Exelon 2002 Annual Report Download - page 54

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note to Sithe. In 2002, Generation agreed to make a loan to
AmerGen of up to $100 million,at an interestrate of one-month
LIBOR plus 2.25%, and with a maturity date of July 1, 2003. As
of December 31, 2002, the balance of the loan to AmerGen was
$35 million.
We project that Generation’s capital expenditures in 2003
will be lower than they were in 2002, and the majority of these
expenditures will be used for additions and upgrades to exist-
ing facilities, nuclear fuel and increases in capacity at existing
plants. Eight nuclear refueling outages are planned for 2003,
compared to 11 during 2002. We project that the total capital
expenditures for nuclear refueling outages will decrease in
2003 over 2002 by $10 million. Generation has agreed to make
capital contributions to AmerGen of 50% of the purchase price
of any acquisitions that AmerGen makes. We anticipate that
Generation’s capital expenditures will be funded by internally
generated funds, Generation’s borrowings or capital contribu-
tions from us.
Enterprises’ capital expenditures were $44 million in 2002.
Enterprises’ capital expenditures for 2002 were primarily for
additions to or upgrades of existing facilities. On April 1, 2002,
Enterprises sold its 49% interest in AT&T Wireless for $285
million in cash.
We project that Enterprises’ capital expenditures for 2003
will be approximately $26 million, primarily for additions to
or upgrades of existing facilities. We anticipate that all of
Enterprises’ capital expenditures will be funded by internally
generated funds, capital contributions or borrowings from us.
Our total estimated capital expenditures in 2003 are
approximately $2.0 billion. Internally generated cash flow is
expected to meet capital requirements excluding acquisitions.
Our proposed capital expenditures and other investments are
subject to periodic review and revision to reflect changes in
economic conditions and other factors.
Cash Flows from Financing Activities
Cash flows used in financing activities were $1.1 billion in 2002,
as compared to $1.3 billion in 2001, due to lower dividend pay-
ments, a contribution from a minority interest, and increased
employee stock purchase plan activity.The primary components
of 2002 financing activity are as follows:
– ComEd issued $700 million of First Mortgage Bonds and
pollution control bonds to redeem $700 million of First
Mortgage Bonds and pollution control bonds.ComEd also paid
at maturity $500 million of First Mortgage Bonds and other
long-term debt, retired $340 million of transitional trust notes
and had net issuances of $123 million of commercial paper.
– PECO issued $225 million of First and Refunding Mortgage
Bonds. The proceeds of these bonds were used to repay
commercial paper that it used to pay at maturity $222 million
of First and Refunding Mortgage Bonds. PECO made principal
payments of $326 million on transition bonds and net
issuances of $200 million of commercial paper.
On January 22, 2003, ComEd issued $350 million of 3.70% First
Mortgage Bonds, due on February 1, 2008 and $350 million of
5.875% First Mortgage Bonds, due on February 1, 2033. These
bond proceeds were used to refinance long-term debt that had
been retired during the third and fourth quarters of 2002.
The 2001 common stock dividend payments of $583 million
cover the period from October 20,2000, the date of the Merger,
through the end of 2001. The 2002 cash dividend payments on
common stock were $563 million. On January 28, 2003, our
Board of Directors declared a quarterly dividend of $0.46 per
share representing an annual dividend rate of $1.84 per share,
which is an increase of $0.08 per share over 2002.We intend to
grow our dividend over time at a rate of approximately 4% to
5%, commensurate with long-term earnings growth. The pay-
ment of future dividends is subject to approval and declaration
by the Board of Directors each quarter.
Financing activities in 2002 exclude the non-cash issuance
of a $534 million note to Sithe for the November 1,2002 acquisi-
tion of Sithe New England and approximately $1.0 billion of
Sithe New England long-term debt, which is reflected in our
Consolidated Balance Sheets as of December 31, 2002.
Credit Issues
We meet our short-term liquidity requirements primarily
through the issuance of commercial paper by the Exelon corpo-
rate holding company (Exelon Corporate) and by ComEd, PECO
and Generation. Exelon Corporate participates, along with
ComEd, PECO and Generation, in a $1.5 billion unsecured 364-
day revolving credit facility with a group of banks. The credit
facility that became effective on November 22, 2002, includes a
term-out option that allows any outstanding borrowings at the
end of the revolving credit period to be repaid on November 21,
2004. Exelon Corporate may increase or decrease the sublimits
of each of the participants upon written notification to the
banks.As of December 31,2002,Exelon Corporate’s sublimit was
$900 million, ComEd’s was $200 million, PECO’s was $400 mil-
lion and there was no sublimit for Generation.The credit facil-
ity is used principally to support the commercial paper
programs of Exelon Corporate,ComEd,PECO and Generation. At
December 31, 2002, our Consolidated Balance Sheet reflects the
$948 million of commercial paper outstanding, of which $267
million was classified as long-term debt.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
exelon corporation and subsidiary companies