Exelon 2014 Annual Report Download - page 112

investment policy. Generation’s and CENG’s investment policies establishes limits on the concentration of holdings in any one
company and also in any one industry. See Note 15—Asset Retirement Obligations of the Combined Notes to Consolidated
Financial Statements for further information regarding the trust funds, the NRC’s minimum funding requirements and related liquidity
ramifications.
Shelf Registration Statements. The Registrants maintain a combined shelf registration statement unlimited in amount, with the
SEC. The ability of each Registrant to sell securities off the shelf registration statement or to access the private placement markets
will depend on a number of factors at the time of the proposed sale, including other required regulatory approvals, as applicable, the
current financial condition of the Registrant, its securities ratings and market conditions.
Regulatory Authorizations. The issuance by ComEd, PECO and BGE of long-term debt or equity securities requires the prior
authorization of the ICC, PAPUC and MDPSC, respectively. ComEd, PECO and BGE normally obtain the required approvals on a
periodic basis to cover their anticipated financing needs for a period of time or in connection with a specific financing. As of
December 31, 2014, ComEd had $702 million available in long-term debt refinancing authority and $943 million available in new
money long-term debt financing authority from the ICC. During the fourth quarter of 2014, ComEd requested an extension of the
expiration date of the refinancing authority from the ICC. In January 2015, the ICC approved the extension of the refinancing
authority, which now expires on February 27, 2017. As of December 31, 2014, PECO had $1.1 billion available in long-term debt
financing authority from the PAPUC. As of December 31, 2014, BGE had $1.4 billion available in long-term financing authority from
MDPSC.
FERC has financing jurisdiction over ComEd’s, PECO’s and BGE’s short-term financings and all of Generation’s financings. As of
December 31, 2014, ComEd, PECO had BGE had short-term financing authority from FERC, which expires on December 31, 2015,
of $2.5 billion, $2.5 billion and $700 million, respectively. Generation currently has blanket financing authority it received from FERC
in connection with its market-based rate authority. See Note 3—Regulatory Matters of the Combined Notes to Consolidated
Financial Statements for additional information.
Exelon’s ability to pay dividends on its common stock depends on the receipt of dividends paid by its operating subsidiaries. The
payments of dividends to Exelon by its subsidiaries in turn depend on their results of operations and cash flows and other items
affecting retained earnings. The Federal Power Act declares it to be unlawful for any officer or director of any public utility “to
participate in the making or paying of any dividends of such public utility from any funds properly included in capital account.” In
addition, under Illinois law, ComEd may not pay any dividend on its stock, unless, among other things, its earnings and earned
surplus are sufficient to declare and pay a dividend after provision is made for reasonable and proper reserves, or unless ComEd
has specific authorization from the ICC. BGE is subject to certain dividend restrictions established by the MDPSC. First, BGE is
prohibited from paying a dividend on its common shares through the end of 2014. Second, BGE is prohibited from paying a dividend
on its common shares if (a) after the dividend payment, BGE’s equity ratio would be below 48% as calculated pursuant to the
MDPSC’s ratemaking precedents or (b) BGE’s senior unsecured credit rating is rated by two of the three major credit rating agencies
below investment grade. Finally, BGE must notify the MDPSC that it intends to declare a dividend on its common shares at least 30
days before such a dividend is paid. There are no other limitations on BGE paying common stock dividends unless: (1) BGE elects
to defer interest payments on the 6.20% Deferrable Interest Subordinated Debentures due 2043, and any deferred interest remains
unpaid; or (2) any dividends (and any redemption payments) due on BGE’s preference stock have not been paid. At December 31,
2014, Exelon had retained earnings of $10,910 million, including Generation’s undistributed earnings of $3,803 million, ComEd’s
retained earnings of $851 million consisting of retained earnings appropriated for future dividends of $2,490 million partially offset by
$1,639 million of unappropriated retained deficit, PECO’s retained earnings of $681 million and BGE’s retained earnings $1,203
million. See Note 22—Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional
information regarding fund transfer restrictions.
108