SEC Comment Letter for EXELON CORP (EXC) (CIK 0001109357) (EXC) — Jun 6, 2008
EXELON CORP (EXC) (CIK 0001109357)
Date: June 6, 2008 · CIK: 0001109357 · Accession: 0000000000-08-028427
AI Filing Summary & Sentiment
File numbers found in text: 001-16169
Referenced dates: May 12, 2008, May 23, 2008
Letter
Mail Stop 3561 June 6, 2008 John W. Rowe Chairman, President and Chief Executive Officer Exelon Corporation 10 South Dearborn St. Chicago, IL 60680-5379 Re: Exelon Corporation Form 10-K for Fiscal Year Ended December 31, 2007 Filed February 7, 2008 Definitive Proxy Statement on Schedule 14A Filed March 20, 2008 File No. 001-16169 Dear Mr. Rowe: We have reviewed your response letter dated May 23, 2008 and have the following comments. You should comply with the comments in all future filings, as applicable. Please confirm in writing that you will do so, and also explain to us how you intend to comply. If you disagree, we will consider your explanation as to why our comments are inapplicable or a revision is unnecessary. Please be as detailed as necessary in your explanation. After reviewing this information, we may raise additional comments. Please understand that the purpose of our re view process is to assist you in your compliance with the applicable disclosure requir ements and to enhance the overall disclosure in your filings. We look forward to working with you in these respects. We welcome any questions you may have about our comments or on any other aspect of our review. Feel free to call us at the telephone numbers lis ted at the end of this letter. Form 10-K for Fiscal Year Ended December 31, 2007
Item 8. Financial Statements and Supplementary Data, page 172 Combined Notes to Consolidated Financial Statements, page 204 Note 4. Regulatory Issues (Exelon, Generation, ComEd and PECO), page 224 1. We reviewed your response to comment two in our letter dated May 12, 2008. Please tell us the authoritative li terature you considered in concl uding that Generation’s settlement
John W. Rowe Exelon Corporation June 6, 2008 Page 2 payments should be recognized in income as paid rather than ratably over the period the benefits are received. Note 19. Commitments and Contingencies, page 296
Fund Transfer Restrictions, page 315 2. We reviewed your response to comment six in our letter dated May 12, 2008. We acknowledge that the Federal Power Act is vague in defi ning whether a dividend is excessive as the Act does not stipulate a ny quantitative limits on the payment of dividends or the funds properly included in th e capital account. We have read the cases you cited regarding the FERC’s in terpretation of the scope of Section 305(a) of the Act. However, it appears that that facts and circum stances in the cited cases that necessitated dividend payments were caused by unusual weat her patterns and the attendant financing and regulatory adjustments made to accommodate such abnormal events. In addition, although you disclose that the Federal Powe r Act does not limit the ability of your subsidiaries to pay dividends sufficient to m eet your actual cash requirements, we are not convinced from the information provided in you r response that restricted net assets, as defined in Rule 4-08(e)(3) of Regulation S-X, of your consolidated and unconsolidated subsidiaries and equity method investees together do not exceed 25 percent of consolidated net assets as of the end of 2007. Please provide us with a more detailed analysis of the impact of the Federal Power Ac t as well as any other restrictions, such as debt covenants or state PUC limitations, on your ability to pay dividends. In doing so, provide a quantitative analys is of restricted net assets which supports your conclusion that Rule 4-08(e) of Regulation S-X is not applicable in your facts and circumstances. The analysis should show that your subsidiaries, regulated or otherwise, on an aggregate basis are able to transfer amounts in the form of loans, advances or cash dividends in excess of 75 percent of consolidated net assets without pot entially violating the provisions of the Federal Power Act and/or ot her agreements or without the consent of a third party. If you cannot make such a re presentation, we believe the information required by Schedule I of Rule 5-04 of Regulatio n S-X would be useful to an analysis of the consolidated financial statements.
*****
Please respond to these comments within 10 business days or tell us when you will provide us with a response. Please furnish a letter that keys your respon ses to our comments and provides any requested information. Detailed letters greatly facilitate our review. Please understand that we may have additional comments after reviewing your responses to our comments.
John W. Rowe Exelon Corporation June 6, 2008 Page 3 You may contact Sondra Snyder, Staff Accountant, at (202) 551-3332 or William Thompson, Accounting Branch Chief, at (202) 551-3344 with any questions regarding the comments on financial statements and related matte rs. Please contact Blair Petrillo, Attorney- Advisor, at (202) 551-3550, Ellie Bavaria, Spec ial Counsel, at (202) 551-3238, or me at (202) 551-3720 with any other questions. Sincerely,
H. Christopher Owings Assistant Director
Show Raw Text
Mail Stop 3561 June 6, 2008 John W. Rowe Chairman, President and Chief Executive Officer Exelon Corporation 10 South Dearborn St. Chicago, IL 60680-5379 Re: Exelon Corporation Form 10-K for Fiscal Year Ended December 31, 2007 Filed February 7, 2008 Definitive Proxy Statement on Schedule 14A Filed March 20, 2008 File No. 001-16169 Dear Mr. Rowe: We have reviewed your response letter dated May 23, 2008 and have the following comments. You should comply with the comments in all future filings, as applicable. Please confirm in writing that you will do so, and also explain to us how you intend to comply. If you disagree, we will consider your explanation as to why our comments are inapplicable or a revision is unnecessary. Please be as detailed as necessary in your explanation. After reviewing this information, we may raise additional comments. Please understand that the purpose of our re view process is to assist you in your compliance with the applicable disclosure requir ements and to enhance the overall disclosure in your filings. We look forward to working with you in these respects. We welcome any questions you may have about our comments or on any other aspect of our review. Feel free to call us at the telephone numbers lis ted at the end of this letter. Form 10-K for Fiscal Year Ended December 31, 2007 Item 8. Financial Statements and Supplementary Data, page 172 Combined Notes to Consolidated Financial Statements, page 204 Note 4. Regulatory Issues (Exelon, Generation, ComEd and PECO), page 224 1. We reviewed your response to comment two in our letter dated May 12, 2008. Please tell us the authoritative li terature you considered in concl uding that Generation’s settlement John W. Rowe Exelon Corporation June 6, 2008 Page 2 payments should be recognized in income as paid rather than ratably over the period the benefits are received. Note 19. Commitments and Contingencies, page 296 Fund Transfer Restrictions, page 315 2. We reviewed your response to comment six in our letter dated May 12, 2008. We acknowledge that the Federal Power Act is vague in defi ning whether a dividend is excessive as the Act does not stipulate a ny quantitative limits on the payment of dividends or the funds properly included in th e capital account. We have read the cases you cited regarding the FERC’s in terpretation of the scope of Section 305(a) of the Act. However, it appears that that facts and circum stances in the cited cases that necessitated dividend payments were caused by unusual weat her patterns and the attendant financing and regulatory adjustments made to accommodate such abnormal events. In addition, although you disclose that the Federal Powe r Act does not limit the ability of your subsidiaries to pay dividends sufficient to m eet your actual cash requirements, we are not convinced from the information provided in you r response that restricted net assets, as defined in Rule 4-08(e)(3) of Regulation S-X, of your consolidated and unconsolidated subsidiaries and equity method investees together do not exceed 25 percent of consolidated net assets as of the end of 2007. Please provide us with a more detailed analysis of the impact of the Federal Power Ac t as well as any other restrictions, such as debt covenants or state PUC limitations, on your ability to pay dividends. In doing so, provide a quantitative analys is of restricted net assets which supports your conclusion that Rule 4-08(e) of Regulation S-X is not applicable in your facts and circumstances. The analysis should show that your subsidiaries, regulated or otherwise, on an aggregate basis are able to transfer amounts in the form of loans, advances or cash dividends in excess of 75 percent of consolidated net assets without pot entially violating the provisions of the Federal Power Act and/or ot her agreements or without the consent of a third party. If you cannot make such a re presentation, we believe the information required by Schedule I of Rule 5-04 of Regulatio n S-X would be useful to an analysis of the consolidated financial statements. ***** Please respond to these comments within 10 business days or tell us when you will provide us with a response. Please furnish a letter that keys your respon ses to our comments and provides any requested information. Detailed letters greatly facilitate our review. Please understand that we may have additional comments after reviewing your responses to our comments. John W. Rowe Exelon Corporation June 6, 2008 Page 3 You may contact Sondra Snyder, Staff Accountant, at (202) 551-3332 or William Thompson, Accounting Branch Chief, at (202) 551-3344 with any questions regarding the comments on financial statements and related matte rs. Please contact Blair Petrillo, Attorney- Advisor, at (202) 551-3550, Ellie Bavaria, Spec ial Counsel, at (202) 551-3238, or me at (202) 551-3720 with any other questions. Sincerely, H. Christopher Owings Assistant Director