ComEd 2006 Annual Report Download - page 312

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, 2005 Exelon Generation ComEd PECO
Investments
Equity method investments:
Direct financing leases ................................. $507 $ — $— $—
Financing trusts (a) .................................... 107 — 34 73
TEG and TEP (b) ...................................... 90 90 — —
Keystone ............................................ 7 7 — —
Conemaugh ......................................... 6 6 — —
Energy services and other ventures ...................... 4 2 — 2
Total equity method investments ......................... 721 105 34 75
Other investments:
Employee benefit trusts and investments(c) ................ 92 15 41 20
Total investments ......................................... $813 $120 $ 75 $ 95
(a) Includes investments in financing trusts which were not consolidated within the financial statements of Exelon at
December 31, 2006 pursuant to the provisions of FIN 46-R. See Note 1—Significant Accounting Policies for further
discussion of the effects of FIN 46-R.
(b) Generation acquired 49.5% interests in two facilities in Mexico on October 13, 2004, and on February 9, 2007, Generation
sold its ownership interests in TEG and TEP. See Note 2—Acquisitions and Dispositions for additional information.
(c) The Registrants’ investments in these marketable securities are recorded at fair market value.
Like-Kind Exchange Transaction (Exelon). Prior to the PECO/Unicom Merger, UII, LLC (formerly
Unicom Investments, Inc.) (UII), a wholly owned subsidiary of Exelon, entered into a like-kind
exchange transaction pursuant to which approximately $1.6 billion was invested in passive generating
station leases with two separate entities unrelated to Exelon. The generating stations were leased back
to such entities as part of the transaction. For financial accounting purposes, the investments are
accounted for as direct financing lease investments. UII 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, UII received a prepayment of $1.2 billion in the
fourth quarter of 2000, which reduced the investment in the leases. The remaining payments are
payable at the end of the thirty-year leases and there are no minimum scheduled lease payments to be
received over the next five years. The components of the net investment in the direct financing leases
were as follows:
December 31,
2006 2005
Total minimum lease payments ............................................ $1,492 $1,492
Less: unearned income ................................................... 963 985
Net investment in direct financing leases .................................... $ 529 $ 507
307