )% | |||||||||||
100 | 147 | (47 | ) | (32.0 | )% | ||||||||||||
Total PPO and delivery only
|
244 | 259 | (15 | ) | (5.8 | )% | |||||||||||
Total electric retail revenues
|
2,154 | 2,105 | 49 | 2.3 | % | ||||||||||||
Wholesale and miscellaneous revenue(d)
|
167 | 126 | 41 | 32.5 | % | ||||||||||||
Total electric and other revenue
|
$ | 2,321 | $ | 2,231 | $ | 90 | 4.0 | % | |||||||||
(a) | Full service revenue reflects deliveries to customers taking electric service under tariffed rates, which include the cost of energy and the delivery cost of the transmission and the distribution of the energy. PECO’s tariffed rates also include a CTC. See Note 5 of Exelon’s Notes to Consolidated Financial Statements within Exelon’s 2004 Form 10-K for further information regarding CTC. |
(b) | Revenues from customers choosing ComEd’s PPO include an energy charge at market rates, transmission and distribution charges, and a CTC. | |
(c) | Delivery only revenue reflects revenue under tariffed rates from customers electing to receive generation service from an alternative electric supplier, which rates include a distribution charge and a CTC. Prior to ComEd’s full integration into PJM on May 1, 2004, ComEd’s transmission charges received from alternative electric suppliers were included in wholesale and miscellaneous revenue. | |
(d) | Wholesale and miscellaneous revenues include transmission revenue (including revenue from PJM), sales to municipalities and other wholesale energy sales. |
76
ComEd Electric Operating Statistics and Revenue Detail |
Three Months | |||||||||||||||||
Ended | |||||||||||||||||
March 31, | |||||||||||||||||
Retail Deliveries — (in GWhs)(a) | 2005 | 2004 | Variance | % Change | |||||||||||||
Full service(b)
|
|||||||||||||||||
Residential
|
7,111 | 7,013 | 98 | 1.4 | % | ||||||||||||
Small commercial & industrial
|
5,108 | 5,691 | (583 | ) | (10.2 | )% | |||||||||||
Large commercial & industrial
|
1,780 | 1,471 | 309 | 21.0 | % | ||||||||||||
Public authorities & electric railroads
|
530 | 556 | (26 | ) | (4.7 | )% | |||||||||||
Total full service
|
14,529 | 14,731 | (202 | ) | (1.4 | )% | |||||||||||
Delivery only(c)
|
|||||||||||||||||
Small commercial & industrial
|
1,668 | 1,528 | 140 | 9.2 | % | ||||||||||||
Large commercial & industrial
|
3,158 | 3,672 | (514 | ) | (14.0 | )% | |||||||||||
4,826 | 5,200 | (374 | ) | (7.2 | )% | ||||||||||||
PPO
|
|||||||||||||||||
Small commercial & industrial
|
1,025 | 769 | 256 | 33.3 | % | ||||||||||||
Large commercial & industrial
|
1,485 | 1,143 | 342 | 29.9 | % | ||||||||||||
2,510 | 1,912 | 598 | 31.3 | % | |||||||||||||
Total delivery only and PPO
|
7,336 | 7,112 | 224 | 3.1 | % | ||||||||||||
Total retail deliveries
|
21,865 | 21,843 | 22 | 0.1 | % | ||||||||||||
(a) | One GWh is the equivalent of one million kWh. |
(b) | Full service reflects deliveries to customers taking electric service under tariffed rates. | |
(c) | Delivery only revenue reflects revenue from customers electing to receive generation service from an alternative electric supplier. |
77
Three Months | |||||||||||||||||
Ended | |||||||||||||||||
March 31, | |||||||||||||||||
Electric Revenue | 2005 | 2004 | Variance | % Change | |||||||||||||
Full service(a)
|
|||||||||||||||||
Residential
|
$ | 565 | $ | 560 | $ | 5 | 0.9 | % | |||||||||
Small commercial & industrial
|
371 | 388 | (17 | ) | (4.4 | )% | |||||||||||
Large commercial & industrial
|
88 | 83 | 5 | 6.0 | % | ||||||||||||
Public authorities & electric railroads
|
33 | 35 | (2 | ) | (5.7 | )% | |||||||||||
Total full service
|
1,057 | 1,066 | (9 | ) | (0.8 | )% | |||||||||||
Delivery only(b)
|
|||||||||||||||||
Small commercial & industrial
|
32 | 34 | (2 | ) | (5.9 | )% | |||||||||||
Large commercial & industrial
|
38 | 47 | (9 | ) | (19.1 | )% | |||||||||||
70 | 81 | (11 | ) | (13.6 | )% | ||||||||||||
PPO(c)
|
|||||||||||||||||
Small commercial & industrial
|
65 | 51 | 14 | 27.5 | % | ||||||||||||
Large commercial & industrial
|
79 | 61 | 18 | 29.5 | % | ||||||||||||
144 | 112 | 32 | 28.6 | % | |||||||||||||
Total delivery only and PPO
|
214 | 193 | 21 | 10.9 | % | ||||||||||||
Total electric retail revenues
|
1,271 | 1,259 | 12 | 1.0 | % | ||||||||||||
Wholesale and miscellaneous revenue(d)
|
115 | 77 | 38 | 49.4 | % | ||||||||||||
Total operating revenues
|
$ | 1,386 | $ | 1,336 | $ | 50 | 3.7 | % | |||||||||
(a) | Full service revenue reflects deliveries to customers taking electric service under tariffed rates, which include the cost of energy and the delivery cost of the transmission and the distribution of the energy. |
(b) | Delivery only revenues reflect revenue under tariff rates from customers electing to receive generation service from an alternative electric supplier, which includes a distribution charge and a CTC. Prior to ComEd’s full integration into PJM on May 1, 2004, ComEd’s transmission charges received from alternative electric suppliers were included in wholesale and miscellaneous revenue. | |
(c) | Revenues from customers choosing the PPO include an energy charge at market rates, transmission and distribution charges, and a CTC. | |
(d) | Wholesale and miscellaneous revenues include transmission revenue (including revenue from PJM), sales to municipalities and other wholesale energy sales. |
78
PECO Electric Operating Statistics and Revenue Detail |
Three Months | |||||||||||||||||
Ended | |||||||||||||||||
March 31, | |||||||||||||||||
Retail Deliveries — (in GWhs) | 2005 | 2004 | Variance | % Change | |||||||||||||
Full service(a)
|
|||||||||||||||||
Residential
|
3,268 | 2,744 | 524 | 19.1 | % | ||||||||||||
Small commercial & industrial
|
1,732 | 1,684 | 48 | 2.9 | % | ||||||||||||
Large commercial & industrial
|
3,510 | 3,617 | (107 | ) | (3.0 | )% | |||||||||||
Public authorities & electric railroads
|
227 | 229 | (2 | ) | (0.9 | )% | |||||||||||
Total full service
|
8,737 | 8,274 | 463 | 5.6 | % | ||||||||||||
Delivery only(b)
|
|||||||||||||||||
Residential
|
104 | 582 | (478 | ) | (82.1 | )% | |||||||||||
Small commercial & industrial
|
397 | 424 | (27 | ) | (6.4 | )% | |||||||||||
Large commercial & industrial
|
186 | 150 | 36 | 24.0 | % | ||||||||||||
Total delivery only
|
687 | 1,156 | (469 | ) | (40.6 | )% | |||||||||||
Total retail deliveries
|
9,424 | 9,430 | (6 | ) | (0.1 | )% | |||||||||||
(a) | Full service reflects deliveries to customers taking electric service under tariffed rates. |
(b) | Delivery only service reflects customers receiving electric generation service from an alternative electric supplier. |
Three Months | |||||||||||||||||
Ended | |||||||||||||||||
March 31, | |||||||||||||||||
Electric Revenue | 2005 | 2004 | Variance | % Change | |||||||||||||
Full service(a)
|
|||||||||||||||||
Residential
|
$ | 386 | $ | 314 | $ | 72 | 22.9 | % | |||||||||
Small commercial & industrial
|
184 | 176 | 8 | 4.5 | % | ||||||||||||
Large commercial & industrial
|
263 | 270 | (7 | ) | (2.6 | )% | |||||||||||
Public authorities & electric railroads
|
20 | 20 | — | — | |||||||||||||
Total full service
|
853 | 780 | 73 | 9.4 | % | ||||||||||||
Delivery only(b)
|
|||||||||||||||||
Residential
|
7 | 42 | (35 | ) | (83.3 | )% | |||||||||||
Small commercial & industrial
|
18 | 20 | (2 | ) | (10.0 | )% | |||||||||||
Large commercial & industrial
|
5 | 4 | 1 | 25.0 | % | ||||||||||||
Total delivery only
|
30 | 66 | (36 | ) | (54.5 | )% | |||||||||||
Total electric retail revenues
|
883 | 846 | 37 | 4.4 | % | ||||||||||||
Wholesale and miscellaneous revenue(c)
|
52 | 49 | 3 | 6.1 | % | ||||||||||||
Total electric and other revenue
|
$ | 935 | $ | 895 | $ | 40 | 4.5 | % | |||||||||
(a) | Full service revenue reflects revenue from customers taking electric service under tariffed rates, which includes the cost of energy, the delivery cost of the transmission and the distribution of the energy and a CTC. |
(b) | Delivery only revenue reflects revenue from customers receiving generation service from an alternative electric supplier, which includes a distribution charge and a CTC. | |
(c) | Wholesale and miscellaneous revenues include transmission revenue from PJM and other wholesale energy sales. |
79
Energy Delivery’s and PECO’s Gas Sales Statistics and Revenue Detail |
Three Months | ||||||||||||||||
Ended | ||||||||||||||||
March 31, | ||||||||||||||||
Deliveries to customers (in million cubic feet (mmcf)) | 2005 | 2004 | Variance | % Change | ||||||||||||
Retail sales
|
30,134 | 29,803 | 331 | 1.1 | % | |||||||||||
Transportation
|
7,545 | 7,132 | 413 | 5.8 | % | |||||||||||
Total
|
37,679 | 36,935 | 744 | 2.0 | % | |||||||||||
Three Months | ||||||||||||||||
Ended | ||||||||||||||||
March 31, | ||||||||||||||||
Revenue | 2005 | 2004 | Variance | % Change | ||||||||||||
Retail sales
|
$ | 350 | $ | 328 | $ | 22 | 6.7 | % | ||||||||
Transportation
|
5 | 5 | — | — | ||||||||||||
Resales and other
|
5 | 11 | (6 | ) | (54.5 | )% | ||||||||||
Total gas revenue
|
$ | 360 | $ | 344 | $ | 16 | 4.7 | % | ||||||||
80
Three Months | ||||||||||||||
Ended | ||||||||||||||
March 31, | ||||||||||||||
Favorable | ||||||||||||||
2005 | 2004 | (Unfavorable) | ||||||||||||
Operating revenues
|
$ | 2,020 | $ | 1,946 | $ | 74 | ||||||||
Operating expenses
|
||||||||||||||
Purchased power
|
450 | 530 | 80 | |||||||||||
Fuel
|
358 | 568 | 210 | |||||||||||
Operating and maintenance(a)
|
609 | 618 | 9 | |||||||||||
Depreciation and amortization
|
62 | 55 | (7 | ) | ||||||||||
Taxes other than income
|
35 | 47 | 12 | |||||||||||
Total operating expenses
|
1,514 | 1,818 | 304 | |||||||||||
Operating income
|
506 | 128 | 378 | |||||||||||
Other income and deductions
|
||||||||||||||
Interest expense
|
(29 | ) | (26 | ) | (3 | ) | ||||||||
Equity in losses of unconsolidated affiliates
|
— | (2 | ) | 2 | ||||||||||
Other, net
|
18 | 19 | (1 | ) | ||||||||||
Total other income and deductions
|
(11 | ) | (9 | ) | (2 | ) | ||||||||
Income from continuing operations before income taxes and
minority interest
|
495 | 119 | 376 | |||||||||||
Income taxes
|
191 | 46 | (145 | ) | ||||||||||
Income from continuing operations before minority interest
|
304 | 73 | 231 | |||||||||||
Minority interest
|
— | (2 | ) | 2 | ||||||||||
Income from continuing operations
|
304 | 71 | 233 | |||||||||||
Discontinued operations
|
||||||||||||||
Loss from discontinued operations
|
(1 | ) | (1 | ) | — | |||||||||
Gain on disposal of discontinued operations
|
21 | — | 21 | |||||||||||
Income taxes
|
4 | — | (4 | ) | ||||||||||
Income (loss) on discontinued operations
|
16 | (1 | ) | 17 | ||||||||||
Income before cumulative effect of a change in accounting
principle
|
320 | 70 | 250 | |||||||||||
Cumulative effect of a change in accounting principle (net of
income taxes of $22 million for the three months ended
March 31, 2004)
|
— | 32 | (32 | ) | ||||||||||
Net income
|
$ | 320 | $ | 102 | $ | 218 | ||||||||
(a) | Operating and maintenance expense for the three months ended March 31, 2004 has been adjusted to reflect a reduction in net periodic postretirement benefit cost of $3 million due to the adoption of FSP FAS 106-2. See Note 1 of the Combined Notes to Consolidated Financial Statements for additional information. |
81
Three Months | ||||||||||||||||
Ended | ||||||||||||||||
March 31, | ||||||||||||||||
Revenue | 2005 | 2004 | Variance | % Change | ||||||||||||
Electric sales to affiliates
|
$ | 1,118 | $ | 860 | $ | 258 | 30.0 | % | ||||||||
Wholesale and retail electric sales
|
660 | 884 | (224 | ) | (25.3 | )% | ||||||||||
Total energy sales revenue
|
1,778 | 1,744 | 34 | 1.9 | % | |||||||||||
Retail gas sales
|
189 | 169 | 20 | 11.8 | % | |||||||||||
Trading portfolio
|
6 | — | 6 | n.m. | ||||||||||||
Other revenue(a)
|
47 | 33 | 14 | 42.4 | % | |||||||||||
Total revenue
|
$ | 2,020 | $ | 1,946 | $ | 74 | 3.8 | % | ||||||||
(a) | Includes sales related to tolling agreements and fossil fuel sales. |
Three Months | ||||||||||||||||
Ended | ||||||||||||||||
March 31, | ||||||||||||||||
Sales (in GWhs) | 2005 | 2004 | Variance | % Change | ||||||||||||
Electric sales to affiliates
|
28,453 | 27,464 | 989 | 3.6 | % | |||||||||||
Wholesale and retail electric sales
|
17,010 | 23,983 | (6,973 | ) | (29.1 | )% | ||||||||||
Total sales
|
45,463 | 51,447 | (5,984 | ) | (11.6 | )% | ||||||||||
Increase | ||||
(Decrease) | ||||
Sale of Boston Generating(a)
|
$ | (152 | ) | |
Volume
|
(130 | ) | ||
Price
|
58 | |||
Decrease in wholesale and retail electric sales
|
$ | (224 | ) | |
(a) | Sales of Boston Generating of $7 million were included in other revenues for 2004. |
82
Three Months | ||||||||||||||||
Ended | ||||||||||||||||
March 31, | ||||||||||||||||
Supply Source (in GWhs) | 2005 | 2004 | Variance | % Change | ||||||||||||
Nuclear generation
|
32,780 | 33,411 | (631 | ) | (1.9 | )% | ||||||||||
Purchases — non-trading portfolio
|
9,546 | 11,691 | (2,145 | ) | (18.3 | )% | ||||||||||
Fossil and hydroelectric generation(a)
|
3,137 | 6,345 | (3,208 | ) | (50.6 | )% | ||||||||||
Total supply
|
45,463 | 51,447 | (5,984 | ) | (11.6 | )% | ||||||||||
(a) | Fossil and hydroelectric supply mix changed as a result of decreased fossil fuel generation due to the sale of Boston Generating in May 2004. |
Increase | ||||
(Decrease) | ||||
Boston Generating
|
$ | (150 | ) | |
Mark-to-market adjustments on economic hedges
|
(102 | ) | ||
Volume
|
(75 | ) | ||
Price
|
56 | |||
Other
|
(19 | ) | ||
Decrease in purchased power and fuel expense
|
$ | (290 | ) | |
83
Three Months | |||||||||||||
Ended | |||||||||||||
March 31, | |||||||||||||
($/MWh) | 2005 | 2004 | % Change | ||||||||||
Average electric revenue
|
|||||||||||||
Electric sales to affiliates
|
$ | 39.29 | $ | 31.31 | 25.5 | % | |||||||
Wholesale and retail electric sales
|
38.80 | 36.86 | 5.3 | % | |||||||||
Total — excluding the trading portfolio
|
39.11 | 33.90 | 15.4 | % | |||||||||
Average electric supply cost(a) — excluding the
trading portfolio
|
$ | 13.84 | $ | 18.17 | (23.8 | )% | |||||||
Average margin — excluding the trading portfolio
|
$ | 25.27 | $ | 15.73 | 60.6 | % |
(a) | Average supply cost includes purchased power and fuel costs associated with electric sales. Average electric supply cost does not include purchased power and fuel costs associated with retail gas sales. |
Increase | ||||
(Decrease) | ||||
Boston Generating
|
$ | (28 | ) | |
Addition of Tamuin International
|
15 | |||
Other
|
4 | |||
Decrease in operating and maintenance expense
|
$ | (9 | ) | |
Three Months | ||||||||
Ended | ||||||||
March 31, | ||||||||
2005 | 2004 | |||||||
Nuclear fleet capacity factor(a)
|
89.9 | % | 90.5 | % | ||||
Nuclear fleet production cost per MWh(a)
|
$ | 14.64 | $ | 14.29 | ||||
Average purchased power cost for wholesale operations per MWh
|
$ | 47.14 | $ | 45.33 |
(a) | Excludes Salem, which is operated by Public Service Enterprise Group Incorporated (PSEG). |
84
85
Three Months | ||||||||||||
Ended | ||||||||||||
March 31, | ||||||||||||
2005 | 2004 | Variance | ||||||||||
Net income
|
$ | 521 | $ | 412 | $ | 109 | ||||||
Non-cash operating activities(a)
|
1,125 | 506 | 619 | |||||||||
Income taxes
|
(344 | ) | 180 | (524 | ) | |||||||
Changes in working capital and other noncurrent assets and
liabilities(b)
|
(349 | ) | (156 | ) | (193 | ) | ||||||
Pension and postretirement healthcare benefit payments
|
(1,962 | ) | (93 | ) | (1,869 | ) | ||||||
Net cash flows (used in) provided by operations
|
$ | (1,009 | ) | $ | 849 | $ | (1,858 | ) | ||||
(a) | Represents depreciation, amortization and accretion, deferred income taxes, cumulative effect of a change in accounting principle, impairment of investments and long-lived assets and other non-cash charges. |
(b) | Changes in working capital and other noncurrent assets and liabilities exclude the changes in commercial paper, income taxes and the current portion of long-term debt. |
86
Three Months | ||||||||
Ended | ||||||||
March 31, | ||||||||
2005 | 2004 | |||||||
ComEd
|
$ | (543 | ) | $ | 298 | |||
PECO
|
72 | 217 | ||||||
Generation
|
(238 | ) | 202 | |||||
Other and eliminations
|
(300 | ) | 132 | |||||
Exelon cash flows (used in) provided by operating activities
|
$ | (1,009 | ) | $ | 849 | |||
Exelon |
• | In January 2005, Exelon received a $102 million Federal income tax refund for capital losses generated in 2003 related to its investment in Sithe, which were carried back to prior periods. |
ComEd, PECO and Generation |
• | There were no significant non-recurring operating cash flows during the periods ended March 31, 2005 and 2004. |
Three Months | ||||||||
Ended | ||||||||
March 31, | ||||||||
2005 | 2004 | |||||||
ComEd
|
$ | 21 | $ | 25 | ||||
PECO
|
(23 | ) | (48 | ) | ||||
Generation
|
(298 | ) | (152 | ) | ||||
Other and eliminations
|
(266 | ) | (196 | ) | ||||
Exelon cash flows used in investing activities
|
$ | (566 | ) | $ | (371 | ) | ||
87
Three Months | ||||||||||||
Ended | ||||||||||||
March 31, | Projected | |||||||||||
2005 | 2004 | 2005 | ||||||||||
ComEd
|
$ | 184 | $ | 177 | $ | 742 | ||||||
PECO
|
56 | 47 | 281 | |||||||||
Energy Delivery
|
240 | 224 | 1,023 | |||||||||
Generation
|
247 | 213 | 1,073 | |||||||||
Other(a)
|
2 | — | 56 | |||||||||
Total Exelon capital expenditures
|
$ | 489 | $ | 437 | $ | 2,152 | ||||||
(a) | Other primarily consists of corporate operations. |
Exelon |
• | Exelon contributed $28 million and $8 million to its investments in synthetic fuel-producing facilities during the three months ended March 31, 2005 and 2004, respectively. |
ComEd |
• | As a result of its prior contributions to the Exelon intercompany money pool, $207 million and $179 million were returned to ComEd during the three months ended March 31, 2005 and 2004, respectively. |
PECO |
• | As a result of its prior contributions to the Exelon intercompany money pool, $34 million was returned to PECO during the three months ended March 31, 2005. |
Generation |
• | On January 31, 2005, subsidiaries of Generation completed a series of transactions that resulted in Generation’s sale of its investment in Sithe. Specifically, subsidiaries of Generation closed on the acquisition of Reservoir Capital Group’s 50% interest in Sithe for cash proceeds of $97 million and the |
88
sale of 100% of Sithe to Dynegy, for net cash proceeds of $103 million. See Note 4 of the Combined Notes to Consolidated Financial Statements for further discussion of the sale of Sithe. | ||
• | On March 31, 2004, Generation consolidated the assets and liabilities of Sithe under the provisions of FIN 46-R, which resulted in an increase in cash of $19 million. See Note 1 and Note 4 of the Combined Notes to Consolidated Financial Statements for further information regarding the FIN 46-R consolidation of Sithe. | |
• | Generation received cash proceeds of $42 million from the January 2004 sale of three gas turbines that were classified as assets held for sale at December 31, 2003. | |
• | During the three months ended March 31, 2004, Generation used $53 million of restricted cash to support the operations of Boston Generating. |
Three Months | ||||||||
Ended | ||||||||
March 31, | ||||||||
2005 | 2004 | |||||||
ComEd
|
$ | 597 | $ | (341 | ) | |||
PECO
|
(48 | ) | (107 | ) | ||||
Generation
|
357 | (108 | ) | |||||
Other and eliminations
|
530 | 84 | ||||||
Exelon cash flows provided by (used in) financing activities
|
$ | 1,436 | $ | (472 | ) | |||
Three Months | ||||||||
Ended | ||||||||
March 31, | ||||||||
2005 | 2004 | |||||||
Exelon
|
$ | 267 | $ | 181 | ||||
ComEd
|
138 | 103 | ||||||
PECO
|
116 | 91 | ||||||
Generation
|
239 | 54 |
89
Outstanding | ||||||||||||
Bank | Available | Commercial | ||||||||||
Borrower | Sublimit(a) | Capacity(b) | Paper | |||||||||
Exelon Corporate
|
$ | 700 | $ | 700 | $ | 290 | ||||||
ComEd
|
50 | 24 | — | |||||||||
PECO
|
300 | 300 | 36 | |||||||||
Generation
|
450 | 354 | — |
(a) | Sublimits under the credit agreements can change upon written notification to the bank group. |
(b) | Available capacity represents primarily the bank sublimit net of outstanding letters of credit. The amount of commercial paper outstanding does not reduce the available capacity under the credit agreements. |
Exelon | ComEd | PECO | Generation | |||||||||||||
Credit agreement threshold
|
2.65 to 1 | 2.25 to 1 | 2.25 to 1 | 3.25 to 1 |
90
Exelon | ||||||||||||||||
Consolidated | ComEd | PECO(a) | Generation | |||||||||||||
Long-term debt
|
29 | % | 26 | % | 19 | % | 32 | % | ||||||||
Long-term debt to affiliates(b)
|
21 | 13 | 56 | — | ||||||||||||
Common equity
|
40 | 61 | 23 | — | ||||||||||||
Member’s equity
|
— | — | — | 67 | ||||||||||||
Preferred securities
|
— | — | 1 | — | ||||||||||||
Notes payable(c)
|
10 | — | 1 | 1 | ||||||||||||
Minority interest
|
— | — | — | — |
(a) | As of March 31, 2005, PECO’s capital structure, excluding the deduction from shareholders’ equity of the $1.3 billion receivable from Exelon (which amount is deducted for GAAP purposes as reflected in the table, but is excluded from the percentages in this footnote), consisted of 37% common equity, 1% preferred securities and 62% long-term debt, including long-term debt to unconsolidated affiliates. |
(b) | Includes $5 billion, $2 billion and $4 billion owed to unconsolidated affiliates of Exelon, ComEd and PECO, respectively, that qualify as special purpose entities under FIN 46-R. These special purpose entities were created for the sole purpose of issuing debt obligations to securitize intangible transition property and CTCs of Energy Delivery or mandatorily redeemable preferred securities. See Note 1 of the Exelon’s Notes to Consolidated Financial Statements within Exelon’s 2004 Form 10-K for further information regarding FIN 46-R. | |
(c) | Does not include $2 billion of Exelon’s short-term debt that will be refinanced primarily with long-term debt by the end of 2005. See Note 7 of the Combined Notes to Consolidated Financial Statements for additional information regarding the $2 billion term loan agreement. |
March 31, | ||||||||||||
2005 | ||||||||||||
Maximum | Maximum | Contributed | ||||||||||
Invested | Borrowed | (Borrowed) | ||||||||||
ComEd
|
$ | 517 | $ | — | $ | 101 | ||||||
PECO
|
210 | — | — | |||||||||
Generation
|
— | 540 | (37 | ) | ||||||||
BSC
|
— | 156 | (64 | ) | ||||||||
UII, LLC
|
2 | — | — |
91
For the | ||||||||
Three Months | ||||||||
Ended | ||||||||
March 31, 2005 | ||||||||
Interest | Interest | |||||||
Received | Paid | |||||||
ComEd
|
$ | 2 | $ | — | ||||
PECO
|
1 | — | ||||||
Generation
|
— | 2 | ||||||
BSC
|
— | 1 | ||||||
UII, LLC
|
— | — |
92
Exelon |
• | Interest payments of $71 million, $132 million, $115 million and $849 million for payments due in 2005, 2006-2007, 2008-2009 and 2010 and beyond, respectively were eliminated due to the sale of Sithe on January 31, 2005. See Note 4 of the Combined Notes to Consolidated Financial Statements for information regarding the sale of Generation’s investment in Sithe. | |
• | Letters of credit decreased $86 million, primarily as a result of the sale of Sithe. See Note 4 of the Combined Notes to Consolidated Financial Statements for further discussion. Guarantees decreased $66 million, primarily as a result of the wind-down of Enterprises’ operations. |
ComEd and PECO |
• | IRS Refund Claims. ComEd and PECO had entered into several agreements with a tax consultant related to the filing of refund claims with the IRS. ComEd and PECO previously made refundable prepayments to the tax consultants of $11 million and $5 million, respectively. The fees for these agreements are contingent upon a successful outcome of the claims and are based upon a percentage of the refunds recovered from the IRS, if any. These potential tax benefits and associated fees could be material to the financial position, results of operations and cash flows of ComEd and PECO. A portion of ComEd’s tax benefits, including any associated interest for periods prior to the merger among PECO, Unicom Corporation (Unicom), the former parent company of ComEd, and Exelon (PECO/ Unicom Merger) would be recorded as a reduction of goodwill pursuant to a reallocation of the PECO/ Unicom Merger purchase price. ComEd and PECO cannot predict the timing of the final resolution of these refund claims. |
In 2004, the IRS granted preliminary approval for one of ComEd’s refund claims and final approval was obtained in the first quarter of 2005. The investment tax credit refund and associated interest have been recorded in the financial statements. Approximately $14 million of tax and interest benefit is reflected in the financial statements of which $12 million ($9 million after-tax) was recorded to goodwill under the provisions of EITF Issue 93-7, “Uncertainties Related to Income Taxes in a Purchase Business Combination.” As a result, in 2005 ComEd recorded an additional consulting expense of $2 million (pre-tax). This amount along with the $5 million (pre-tax) expense recorded in 2004 resulted in a decrease to the prepayment from $11 million to $4 million. The charges represent an estimate of the fee to the tax consultant which may be adjusted upward or downward depending on the IRS’ final calculation of the interest benefit. | |
Based on recent negotiations with the IRS, PECO believes it will receive a refund related to one of its claims. As of March 31, 2005, PECO had not reflected the tax benefit associated with the refund claim pending final approval of the IRS. During the first quarter of 2005, PECO eliminated its prepaid tax consultant fee and recorded an additional accrual of $4 million resulting in a total pre-tax charge of $9 million. The charge represents an estimate of the fee to the tax consultant which may be adjusted upward or downward depending on the final resolution of the matter with the IRS. |
93
Generation |
• | Interest payments of $71 million, $132 million, $115 million and $849 million for payments due in 2005, 2006-2007, 2008-2009 and 2010 and beyond, respectively were eliminated due to the sale of Sithe on January 31, 2005. See Note 4 of the Combined Notes to Consolidated Financial Statements for information regarding the sale of Generation’s investment in Sithe. | |
• | Letters of credit decreased $87 million, primarily as a result of the sale of Sithe. Guarantees decreased $18 million, primarily as a result of the sale of Sithe. See Note 4 of the Combined Notes to Consolidated Financial Statements for further discussion. |
94
General |
Executive Overview |
Results of Operations |
Three Months Ended March 31, 2005 Compared to Three Months Ended March 31, 2004 |
Three Months | ||||||||||||||
Ended | ||||||||||||||
March 31, | Favorable | |||||||||||||
(Unfavorable) | ||||||||||||||
2005 | 2004 | Variance | ||||||||||||
Operating revenues
|
$ | 1,386 | $ | 1,336 | $ | 50 | ||||||||
Operating expenses
|
||||||||||||||
Purchased power
|
820 | 533 | (287 | ) | ||||||||||
Operating and maintenance(a)
|
203 | 215 | 12 | |||||||||||
Depreciation and amortization
|
97 | 102 | 5 | |||||||||||
Taxes other than income
|
78 | 79 | 1 | |||||||||||
Total operating expense
|
1,198 | 929 | (269 | ) | ||||||||||
Operating income
|
188 | 407 | (219 | ) | ||||||||||
Other income and deductions
|
||||||||||||||
Interest expense
|
(74 | ) | (106 | ) | 32 | |||||||||
Equity in losses of unconsolidated affiliates
|
(4 | ) | (3 | ) | (1 | ) | ||||||||
Other, net
|
6 | 9 | (3 | ) | ||||||||||
Total other income and deductions
|
(72 | ) | (100 | ) | 28 | |||||||||
Income before income taxes
|
116 | 307 | (191 | ) | ||||||||||
Income taxes
|
46 | 123 | 77 | |||||||||||
Net income
|
$ | 70 | $ | 184 | $ | (114 | ) | |||||||
(a) | Operating and maintenance expense for the three months ended March 31, 2004 has been adjusted to reflect a reduction in net periodic postretirement benefit cost of $2 million due to the adoption of FSP FAS 106-2. See Note 1 of the Combined Notes to Consolidated Financial Statements for additional information. |
Net Income |
95
Cash Flows from Operating Activities |
Cash Flows from Investing Activities |
Cash Flows from Financing Activities |
Credit Matters |
Contractual Obligations, Commercial Commitments and Off-Balance Sheet Obligations |
96
General |
Executive Overview |
Results of Operations |
Three Months Ended March 31, 2005 Compared to Three Months Ended March 31, 2004 |
Three Months | ||||||||||||||
Ended | ||||||||||||||
March 31, | Favorable | |||||||||||||
(Unfavorable) | ||||||||||||||
2005 | 2004 | Variance | ||||||||||||
Operating revenues
|
$ | 1,295 | $ | 1,239 | $ | 56 | ||||||||
Operating expenses
|
||||||||||||||
Purchased power
|
432 | 396 | (36 | ) | ||||||||||
Fuel
|
265 | 250 | (15 | ) | ||||||||||
Operating and maintenance(a)
|
134 | 134 | — | |||||||||||
Depreciation and amortization
|
136 | 125 | (11 | ) | ||||||||||
Taxes other than income
|
54 | 58 | 4 | |||||||||||
Total operating expenses
|
1,021 | 963 | (58 | ) | ||||||||||
Operating income
|
274 | 276 | (2 | ) | ||||||||||
Other income and deductions
|
||||||||||||||
Interest expense
|
(72 | ) | (77 | ) | 5 | |||||||||
Equity in losses of unconsolidated affiliates
|
(4 | ) | (7 | ) | 3 | |||||||||
Other, net
|
2 | 2 | — | |||||||||||
Total other income and deductions
|
(74 | ) | (82 | ) | 8 | |||||||||
Income before income taxes
|
200 | 194 | 6 | |||||||||||
Income taxes
|
71 | 62 | (9 | ) | ||||||||||
Net income
|
129 | 132 | (3 | ) | ||||||||||
Preferred stock dividends
|
1 | 1 | — | |||||||||||
Net income on common stock
|
$ | 128 | $ | 131 | $ | (3 | ) | |||||||
(a) | Operating and maintenance expense for the three months ended March 31, 2004 has been adjusted to reflect a reduction in net periodic postretirement benefit cost of $1 million due to the adoption of FSP FAS 106-2. See Note 1 of the Combined Notes to Consolidated Financial Statements for additional information. |
Net Income |
97
Cash Flows from Operating Activities |
Cash Flows from Investing Activities |
Cash Flows from Financing Activities |
Credit Matters |
Contractual Obligations, Commercial Commitments and Off-Balance Sheet Obligations |
98
General |
Executive Overview |
Results of Operations |
Three Months Ended March 31, 2005 Compared to Three Months Ended March 31, 2004 |
Cash Flows from Operating Activities |
Cash Flows from Investing Activities |
Cash Flows from Financing Activities |
99
Credit Matters |
Contractual Obligations, Commercial Commitments and Off-Balance Sheet Obligations |
100
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Generation |
Normal Operations and Hedging Activities |
101
Proprietary Trading Activities |
Total | ||||
Total mark-to-market energy contract net liabilities at
January 1, 2005
|
$ | (145 | ) | |
Total change in fair value during 2005 of contracts recorded in
earnings
|
58 | |||
Reclassification to realized at settlement of contracts recorded
in earnings
|
10 | |||
Reclassification to realized at settlement from OCI
|
87 | |||
Effective portion of changes in fair value — recorded
in OCI
|
(291 | ) | ||
Purchase/sale/disposal of existing contracts or portfolios
subject to mark-to-market
|
(96 | ) | ||
Total mark-to-market energy contract net liabilities at
March 31, 2005
|
$ | (377 | ) | |
102
March 31, | December 31, | |||||||
2005 | 2004 | |||||||
Current assets
|
$ | 579 | $ | 403 | ||||
Noncurrent assets
|
316 | 373 | ||||||
Total mark-to-market energy contract assets
|
895 | 776 | ||||||
Current liabilities
|
(865 | ) | (598 | ) | ||||
Noncurrent liabilities
|
(407 | ) | (323 | ) | ||||
Total mark-to-market energy contract liabilities
|
(1,272 | ) | (921 | ) | ||||
Total mark-to-market energy contract net liabilities
|
$ | (377 | ) | $ | (145 | ) | ||
Maturities Within | |||||||||||||||||||||||||||||
2010 and | Total Fair | ||||||||||||||||||||||||||||
(In millions) | 2005 | 2006 | 2007 | 2008 | 2009 | Beyond | Value | ||||||||||||||||||||||
Normal Operations, qualifying cash-flow hedge
contracts(a):
|
|||||||||||||||||||||||||||||
Actively quoted prices
|
$ | 3 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 3 | |||||||||||||||
Prices provided by other external sources
|
(283 | ) | (122 | ) | (26 | ) | — | — | — | (431 | ) | ||||||||||||||||||
Total
|
$ | (280 | ) | $ | (122 | ) | $ | (26 | ) | $ | — | $ | — | $ | — | $ | (428 | ) | |||||||||||
Normal Operations, other derivative contracts(b):
|
|||||||||||||||||||||||||||||
Actively quoted prices
|
$ | 66 | $ | 17 | $ | (1 | ) | $ | — | $ | — | $ | — | $ | 82 | ||||||||||||||
Prices provided by other external sources
|
(31 | ) | 1 | 3 | — | — | — | (27 | ) | ||||||||||||||||||||
Prices based on model or other valuation methods
|
6 | (7 | ) | (3 | ) | — | — | — | (4 | ) | |||||||||||||||||||
Total
|
$ | 41 | $ | 11 | $ | (1 | ) | $ | — | $ | — | $ | — | $ | 51 | ||||||||||||||
(a) | Mark-to-market gains and losses on contracts that qualify as cash-flow hedges are recorded in other comprehensive income. | |
(b) | Mark-to-market gains and losses on other non-trading and trading derivative contracts that do not qualify as cash-flow hedges are recorded in earnings. |
103
Total Cash-Flow Hedge OCI Activity, | ||||||||||||
Net of Income Tax | ||||||||||||
Power Team Normal | Interest-Rate | Total | ||||||||||
Operations and | and Other | Cash-Flow | ||||||||||
(In millions) | Hedging Activities | Hedges | Hedges | |||||||||
Accumulated OCI derivative loss at January 1, 2005
|
$ | (137 | ) | $ | (9 | ) | $ | (146 | ) | |||
Changes in fair value
|
(176 | ) | (2 | ) | (178 | ) | ||||||
Reclassifications from OCI to net income
|
54 | — | 54 | |||||||||
Accumulated OCI derivative loss at March 31, 2005
|
$ | (259 | ) | $ | (11 | ) | $ | (270 | ) | |||
Generation |
104
Total | Number Of | Net Exposure Of | |||||||||||||||||||
Exposure | Counterparties | Counterparties | |||||||||||||||||||
Before Credit | Credit | Net | Greater than 10% | Greater than 10% | |||||||||||||||||
Rating as of March 31, 2005(a) | Collateral | Collateral | Exposure | of Net Exposure | of Net Exposure | ||||||||||||||||
Investment grade
|
$ | 210 | $ | 32 | $ | 178 | 3 | $ | 78 | ||||||||||||
Non-investment grade
|
31 | 15 | 16 | — | — | ||||||||||||||||
No external ratings Internally rated — investment grade
|
14 | 3 | 11 | — | — | ||||||||||||||||
Internally rated — non- investment grade
|
3 | — | 3 | — | — | ||||||||||||||||
Total
|
$ | 258 | $ | 50 | $ | 208 | 3 | $ | 78 | ||||||||||||
(a) | This table does not include accounts receivable exposure and forward credit exposure related to Exelon Energy. |
Maturity of Credit Risk Exposure | |||||||||||||||||
Exposure | Total Exposure | ||||||||||||||||
Less than | Greater than | Before Credit | |||||||||||||||
Rating as of March 31, 2005(a) | 2 Years | 2-5 Years | 5 Years | Collateral | |||||||||||||
Investment grade
|
$ | 208 | $ | 2 | $ | — | $ | 210 | |||||||||
Non-investment grade
|
27 | 4 | — | 31 | |||||||||||||
No external ratings
|
|||||||||||||||||
Internally rated — investment grade
|
14 | — | — | 14 | |||||||||||||
Internally rated — non-investment grade
|
3 | — | — | 3 | |||||||||||||
Total
|
$ | 252 | $ | 6 | $ | — | $ | 258 | |||||||||
(a) | This table does not include accounts receivable exposure and forward credit exposure related to Exelon Energy. |
105
Exelon |
Variable Rate Debt |
Cash-Flow Hedges |
Exelon |
ComEd |
106
Generation and PECO |
Fair-Value Hedges |
ComEd |
Generation and PECO |
107
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Exelon |
ComEd |
PECO and Generation |
Cromby Generating Station (Generation) |
108
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
(c) Exelon |
Maximum Number | ||||||||||||||||
(or Approximate | ||||||||||||||||
Total Number of | Dollar Value) of | |||||||||||||||
Shares Purchased | Shares that May | |||||||||||||||
Total Number | As Part of Publicly | Yet Be Purchased | ||||||||||||||
of Shares | Average Price | Announced Plans | Under the Plans | |||||||||||||
Period | Purchased(a) | Paid per Share | or Programs(b) | or Programs | ||||||||||||
January 1 – January 31, 2005
|
6,423 | 43.49 | — | (b | ) | |||||||||||
February 1 – February 28, 2005
|
196,062 | 44.26 | — | (b | ) | |||||||||||
March 1 – March 31, 2005
|
1,706 | 44.13 | — | (b | ) | |||||||||||
Total
|
204,191 | 44.24 | (b | ) | ||||||||||||
(a) | Shares other than those purchased as a part of a publicly announced plan primarily represent restricted shares surrendered by employees to satisfy tax obligations arising upon the vesting of restricted shares and shares repurchased from a retired executive. |
(b) | In April 2004, Exelon’s Board of Directors approved a discretionary share repurchase program that allows Exelon to repurchase shares of its common stock on a periodic basis in the open market. The share repurchase program is intended to mitigate, in part, the dilutive effect of shares issued under Exelon’s employee stock option plan and Exelon’s Employee Stock Purchase Plan (ESPP). The aggregate shares of common stock repurchased pursuant to the program cannot exceed the economic benefit received after January 1, 2004 due to stock option exercises and share purchases pursuant to Exelon’s ESPP. The economic benefit consists of direct cash proceeds from purchases of stock and tax benefits associated with exercises of stock options. The share repurchase program has no specified limit and no specified termination date. |
Item 5. | Other Information |
(a) Exelon, ComEd and Generation |
Regulatory Issues (Exelon ComEd) |
Clean Air Interstate Rule (Generation) |
109
110
Item 6. | Exhibits |
2-1
|
— | Amended and Restated Agreement and Plan of Merger dated as of October 20, 2000, among PECO Energy Company, Exelon Corporation and Unicom Corporation (File No. 1-01401, PECO Energy Company Form 10-Q for the quarter ended September 30, 2000, Exhibit 2-1). | ||
2-2
|
— | Agreement and Plan of Merger between Exelon Corporation and Public Service Enterprise Group Incorporated dated as of December 20, 2004 (File No. 1-16169, Form 8-K dated December 21, 2004, Exhibit 2.1). | ||
3-1
|
— | Articles of Incorporation of Exelon Corporation (Registration Statement No. 333-37082, Form S-4, Exhibit 3-1). | ||
3-2
|
— | Amendment to Articles of Incorporation for Exelon Corporation (File No. 1-16169, Form 10-Q for the quarter ended June 30, 2004, Exhibit 3-1). | ||
3-3
|
— | Amended and Restated Bylaws of Exelon Corporation, adopted January 27, 2004 (File No. 1-16169, 2003 Form 10-K, Exhibit 3-2). | ||
3-4
|
— | Amended and Restated Articles of Incorporation of PECO Energy Company (File No. 1-01401, 2000 Form 10-K, Exhibit 3-3). | ||
3-5
|
— | Bylaws of PECO Energy Company, adopted February 26, 1990 and amended January 26, 1998 (File No. 1-01401, 1997 Form 10-K, Exhibit 3-2). | ||
3-6
|
— | Restated Articles of Incorporation of Commonwealth Edison Company effective February 20, 1985, including Statements of Resolution Establishing Series, relating to the establishment of three new series of Commonwealth Edison Company preference stock known as the “$9.00 Cumulative Preference Stock,” the “$6.875 Cumulative Preference Stock” and the “$2.425 Cumulative Preference Stock” (File No. 1-1839, 1994 Form 10-K, Exhibit 3-2). | ||
3-7
|
— | Bylaws of Commonwealth Edison Company, effective September 2, 1998, as amended through October 20, 2000 (File No. 1-1839, 2000 Form 10-K, Exhibit 3-6). | ||
3-8
|
— | Certificate of Formation of Exelon Generation Company, LLC (Registration Statement No. 333-85496, Form S-4, Exhibit 3-1). | ||
3-9
|
— | First Amended and Restated Operating Agreement of Exelon Generation Company, LLC executed as of January 1, 2001 (File No. 333-85496, 2003 Form 10-K, Exhibit 3-8). | ||
4-1
|
— | First and Refunding Mortgage dated May 1, 1923 between The Counties Gas and Electric Company (predecessor to PECO Energy Company) and Fidelity Trust Company, Trustee (First Union National Bank, successor), (Registration No. 2-2281, Exhibit B-1). | ||
4-1-1
|
— | Supplemental Indentures to PECO Energy Company’s First and Refunding Mortgage: |
Dated as of | File Reference | Exhibit No. | ||||||
May 1, 1927
|
2-2881 | B-1(c) | ||||||
March 1, 1937
|
2-2881 | B-1(g) | ||||||
December 1, 1941
|
2-4863 | B-1(h) | ||||||
November 1, 1944
|
2-5472 | B-1(i) | ||||||
December 1, 1946
|
2-6821 | 7-1(j) | ||||||
September 1, 1957
|
2-13562 | 2(b)-17 | ||||||
May 1, 1958
|
2-14020 | 2(b)-18 | ||||||
March 1, 1968
|
2-34051 | 2(b)-24 | ||||||
March 1, 1981
|
2-72802 | 4-46 | ||||||
March 1, 1981
|
2-72802 | 4-47 | ||||||
December 1, 1984
|
1-01401, 1984 Form 10-K | 4-2(b) | ||||||
April 1, 1991
|
1-01401, 1991 Form 10-K | 4(e)-76 | ||||||
December 1, 1991
|
1-01401, 1991 Form 10-K | 4(e)-77 | ||||||
1-01401, June 30, 1992 Form 10-Q | 4(e)-81 | |||||||
1-01401, 1992 Form 10-K | 4(e)-86 | |||||||
1-01401, March 31, 1993 Form 10-Q | 4(e)-88 |
111
Dated as of | File Reference | Exhibit No. | ||||||
1-01401, March 31, 1993 Form 10-Q | 4(e)-89 | |||||||
1-01401, Form 8-A dated August 19, 1993 | 4(e)-92 | |||||||
1-01401, Form 8-K dated May 24, 1995 | 4(e)-96 | |||||||
1-01401, September 30, 2002 Form 10-Q | 4-1 | |||||||
1-01401, September 30, 2002 Form 10-Q | 4-2 | |||||||
0-16844, March 31, 2003 Form 10-Q | 4.1 | |||||||
0-16844, September 30, 2004 Form 10-Q | 4-1-1 |
4-2
|
— | Exelon Corporation Dividend Reinvestment and Stock Purchase Plan (Registration Statement No. 333-84446, Form S-3, Prospectus). | ||
4-3
|
— | Mortgage of Commonwealth Edison Company to Illinois Merchants Trust Company, Trustee (BNY Midwest Trust Company, as current successor Trustee), dated July 1, 1923, as supplemented and amended by Supplemental Indenture thereto dated August 1, 1944. (File No. 2-60201, Form S-7, Exhibit 2-1). | ||
4-3-1
|
— | Supplemental Indentures to aforementioned Commonwealth Edison Mortgage. |
Dated as of | File Reference | Exhibit No. | ||||||
August 1, 1946
|
2-60201, Form S-7 | 2-1 | ||||||
April 1, 1953
|
2-60201, Form S-7 | 2-1 | ||||||
March 31, 1967
|
2-60201, Form S-7 | 2-1 | ||||||
April 1,1967
|
2-60201, Form S-7 | 2-1 | ||||||
February 28, 1969
|
2-60201, Form S-7 | 2-1 | ||||||
May 29, 1970
|
2-60201, Form S-7 | 2-1 | ||||||
June 1, 1971
|
2-60201, Form S-7 | 2-1 | ||||||
April 1, 1972
|
2-60201, Form S-7 | 2-1 | ||||||
May 31, 1972
|
2-60201, Form S-7 | 2-1 | ||||||
June 15, 1973
|
2-60201, Form S-7 | 2-1 | ||||||
May 31, 1974
|
2-60201, Form S-7 | 2-1 | ||||||
June 13, 1975
|
2-60201, Form S-7 | 2-1 | ||||||
May 28, 1976
|
2-60201, Form S-7 | 2-1 | ||||||
June 3, 1977
|
2-60201, Form S-7 | 2-1 | ||||||
May 17, 1978
|
2-99665, Form S-3 | 4-3 | ||||||
August 31, 1978
|
2-99665, Form S-3 | 4-3 | ||||||
June 18, 1979
|
2-99665, Form S-3 | 4-3 | ||||||
June 20, 1980
|
2-99665, Form S-3 | 4-3 | ||||||
April 16, 1981
|
2-99665, Form S-3 | 4-3 | ||||||
April 30, 1982
|
2-99665, Form S-3 | 4-3 | ||||||
April 15, 1983
|
2-99665, Form S-3 | 4-3 | ||||||
April 13, 1984
|
2-99665, Form S-3 | 4-3 | ||||||
April 15, 1985
|
2-99665, Form S-3 | 4-3 | ||||||
April 15, 1986
|
33-6879, Form S-3 | 4-9 | ||||||
June 15, 1990
|
33-38232, Form S-3 | 4-12 | ||||||
October 1, 1991
|
33-40018, Form S-3 | 4-13 | ||||||
October 15, 1991
|
33-40018, Form S-3 | 4-14 | ||||||
33-48542, Form S-3 | 4-14 | |||||||
33-53766, Form S-3 | 4-14 | |||||||
1-1839, 1992 Form 10-K | 4-14 |
112
Dated as of | File Reference | Exhibit No. | ||||||
33-64028, Form S-3 | 4-12 | |||||||
33-64028, Form S-3 | 4-13 | |||||||
1-1839, Form 8-K dated May 21, 1993 | 4-1 | |||||||
1-1839, Form 10-Q for quarter ended June 30, 1993. | 4-1 | |||||||
1-1839, 1993 Form 10-K | 4-15 | |||||||
1-1839, 1994 Form 10-K | 4-16 | |||||||
1-1839, 1996 Form 10-K | 4-16 | |||||||
1-1839, 2001 Form 10-K | 4-4-1 | |||||||
1-1839, 2001 Form 10-K | 4-4-1 | |||||||
1-1839, 2001 Form 10-K | 4-4-1 | |||||||
1-1839, 2001 Form 10-K | 4-4-1 | |||||||
1-1839, Form 8-K dated January 22, 2003 | 4-4 | |||||||
1-1839, Form 8-K dated April 7, 2003 | 4-4 | |||||||
1-1839, Form 8-K dated August 25, 2003 | 4-4 | |||||||
4-3-1 |
4-3-2
|
— | Instrument of Resignation, Appointment and Acceptance dated as of February 20, 2002, under the provisions of the Mortgage dated July 1, 1923, and Indentures Supplemental thereto, regarding corporate trustee (File No. 1-1839, 2001 Form 10-K, Exhibit 4-4-2). | ||
4-3-3
|
— | Instrument dated as of January 31, 1996, under the provisions of the Mortgage dated July 1, 1923 and Indentures Supplemental thereto, regarding individual trustee (File No. 1-1839, 1995 Form 10-K, Exhibit 4-29). | ||
4-4
|
— | Indenture dated as of September 1, 1987 between Commonwealth Edison Company and Citibank, N.A., Trustee relating to Notes (File No. 1-1839, Form S-3, Exhibit 4-13). | ||
4-4-1
|
— | Supplemental Indentures to aforementioned Indenture. |
Dated as of | File Reference | Exhibit No. | ||||||
September 1, 1987
|
33-32929, Form S-3 | 4-16 | ||||||
1-1839, 1999 Form 10-K | 4-21 | |||||||
1-1839, 2000 Form 10-K | 4-7-3 |
4-5
|
— | Indenture dated June 1, 2001 between Generation and First Union National Bank (now Wachovia Bank, National Association) (Registration Statement No. 333-85496, Form S-4, Exhibit 4.1). | ||
4-6
|
— | Indenture dated December 19, 2003 between Generation and Wachovia Bank, National Association (File No. 333-85496, 2003 Form 10-K, Exhibit 4-6). | ||
4-7
|
— | Indenture to Subordinated Debt Securities dated as of June 24, 2003 between PECO Energy Company, as Issuer, and Wachovia Bank National Association, as Trustee (File No. 0-16844, PECO Energy Company Form 10-Q for the quarter ended June 30, 2003, Exhibit 4.1). | ||
4-8
|
— | Preferred Securities Guarantee Agreement between PECO Energy Company, as Guarantor, and Wachovia Trust Company, National Association, as Trustee, dated as of June 24, 2003 (File No. 0-16844, PECO Energy Company Form 10-Q for the quarter ended June 30, 2003, Exhibit 4.2). | ||
4-9
|
— | PECO Energy Capital Trust IV Amended and Restated Declaration of Trust among PECO Energy Company, as Sponsor, Wachovia Trust Company, National Association, as Delaware Trustee and Property Trustee, and J. Barry Mitchell, George R. Shicora and Charles S. Walls as Administrative Trustees dated as of June 24, 2003 (File No. 0-16844, PECO Energy Company Form 10-Q for the quarter ended June 30, 2003, Exhibit 4.3). | ||
10-1
|
— | $2 billion term loan agreement dated March 7, 2005 among Exelon Corporation, lenders named within the agreement and Citicorp North America as Administrative Agent (File No. 1-16169, Exelon Corporation Form 8-K dated March 7, 2005, Exhibit 99). |
113
31-1
|
— | Filed by John W. Rowe for Exelon Corporation | ||
31-2
|
— | Filed by John F. Young for Exelon Corporation | ||
31-3
|
— | Filed by J. Barry Mitchell for Exelon Corporation | ||
31-4
|
— | Filed by John L. Skolds for Commonwealth Edison Company | ||
31-5
|
— | Filed by J. Barry Mitchell for Commonwealth Edison Company | ||
31-6
|
— | Filed by John L. Skolds for PECO Energy Company | ||
31-7
|
— | Filed by J. Barry Mitchell for PECO Energy Company | ||
31-8
|
— | Filed by John L. Skolds for Exelon Generation Company, LLC | ||
31-9
|
— | Filed by J. Barry Mitchell for Exelon Generation Company, LLC |
32-1
|
— | Filed by John W. Rowe for Exelon Corporation | ||
32-2
|
— | Filed by John F. Young for Exelon Corporation | ||
32-3
|
— | Filed by J. Barry Mitchell for Exelon Corporation | ||
32-4
|
— | Filed by John L. Skolds for Commonwealth Edison Company | ||
32-5
|
— | Filed by J. Barry Mitchell for Commonwealth Edison Company | ||
32-6
|
— | Filed by John L. Skolds for PECO Energy Company | ||
32-7
|
— | Filed by J. Barry Mitchell for PECO Energy Company | ||
32-8
|
— | Filed by John L. Skolds for Exelon Generation Company, LLC | ||
32-9
|
— | Filed by J. Barry Mitchell for Exelon Generation Company, LLC |
114
/s/ John W. Rowe Chairman and Chief Executive Officer (Principal Executive Officer) |
/s/ John F. Young ---------------------------------- John F. Young Executive Vice President, Finance and Markets (Principal Financial Officer) |
|
/s/ Matthew F.
Hilzinger Vice President and Corporate Controller (Principal Accounting Officer) |
/s/ J. Barry Mitchell ---------------------------------- J. Barry Mitchell Senior Vice President, Treasurer and Chief Financial Officer (Principal Financial Officer) |
/s/ John L. Skolds President, Exelon Energy Delivery (Principal Executive Officer) |
/s/ J. Barry Mitchell ---------------------------------- J. Barry Mitchell Senior Vice President, Treasurer and Chief Financial Officer (Principal Financial Officer) |
|
/s/ Matthew F.
Hilzinger Vice President and Corporate Controller, Exelon (Principal Accounting Officer) |
/s/ Frank M. Clark ---------------------------------- Frank M. Clark President, ComEd |
115
/s/ John L. Skolds President, Exelon Energy Delivery (Principal Executive Officer) |
/s/ J. Barry Mitchell ---------------------------------- J. Barry Mitchell Senior Vice President, Treasurer and Chief Financial Officer (Principal Financial Officer) |
|
/s/ Matthew F.
Hilzinger Vice President and Corporate Controller, Exelon (Principal Accounting Officer) |
/s/ Denis P.
O’Brien ---------------------------------- Denis P. O’Brien President, PECO |
/s/ John L. Skolds President (Principal Executive Officer) |
/s/ J. Barry Mitchell ---------------------------------- J. Barry Mitchell Senior Vice President, Treasurer and Chief Financial Officer (Principal Financial Officer) |
|
/s/ Jon D. Veurink Vice President and Controller (Principal Accounting Officer) |
116
This ‘10-Q’ Filing | Date | Other Filings | ||
---|---|---|---|---|
3/1/17 | ||||
3/1/15 | ||||
7/16/09 | 4, 425, 8-K, DFAN14A, SC TO-T/A | |||
4/15/07 | ||||
12/31/06 | 10-K, 11-K, 4, 5 | |||
10/31/06 | ||||
3/31/06 | 10-Q, 4 | |||
1/1/06 | ||||
12/31/05 | 10-K, 11-K, 4, 5 | |||
12/1/05 | ||||
6/15/05 | ||||
Filed on: | 4/26/05 | 8-K, 8-K/A | ||
4/18/05 | 4 | |||
4/4/05 | 4, 8-K | |||
4/1/05 | 4, 8-K | |||
For Period End: | 3/31/05 | 4, 425, 8-K, U-9C-3 | ||
3/17/05 | ||||
3/16/05 | ||||
3/15/05 | U-1 | |||
3/10/05 | 3 | |||
3/7/05 | 8-K | |||
3/1/05 | 3 | |||
2/28/05 | 4, U-1 | |||
2/25/05 | 4, 8-K | |||
2/15/05 | ||||
1/31/05 | 8-K | |||
1/1/05 | ||||
12/31/04 | 10-K, 11-K, 4, 5, U-13-60, U-9C-3, U5S | |||
12/21/04 | 425, 8-K | |||
12/20/04 | 425, 8-K | |||
12/1/04 | ||||
9/30/04 | 10-Q, 4, U-9C-3 | |||
6/30/04 | 10-Q, 4, U-9C-3 | |||
5/25/04 | 4, 8-K, U-12-IB | |||
5/5/04 | ||||
5/1/04 | ||||
4/30/04 | 4, U-13-60, U5S | |||
4/15/04 | ||||
4/1/04 | 4, U-1/A | |||
3/31/04 | 10-Q, 35-CERT, 4, S-4, U-9C-3 | |||
3/1/04 | ||||
1/27/04 | 3, 8-K | |||
1/1/04 | 4 | |||
12/31/03 | 10-K, 11-K, 4, 5, U-13-60, U-9C-3, U5S | |||
12/19/03 | ||||
8/25/03 | 4, 8-K | |||
8/13/03 | 8-K | |||
6/30/03 | 10-Q, 10-Q/A, 4, U-9C-3 | |||
6/24/03 | ||||
4/15/03 | ||||
4/7/03 | 8-K | |||
3/31/03 | 10-Q, 10-Q/A, 35-CERT, 4, 8-K, U-9C-3 | |||
3/14/03 | 8-K, 8-K/A | |||
1/22/03 | 8-K | |||
1/13/03 | ||||
10/7/02 | ||||
10/1/02 | ||||
9/30/02 | 10-Q, 10-Q/A, U-9C-3 | |||
9/15/02 | ||||
6/1/02 | ||||
5/20/02 | DEF 14C | |||
3/1/02 | 8-K | |||
2/20/02 | ||||
6/1/01 | ||||
1/1/01 | ||||
10/20/00 | 8-A12B/A, 8-K, 8-K/A, U5A | |||
9/30/00 | 10-Q | |||
9/1/00 | ||||
9/2/98 | ||||
1/26/98 | 8-K | |||
1/1/97 | ||||
6/1/96 | ||||
3/15/96 | ||||
1/31/96 | ||||
5/24/95 | 8-K, DEF 14C | |||
5/1/95 | ||||
12/1/94 | ||||
1/15/94 | ||||
8/19/93 | ||||
8/15/93 | ||||
7/15/93 | ||||
6/30/93 | ||||
6/15/93 | ||||
5/21/93 | ||||
5/1/93 | ||||
4/15/93 | ||||
4/1/93 | ||||
3/31/93 | ||||
3/1/93 | ||||
2/1/93 | ||||
9/15/92 | ||||
6/30/92 | ||||
6/1/92 | ||||
5/15/92 | ||||
List all Filings |