ComEd 2002 Annual Report Download - page 90

The following table provides a reconciliation of the reserve for
employee severance and other benefits associated with the Merger:
Adjusted employee severance and other benefits reserve $ 179
Payments to employees in 2000 (5)
Payments to employees in 2001 (72)
Payments to employees in 2002 (74)
Employee severance and other benefits reserve
as of December 31, 2002(1) $28
(1) Relates to certain benefits that are being paid after 2002.
The following table provides a reconciliation of the former
Unicom positions that were expected to be eliminated as a
result of the Merger:
Total
Estimate at October 20, 2000 2,275
2001 adjustments(a) 118
Total positions 2,393
Employees terminated in 2000 279
Employees terminated in 2001 607
Employees terminated in 2002 1,053
Normal attrition 298
Business plan changes(b) 156
Total positions 2,393
(a) The increase is a result of the identification of additional positions to be eliminated
in 2001.
(b) The reduction is due to a determination in the third quarter of 2002, that certain
positions would not be eliminated by the end of 2002 as originally planned due to a
change in certain business plans.
note 03 • acquisitions and dispositions
Sithe New England Holdings Asset Acquisition
On November 1, 2002,Generation purchased the assets of Sithe
New England Holdings, LLC (Sithe New England), a subsidiary
of Sithe, and related power marketing operations. Sithe New
England’s primary assets are gas-fired facilities currently under
development. The purchase price for the Sithe New England
assets consisted of a $534 million note to Sithe, $14 million of
direct acquisition costs and an adjustment to Generation’s
investment in Sithe to reflect Sithe’s sale of Sithe New England
to Generation. Additionally, Generation will assume various
Sithe guarantees related to an equity contribution agreement
between Sithe New England and Sithe Boston Generation, LLC
(SBG),a project subsidiary of Sithe New England.The equity con-
tribution agreement requires, among other things, that Sithe
New England,upon the occurrence of certain events,contribute
up to $38 million of equity for the purpose of completing the
construction of two generating facilities. SBG has a $1.25 billion
credit facility (the SBG Facility) to finance the construction of
these two generating facilities. The $1.0 billion outstanding
under the facility at December 31, 2002 is reflected on Exelon’s
Consolidated Balance Sheet. Sithe New England owns 4,066
megawatts (MWs) of generation capacity, consisting of 1,645
MWs in operation and 2,421 MWs under construction. Sithe
New England's generation facilities are located primarily in
Massachusetts.
The allocation of purchase price to the fair value of assets
acquired and liabilities assumed in the acquisition is as follows:
Current Assets (including $12 of cash acquired) $ 82
Property, Plant and Equipment 1,889
Deferred Debits and Other Assets 62
Current Liabilities (159)
Deferred Credits and Other Liabilities (124)
Long-Term Debt (1,036)
Total Purchase Price $ 714
The SBG Facility provides that if these construction projects are
not completed by June 12, 2003, the SBG Facility lenders will
have the right,but will not be required, to, among other things,
declare all amounts then outstanding under the SBG Facility
and the interest rate swap agreements to be due. Generation
believes that the construction projects will be substantially
complete by May 31,2003, but that all of the approvals required
under the SBG Facility may not be issued by that date.
Generation is currently evaluating whether the requirements
of the SBG Facility relating to the construction projects can be
satisfied by June 12, 2003. In the event that the requirements
are not expected to be satisfied by June 12,2003,Generation will
contact the SBG Facility lenders concerning an amendment
or waiver of these provisions of the SBG Facility. Generation
currently expects that arrangements for such an amendment
Notes To Consolidated Financial Statements
exelon corporation and subsidiary companies
88
Original Adjustments Adjusted
Estimate 2001 2002 Liabilities
Employee severance payments $ 128 $ 33 $ (10) $ 151 (a)
Other benefits 21 9 (2) 28 (a)
Employee severance payments and other benefits 149 42 (12) 179
Actuarially determined pension and postretirement costs 158 (11) – 147 (b)
Total Unicom employee cost $ 307 $ 31 $ (12) $ 326
(a) The increase is a result of the identification in 2001 of additional positions to be eliminated, partially offset by the 2002 elimination of identified positions through normal attrition and
changes in certain business plans.
(b) The reduction results from lower estimated pension and postretirement welfare benefits reflecting revised actuarial estimates.