8-K/AOther Events

EXELON CORP 8-K/A Report (Mar 14, 2003)

Filed March 14, 2003For Securities:EXC

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.

Frequently Asked Questions

Exelon and British Energy have discussed the potential sale of British Energy's interest in AmerGen to Exelon. However, they have been unable to agree on a price, with British Energy indicating interest in selling for over $300 million and Exelon expressing interest in purchasing for around $200 million. There are no current discussions regarding this sale.

Exelon is actively trying to sell its investment in Sithe Energies. The company is also continuing discussions with Apollo and Marubeni to restructure its investment to resolve ownership limitations. If these efforts are unsuccessful, Exelon plans to divest non-strategic assets.

If Exelon successfully sells its Sithe investment, it anticipates recognizing a one-time loss. However, the company expects to receive several hundred million dollars in cash and will avoid consolidating Sithe's financial results, which include approximately $1.3 billion in debt.

Exelon is affirming its guidance for 2003 operating earnings per share to be in the range of $4.80-$5.00. This guidance assumes normal weather conditions and does not account for one-time items. First-quarter 2003 earnings are projected to exceed analyst expectations but will remain within 20%-25% of the full-year earnings.