Document
|
| | | | | | | | | |
| | | |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION | |
Washington, D.C. 20549 | |
| | | | | | | | | |
FORM 8-K | |
| | | | | | | | | |
| | | | | | | | | |
CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 December 22, 2017 Date of Report (Date of earliest event reported) | |
| | | | | | | |
| | | | | | | |
| Commission File Number | | Exact Name of Registrant as Specified in Its Charter; State of Incorporation; Address of Principal Executive Offices; and Telephone Number | | IRS Employer
Identification
Number |
| 1-16169 | | EXELON CORPORATION | | | 23-2990190 |
| | | (a Pennsylvania corporation) 10 South Dearborn Street P.O. Box 805379 Chicago, Illinois 60680-5379 (800) 483-3220 | | | |
| 333-85496 | | EXELON GENERATION COMPANY, LLC | | | 23-3064219 |
| | | (a Pennsylvania limited liability company) 300 Exelon Way Kennett Square, Pennsylvania 19348-2473 (610) 765-5959 | | | |
| 1-1839 | | COMMONWEALTH EDISON COMPANY | | | 36-0938600 |
| | | (an Illinois corporation) 440 South LaSalle Street Chicago, Illinois 60605-1028 (312) 394-4321 | | | |
| 000-16844 | | PECO ENERGY COMPANY | | | 23-0970240 |
| | | (a Pennsylvania corporation) P.O. Box 8699 2301 Market Street Philadelphia, Pennsylvania 19101-8699 (215) 841-4000 | | | |
| 1-1910 | | BALTIMORE GAS AND ELECTRIC COMPANY | | | 52-0280210 |
| | | (a Maryland corporation) 2 Center Plaza 110 West Fayette Street Baltimore, Maryland 21201 (410) 234-5000 | | | |
| 001-31403 | | PEPCO HOLDINGS LLC | | | 52-2297449 |
| | | (a Delaware limited liability company) 701 Ninth Street, N.W. Washington, District of Columbia 20068 (202) 872-2000 | | | |
| 001-01072 | | POTOMAC ELECTRIC POWER COMPANY | | | 53-0127880 |
| | | (a District of Columbia and Virginia corporation) 701 Ninth Street, N.W. Washington, District of Columbia 20068 (202) 872-2000 | | | |
|
| | | | | | | | | |
| 001-01405 | | DELMARVA POWER & LIGHT COMPANY | | | 51-0084283 |
| | | (a Delaware and Virginia corporation) 500 North Wakefield Drive Newark, Delaware 19702 (202) 872-2000 | | | |
| 001-03559 | | ATLANTIC CITY ELECTRIC COMPANY | | | 21-0398280 |
| | | (a New Jersey corporation) 500 North Wakefield Drive Newark, Delaware 19702 (202) 872-2000 | | | |
| | | | | | | | | |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
|
| |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
| |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
| |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
| |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether any of the registrants are emerging growth companies as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
If an emerging growth company, indicate by check mark if any of the registrants have elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Section 8 - Other Events
Item 8.01. Other Events.
On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (the Act). While management is still evaluating the impacts of the Act and timing for utility rate adjustments, adjusted non-GAAP operating earnings per share for Exelon Corporation (Exelon) is expected to increase by approximately $0.10 on a run-rate basis in 2019 relative to Exelon’s projections before the Act. The Registrants are still quantifying the impacts of the Act on their results of operations and financial positions as of December 31, 2017 and the amount and timing of the cash impacts will depend on the period over which certain income tax benefits are provided to customers, which may vary from jurisdiction to jurisdiction.
Pursuant to the Act, Exelon, Exelon Generation Company, LLC (Generation), Commonwealth Edison Company (ComEd), PECO Energy Company (PECO), Baltimore Gas and Electric Company (BGE), Pepco Holdings LLC (PHI), Potomac Electric Power Company (Pepco), Delmarva Power & Light Company (DPL) and Atlantic City Electric Company (ACE) (the Registrants) are required to remeasure their existing deferred income tax balances as of December 31, 2017 to reflect the decrease in the corporate income tax rate from 35 percent to 21 percent beginning January 1, 2018, which is expected to result in a material decrease to their net deferred income tax liability balances. Generation will record a corresponding net decrease to income tax expense, while ComEd, PECO, BGE, PHI, Pepco, DPL, and ACE (the Utility Registrants) will record corresponding regulatory liabilities given that changes in income taxes are generally passed through in customer rates. The one-time 2017 impacts of the Act will be excluded from Exelon’s 2017 adjusted non-GAAP operating earnings.
Beginning in 2018, Generation will incur lower income tax expense, which will decrease its projected effective income tax rate, even with the elimination of the domestic production activities deduction, and increase its net income. Generation’s operating cash inflows are also expected to increase beginning in 2018 reflecting the lower income tax rates and full expensing of capital investments. Generation’s projected effective income tax rate in 2018, 2019, and 2020 is expected to be approximately 22 percent.
Beginning in 2018, the Utility Registrants’ will incur lower income tax expense, which will generally decrease their projected effective income tax rates. The Act is expected to lead to lower customer rates over time due to lower income tax expense recoveries and the refund of deferred income tax regulatory liabilities, partially offset by the impacts of higher rate base. The Act is expected to lead to an incremental increase in rate base of approximately $1.6 billion by 2020 relative to our previous expectations across the Utility Registrants. The increased rate base will be funded consistent with each utility jurisdiction, using a combination of debt and equity funding from Exelon with the increased cash flows at Generation exceeding the incremental equity needs at the Utility Registrants. The Act is generally expected to result in lower operating cash inflows for the Utility Registrants as a result of the elimination of bonus depreciation and lower customer rates.
Exelon Corporate expects that the interest on its debt will continue to be fully tax deductible albeit at a lower tax rate.
ComEd and BGE plan to make filings on January 5, 2018 with their state regulatory commissions to begin passing back income tax savings resulting from the Act to their customers. Copies of the ComEd and BGE press releases are attached to this report as Exhibits 99.1 and 99.2. The other Utility Registrants also continue to work with their state regulatory commissions to determine the amount and timing of the income tax savings benefits for their customers.
Section 9 - Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
* * * * *
This Current Report includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. The factors that could cause actual results to differ materially from these forward-looking statements made by Exelon Corporation, Exelon Generation Company, LLC, Commonwealth Edison Company, PECO Energy Company, Baltimore Gas and Electric Company, Pepco Holdings LLC, Potomac Electric Power Company, Delmarva Power & Light Company, and Atlantic City Electric Company (Registrants) include those factors discussed herein as well as those discussed in (1) Exelon's 2016 Annual Report on Form 10-K in (a) ITEM 1A. Risk Factors, (b) ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) ITEM 8. Financial Statements and Supplementary Data: Note 24; (2) Exelon's Third Quarter 2017 Quarterly Report on Form 10-Q in (a) Part II, Other Information, ITEM 1A. Risk Factors; (b) Part 1, Financial Information, ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) Part I, Financial Information, ITEM 1. Financial Statements: Note 18 and (3) other factors discussed in filings with the Securities and Exchange Commission by the registrants. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this Current Report. None of the registrants undertakes any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this Current Report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
| |
| EXELON CORPORATION |
| |
| /s/ Jonathan W. Thayer |
| Jonathan W. Thayer |
| Senior Executive Vice President and Chief Financial Officer |
| Exelon Corporation |
| |
| EXELON GENERATION COMPANY, LLC |
| |
| /s/ Bryan P. Wright |
| Bryan P. Wright |
| Senior Vice President and Chief Financial Officer |
| Exelon Generation Company, LLC |
| |
| COMMONWEALTH EDISON COMPANY |
| |
| /s/ Joseph R. Trpik, Jr. |
| Joseph R. Trpik, Jr. |
| Senior Vice President, Chief Financial Officer and Treasurer |
| Commonwealth Edison Company |
| |
| PECO ENERGY COMPANY |
| |
| /s/ Phillip S. Barnett |
| Phillip S. Barnett |
| Senior Vice President, Chief Financial Officer and Treasurer |
| PECO Energy Company |
| |
| BALTIMORE GAS AND ELECTRIC COMPANY |
| |
| /s/ David M. Vahos |
| David M. Vahos |
| Senior Vice President, Chief Financial Officer and Treasurer |
| Baltimore Gas and Electric Company |
| |
|
| |
| PEPCO HOLDINGS LLC |
| |
| /s/ Donna J. Kinzel |
| Donna J. Kinzel |
| Senior Vice President, Chief Financial Officer and Treasurer |
| Pepco Holdings LLC |
| |
| POTOMAC ELECTRIC POWER COMPANY |
| |
| /s/ Donna J. Kinzel |
| Donna J. Kinzel |
| Senior Vice President, Chief Financial Officer and Treasurer |
| Potomac Electric Power Company |
| |
| DELMARVA POWER & LIGHT COMPANY |
| |
| /s/ Donna J. Kinzel |
| Donna J. Kinzel |
| Senior Vice President, Chief Financial Officer and Treasurer |
| Delmarva Power & Light Company |
| |
| ATLANTIC CITY ELECTRIC COMPANY |
| |
| /s/ Donna J. Kinzel |
| Donna J. Kinzel |
| Senior Vice President, Chief Financial Officer and Treasurer |
| Atlantic City Electric Company |
January 5, 2018
EXHIBIT INDEX