ComEd 2015 Annual Report Download - page 155

Table of Contents
Liquidity and Capital Resources
Exelon’s and Generation’s prior year activity presented below includes the activity of CENG, from the integration date effective April 1, 2014.
All results included throughout the liquidity and capital resources section are presented on a GAAP basis.
The Registrants’ operating and capital expenditures requirements are provided by internally generated cash flows from operations as well as
funds from external sources in the capital markets and through bank borrowings. The Registrants’ businesses are capital intensive and require
considerable capital resources. Each Registrant’s access to external financing on reasonable terms depends on its credit ratings and current
overall capital market business conditions, including that of the utility industry in general. If these conditions deteriorate to the extent that the
Registrants no longer have access to the capital markets at reasonable terms, Exelon, Generation, ComEd, PECO and BGE have access to
unsecured revolving credit facilities with aggregate bank commitments of $0.5 billion, $5.3 billion, $1 billion, $0.6 billion and $0.6 billion,
respectively. Exelon Corporate, Generation, ComEd, PECO and BGE’s syndicated revolving credit facilities expire in 2018 and 2019. In addition,
Generation has $0.4 billion in bilateral facilities with banks which have various expirations between March 2016 and January 2019. The Registrants
utilize their credit facilities to support their commercial paper programs, provide for other short-term borrowings and to issue letters of credit. See
the “Credit Matters” section below for further discussion. The Registrants expect cash flows to be sufficient to meet operating expenses, financing
costs and capital expenditure requirements.
The Registrants primarily use their capital resources, including cash, to fund capital requirements, including construction expenditures, retire
debt, pay dividends, fund pension and other postretirement benefit obligations and invest in new and existing ventures. The Registrants spend a
significant amount of cash on capital improvements and construction projects that have a long-term return on investment. Additionally, ComEd,
PECO and BGE operate in rate-regulated environments in which the amount of new investment recovery may be delayed or limited and where
such recovery takes place over an extended period of time.
See Note 14—Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for further discussion of the
Registrants’ debt and credit agreements.
PHI Merger Financing
Exelon has raised cash to fund the all-cash purchase price, acquisition and integration related costs, and merger commitments, through the
issuance of $4.2 billion of debt (of which $3.3 billion remains after execution of the exchange offer, see Note 14—Debt and Credit Agreements for
further information on the exchange), $1.15 billion of junior subordinated notes in the form of 23 million equity units, the issuance of $1.9 billion of
common stock, cash proceeds of $1.8 billion from asset sales primarily at Generation (after-tax proceeds of approximately $1.4 billion) and the
remaining balance from cash on hand and/or short-term borrowings available to Exelon. Exelon will have sufficient cash to fund the all-cash
purchase price, acquisition and integration related costs, and merger commitments. See Note 14—Debt and Credit Agreements and Note 19—
Shareholder’s Equity for further information on the debt and equity issuances. In the event the PHI merger is terminated, the Board of Directors
could direct Exelon to use its existing cash on hand to retire debt, to return capital to shareholders or for other general corporate purposes.
Cash Flows from Operating Activities
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Generation’s cash flows from operating activities primarily result from the sale of electric energy and energy-related products and services to
customers. Generation’s future cash flows from operating
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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