Summary
This amended Form 8-K filing from Exelon Corporation clarifies earlier disclosures regarding discussions with British Energy concerning AmerGen and provides updated information on the potential restructuring or sale of Exelon's investment in Sithe Energies, Inc. The company aims to resolve ownership limitations with Sithe's qualifying facilities and expects to implement restructuring measures in 2003. If unsuccessful, Exelon anticipates divesting non-strategic assets with an uncertain financial outcome. Exelon's CEO indicated that a sale of the Sithe investment is actively being pursued, which would likely result in a one-time loss but provide several hundred million dollars in cash and relieve Exelon from consolidating Sithe's substantial debt. The company also reaffirmed its 2003 operating earnings per share guidance of $4.80-$5.00, projecting first-quarter earnings to exceed analyst expectations. Regarding AmerGen, Exelon and British Energy have engaged in price negotiations for British Energy's stake, with differing valuation expectations.
Key Highlights
- 1Exelon is actively seeking to sell its investment in Sithe Energies, Inc.
- 2A sale of Sithe could result in a one-time loss for Exelon but would yield several hundred million dollars in cash and remove $1.3 billion in debt from consolidation.
- 3Exelon reaffirms its 2003 operating earnings per share guidance of $4.80-$5.00.
- 4First-quarter 2003 earnings are expected to be higher than analyst estimates, though within the 20%-25% range of full-year earnings.
- 5Discussions with British Energy regarding the sale of its interest in AmerGen have occurred, but parties have not agreed on a price (British Energy seeking >$300M, Exelon offering ~$200M).
- 6Exelon is continuing discussions with Apollo and Marubeni to restructure its Sithe investment to address ownership limitations.
- 7Power Team experienced actual demand exceeding forecast demand in January and February 2003, requiring power purchases due to a weather-related shortfall.