ComEd 2013 Annual Report Download - page 37

TheFederal Power Actdeclaresittobe unlawful for anyofficer or director ofanypublic utility“to participate inthemakingor paying
ofany dividends ofsuch public utilityfromanyfunds properlyincludedincapital account.” What constitutes“funds properlyincluded
incapital account”isundefinedintheFederal Power Actorthe relatedregulations; however,FERChasconsistentlyinterpretedthe
provision to allow dividends to bepaid aslongas(1)thesourceofthedividends is clearly disclosed, (2)thedividendisnot
excessiveand(3)there is no self-dealingon the part ofcorporate officials. While theserestrictionsmaylimittheabsolute amount of
dividends that a particular subsidiarymaypay, Exelon doesnot believetheselimitationsare materiallylimitingbecause,under these
limitations, thesubsidiariesare allowedto pay dividends sufficient to meet Exelon’s actual cash needs.
Under Illinois law, ComEd maynot payany dividendon itsstock unless, amongother things, “[its] earnings andearnedsurplusare
sufficient to declare andpaysameafter provision is madefor reasonable andproper reserves,” or unless ithasspecific authorization
fromtheICC. ComEd hasalsoagreedinconnection withafinancingarrangedthrough ComEd Financing III that ComEd will not
declare dividends on anysharesofitscapital stock intheevent that:(1)itexercisesitsrighttoextendtheinterestpayment periods
on thesubordinateddebtsecurities issuedto ComEd Financing III; (2)itdefaultson itsguarantee ofthepayment of distributionson
the preferredtrustsecuritiesofComEd Financing III; or (3)an event ofdefault occursunder theIndenture under which the
subordinateddebtsecuritiesare issued. Nosuch event hasoccurred.
PECO hasagreedinconnection withfinancings arrangedthrough PEC L.P. and PECO TrustIV that PECO will not declare
dividends on anysharesofitscapital stock intheevent that:(1)itexercisesitsrighttoextendtheinterestpayment periods on the
subordinateddebentures which were issuedto PEC L.P. or PECO TrustIV; (2)itdefaultson itsguarantee ofthepayment of
distributionson theSeriesDPreferredSecuritiesof PEC L.P. or the preferredtrustsecuritiesof PECO TrustIV; or (3)an event of
default occursunder theIndenture under which thesubordinateddebenturesare issued. Nosuch event hasoccurred.
BGE is subjecttocertaindividendrestrictionsestablishedbytheMDPSC. First, BGE is prohibitedfrompayingadividendon its
common sharesthrough theendof2014. Second, BGE is prohibitedfrompayingadividendon itscommon sharesif(a)after the
dividendpayment, BGE’s equityratiowouldbebelow 48% ascalculatedpursuant to theMDPSC’s ratemakingprecedentsor
(b) BGE’s senior unsecuredcredit ratingisratedbytwoofthethree major credit ratingagenciesbelowinvestment grade.Finally,
BGE must notify theMDPSC that itintends to declare a dividendon itscommon sharesat least30days before such adividendis
paid. There are no other limitationson BGE payingcommon stock dividends unless: (1) BGE electsto defer interestpaymentson
the6.20%Deferrable InterestSubordinatedDebenturesdue 2043,andanydeferredinterestremainsunpaid; or (2)any dividends
(andanyredemption payments) due on BGE’s preferencestock have not been paid.
At December 31,2013,Exelon hadretainedearnings of$10,358 million,includingGeneration’s undistributedearnings of$3,613
million,ComEd’s retainedearnings of $750million consistingofretainedearnings appropriatedfor future dividends of$2,389 million,
partiallyoffset by $1,639million ofunappropriatedretaineddeficits, PECO’s retainedearnings of $649 million,and BGE’s retained
earnings of$1,005million.
Thefollowingtable setsforthExelon’s quarterlycash dividends per share paid during2013 and2012:
2013 2012
(per share)
4th
Quarter
3rd
Quarter
2nd
Quarter
1st
Quarter
4th
Quarter
3rd
Quarter
2nd
Quarter
1st
Quarter
Exelon ....................................... $0.310 $0.310 $0.310 $0.525$0.525$0.525$0.525$0.525
Thefollowingtable setsforthGeneration’s quarterly distributionsandComEd’s and PECO’s quarterlycommon dividendpayments:
2013 2012
(in millions)
4th
Quarter
3rd
Quarter
2nd
Quarter
1st
Quarter
4th
Quarter
3rd
Quarter
2nd
Quarter
1st
Quarter
Generation .................................... $75 $76 $263$211 $242$493$291$600
ComEd ....................................... 55 55 55 55 10 10 10 75
PECO ........................................ 8383838385 86 85 87
First Quarter 2014 Dividend. OnJanuary28, 2014, theExelon BoardofDirectorsdeclaredafirstquarter 2014regular quarterly
dividendof$0.31 per share on Exelon’s common stock payable on March 10,2014, to shareholdersofrecordofExelon at theendof
thedayon February14, 2014.
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