ComEd 2006 Annual Report Download - page 211

Exelon Corporation and Subsidiary Companies
Exelon Generation Company, LLC and Subsidiary Companies
Commonwealth Edison Company and Subsidiary Companies
PECO Energy Company and Subsidiary Companies
Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
Sale of Investments. On December 1, 2004, Enterprises sold its limited partnership interest in
EnerTech Capital Partners II, L.P. and its limited liability company interests in Kinetic Ventures I, LLC
and Kinetic Ventures II, LLC for $8 million in cash and the assumption by the buyers of approximately
$10 million in unfunded capital commitments. Prior to the sale, in 2004, these investments were written
down to their expected sales price, resulting in pre-tax impairment charges totaling $18 million. As
such, there was no net gain or loss recorded associated with the sale.
The results of Thermal and Exelon Services have been included in discontinued operations within
Exelon’s Consolidated Statements of Operations. See Note 3—Discontinued Operations for additional
information.
Investments in Synthetic Fuel-Producing Facilities (Exelon)
In November 2003, Exelon purchased interests in two synthetic fuel-producing facilities. The
purchase price for these facilities included a combination of cash, notes payable and contingent
consideration dependent upon the production level of the facilities. The notes payable recorded for the
purchase of the facilities were $238 million. Exelon’s right to acquire a fixed amount of tax credits
generated by the facilities was recorded as an intangible asset which was amortized as the tax credits
were earned; however, Exelon recorded an impairment charge to fully impair this intangible asset in
the second quarter of 2006.
In July 2004, Exelon purchased an interest in a limited partnership that indirectly owns four
synthetic fuel-producing facilities. Exelon’s purchase price for these facilities included a combination of
a note payable and contingent consideration dependent upon the production levels of the facilities. The
note payable recorded for the purchase of the facilities was $22 million. Exelon’s right to acquire a
fixed amount of tax credits generated by the facilities was recorded as an intangible asset which was
amortized as these tax credits are earned; however, Exelon recorded an impairment charge to fully
impair this intangible asset in the second quarter of 2006.
See Note 12—Income Taxes for additional information regarding Exelon’s investments in synthetic
fuel-producing facilities.
Investments in Affordable Housing (Exelon)
On October 15, 2004 and November 12, 2004, Exelon sold investments in affordable housing for
total proceeds of $78 million and recognized a net gain on sale of $4 million before income taxes.
Acquisition of Southeast Chicago Energy Project, LLC (SCEP) (Exelon and Generation)
Generation and Peoples Calumet, LLC (Peoples Calumet), a subsidiary of Peoples Energy
Corporation, were joint owners of SCEP, a 350-megawatt natural gas-fired, peaking electric power
plant located in Chicago, Illinois, which began operation in 2002. In 2002, Generation and Peoples
Calumet owned 70% and 30%, respectively, of SCEP. Pursuant to the joint owners agreement,
Generation was obligated to purchase Peoples Calumet’s 30% interest ratably over a 20-year period.
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