ML17252B185
| ML17252B185 | |
| Person / Time | |
|---|---|
| Site: | Dresden  |
| Issue date: | 12/31/1965 |
| From: | Commonwealth Edison Co |
| To: | US Atomic Energy Commission (AEC) |
| References | |
| Download: ML17252B185 (28) | |
Text
19 6 5
- ANNUAL Commonwealth Edison Company REPORT Your Board of Directors has authorized this annual report for the year ended December 31, 1965. Our 1965 Financial Review containing detailed comparative data for the past five years will be available late in March. If you desire a copy, please write to our Secretary, William H. Colwell. Also, if you have any questions or wish any further information about the Company at any time, you are cordially invited to write to Mr. Colwell or me. HIGHLIGHTS Net Income Earnings per Share Number of Customers at End of Year Operating Revenues Kilowatthours Sold to Ultimate Consumers Kilowatthours Sold to Residential Customers Average Residential Use in Kilowatthours Average Residential Revenue (Excluding light bulb service) per Kilowatthour Production Fuel Btu's per Kilowatthour Generated Peak Load in Kilowatts Net Generating Capability at End of Year in Kilowatts 1965 $108,94 7,904 $2.61 2,272,700 $593,151,137 30,637 ,668,979 7,857,549,026 3,865 2.71¢ $94,026,500 10,172 6,468,000 7,290,000 1964 $100,439,970 Up 8.53 $2.41 Up 8.33 2,230,300 Up 1.93 $564,903,916 Up 5.03 28,407,863,893 Up 7.83 7,361,257,421 Up 6.73 3,697 Up4.53 2.76¢ Down 1.83 $88, 724,825 Up6.03 10,240 Improved 0.73 6,102,000 Up 6.03 6,771,000 Up 7.73
\' 'l .\ 1 l"ommonv.t*alth Ed1:--<.11 ('omp;m_, k F l'O k I 1 9 6 5 ANNUAL REPORT Commonwealth Edison Company 72 West Adams Street* Chicago, Illinois 60690 ABOUT THE COVER Chicago's traditional landmarks for many years have included the Water Tower and the Tribune Tower, shown (left to right) in the left panel. In 1963, a new and exciting landmark came on the scene, the all-electric, twin-towered, 60-story Marina City (center). In 1965, plans were announced for three new all-electric buildings, each of which will become another dramatic landmark. These buildings, shown in the right panel, are (left to right) the 100-story John Hancock Center, The First National Bank of Chicago's 60-story building and the 70-story Lake Point Tower. All are now under construction.
J. Harris Ward Joseph L. Block 2 Commonwealth Edison Company Thomas G. Ayers John A. Barr Lowell T. Coggeshall Gordon R. Corey Albert B. Dick III Willis Gale David M. Kennedy Brooks McCormick Morgan F. Murphy Edward Byron Smith Board of Directors J. Harris Ward, Chairman Thomas G. Ayers, President John A. Barr, Dean, School of Business, Northwestern University Joseph L. Block, Chairman, Inland Steel Company Lowell T. Coggeshall, Vice-President, The University of Chicago Gordon R. Corey, Chairman of the Finance Committee Albert B. Dick III, Chairman of the Board, A. B. Dick Company Willis Gale, former Chairman David M. Kennedy, Chairman of the Board of Directors, Continental Illinois National Bank and Trust Company of Chicago Brooks McCormick, Executive Vice-President, International Harvester Company Morgan F. Murphy, Chairman of the Executive Committee Edward Byron Smith, Chairman of the Board, The Northern Trust Company Leroy S. Stephens, Chairman of the Board, Stephens-Adamson Mfg. Co. Leroy S. Stephens 3 Management OFFICERS J. Harris Ward, Chairman Gordon R. Corey, Chairman of the Finance Committee Thomas G. Ayers, President Morgan F. Murphy, Chairman of the Executive Committee Murray Joslin, Vice-President Nicholas Galitzine, Vice-President Laurence E. Pierron, Vice-President Hubert H. Nexon, Vice-President Ludwig F. Lischer, Vice-President Glen W. Beeman, Vice-President William H. Colwell, Secretary D. Robert Bower, Treasurer Grant H. Wier, Comptroller MANAGERS DIVISION VICE-PRESIDENTS Wallace B. Behnke, Jr., Chicago-North Clarence Hall, Chicago-South Vern L. Stone, Manager of Production Carl E. Parker, Manager of Industrial Relations Paul W. Boyer, Assistant Vice-President John G. Eilering, General Division Manager Ralph L. Heumann, Manager of Accounting Harold W. Otto, Operating Manager Robert J. Schultz, Manager of Marketing Transfer Agents The Northern Trust Company, 50 South LaSalle Street, Chicago, Illinois 60690 Manufacturers Hanover Trust Company, Richard E. Meagher, Chicago-Central Lawrence A. Cullen, Northern, Northbrook Byron Lee, Jr., Southern, Joliet Arthur J. Moore, Western, Maywood Ralph Raymond, Illinois Northern, Dixon One Whitehall Street, New York, New York 10015 Registrars 4 Old Colony Trust Company, 45 Milk Street, Boston, Massachusetts 02106 Continental Illinois National Bank and Trust Company of Chicago, 231 South LaSalle Street, Chicago, Illinois 60690 Morgan Guaranty Trust Company of New York, 140 Broadway, New York, New York 10015 State Street Bank and Trust Company, Corner of State and Congress Streets, Boston, Massachusetts 02101 The common stock is listed on the Midwest, New York and Pacific Coast Stock Exchanges. Ticker Symbol-CWE TO THE STOCKHOLDERS OF Commonwealth Edison Company Net Income Up 8.5% Earnings per share were $2.61 in 1965 pared with $2.41 in 1964. Total operating revenues of $593,151,137 were 5.03 above those for 1964 and net income amounted to $108,947,904, an increase over the previous year of 8.53. In view of a cool summer and extraordinarily heavy storm costs, the results achieved are couraging. As we look ahead to 1966, we expect the development of our market to lead to continuing sales increases. These should enable us to more than counter-balance rising expenses and lead to an improvement in net income proximating that of 1965. Dividend Increased Quarterly cash dividends paid in 1965 were at the rate of 45¢ per share. The total of $1.80 per share paid for the year compares with $1.40 in 1964 plus 13 in stock. The quarterly dividend was increased 5¢ a share to 50¢ for the payment on February 1, 1966. Class of Service Residential. ................................ Small commercial and industrial . . . . . . . ....... Large commercial and industrial . . . . . . ........ Public authorities ........................... Electric railroads. . . . . . . . . . . . . . . . . . . ......... Ultimate consumers ...................... Sales for resale . . . . . . . . . . . . . . . . . . . . . . . ....... Other revenues. . . . . . . . . . . . . . . . . . . . . . . ....... Total .................................. *Decrease. Kilowatthour Sales and Revenues Up Total kilowatthour sales in 1965 exceeded those of the previous year by 8.63 while sales to ultimate consumers were up 7.83. Total operating revenues rose 5.03 and operating revenues from ultimate consumers were up 4.73. Revenues grew more slowly than sales partly because of our pricing structure, which gives our customers lower unit costs as their use creases, and partly because of the price tions described later in this report. The fast-growing area outside of Chicago continues each year to provide a greater centage of our sales and revenues. The area side of the city was responsible for 54 3 of watthour sales to ultimate consumers and 533 of related revenues in 1965. Sales for resale increased 37.23 over the vious year while revenues from such sales rose 40.53. These increases were due largely to greater sales to other utilities. At the end of the year, we were serving a total of 2,272, 700 customers. Of these, 2,052,600 were residential, 212,200 were commercial and industrial and 7,900 were public authorities. The total number of customers served at the end of 1964 was 2,230,300. Our revenues and sales by service classes in 1965 were: Operating 3 Increase K ilowatthour 3 Increase Revenues Over 1964 Sales Over 1964 $216,596,267 4.9 7,857,549,026 6.7 220,096,224 3.2 9, 793,386,319 6.7 105,810,360 6.4 10,412,024,205 9.3 31,654,770 8.9 2,192,106,886 11.3 5,529,838 1.2 382,602,543 4.0 $579,687,459 4.7 30,637,668,979 7.8 8,677,671 40.5 999,521,903 37.2 4,786,007 .4* $593,151,137 5.0 31,637,190,882 8.6 5 Dresden Nuclear Power Station as it will appear after its second unit has been completed. The new addition, which is now under construction, is located to the left of the entrance. The building which will house the new reactor's pressure chamber is the tall one in the foreground and attached to it is the longer turbine generator building. Operating Expenses Increase Operating expenses other than depreciation amounted to $230,318,099 for the year pared with $220, 731, 722 for 1964, a rise of 4.33. Total payroll for 1965 was $117 ,500,000, of which $87,400,000 was included in operating expenses and $30,100,000 in construction and other accounts. Our total payroll increased $5,100,000 over 1964. 6 Our provision for depreciation in 1965 was $74,780,659, an increase of $3,708,746 over the $71,071,913 for 1964. These provisions were equivalent to 3.21 % and 3.18%, respectively, of the cost of depreciable property. Taxes Rise In 1965, 26¢ out of each customer revenue dollar went for federal, state and local taxes notwithstanding the fact that the corporate income tax rate was reduced from 50% in 1964 to 48% in 1965. Tax provisions for the year were $154,946,302 compared with $150,877,022 for 1964. More than $71,000,000 of this total was for state and local taxes. We paid more state and local taxes in 1965 than any other Illinois taxpayer. We are glad to shoulder our fair share, but not more than our fair share, of the total tax burden. We are bearing more than our fair share today. We are hopeful that widespread recognition of the need for some type of revenue reform in Illinois will eventually result in more equitable tax treatment for all. Our tax provisions were: State and local taxes ... . Federal income taxes .. . Deferred federal income taxes (net) ......... . Miscellaneous federal taxes .............. . 1965 1964 $ 71,616,769 $ 66,895,847 73,336,000 73,603,000 8,200,000 1,793,533 8,550,000 1,828,175 $154,946,302 $150,877,022 New Peak Load Established A new peak load of 6,468,000 kilowatts was established on July 23, 1965, although trial load was not then at its highest because of vacations. Despite this, the new peak exceeded that for 1964 by 366,000 kilowatts, or 6%. If August had not been unusually cool, the 1965 peak would probably have been higher. Construction Program Up Expenditures for new construction in 1965 totaled $145,081,090, an increase of $15,429,665 over 1964. Plant retirements and adjustments for the year were $20,670,277, resulting in net additions to plant of $124,410,813. Gross vestment in property, plant and equipment amounted to $2,594,308,552 at the end of 1965. We have raised our estimates for new struction and now expect to spend $800,000,000 in the next five years-$160,000,000 in 1966, $175,000,000 in 1967, $165,000,000 in 1968, $150,000,000 in 1969 and the same amount in 1970. This program is subject to continuous review and may be changed as conditions rant. It includes expenditures for five ing units, one scheduled for service in each of the next five years, and initial work on units with later service dates. Our new construction estimates also reflect more rapid expansion and reinforcement of our transmission and tion systems. At the end of 1965, our net generating bility was 7,290,000 kilowatts compared with a year earlier. In 1970, when the generating units now under construction or on order are completed and after retirements of old equipment, our net generating capability is scheduled to be about 10,200,000 kilowatts. As appears below, we now have under struction three coal-fired units and one nuclear unit for service between now and 1969, and we have another nuclear unit on order for service in 1970. Whether subsequent units will be fired or nuclear will be a close question. The answer may well vary from unit to unit and from year to year throughout the 1970's as the close competitive balance between coal and clear fuel is maintained. Two 580,000-Kilowatt Additions at Joliet The first of two new units, both now rated at 580,000 kilowatts, was placed in service at our Joliet Station on April 9, 1965. The second unit is expected to be ready for operation in the spring of 1966. Kincaid Construction Progressing Construction is progressing on our Kincaid mine-mouth station near Taylorville, Illinois, about 175 miles southwest of Chicago. The first of two 600,000-kilowatt units is scheduled for service in 1967 and the second in 1968. Dresden 2 and 3 The Atomic Energy Commission has issued a permit for construction of the second nuclear unit at our Dresden Nuclear Power Station. Construction work is now in progress. While the initial licensed capacity of Dresden 2 will be 7 715,000 kilowatts, the warranted capacity of the unit is 755,000 kilowatts and its ultimate capacity is expected to be about 800,000 watts, four times the capacity of Dresden 1. Scheduled for completion early in 1969, the new nuclear unit is expected to produce power at a cost 5% to 10% below that of our newest fued units. The recently ordered Dresden 3 unit is similar to Dresden 2. To be completed in 1970, it will be our last addition at the Dresden site. Public Financing Possible in 1966 The upward revisions in our construction budget coupled with possible acceleration of come tax payments may require us to do some public debt :financing in 1966. If so, this will be our first outside security offering since 1961. We have, however, continued to sell common stock under our Employe Stock Purchase Plan. In 1965, employes purchased 70,369 shares for $3,57 4,399 under the Plan. Construction site of our new Kincaid mine-mouth generating station 175 miks southwest of Chicago, showing the intake channel and the turbine room foundation. A reservoir to supply the station with condensing water will ultimately be a three finger lake covering 2, 700 acres and containing 35,000 acre feet of water-the equivalent of six football fields of water a mile deep. 8 The principal amount of debentures quired in 1965 for sinking fund purposes was $6,441,000. Our capitalization at the end of the year was 48.23 debt and 51.83 common equity. With some outside financing anticipated, the centage of debt may increase moderately ing the next five years. In 1965, funds were provided and applied as follows: Funds provided from: Net income of $108,947,904 less $77,145,824 cash dividends .......... $ 31,802,080 Add back non-cash charges to income for depreciation, deferred federal income taxes and 3 % investment tax credit deferred....................... . . . . 86,849,139 Total funds provided internally ... $118,651,219 Sales of common stock to employes . . . . . 3,574,399 Reduction in working capital and other items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,273,433 Total funds provided . . . . . . . . . . . $150,499,051 Funds applied to: New construction . . . . . . . . . . . . . . . . . . . . . $145,081,090 Acquisition of sinking fund debentures.. 5,417,961 Total funds applied . . . . . . . . . . . . . $150,499,051 Electricity Prices Reduced On February 1, 1965, we reduced electricity prices $3,000,000 on an annual basis. The duction was due to lower delivered fuel costs resulting partly from the institution of unit train coal deliveries at several of our generating stations. Similar fuel charge reductions of $12,000,000 or more are expected before 1970. On December 15, 1965, another electricity price reduction, amounting to $5,200,000 on an annual basis, became effective. This tion was designed to share with our customers other cost savings we have been able to achieve and to improve our competitive position. Including these and earlier reductions, we have reduced electricity prices by more than $28,000,000 in the past four years. We fully expect that these reductions will, in the long run, be more than offset by increased sales. Included in the December 15 price change was Helicopter being used to top out a 550-foot chimney for the new 580,000-kilowatt Unit 7 at ourJ olietGenerating Station. a reduction in the price of electricity for space heating from 1.25¢ to 1.20¢ per kilowatthour. This was the seventh time in seven years that the price of electric heat has gone down. The latest reduction is expected to encourage the winter use of electricity and help ance the high summer air conditioning loads. 9 Research Efforts Continue We now have more than 200 research projects under way, some carried on by us alone, and others in cooperation with manufacturers, versities, suppliers and the Edison Electric stitute. Our research ranges from developing new uses for electricity to improving methods of power generation and supply. We hope that these projects will lead to increased sales, higher efficiency and better service to our tomers. A major concern in recent years has been our search for ways to make underground sion and distribution systems economically feasible. A cost-cutting technique resulting from this research is our practice of installing electric distribution and telephone cables in the same trench. Both cables are installed by a single crew. As a result of this and other provements, we have been able to bury more and more of our lines each year. In 1965, about 503 of our new residential subdivisions were served from underground distribution facilities. In recent months we have been field testing a new type of distribution cable developed by Union Carbide Corporation. The cable is posed of a metallic sodium conductor coated with polyethylene plastic. The new sodium cable may prove to be an attractive alternative to conventional cable. Esther Weber-Timekeeper 10 Pres Lanham-Engineer Ray Geary-Lineman Research on consumer products which use electricity is being carried on in a variety of fields. One example is the zinc-air storage tery now being developed jointly by Edison Electric Institute and General Atomics. We are actively participating in this work with the hope that an improved battery can be oped which will make electrically powered cles practical for short-haul work. The resulting battery charging requirements would create another important market for us. Wages, Pensions Higher At the end of the year, we had 12,251 ployes, 473 of whom were participating in our Employe Stock Purchase Plan. As a result of collective bargaining ments with the International Brotherhood of Electrical Workers (AFL-CIO) and the United Mine Workers of America, District 50, ated in 1964, wage rates increased an average of 9.2¢ per hour on April 1, 1965. This increase amounted to $1,876,000 on an annual basis. Employe giving also increased. Our employes contributed $348,000 to the Metropolitan sade of Mercy and other community funds, 93 more than the previous year. With about 973 donating, the average gift was about $30. This is in addition to employe participation in local charitable, civic and community activities. In 1965 we paid $11,363,900 to our service annuity funds to provide for employe pensions. This compares with $10,815, 700 in 1964. ing the year, retired employes were paid pensions totalling $8,209,635, up $1,114,102 from 1964. The book value of our annuity fund assets was $193,271,069 on December 31 when 3,859 annuitants were on our pension rolls. Stockholders Increase Our stockholders increased from 167,601 at the end of 1964 to 169,494 at the end of 1965. They reside in every state and in 43 foreign countries. Distribution of stock ownership in December was as follows: Percent of Total Stockholders Illinois.............. 57.8 Other States. . . . . . . . . 41.8 Foreign............. .4 100.0 New Vice-President Elected Glen W. Beeman was elected a Vice-President on October 26. Prior to his election, Mr. Beeman was Director of Purchases. Byron Lee, Jr., former Division Commercial Manager, was appointed Vice-President of our Southern Division, effective January 1, 1966. He succeeded Gilbert K. Hardacre who was pointed Executive Assistant to the Vice-dent in charge of division operations. Mr. Hardacre is scheduled to retire next May. The directors join me in expressing thanks to our stockholders, officers and employes for helping to make 1965 another good year for the Company. By Order of the Board. Chicago, January 21, 1966. The annual meeting of stockholders will be held on May 17, 1966. Stockholders of record on April 7 will be entided to vote at the meeting. Formal notice, proxy statement and form of proxy will be mailed about April 14. Following the meeting, a booklet covering the proceedings will be sent to all stockholders. 11 THE NORTHEAST BLACKOUT Our whole country was disturbed, and properly so, by the Northeast Blackout. We have, of course, studied carefully and in detail the occurrences leading up to and surrounding the catastrophe. We are reviewing our design and operating procedures and adding to the safeguards which have successfully protected our production and transmission systems in the past. We have never had a total system shutdown. We have operated interconnections for many years at the highest voltages involved in the Northeast. These interconnections have improved the reliability of our system and have never caused a major service ruption. We have complete confidence in our production an transmission systems and we will continue to work stantly to improve our distribution system.
Recent Developments in Our Industrial, Commercial and Residential Business The first stage of the injector system of the new Zero Gradient Synchrotron (ZGS) at Argonne National tory. This synchrotron is the center of Argonne's high energy physics research. Argonne is one of the major atomic research and development centers in the country. It has more than 100 buildings on its 3,700-acre site southwest of Chicago. Industrial Our industrial customers are the largest users of electricity in our territory. As a group, they used well over 12 billion kilowatthours, more than a third of our kilowatthour sales to mate consumers in 1965 and more than all such sales in 1950. The use of electricity for steel making in our territory has always been of great importance. Today, the steel industry is turning to tion methods using more electric power. The production of steel with electric arc furnaces and the basic oxygen process is on the rise. The versatile electric arc furnace, which can make almost all grades of carbon and alloy An electric iron melting furnace operating in a Link-Belt Company plant on Chicago's south side. This new electric process has a number of advantages over the conventional cupola. It creates no smoke or dust, assures proper blending of alloy additives and melts practically every type of charge.
steel, uses about 500 kilowatthours per ton. Although using far less electricity than the electric arc furnace, the basic oxygen process for steel production requires about five times as much electricity per ton as the previously dominant open-hearth method which it is ginning to replace on a major scale. A picture of the basic oxygen furnace at International Harvester's Wisconsin Steel Works is shown on the outside back cover. But the steel industry is not the only major industry we serve. The large industrial loads in our territory are probably more varied than those in any other area of its size. Among our largest industrial customers are companies gaged in such widely different fields as oil ing, ferrous and non-ferrous metalworking, printing, and the manufacture of appliances, automobiles, heavy construction equipment, glass, chemicals and pharmaceuticals. This is only a sample of a long list which could be extended almost indefinitely. We are not mere observers of the industrial progress of our territory. Our Industrial ket Research people study the processes used by our industrial customers for the purpose of exploring new and improved applications of electricity. Their work has given us new sales opportunities. Our Industrial Development Department cooperates with industries and communities to encourage industrial growth. During 1965, this department helped 34 new plants to locate in our territory. The photographs on these pages show a few examples of the modern processes which tribute to our growing industrial load. A production line at the new Chrysler automobile assembly plant in Belvidere. When the plant is in full operation, it will have about 5,000 employes and produce 960 Plymouth and Dodge cars per day.
Heating Commercial Buildings with Light Because good lighting contributes so much to better work and more effective merchandise display, our customers have adopted sively higher lighting levels. Today, the modern lighting required in an office building to satisfy its tenants will heat the building on all except the coldest days. With proper distribu6on of the air which has been warmed by the lighting :fixtures, and occasional use of supplementary electric heating in air ducts or under windows, the entire building can be heated comfortably and economically. In summer, the warm air from the lighting :fixtures can be exhausted to the outdoors, thus relieving the load on the air conditioning system. Heat-with-light is an exciting concept which has captured the imagination of architects and builders of commercial buildings in Chicago and northern Illinois. An all-electric lighting, ing and cooling system lets the architect plan for beauty and efficiency without having to design around a boiler, smoke stack and maze of steam piping running through the central core. ing owners like the heat-with-light concept because of competitive operating costs, design simplicity, generally lower construction costs and satisfied tenants. The First National Bank Building
Dearborn,
Monroe, Clark and Madison Streets 16 J The 990 Grove office building in Evanston was one of the first major heat-with-light ings in our territory. It has been operating cessfully since 1964. Fifty other heat-with-light buildings with over 5,000,000 square feet of space have been started, and 40 of these are ready occupied. Among the most recently gun are the all-electric 100-story John Hancock Center, which will have its office areas heated with light, and the 60-story First National Bank Building, which will be entirely heated with light. Both are shown here. OTHER APPLICATIONS OF THE ALL-ELECTRIC CONCEPT There are many excellent electric heating systems other than heating with light. A wide variety of buildings are being designed and built to utilize electricity as the sole source of energy. In our service territory, 10 all-electric churches and 25 all-electric schools are in service or under construction. Electric heat is being used for race track pavilions, loading docks, garages, warehouses, gas stations, banks, and even outdoor passageways in shopping areas to warm shoppers as they walk from store to store. The versatility of all-electric systems promises ever wider application. John Hancock Center 861 North Michigan Avenue 17 18 Lake Point Tower Progress in the Residential Market Each year our residential customers become more dependent upon electricity in their daily lives. During the early years of our operations, electricity was used mainly for lighting. Today electric power can supply all of the energy needs of a home. Electric space heating is, of course, the major component in the total electric concept. Its importance for our future can be judged from the fact that the average number of kilowatthours used by all-electric residential customers in 1965 was more than five times the 505 North Lake Shore Drive Cameo Terrace West, Downers Grove Brandywine Near Oak Brook I average for other residential customers. In 1965, electric heat was specified for nearly 7,000 dwelling units in our service area, making a total of almost 21,000 such units now on our lines or under construction. Over the past eight years, the electric heating share of the area's new residential construction market has grown from virtually nothing to 153 of the dwelling units now being built. Some outstanding examples of the newest electrically-heated projects in our service area are shown on these pages. Of particular interest are the 70-story, 900 unit Lake Point Tower, under construction near Lake Shore Drive and Grand A venue, and the top 50 :floors of the John Hancock Building which will contain 700 electrically heated apartments. Residential air conditioning continued to grow at a rapid rate in 1965, spurred by the increase in the number of residences which installed central air conditioning. When hot weather comes, air conditioners, ators and other cooling appliances add nearly 1,000,000 kilowatts to our residential load. Major electric appliance installations are also stimulating the growth of residential sales. Such appliances include electric ranges, clothes dryers, dishwashers and frost-free frigerators. Prospects for continued growth are enhanced by greater consumer demand for color television and other conveniences such as outdoor protective and decorative lighting, and increasing automation of all forms of home equipment. Thorndale Beach Condominium Apartments 5861 North Sheridan Road, Chicago The Tiara, 6145 North Sheridan Road, Chicago 19 Opinion of Independent Public Accountants ARTHUR ANDERSEN & Co. CHICAGO, ILLINOIS To the Stockholders of Commonwealth Edison Company: We have examined the consolidated balance sheet of COMMONWEALTH EDISON COMPANY (an Illinois corporation) and subsidiary companies as of December 31, 1965, and the related statements of income and retained earnings for the year then ended. Our examination was made in accordance with generally accepted audit-ing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. We had made a similar examination for the preceding year. In our opinion, the accompanying balance sheets and statements of income and retained earnings present fairly the financial position of Commonwealth Edison Company and subsidiary companies as of December 31, 1965 and 1964, and the results of their operations for the years ended those dates, in conformity with generally accepted accounting principles consistently applied during the period. (Signed) AR THUR ANDERSEN & CO. January27, 1966 ..
Statements of Consolidated Income Commonwealth Edison Company and Subsidiary Companies OPERATING REVENUES ......................... . OTHER INCOME (net) ........................... . OPERATING EXPENSES, TAXES AND OTHER DEDUCTIONS: Fuel. ...................................... . Purchased and interchanged power (net) ........ . Operation ................................... . Maintenance ................................ . Provision for depreciation ..................... . Provisions for taxes-State, local and miscellaneous federal. ........ . Federal income ............................ . Deferred federal income (net) ................ . 3% investment tax credit deferred (net) ........ . Interest on long-term debt .................... . Other deductions ............................ . Less-Interest charged to construction ......... . NET INCOME .................................. . COMMON SHARES AT END OF YEAR ............... . EARNINGS PER SHARE .......................... . 1965 $593,151,137 3,510,326 $596,661,463 $ 94,026,500 424,803 95,109,681 40,757,115 74,780,659 73,410,302 73,336,000 8,200,000 3,868,480 27,725,384 457,835 4,383,200 $487,713,559 $108,947,904 41,735,174 $2.61 1964 $564,903,916 3,838,439 $568,742,355 $ 88,724,825 3,079,154 97,469,433 31,458,310 71,071,913 68,724,022 73,603,000 8,550,000 1,417,282 27,939,241 231,905 3,966,700 $468,302,385 $100,439,970 41,664,805 $2.41 21 Consolidated Balance Sheets Commonwealth Edison Company and Subsidiary Companies Assets 22 UTILITY PLANT: At original cost or less ........................ . Less-Accumulated provision for depreciation ............................ . Net Utility Plant .......................... . INVESTMENTS-at cost or less: Subsidiary companies not consolidatedChicago & Illinois Midland Railway Company ............................... . Other subsidiaries .......................... . Other investments ............................ . CURRENT ASSETS: Cash ....................................... . Temporary cash investments, at cost ........... . Deposit for bond interest ...................... . Receivables ................................. . Less-Provision for uncollectible accounts ....... . Coal (at average cost) ........................ . Nuclear fuel (at cost or less) .................. . Materials and supplies (at average cost) ........ . Prepaid insurance, taxes and other items ........ . DEFERRED CHARGES ............................ . Rent,a,l obligations at December 31, 1965, under 48 leases extending beyond 1966, approximated $552,000 annually. DECEMBER 31 1965 $2,594,308,552 721,035,040 $1,873,273,512 4,458,500 2,793,137 3,614,219 $ 10,865,856 10,460,718 21,624,032 1,861,204 43,238,819 1,700,000 18,200,336 6,136,125 10,735,140 1,412,564 $ 111,968,938 1,241,964 $1,997,350,270 DECEMBER 31 1964 $2,469,897,739 666,054,229 $1,803,843,510 4,458,500 1,855,000 4,357,221 $ 10,670, 721 10,551,152 41,570,643 1,889,822 38,953,951 1,700,000 19,921,072 5,573,578 10,156,671 1,142,130 $ 128,059,019 1,343,666 $1,943,916,916 Liabilities DECEMBER 31 CAPITAL STOCK: Common stock-$12.50 par value per share: Authorized 60,000,000 shares-278,382 shares reserved for Employe Stock Purchase Plan at December 31, 1965 1965 Outstanding-1965-41,735,174 shares......... $ 521,689,675 1964-41,664,805 shares ........ . Preferred stock-1,850,000 shares authorized None outstanding PREMIUM ON COMMON STOCK .................... . RETAINED EARNINGS ........................... . LONG-TERM DEBT (see schedule on page 24): First mortgage bonds ......................... . Sinking fund debentures ...................... . Total Capitalization ...................... . CURRENT LIABILITIES: Accounts payable ............................ . Accrued interest ............................. . Accrued taxes ............................... . Dividend payable ............................ . Other ....................................... . DEFERRED LIABILITIES: Accumulated deferred federal income taxes ...... . Accumulated deferred 3 3 investment tax credits being amortized over the lives of related property Other ....................................... . UNAMORTIZED NET PREMIUM ON DEBT ............ . Purchase commitments at December 31, 1965, principally construction, approximated $200,600,000. 182,419,200 178,233,282 $ 882,342,157 590,000;000 229,652,000 $ 819,652,000 $1, 701,994,157 28,072,005 8,808,639 94,205,215 20,867,587 15,232,825 $ 167,186,271 102,200,000 10,300,762 15,349,575 $ 127,850,337 319,505 $1,997,350,270 DECEMBER 31 1964 $ 520,810,063 179, 724,414 146,431,202 $ 846,965,679 590,000,000 236,093,000 $ 826,093,000 $1,673,058,679 20,536,879 8,830,306 93,592,256 18,749,162 13,155,825 $ 154,864,428 94,000,000 6,432,282 15,160,492 $ 115,592, 774 401,035 $1,943,916,916 23 Statements of Consolidated Retained Earnings BALANCE BEGINNING OF YEAR .................. . Ann: Net income ................................. . DEDUCT: Dividends on common stock-Cash ..................................... . Common stock-1 % ....................... . BALANCE END OF YEAR ........................ . Schedule of Long-Term Debt At December 31 FIRST MORTGAGE BONDS: 3 % due February 1, 1977 ..................... . 3% due June 1, 1978 ......................... . 3.7;l% due July 1, 1982 ....................... . 3% due May 1, 1984 ......................... . 3% due April 1, 1985 ........................ . 372% due June 1, 1986 ....................... . 4.7;l% due March 1, 1987 ..................... . 3%% due March 1, 1988 ..................... . 4%% due March 1, 1990 ..................... . SINKING FUND DEBENTURES: 3 % due April 1, 1999 ........................ . 2%% due April 1, 1999 ...................... . 2Ys% due April 1, 2001. ..................... . 3Ys% due October 1, 2004 .................... . 3Ys% due January 1, 2008 .................... . 4%% due January 1, 2009 .................... . 4%% due December 1, 2011 .................. . Total Long-Term Debt ................... . 24 1965 $146,431,202 108,947,904 $255,379,106 $ 77,145,824 $ 77,145,824 $1 78,233,282 1965 $180,000,000 50,000,000 40,000,000 50,000,000 100,000,000 40,000,000 50,000,000 50,000,000 30,000,000 $590,000,000 $ 31,746,000 31,697,000 33,949,000 37,935,000 40,694,000 17,060,000 36,571,000 $229,652,000 $819,652,000 1964 $130,351,366 100,439,970 $230, 791,336 $ 62,015,639 22,344,495 $ 84,360,134 $146,431,202 1964 $180,000,000 50,000,000 40,000,000 50,000,000 100,000,000 40,000,000 50,000,000 50,000,000 30,000,000 $590,000,000 $ 32,471,000 32,914,000 34,799,000 38,882,000 41,827,000 17,600,000 37,600,000 $236,093,000 $826,093,000
- .. ILLINOIS Legend Steam.Electric Generating Stations Nuclear Power Station Substations Line Routes (Existing) Extra-High-Voltage Line Routes (Future) Other Major Transmission Line Routes (Orn! or More Lines) Certain Other Transmission Lines (()utsick Chicago) lnten:onnections With Other Companies Territory Se.-.*ed by the Company WISCONSIN Harvard woods tock .::: .. ::;,v;:;:*d::;;"';..* __ ... I .._ __ .,. Crylfal Lok* Elgin , I / I / I ,' I ' I ' cr;oh* ,' I ' I / I / I ' I / / , Pontuy ,' Ponlloc ,_.,,,,,. JJ.idpoin .. /I I r I I t r I I { l I I l I I f f l I f I I I I I I l I I I , , , , Kankakee I I I I I I I I I f I l I I Commonwealth Edison's Service Area I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I Communities Served by Others I ! I I o.ca1 .. s.,.ngGefd I I I / Commonwealth Edison Company's service area includes 11,000 squa-re miles of northern Illinois. This map shows the bone of power lines, present and futu-re, designed to carry electricity to all parts of the area from the Company's 13 generating tions including Kincaid, now tion. The arrows indicate interconnections with other utilities. These interties a-re used both to st-rengthen the Company's system and to improve its efficiency and economy. I / I ' / ,' 1/' Kincaid (Under Construction) ' ' ' .. Lake Michigan Evanston z c )> z )>
Commonwealth Edison Company 72 West Adams Street Chicago, Illinois 60690 If undeliverable, do not return. Molten iron being emptied into the mouth of a basic oxygen furnace at International Harvester's Wisconsin Steel Works on cago's south side. The basic oxygen furnace is replacing the open-hearth furnace. It can produce as much steel in less than an hour as an open-hearth furnace in 6 to 10 hours1.157407e-4 days <br />0.00278 hours <br />1.653439e-5 weeks <br />3.805e-6 months <br />. Operation of the furnace and the production of the oxygen it uses require much more tric power than open-hearth equipment. Commonwealth Edison Company ANNUAL REPORT 1965 !