Item 7.01. Regulation FD Disclosure
Exelon Corporation ("Exelon") is disclosing under Item 7.01 of this Current
Report certain unaudited pro forma financial information relating to the
separation of Constellation Energy Corporation (collectively with its
consolidated subsidiaries, "Constellation") from Exelon on February 1, 2022
("the separation"). Immediately prior to the separation, Exelon transferred its
competitive generation and customer-facing energy businesses conducted through
Constellation Energy Generation, LLC (formerly Exelon Generation Company, LLC)
and its subsidiaries ("Generation") to its newly-formed wholly-owned subsidiary,
Constellation. Constellation was formed on June 15, 2021 in connection with the
separation transaction and has engaged in no activity other than incidental to
the separation. The separation occurred through a pro-rata distribution to
Exelon's shareholders of all of the shares of common stock of Constellation.
On January 21, 2022 and January 24, 2022, Exelon entered into four separate
unsecured term loan credit facilities in the aggregate amount of $2 billion
(collectively, the "Term Loans") with Barclays Bank PLC ("Barclays Term Loan"),
PNC Bank National Association ("PNC Term Loan"), Sumitomo Mitsui Banking
Corporation ("SMBC Term Loan") and U.S. Bank National Association ("U.S. Bank
Term Loan" and together with the PNC Term Loan and SMBC Term Loan, the "18-Month
Term Loans"). The proceeds from the Term Loans were used to primarily fund a
$1.75 billion cash payment to Constellation and for general corporate purposes.
The Barclays Term Loan was in the amount of $1.15 billion and will mature on
January 23, 2023. The Barclays Term Loan bears interest at a variable rate equal
to the Secured Overnight Financing Rate ("SOFR") plus 0.75% with a 22.5 basis
point increase commencing on July 24, 2022. The 18-Month Term Loans were in an
aggregate amount of $850 million. The SMBC Term Loan and the U.S. Bank Term Loan
will mature on July 21, 2023. The PNC Term Loan will mature on July 24, 2023.
Loans made under the 18-Month Term Loans bear interest at a variable rate equal
to SOFR plus 0.65%. The Term Loans are expected to be replaced by permanent
financing in the future.
The assumptions and separation and related transactions pro forma adjustments in
the selected unaudited pro forma financial information presented below are
consistent with those presented in Exelon's Current Report on Form 8-K filed on
February 2, 2022 in connection with the separation.
The selected unaudited pro forma statement of operations information for the
year ended December 31, 2021 gives effect to the separation and related
transactions as if they had occurred on January 1, 2021.
These estimates should not be viewed as a substitute for full financial
statements prepared in accordance with U.S. GAAP or full unaudited pro forma
condensed consolidated financial statements prepared in accordance with Article
11 of Regulation S-X. Actual results or pro-forma financial information prepared
in accordance with Article 11 of Regulation S-X may result in different amounts
and additional disclosures not presented below.
Exelon Corporation and Subsidiary Companies
Selected Unaudited Pro Forma Consolidated Statement of Operations Information
for the Year Ended December 31, 2021
(In millions) Pro Forma (a)
Total operating revenues $ 17,939 (b)
Operating income 2,612 (b) (c) (d)
__________
Separation and related transactions pro forma adjustments
(a)Includes the adjustments to eliminate the historical operating results of
Constellation, adjusted for eliminations recorded at Exelon, which will be
accounted for as discontinued operations in Exelon's Quarterly Report on Form
10-Q for the quarterly period ended March 31, 2022, except as otherwise
indicated in the following notes.
(b)Includes certain revenue, expenses, and other intercompany transactions
associated with historical affiliate transactions between Exelon's utility
subsidiaries and Constellation, previously eliminated in Exelon's consolidated
statement of operations that are expected to continue as third-party
transactions and will no longer be eliminated after the separation.
(c)Excludes certain corporate overhead costs related to legal, human resources,
financial, information technology, supply management services, and other shared
services functions, that are clearly identifiable as costs of Generation and
will not continue to be recognized by Exelon on an ongoing basis.
(d)Includes the incremental non-recurring transaction costs expected to be
incurred that have not been recognized in the historical financial statements.
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The information furnished pursuant to this Item 7.01, shall not be deemed to be
"filed" for purposes of Section 18 of, or otherwise regarded as filed under, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall it
be deemed incorporated by reference into any filing under the Securities Act or
in the Exchange Act, except as shall be expressly set forth by specific
reference in such filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
Exhibit No. Description
101 Cover Page Interactive Data File - the cover page XBRL tags are embedded
within the Inline XBRL document.
104 The cover page from this Current Report on Form 8-K, formatted as Inline
XBRL.
* * * * *
This Current Report on Form 8-K contains certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995 that
are subject to risks and uncertainties. Words such as "could," "may," "expects,"
"anticipates," "will," "targets," "goals," "projects," "intends," "plans,"
"believes," "seeks," "estimates," "predicts," and variations on such words, and
similar expressions that reflect our current views with respect to future events
and operational, economic, and financial performance, are intended to identify
such forward-looking statements.
The factors that could cause actual results to differ materially from the
forward-looking statements made by Exelon include those factors discussed herein
as well as the items discussed in (1) Exelon's 2021 Annual Report on Form 10-K
in (a) Part I, ITEM 1A. Risk Factors, (b) Part II, ITEM 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations, and
(c) Part II, ITEM 8. Financial Statements and Supplementary Data: Note 19,
Commitments and Contingencies and (2) other factors discussed in Exelon's
filings with the Securities and Exchange Commission.
Investors are cautioned not to place undue reliance on these forward-looking
statements, whether written or oral, which apply only as of the date of this
Current Report on Form 8-K. Exelon undertakes no obligation to publicly release
any revision to its forward-looking statements to reflect events or
circumstances after the date of this Current Report on Form 8-K.
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