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
MAY 3, 2001
(Date of earliest
event reported)
EXELON CORPORATION
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 1-16169 23-2990190
(State or other (SEC (IRS Employer
jurisdiction of file number) Identification
incorporation) Number)
37TH FLOOR, 10 SOUTH DEARBORN STREET
POST OFFICE BOX A-3005
CHICAGO, ILLINOIS 60690-3005
(Address of principal executive offices)
Registrant's telephone number, including area code:
(312) 394-4321
ITEM 5. OTHER EVENTS
On May 3, 2001, Exelon Corporation (the "Company") announced that it
agreed to sell $500 million of 6 3/4% Senior Notes due 2011 (the "Senior
Notes"). The Senior Notes bear interest at 6 3/4% per annum, mature on May 1,
2011 and are redeemable at the option of the Company at any time at par and a
make-whole premium, with accrued interest to the redemption date.
The net proceeds of the Senior Notes will be used by the Company to
partially refinance a term loan due October 12, 2001. In October 2000, the
Company obtained a $1.25 billion term loan to finance the cash consideration
paid to former holders of Unicom Corporation common stock in connection with
the merger of Unicom Corporation and PECO Energy Company and to finance the
purchase of the Company's 49.9% interest in Sithe Energies in December 2000.
The Senior Notes were offered pursuant to the Company's existing shelf
registration of up to $1.5 billion of debt securities. Certain financial
information set forth below not previously included in the Company's reports
under the Securities Exchange Act of 1934 was included in the Prospectus, dated
May 1, 2001, or the Prospectus Supplement, dated May 3, 2001, relating to the
Senior Notes.
CAPITALIZATION
The following table shows Exelon's short-term debt and capitalization
(1) on a consolidated basis and (2) on a consolidated basis as adjusted to
reflect the offering of the Senior Notes and the use of the proceeds from the
offering. This table should be read in conjunction with the consolidated
financial statements and related notes of Exelon for the year ended December
31, 2000.
AS OF DECEMBER 31, 2000
---------------------------
AS ADJUSTED
ACTUAL FOR OFFERING(a)
--------- ---------------
($ IN MILLIONS)
Short-term debt(b).................................... $ 2,281 $ 1,785
Capitalization:
Long-term debt:
Transition bonds(c)............................... $ 6,982 $ 6,982
Other long-term debt.............................. 5,976 6,476
Preferred securities of subsidiaries................ 630 630
Shareholders' equity................................ 7,215 7,215
------- -------
Total capitalization............................ $20,803 $21,303
======= =======
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(a) Reflects payment of $496 million of short-term indebtedness from the
proceeds of the offering.
(b) Includes current maturities of long-term debt of $908 million, of which
$467 million are transition bonds.
(c) Transition bonds represent transition notes and bonds issued by subsidiaries
of ComEd and PECO to securitize portions of their respective stranded cost
recovery. Includes unamortized discount of $109 million.
SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
The following financial information about Exelon is only a summary. Exelon
acquired Unicom on October 20, 2000 in a business combination accounted for
under the purchase method of accounting. The results of Unicom are included in
Exelon's financial results since the acquisition date. This table should be read
in conjunction with the historical consolidated financial statements of Exelon
and the related notes.
YEAR ENDED DECEMBER 31,
------------------------------------------
1998 1999 2000
-------- -------- --------
($ IN MILLIONS)
INCOME STATEMENT DATA
Operating revenues........................................ $5,325 $5,478 $7,499
Operating income.......................................... 1,268 1,373 1,527
Net income................................................ 500 570 586
CASH FLOW DATA
EBITDA(a)................................................. $2,033 $1,731 $2,134
Cash interest paid(b)..................................... 385 350 519
Capital expenditures...................................... 415 491 752
Cash flow from operations................................. 1,486 883 1,096
AS OF DECEMBER 31,
-------------------------
1999 2000
-------- --------
($ IN MILLIONS)
BALANCE SHEET DATA
Property, plant and equipment, net........................ $ 5,004 $12,936
Total assets.............................................. 13,087 34,597
Long-term debt(c)......................................... 5,969 12,958
Preferred securities of subsidiaries...................... 321 630
Shareholders' equity...................................... 1,773 7,215
--------------
(a) EBITDA is defined as operating income plus depreciation and amortization as
reported in the consolidated statements of cash flows. EBITDA is not a
measure of performance under generally accepted accounting principles
(GAAP). While EBITDA should not be considered as a substitute for net
income, cash flows from operating activities and other income or cash flow
statement data prepared in accordance with GAAP, or as a measure of
profitability or liquidity, management understands that EBITDA is
customarily used as a measure in evaluating companies.
(b) Includes cash interest paid of none, $107 million and $307 million in
connection with transition bonds for 1998, 1999 and 2000, respectively.
(c) Excludes current maturities of $128 million and $908 million in 1999 and
2000, respectively.
SELECTED UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
Presented below are selected unaudited pro forma combined financial
information for the years ended December 31, 1999 and December 31, 2000. The
selected pro forma financial information gives effect to the merger as if it had
occurred at the beginning of the periods presented. Merger-related costs of $367
million ($220 million, net of income taxes) have been excluded from the pro
forma information below. The pro forma information also gives effect to the
December 1999 sale by ComEd of its fossil generating assets as if it had
occurred at the beginning of 1999.
This information does not purport to represent what the results of
operations of Exelon would actually have been had the merger occurred at January
1, 1999 or January 1, 2000 or to project Exelon's results of operations for any
future period or date. The data set forth below should be read together with the
historical financial statements and notes of Exelon.
YEAR ENDED DECEMBER 31,
-------------------------
1999 2000
-------- --------
($ IN MILLIONS)
INCOME STATEMENT DATA
Operating revenues........................................ $12,225 $13,508
Operating income.......................................... 3,086 2,987
Net income................................................ 1,156 1,216
CASH FLOW DATA
EBITDA(a)................................................. $ 4,180 $ 4,554
Cash interest paid........................................ 948 947
Capital expenditures...................................... 1,948 1,923
Cash flow from operations................................. 2,243 1,278
--------------
(a) EBITDA is defined as operating income plus depreciation and amortization as
reported in the consolidated statements of cash flows. EBITDA is not a
measure of performance under GAAP. While EBITDA should not be considered as
a substitute for net income, cash flows from operating activities and other
income or cash flow statement data prepared in accordance with GAAP, or as
a measure of profitability or liquidity, management understands that EBITDA
is customarily used as a measure in evaluating companies.
The selected unaudited financial information presented below represents
Exelon's actual results for the quarter ended March 31, 2000; the pro forma
results for the quarter ended March 31, 2000, assuming the merger with Unicom
occurred on January 1, 2000; and the actual results for the quarter ended March
31, 2001.
THREE MONTH PERIOD ENDED
MARCH 31,
-------------------------------
2000
-------------------- 2001
ACTUAL PRO FORMA ACTUAL
-------- --------- --------
($ IN MILLIONS)
INCOME STATEMENT DATA
Revenues........................................ $1,353 $2,987 $3,823
Earnings before interest and income taxes....... 365 725 941
Net income...................................... 191 344 399
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratio of earnings to fixed
charges for each of the periods indicated.
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------
1996 1997 1998 1999 2000
---- -------- -------- -------- --------
3.29 2.71 3.60 3.39* 2.57*
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*Corrected amount.
The ratios of earnings to fixed charges represent, on a pre-tax basis, the
number of times earnings cover fixed charges. Earnings consist of net income
plus fixed charges and taxes based on our income. Fixed charges consist of
interest on funded indebtedness, other interest, amortization of net gain on
reacquired debt and net discount on debt and the interest portion of all rentals
charged to income. For the purposes of calculating these ratios, income from
continuing operations (1) for 2000 does not include the extraordinary charge
against income of $6 million ($4 million net of income taxes) or the cumulative
effect of a change in accounting principle which increased income $40 million
($24 million net of income taxes), (2) for 1999 does not include the
extraordinary charge against income of $62 million ($37 million net of income
taxes), (3) for 1998 does not include the extraordinary charge against income of
$33 million ($20 million net of income taxes) and (4) for 1997 does not include
the extraordinary charge against income of $3.1 billion ($1.8 billion net of
income taxes). The ratio of earnings to fixed charges reflects operations of
Unicom Corporation (the former parent of ComEd) since October 20, 2000, the date
of the merger.
The following table sets forth the pro forma ratio of earnings to fixed
charges for each of the periods indicated. The pro forma ratios give effect to
the merger with Unicom Corporation as if it occurred on January 1, 1999 and
2000, respectively.
YEARS ENDED
DECEMBER 31,
-----------------------
1999 2000
---- --------
2.99 2.93
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
1-1 Purchase Agreement, dated as of May 3, 2001, between the
Company and the purchasers named therein
4-1 Officer's Certificate, dated as of May 8, 2001, setting
forth the terms of the Senior Notes
4-2 Form of global certificate, representing the Senior Notes
12-1 Computation of Ratios of Earnings to Fixed Charges
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
/s/ J. Barry Mitchell
-----------------------------------
J. Barry Mitchell
Vice President and Treasurer
May 7, 2001