ComEd 2002 Annual Report Download - page 56

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authority. Our request that the short-term debt sub-limit
restriction be eliminated is pending with the SEC.The SEC order
also authorized us to issue guarantees of up to $4.5 billion out-
standing at any one time.At December 31,2002,Exelon had pro-
vided $1.5 billion of guarantees. See Contractual Obligations,
Commercial Commitments and Off Balance Sheet Obligations
in this section for further discussion of guarantees. The SEC
order requires us to maintain a ratio of common equity to total
capitalization (including securitization debt) on and after June
30, 2002 of not less than 30%. Exelon expects that it will main-
tain a common equity ratio of at least 30%.
Under PUHCA,Exelon,ComEd,PECO and Generation can pay
dividends only from retained, undistributed or current earn-
ings.However, the SEC order granted permission to ComEd,and
to us,to the extent we receive dividends from ComEd paid from
ComEd additional paid-in-capital, to pay up to $500 million in
dividends out of additional paid-in capital, although Exelon
may not pay dividends out of paid-in capital after December 31,
2002 if its common equity is less than 30% of its total capital-
ization. At December 31, 2002, Exelon had retained earnings of
$2.0 billion, including ComEd’s retained earnings of $577 mil-
lion, PECO’s retained earnings of $401 million and Generation’s
undistributed earnings of $924 million. We are also limited
by order of the SEC under PUHCA to an aggregate investment of
$4 billion in exempt wholesale generators (EWGs) and foreign
utility companies (FUCOs). At December 31, 2002, we had
invested $2.1 billion in EWGs, leaving $1.9 billion of investment
authority under the order.Our request for an additional $1.5 bil-
lion in EWG investment authorization is pending with the SEC.
During 2001, we loaned $150 million to Sithe. Sithe paid
$2 million in interest on this loan and fully repaid the principal
balance in December of 2001 from the proceeds of a bank
borrowing. In connection with a bank borrowing by Sithe, we
provided the lenders with a support letter confirming our
investment in Sithe and agreeing to maintain a positive net
worth in Sithe. We expect that Sithe’s net worth will remain
positive for the foreseeable future and, accordingly, this agree-
ment is not reflected in the following Contractual Obligations,
Commercial Commitments and Off Balance Sheet Obligations
discussion. This agreement does not guarantee any debt or
obligation of Sithe.
Contractual Obligations, Commercial Commitments
and Off Balance Sheet Obligations
Our contractual obligations as of December 31,2002 representing
cash obligations that we consider to be firm commitments are
as follows:
Management’s Discussion and Analysis of Financial Condition and Results of Operations
exelon corporation and subsidiary companies
Payment due within
Due 2008
Total 2003 2004–2005 2006–2007 and beyond
Long-Term Debt $ 14,595 $ 1,669 $ 2,275 $ 2,445 $ 8,206
Notes Payable 681 681 – – –
Short-Term Note to Sithe 534 534 – – –
Operating Leases 895 77 117 103 598
Purchase Obligations 14,729 2,677 2,987 1,856 7,209
Spent Nuclear Fuel Obligation 858 – – – 858
Obligation to Minority Shareholders 54 3 6 6 39
Total Contractual Obligations $ 32,346 $ 5,641 $ 5,385 $ 4,410 $ 16,910
For additional information about:
– long-term debt see Note 13 of the Notes to Consolidated
Financial Statements
– notes payable see Note 12 of the Notes to Consolidated
Financial Statements
– short-term note to Sithe see Note 3 of the Notes to Consolidated
Financial Statements
– operating leases see Note 19 of the Notes to Consolidated
Financial Statements
– purchase obligations see Note 19 of the Notes to Consolidated
Financial Statements
– the spent nuclear fuel obligation see Note 11 of the Notes to
Consolidated Financial Statements
– the obligation to minority shareholders see Note 19 of the
Notes to Consolidated Financial Statements