-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K5c6q23qcGUHsc1yoviJsezYeAM54whYVpHu/ww9cRO43s0bjNGnltjC3kT868tW Yn84MTLlZL4+4vkiZAFM9w== 0000950159-02-000589.txt : 20020926 0000950159-02-000589.hdr.sgml : 20020926 20020926132702 ACCESSION NUMBER: 0000950159-02-000589 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020926 ITEM INFORMATION: Other events FILED AS OF DATE: 20020926 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMMONWEALTH EDISON CO CENTRAL INDEX KEY: 0000022606 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 360938600 STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01839 FILM NUMBER: 02772900 BUSINESS ADDRESS: STREET 1: ONE FIRST NATIONAL PLZ 37TH FL STREET 2: P O BOX 767 CITY: CHICAGO STATE: IL ZIP: 60690 BUSINESS PHONE: 3123944321 MAIL ADDRESS: STREET 1: 10 SOUTH DEARBORN STREET STREET 2: 37TH FLOOR CITY: CHICAGO STATE: IL ZIP: 606900767 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EXELON CORP CENTRAL INDEX KEY: 0001109357 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 232990190 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-16169 FILM NUMBER: 02772901 BUSINESS ADDRESS: STREET 1: 10 S DEARBORN ST 37TH FLR STREET 2: PO BOX A-3005 CITY: CHICAGO STATE: IL ZIP: 60690-3005 BUSINESS PHONE: 3123947399 MAIL ADDRESS: STREET 1: P O BOX 767 CITY: CHICAGO STATE: IL ZIP: 60690 8-K 1 exelon9-268k.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 September 26, 2002 (Date of earliest event reported)
Commission File Name of Registrant; State of Incorporation; Address of IRS Employer Number Principal Executive Offices; and Telephone Number Identification Number - --------------------- --------------------------------------------------------- ------------------------- 1-16169 EXELON CORPORATION 23-2990190 (a Pennsylvania corporation) 10 South Dearborn Street - 37th Floor P.O. Box 805379 Chicago, Illinois 60680-5379 (312) 394-7398 1-1839 COMMONWEALTH EDISON COMPANY 36-0938600 (an Illinois corporation) 10 South Dearborn Street - 37th Floor P.O. Box 805379 Chicago, Illinois 60680-5379 (312) 394-4321
Item 5. Other Events On September 26, 2002 Commonwealth Edison Company (ComEd) received a letter order from the Federal Energy Regulatory Commission (FERC) indicating that it has no objection to ComEd's determination that none of its goodwill was related to assets transferred to Exelon Generation Company, LLC. ComEd's goodwill was created in the October 20, 2000 merger of PECO Energy Company and Unicom (ComEd's former parent). ComEd attributed the goodwill to its transmission and distribution business and attributed none of the goodwill to its generation business. Attached as Exhibit 99.1 is Exelon's news release issued on September 26, 2002 regarding this matter. Attached as Exhibit 99.2 is the text of the September 26, 2002 FERC letter order to ComEd. Exhibits Description 99.1 Exelon's news release issued on September 26, 2002 regarding FERC's letter order that FERC has no objection to ComEd's determination that none of ComEd's goodwill was related to assets transferred to Exelon Generation Company, LLC. 99.2 Text of the September 26, 2002 FERC letter order to ComEd. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. EXELON CORPORATION COMMONWEALTH EDISON COMPANY /S/ Ruth Ann M. Gillis ----------------------------------- Ruth Ann M. Gillis Senior Vice President Exelon Corporation September 26, 2002 EX-99 3 exhibit99-1.txt EXHIBIT 99.1 Exhibit 99.1 [Exelon Logo] News Release From: Exelon Corporation FOR IMMEDIATE RELEASE Corporate Communications September 26, 2002 P.O. Box 805379 Chicago, IL 60680-5379 Contact: Don Kirchoffner, Exelon Media Relations 312.394.3001 John Hatfield, ComEd Media Relations 312.394.4214 Linda Byus, CFA, Investor Relations 312.394.7696 Exelon Accounting for Merger Goodwill is Appropriate, Federal Regulators Rule Chicago (September 26, 2002) - Exelon Corporation (NYSE:EXC) received approval today from the Federal Energy Regulatory Commission (FERC) for its accounting treatment for goodwill during a corporate restructuring in January 2001. FERC's decision means that Commonwealth Edison (ComEd), Exelon's Illinois energy delivery subsidiary, will not be required to remove goodwill from its books, as FERC had directed in a previous letter order dated August 27, 2002. In a letter order today signed by Deputy Executive Director and Chief Accountant John M. Delaware, FERC ruled that, "Since the issuance of the August 27th letter, however, ComEd has provided the Commission, as well as the Securities and Exchange Commission, with extensive additional information to support ComEd's contention that the amount recognized as goodwill on its books relates entirely to ComEd's energy delivery business and thus no portion of that amount should be associated with the facilities and businesses transferred to Generation." The ruling comes a week after the Securities and Exchange Commission (SEC) notified Exelon that it did not object to the company's treatment of goodwill. The SEC's decision was significant because it confirmed Exelon's position that the company's accounting complied with generally accepted accounting principles (GAAP). "This was a particularly important matter for us to resolve swiftly and conclusively, not only because of the potential impact on our shareholders, but also because of our uncompromising commitment to honest reporting," stated Exelon Chairman and Chief Executive Officer John W. Rowe. "Our accounting was open and appropriate, and we are quite pleased to have this behind us. I particularly appreciate the support we received from members of the Illinois Commerce Commission." Page 2 Exelon Senior Vice President Elizabeth Moler praised federal regulators for their quick action. "Officials at FERC and the SEC deserve great credit for recognizing the potential impact of this issue on Exelon and on the continued development of competition in Illinois. Their professionalism and thoroughness was extraordinary," said Moler. The accounting issue arose last month when FERC staff sent ComEd a letter order ruling that an unspecified amount of goodwill should be removed from ComEd's books in conjunction with the company's January 2001 transfer of nuclear units and power marketing operations to its affiliate Exelon Generation Company, LLC. ComEd responded that the company's accounting treatment was consistent with GAAP, and that FERC's order would unintentionally disrupt the continued development of competition in Illinois. ComEd filed a petition on September 9 asking FERC for a rehearing. Today's FERC order stated, "Based on our review of the additional information ComEd has provided and the additional disclosures it intends to provide in the 2002 FERC Form 1 regarding the sensitivity of the goodwill impairment analysis, we have no objection to ComEd's determination that none of the goodwill was related to assets transferred to Generation." ### ================================================================================ This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained herein. The forward-looking statements herein include statements about future financial and operating results of Exelon. Economic, business, competitive and/or regulatory factors affecting Exelon's businesses generally could causeactual results to differ materially from those described herein. For a discussion of the factors that could cause actual results to differ materially, please see Exelon's filings with the Securities and Exchange Commission, particularly those discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Outlook" in Exelon's 2001 Annual Report. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Exelon does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this press release. Exelon Corporation is one of the nation's largest electric utilities with approximately 5 million customers and more than $15 billion in annual revenues. The company has one of the industry's largest portfolios of electricity generation capacity, with a nationwide reach and strong positions in the Midwest and Mid-Atlantic. Exelon distributes electricity to approximately 5 million customers in Illinois and Pennsylvania and gas to more than 440,000 customers in the Philadelphia area. Exelon is headquartered in Chicago and trades on the NYSE under the ticker EXC. EX-99 4 exhibit99-2.txt EXHIBIT 99.2 Exhibit 99.2 Below is the text of the September 26, 2002 Federal Energy Regulatory Commission letter order to Commonwealth Edison Company. [On Federal Energy Regulatory Commission letterhead] Federal Energy Regulatory Commission Washington, D.C. 20426 Office of the Executive Director In Reply Refer To: OED-DRAP, Docket No. AC01-56-002 September 26, 2002 Commonwealth Edison Company Attention: Mr. John E. Ebright Controller Three Lincoln Centre Oakbrook Terrace, IL 601804260 By letters dated August 1 and 27, 2002, I advised Commonwealth Edison (ComEd) that it should remove from Account 114, Electric Plant Acquisition Adjustments, the amount of goodwill associated with the generation and power marketing businesses transferred to its affiliate, Exelon Generation LLC (Generation). My determination was based on an inability to reach a contrary conclusion based simply on an assertion that the fair value of the generation assets was significantly below their book value at the time of the merger.1 Goodwill represented the amount paid above fair value for all of ComEd's identifiable assets at the time of the Peco/Unicom merger. Therefore, the fact that the fair value of the generation assets was below their book value at the time of the merger was not a sufficient basis either under Generally Accepted Accounting Principles or the Uniform systems of Accounts for concluding that no amount of the goodwill should be associated with both the generation business and power marketing business that were being transferred to Generation. Since the issuance of the August 27th letter, however, ComEd has provided the Commission, as well as the Securities and Exchange Commission, with extensive additional information to support ComEd's contention that the amount recognized as goodwill on its books relates entirely to ComEd's energy delivery business and thus no portion of that amount should be associated with the facilities and businesses transferred to Generation. In particular, ComEd argued and provided supporting information that: o the amount recognized as goodwill relates exclusively to ComEd's transmission and distribution business because of cash flows expected to be realized from the stranded cost recovery provision of the Illinois Restructuring Act that are included in rates charged for delivery services by ComEd. o at the time of the Peco/Unicom merger, the unidentified value (i.e. the goodwill) in the purchase transaction was associated with the regulatory framework in Illinois, ComEd's energy delivery franchises, and the connection its transmission and distribution assets provided to over 3 million retail customers. o no intangible value was assignable to the power marketing operations transferred to Generation because those operations were limited in scope2 and the processes and systems developed by Wholesale Marketing Group were not expected to be used by Generation. Based on our review of the additional information ComEd has provided and the additional disclosures it intends to provide in the 2002 FERC Form 1 regarding the sensitivity of the goodwill impairment analysis3 we have no objection to ComEd's determination than none of the goodwill was related to assets transferred to Generation. This letter order constitutes final agency action. To request that the Commission rehear you case you must file a request within 30 days of the date of this letter order (see 18 C.F.R. ss. 385.713). Sincerely, /s/ John M. Delaware ------------------------ John M. Delaware Deputy Executive Director and Chief Accountant -------------------- 1 Commonwealth Edison letter to the FERC Chief Accountant dated August 15, 2002. 2 ComEd stated that the primary focus of its Wholesale Marketing Group (WMG) was managing and balancing electricity supply to the load on ComEd's system. WMG had very limited approval to engage in financial hedging transactions and did not engage in speculative trading. 3 ComEd letter dated September 18, 2002. -----END PRIVACY-ENHANCED MESSAGE-----