Exelon 2015 Annual Report Download - page 64

Table of Contents
liquefied natural gas. Such initiatives could involve significant risks and uncertainties, including distraction of management from current operations,
inadequate return on capital, and unidentified issues not discovered in the diligence performed prior to launching an initiative or entering a market.
As these markets mature, there could be new market entrants or expansion by established competitors that increase competition for customers
and resources. Additionally, it is possible that FERC, state public utility commissions or others could impose certain other restrictions on such
transactions. All of these factors could result in higher costs or lower revenues than expected, resulting in lower than planned returns on
investment.
ComEd, PECO and BGE face risks associated with their regulatory-mandated Smart Grid initiatives. These risks include, but are not limited
to, cost recovery, regulatory concerns, cybersecurity and obsolescence of technology. Due to these risks, no assurance can be given that such
initiatives will be successful and will not have a material adverse effect on ComEd’s, PECO’s or BGE’s financial results.
Risks Related to the Pending Merger with PHI
Exelon and PHI could encounter difficulties in satisfying the conditions for the completion of the Merger and the Merger could not be
completed within the expected time frame or at all.
Consummation of the Merger is subject to the satisfaction or waiver of specified closing conditions, including (1) the receipt of regulatory
approvals required to consummate the Merger, (2) the expiration or termination of the applicable waiting period under the HSR Act and (3) other
customary closing conditions, including (a) the accuracy of each party’s representations and warranties (subject to customary materiality
qualifiers) and (b) each party’s compliance with its obligations and covenants contained in the Merger Agreement. In addition, the obligation of
Exelon to consummate the Merger is subject to the required regulatory approvals not, individually or in the aggregate, imposing terms, conditions,
obligations or commitments that constitute a burdensome condition (as defined in the Merger Agreement).
In addition, the Merger Agreement provides that either Exelon or PHI could terminate the Merger Agreement if the merger is not completed
by October 28, 2015. Exelon and PHI have agreed, among other things, that they will not exercise their rights to terminate the Merger Agreement
before March 4, 2016, except under limited circumstances.
See Note 4—Mergers, Acquisitions, and Dispositions of the Combined Notes to Consolidated Financial Statements for additional information
regarding the status of the Merger.
The Merger is subject to the receipt of consent or approval from governmental entities that could delay the completion of the Merger or
impose conditions that could cause abandonment of the Merger.
Completion of the Merger is conditioned upon the receipt of consents, orders, approvals or clearances, to the extent required, from various
regulatory authorities, including the DCPSC and the public utility commissions or similar entities in certain states in which the companies operate.
The Merger has been approved by the Delaware Public Service Commission (DPSC), the Maryland Public Service Commission (MDPSC), the New
Jersey Board of Public Utilities (NJBPU) and the Virginia State Corporation Commission. Approval of the Merger by the MDPSC is subject to
appeals by the Maryland Office of People’s Counsel, the Sierra Club/Chesapeake Climate Action Network and Public Citizen, Inc. in the Circuit
Court of Queen Anne’s County, and the approval by the NJBPU expires on June 30, 2016. The HSR Act waiting period applicable to the Merger
expired on December 2, 2015. The Merger remains subject to approval by the DCPSC. See Note 4—Mergers, Acquisitions, and Dispositions of the
Combined Notes to Consolidated Financial Statements for additional information regarding the status of regulatory approvals.
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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