ComEd 2002 Annual Report Download - page 97

Download and view the complete annual report

Please find page 97 of the 2002 ComEd annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 124

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124

holds the leasehold interests in the generating stations in several
separate bankruptcy remote, special purpose companies it
directly or indirectly wholly owns. Under the terms of the lease
agreements, Exelon received a prepayment of $1.2 billion in the
fourth quarter of 2000, which reduced the investment in the
lease. The remaining payments are payable at the end of the
thirty year lease and there are no minimum scheduled lease
payments to be received over the next five years.The components
of the netinvestment in the direct financing leases are as follows:
December 31,
2002 2001
Total minimum lease payments $ 1,492 $ 1,492
Less:Unearned income 1,047 1,065
Net investment in direct financing leases $ 445 $427
December 31,
2002 2001
Regulatory Assets
Competitive transition charge $ 4,639 $ 4,947
Recoverable deferred income taxes (see Note 14) 661 701
Nuclear decommissioning costs for retired plants 248 310
Recoverable transition costs 175 277
Reacquired debt costs and interest rate
swap settlements 137 112
Non-pension postretirement benefits 65 71
Compensated absences 65
Other 7–
Long-Term Regulatory Assets 5,938 6,423
Deferred energy costs (current asset) 31 56
Total $ 5,969 $6,479
– Competitive Transition Charges (CTC) represent PECO’s stranded
costs that the PUC determined would be allowed to be recover-
able through regulated rates. These costs are related to the
deregulation of the generation portion of the electric utility
business in Pennsylvania.The unamortized balance of the CTC
of $4.6 billion and $4.9 billion as of December 31, 2002 and
2001, respectively, was recorded on our Consolidated Balance
Sheets.The CTC includes Intangible Transition Property sold to
PECO Energy Transition Trust, a wholly owned subsidiary of
PECO,in connection with the securitization of PECO’s stranded
cost recovery. These charges are being amortized through
December 31, 2010 with a return on the unamortized balance
of 10.75%.
– Nuclear decommissioning costs for retired plants—recovery is
provided through ComEd’s current regulated rates and is
expected to be fully recovered by the end of 2006.
– Recoverable transition costs—recovery is provided for in
regulated rates pursuant to the Illinois Restructuring Act and
is expected to be recovered by the end of 2006.
– Reacquired debt costs and interest rate swap settlements—
recoverable gains and losses on reacquired debt are deferred
and amortized over the rate-regulatory period,which is over the
life of the new debt issued to finance the debt redemption.
Interest rate swap settlements are deferred and amortized
over the period that the related debt is outstanding.
The regulatory assets related to the nuclear decommissioning
costs and deferred income taxes did not require a cash outlay
of investor supplied funds; consequently, these costs are not
earning a rate of return. Recovery of the regulatory assets for
loss on reacquired debt and recoverable transition costs is pro-
vided for through regulated revenue sources that are based on
the pre-open access cost of service.Therefore,they are earning a
rate of return.
December 31,
2002 2001
Accrued Expenses
Taxes Accrued $ 420 $91
Interest Accrued 307 299
Other Accrued Expenses 584 745
Total $ 1,311 $1,135
note 07 • earnings per share
Diluted earnings per share are calculated by dividing net
income by the weighted average shares of common stock out-
standing including shares issuable upon exercise of stock
options outstanding under Exelon’s stock option plans consid-
ered to be common stock equivalents. The following table
shows the effect of these stock options on the weighted average
number of shares outstanding used in calculating diluted
earnings per share (in millions):
2002 2001 2000
Average Common Shares Outstanding 322 320 202
Assumed Exercise of Stock Options 322
Average Dilutive Common Shares
Outstanding 325 322 204
Stock options not included in average common shares used in
calculating diluted earnings per share due to their antidilutive
effect were approximately five million, five million and 30,000
for 2002, 2001 and 2000,respectively.
Notes To Consolidated Financial Statements
exelon corporation and subsidiary companies
95