ComEd 2006 Annual Report Download - page 300

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)
December 31, 2006, such capital was $2.8 billion and amounted to about 32 times the liquidating value
of the outstanding preferred stock of $87 million. Additionally, PECO may not declare dividends on any
shares of its capital stock in the event that: (1) it exercises its right to extend the interest payment
periods on the subordinated debentures which were issued to PECO Energy Capital, L.P. (PEC L.P.)
or PECO Trust IV; (2) it defaults on its guarantee of the payment of distributions on the Series D
Preferred Securities of PEC L.P. or the preferred trust securities of PECO Trust IV; or (3) an event of
default occurs under the Indenture under which the subordinated debentures are issued. At
December 31, 2006 and 2005, Exelon had retained earnings of $3.4 billion and $3.2 billion,
respectively, which included Generation undistributed earnings of $1.8 billion and $1.0 billion, ComEd
retained deficit of $(193) million and $(81) million, PECO retained earnings of $584 million and $649
million, respectively. At December 31, 2006 and 2005, Exelon’s common equity to total capitalization
ratio was 43% and 39%, respectively. At December 31, 2006 and 2005, ComEd’s retained deficits
included unappropriated retained deficits of $(1.6) billion and $(1.2) billion, respectively, partially offset
by $1.4 billion and $1.1 billion, respectively, of retained earnings appropriated for future dividends.
Jointly Owned Electric Utility Plant
On January 28, 2004, the NRC issued a letter requesting PSEG to conduct a review of its Salem
facility, of which Generation owns 42.59%, to assess the workplace environment for raising and
addressing safety issues. PSEG responded to the letter on February 28, 2004 and had independent
assessments of the work environment at both facilities performed. Assessment results were provided
to the NRC in May 2004. The assessments concluded that Salem was safe for continued operation,
but also identified issues that need to be addressed. At an NRC public meeting on June 16, 2004,
PSEG outlined its action plans to address these issues, which focus on safety conscious work
environment, the corrective action program and work management. PSEG provided the NRC a report
of its progress and the progress of its actions to resolve identified issues at public meetings in 2004
and 2005. On August 31, 2006, the NRC provided PSEG with a letter restoring normal oversight levels
regarding safety-conscious work environment issues, based on substantial and sustainable
improvements in this area.
AmerGen Contingency Payment
In connection with the purchase of Unit No. 1 of the TMI facility by AmerGen in 2000, AmerGen
entered into an agreement with the seller whereby the seller would receive additional consideration
based upon future purchase power prices through 2009. Under the terms of the agreement,
approximately $11 million and $11 million had been accrued at December 31, 2006 and 2005,
respectively. The amount accrued as of December 31, 2006 will be payable to the former owners of the
TMI facility in the first quarter of 2007 and the amount accrued as of December 31, 2005 was paid in
the first quarter of 2006. These payments represented contingent consideration for the original
acquisition and have accordingly been reflected as an increase to the long-lived assets associated with
the TMI facility, and are being depreciated over the remaining useful life of the facility.
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