Exelon 2002 Annual Report Download - page 120

Download and view the complete annual report

Please find page 120 of the 2002 Exelon 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

Notes To Consolidated Financial Statements
exelon corporation and subsidiary companies
118
Equity in earnings of AmerGen and Sithe of $88 million, $90
million and $4 million for 2002,2001 and 2000,respectively, are
included in Generation’s Net Income. Equity in earnings (losses)
of communications joint ventures and other investments of $3
million, $(19) million and $(45) million for 2002, 2001 and 2000,
respectively, are included in Enterprises’ Net Income. Equity in
earnings (losses) of affordable housing investments of $(11) mil-
lion and $(9) million for 2002 and 2001, respectively, are
included in Corporate’s Net Income.
note 21 • related party transactions
Exelon’s financial statements reflect related-party transactions
with unconsolidated affiliates as reflected in the tables below.
For the Years Ended December 31,
2002 2001 2000
Purchased Power from AmerGen(1) $273 $57 $52
Interest Income from AmerGen(2) 2––
Interest Income from Sithe(3) –2–
Interest Expense to Sithe(4) 2––
Services Provided to AmerGen(5) 70 80 32
Services Provided to Sithe(6) 1––
Services Provided by Sithe(7) 13 ––
December 31,
2002 2001
Net Receivable from AmerGen(1,2,3) $39 $44
Net Payable to Sithe(4,5) 7–
Note Payable to Sithe(7) 534 –
(1) Generation has entered into PPAs dated December 18,2001 and November 22, 1999 with
AmerGen. Under the 2001 PPA, Generation has agreed to purchase from AmerGen all
the energy from Unit No. 1 at Three Mile Island Nuclear Station from January 1, 2002
through December 31, 2014. Under the 1999 PPA, Generation agreed to purchase from
AmerGen all of the residual energy from Clinton Nuclear Power Station (Clinton)
through December 31, 2002. Currently, the residual output is approximately 31% of the
total output of Clinton. In accordance with the terms of the AmerGen partnership
agreement,the 1999 PPA will be extended through the end of the AmerGen partnership
agreement in 2006.
(2) In February 2002, Generation entered into an agreement to loan AmerGen up to $75
million at an interest rate equal to the 1-month London Interbank Offering Rate plus
2.25%. In July 2002, the limit of the loan agreement was increased to $100 million and
the maturity date was extended to July 1, 2003. As of December 31 2002, the outstand-
ing principal balance of the loan was $35 million.
(3) In August 2001, Exelon loaned Sithe,an equity method investee of Generation,$150 mil-
lion. The note, which bore interest at the eurodollar rate, plus 2.25%, was repaid in
December 2001 with the proceeds of bank borrowings. In connection with the bank bor-
rowings,Exelon provided the lenders with a support letter confirming its investment in
Sithe and Exelon’s agreement to maintain a positive net worth of Sithe.
(4) Under the terms of the agreement to acquire Sithe New England dated November 1,
2002, Generation issued a $534 million note to be paid in full on June 18, 2003 to Sithe.
The note bears interest at the rate equal to LIBOR plus 0.875%. Interest accrued on the
note as of December 31, 2002 was $2 million.
(5) Under a service agreement dated March 1, 1999, Generation provides AmerGen with
certain operation and support services to the nuclear facilities owned by AmerGen.This
service agreement has an indefinite term and may be terminated by Generation or
AmerGen with 90 days notice. Generation is compensated for these services in an
amount agreed to in the work order, which is not less than the higher of its fully
allocated cost for performing each service or the market price for such service.
(6) Under a service agreement dated December 18, 2000, Generation provides certain
engineering and environmental services for fossil facilities owned by Sithe and for cer-
tain developmental projects. Generation is compensated for these services in an
amount agreed to in the work order,but not less than the higher of fully allocated costs
for performing such services or the market price.
(7) Under a service agreement dated December 18, 2000, Sithe provides Generation certain
fuel and project development services. Sithe is compensated for these services in the
amount agreed to in the work order,but not less than the higher of fully allocated costs
for performing such services or the market price.