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Commonwealth Edison

Filed: 8 May 20, 3:19pm
0001109357 us-gaap:OperatingSegmentsMember us-gaap:ServiceOtherMember exc:ExelonGenerationCoLLCMember 2020-01-01 2020-03-31 0001109357 exc:ExelonGenerationCoLLCMember exc:StateandmunicipaldebtDomain us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001109357 us-gaap:FairValueInputsLevel3Member exc:EffectsofNettingandAllocationofCollateralLiabilitesMember us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001109357 exc:PecoEnergyCoMember exc:BaltimoreGasAndElectricCompanyAffiliateMember 2020-03-31
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2020
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission
File Number
 Name of Registrant; State or Other Jurisdiction of Incorporation; Address of Principal Executive Offices; and Telephone Number IRS Employer Identification Number
     
001-16169 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
  
     
001-01839 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
  
     
001-01910 BALTIMORE GAS AND ELECTRIC COMPANY 52-0280210
  
(a Maryland corporation)
2 Center Plaza
110 West Fayette Street
Baltimore, Maryland 21201-3708
(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
  




Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
EXELON CORPORATION:    
Common Stock, without par value EXC The Nasdaq Stock Market LLC
     
PECO ENERGY COMPANY:    
Trust Receipts of PECO Energy Capital Trust III, each representing a 7.38% Cumulative Preferred Security, Series D, $25 stated value, issued by PECO Energy Capital, L.P. and unconditionally guaranteed by PECO Energy Company EXC/28 New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x  No  o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  x  No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Exelon CorporationLarge Accelerated FilerxAccelerated FilerNon-accelerated FilerSmaller Reporting CompanyEmerging Growth Company
Exelon Generation Company, LLCLarge Accelerated FilerAccelerated FilerNon-accelerated FilerxSmaller Reporting CompanyEmerging Growth Company
Commonwealth Edison CompanyLarge Accelerated FilerAccelerated FilerNon-accelerated FilerxSmaller Reporting CompanyEmerging Growth Company
PECO Energy CompanyLarge Accelerated FilerAccelerated FilerNon-accelerated FilerxSmaller Reporting CompanyEmerging Growth Company
Baltimore Gas and Electric CompanyLarge Accelerated FilerAccelerated FilerNon-accelerated FilerxSmaller Reporting CompanyEmerging Growth Company
Pepco Holdings LLCLarge Accelerated FilerAccelerated FilerNon-accelerated FilerxSmaller Reporting CompanyEmerging Growth Company
Potomac Electric Power CompanyLarge Accelerated FilerAccelerated FilerNon-accelerated FilerxSmaller Reporting CompanyEmerging Growth Company
Delmarva Power & Light CompanyLarge Accelerated FilerAccelerated FilerNon-accelerated FilerxSmaller Reporting CompanyEmerging Growth Company
Atlantic City Electric CompanyLarge Accelerated FilerAccelerated FilerNon-accelerated FilerxSmaller Reporting CompanyEmerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has 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. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes    No  x

The number of shares outstanding of each registrant’s common stock as of March 31, 2020 was:
Exelon Corporation Common Stock, without par value974,407,848
Exelon Generation Company, LLCnot applicable
Commonwealth Edison Company Common Stock, $12.50 par value127,021,353
PECO Energy Company Common Stock, without par value170,478,507
Baltimore Gas and Electric Company Common Stock, without par value1,000
Pepco Holdings LLCnot applicable
Potomac Electric Power Company Common Stock, $0.01 par value100
Delmarva Power & Light Company Common Stock, $2.25 par value1,000
Atlantic City Electric Company Common Stock, $3.00 par value8,546,017



TABLE OF CONTENTS

 Page No.
  
 
 
 
 
  
 
 
 
 
  
 
 
 
 
  
 
 
 
 
  
 
 
 
 
  
 
 
 
 

1



2



3


GLOSSARY OF TERMS AND ABBREVIATIONS
Exelon Corporation and Related Entities
Exelon Exelon Corporation
Generation Exelon Generation Company, LLC
ComEd Commonwealth Edison Company
PECO PECO Energy Company
BGE Baltimore Gas and Electric Company
Pepco Holdings or PHI Pepco Holdings LLC (formerly Pepco Holdings, Inc.)
Pepco Potomac Electric Power Company
DPL Delmarva Power & Light Company
ACE Atlantic City Electric Company
Registrants Exelon, Generation, ComEd, PECO, BGE, PHI, Pepco, DPL and ACE, collectively
Utility Registrants ComEd, PECO, BGE, Pepco, DPL and ACE, collectively
ACE Funding or ATF Atlantic City Electric Transition Funding LLC
Antelope Valley Antelope Valley Solar Ranch One
BSC Exelon Business Services Company, LLC
CENG Constellation Energy Nuclear Group, LLC
Constellation Constellation Energy Group, Inc.
EGR IV ExGen Renewables IV, LLC
EGRP ExGen Renewables Partners, LLC
Exelon Corporate Exelon in its corporate capacity as a holding company
FitzPatrick James A. FitzPatrick nuclear generating station
NER NewEnergy Receivables LLC
PCI Potomac Capital Investment Corporation and its subsidiaries
PECO Trust III PECO Capital Trust III
PECO Trust IV PECO Energy Capital Trust IV
Pepco Energy Services Pepco Energy Services, Inc. and its subsidiaries
PHI Corporate PHI in its corporate capacity as a holding company
PHISCO PHI Service Company
SolGen SolGen, LLC
TMI Three Mile Island nuclear facility

4


GLOSSARY OF TERMS AND ABBREVIATIONS
Other Terms and Abbreviations  
Note "—" of the 2019 Form 10-K Reference to specific Combined Note to Consolidated Financial Statements within Exelon’s 2019 Annual Report on Form 10-K
AEC Alternative Energy Credit that is issued for each megawatt hour of generation from a qualified alternative energy source
AESO Alberta Electric Systems Operator
AFUDC Allowance for Funds Used During Construction
AMI Advanced Metering Infrastructure
AOCI Accumulated Other Comprehensive Income (Loss)
ARC Asset Retirement Cost
ARO Asset Retirement Obligation
BGS Basic Generation Service
CERCLA Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended
CES Clean Energy Standard
Clean Water Act Federal Water Pollution Control Amendments of 1972, as amended
CODM Chief operating decision maker(s)
D.C. Circuit Court United States Court of Appeals for the District of Columbia Circuit
DC PLUG District of Columbia Power Line Undergrounding Initiative
DCPSC Public Service Commission of the District of Columbia
DOE United States Department of Energy
DOEE Department of Energy & Environment
DOJ United States Department of Justice
DPSC Delaware Public Service Commission
EDF Electricite de France SA and its subsidiaries
EIMA Energy Infrastructure Modernization Act (Illinois Senate Bill 1652 and Illinois House Bill 3036)
EPA United States Environmental Protection Agency
ERCOT Electric Reliability Council of Texas
FASB Financial Accounting Standards Board
FEJA Illinois Public Act 99-0906 or Future Energy Jobs Act
FERC Federal Energy Regulatory Commission
FRCC Florida Reliability Coordinating Council
FRR Fixed Resource Requirement
GAAP Generally Accepted Accounting Principles in the United States
GCR Gas Cost Rate
GSA Generation Supply Adjustment
ICC Illinois Commerce Commission
ICE Intercontinental Exchange
IPA Illinois Power Agency
IRC Internal Revenue Code
IRS Internal Revenue Service
   

5


GLOSSARY OF TERMS AND ABBREVIATIONS
Other Terms and Abbreviations  
ISO Independent System Operator
ISO-NE Independent System Operator New England Inc.
LIBOR London Interbank Offered Rate
MDE Maryland Department of the Environment
MDPSC Maryland Public Service Commission
MGP Manufactured Gas Plant
MISO Midcontinent Independent System Operator, Inc.
mmcf Million Cubic Feet
MOPR Minimum Offer Price Rule
MW Megawatt
MWh Megawatt hour
NDT Nuclear Decommissioning Trust
NERC North American Electric Reliability Corporation
NGX Natural Gas Exchange
NJBPU New Jersey Board of Public Utilities
Non-Regulatory Agreements Units Nuclear generating units or portions thereof whose decommissioning-related activities are not subject to contractual elimination under regulatory accounting
NOSA Nuclear Operating Services Agreement
NPNS Normal Purchase Normal Sale scope exception
NRC Nuclear Regulatory Commission
NYISO New York Independent System Operator Inc.
NYMEX New York Mercantile Exchange
NYPSC New York Public Service Commission
OCI Other Comprehensive Income
OIESO Ontario Independent Electricity System Operator
OPEB Other Postretirement Employee Benefits
PAPUC Pennsylvania Public Utility Commission
PGC Purchased Gas Cost Clause
PG&E Pacific Gas and Electric Company
PJM PJM Interconnection, LLC
POLR Provider of Last Resort
PPA Power Purchase Agreement
PPE Property, plant and equipment
Price-Anderson Act Price-Anderson Nuclear Industries Indemnity Act of 1957
PRP Potentially Responsible Parties
PSDAR Post-Shutdown Decommissioning Activities Report
PSEG Public Service Enterprise Group Incorporated
REC Renewable Energy Credit which is issued for each megawatt hour of generation from a qualified renewable energy source
RNF Revenues Net of Purchased Power and Fuel Expense
Regulatory Agreement Units Nuclear generating units or portions thereof whose decommissioning-related activities are subject to contractual elimination under regulatory accounting
   

6


GLOSSARY OF TERMS AND ABBREVIATIONS
Other Terms and Abbreviations  
RFP Request for Proposal
Rider Reconcilable Surcharge Recovery Mechanism
RMC Risk Management Committee
ROE Return on equity
ROU Right-of-use
RTO Regional Transmission Organization
SEC United States Securities and Exchange Commission
SERC SERC Reliability Corporation (formerly Southeast Electric Reliability Council)
SNF Spent Nuclear Fuel
SOS Standard Offer Service
TCJA Tax Cuts and Jobs Act
Transition Bonds Transition Bonds issued by ACE Funding
VIE Variable Interest Entity
WECC Western Electric Coordinating Council
ZEC Zero Emission Credit, or Zero Emission Certificate
ZES Zero Emission Standard

7


FILING FORMAT
This combined Form 10-Q is being filed separately 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). Information contained herein relating to any individual Registrant is filed by such Registrant on its own behalf. No Registrant makes any representation as to information relating to any other Registrant.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
This Report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties including among others those related to the expected or potential impact of the novel coronavirus (COVID-19) pandemic, and the related responses of various governments and regulatory bodies, our customers, and the company, on our business, financial condition and results of operations; any such forward-looking statements, whether concerning the COVID-19 pandemic or otherwise, involve risks, assumptions 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 the Registrants include those factors discussed herein, as well as the items discussed in (1) the Registrants' combined 2019 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 18, Commitments and Contingencies; (2) this Quarterly Report on Form 10-Q in (a) Part II, ITEM 1A. Risk Factors; (b) Part I, ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) Part I, ITEM 1. Financial Statements: Note 14, Commitments and Contingencies; and (3) other factors discussed in filings with the SEC by the Registrants.
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 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 Report.
WHERE TO FIND MORE INFORMATION
The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information that the Registrants file electronically with the SEC. These documents are also available to the public from commercial document retrieval services and the Registrants' website at www.exeloncorp.com. Information contained on the Registrants' website shall not be deemed incorporated into, or to be a part of, this Report.

8


PART I. FINANCIAL INFORMATION
Item 1. Financial Statements

9



EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
 Three Months Ended
March 31,
(In millions, except per share data)2020 2019
Operating revenues   
Competitive businesses revenues$4,403
 $4,979
Rate-regulated utility revenues4,276
 4,503
Revenues from alternative revenue programs67
 (5)
Operating revenue from affiliates1
 
Total operating revenues8,747
 9,477
Operating expenses   
Competitive businesses purchased power and fuel2,710
 3,204
Rate-regulated utility purchased power and fuel1,157
 1,349
Operating and maintenance2,204
 2,189
Depreciation and amortization1,021
 1,075
Taxes other than income taxes437
 445
Total operating expenses7,529

8,262
Gain on sales of assets and businesses2
 3
Operating income1,220

1,218
Other income and (deductions)
 
Interest expense, net(404) (397)
Interest expense to affiliates(6) (6)
Other, net(725) 467
Total other income and (deductions)(1,135)
64
Income before income taxes85
 1,282
Income taxes(294) 310
Equity in losses of unconsolidated affiliates(3) (6)
Net income376

966
Net (loss) income attributable to noncontrolling interests(206) 59
Net income attributable to common shareholders$582

$907
Comprehensive income, net of income taxes   
Net income$376
 $966
Other comprehensive income (loss), net of income taxes   
Pension and non-pension postretirement benefit plans:   
Prior service benefit reclassified to periodic benefit cost(10) (16)
Actuarial loss reclassified to periodic benefit cost47
 36
Pension and non-pension postretirement benefit plan valuation adjustment(7) (38)
Unrealized loss on cash flow hedges(1) 
Unrealized loss on investments in unconsolidated affiliates
 (2)
Unrealized (loss) gain on foreign currency translation(8) 2
Other comprehensive income21

(18)
Comprehensive income397

948
Comprehensive (loss) income attributable to noncontrolling interests(206) 58
Comprehensive income attributable to common shareholders$603
 $890
    
Average shares of common stock outstanding:   
Basic975
 971
Assumed exercise and/or distributions of stock-based awards1
 1
Diluted(a)
976
 972
    
Earnings per average common share:   
Basic$0.60
 $0.93
Diluted$0.60
 $0.93
__________
(a)The number of stock options not included in the calculation of diluted common shares outstanding due to their antidilutive effect was immaterial for the three months ended March 31, 2020 and March 31, 2019.

See the Combined Notes to Consolidated Financial Statements
10


EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Three Months Ended
March 31,
(In millions)2020 2019
Cash flows from operating activities   
Net income$376
 $966
Adjustments to reconcile net income to net cash flows provided by operating activities:   
Depreciation, amortization and accretion, including nuclear fuel and energy contract amortization1,378
 1,460
Asset impairments8
 7
Deferred income taxes and amortization of investment tax credits(245) 187
Net fair value changes related to derivatives(132) 31
Net realized and unrealized losses (gains) on NDT funds651
 (308)
Other non-cash operating activities273
 127
Changes in assets and liabilities:   
Accounts receivable800
 79
Inventories81
 128
Accounts payable and accrued expenses(976) (764)
Option premiums (paid) received, net(38) 6
Collateral posted, net(21) (101)
Income taxes(56) 141
Pension and non-pension postretirement benefit contributions(531) (328)
Other assets and liabilities(488) (587)
Net cash flows provided by operating activities1,080

1,044
Cash flows from investing activities   
Capital expenditures(2,016) (1,873)
Proceeds from NDT fund sales1,183
 3,713
Investment in NDT funds(1,234) (3,666)
Proceeds from sales of assets and businesses
 8
Other investing activities(8) 32
Net cash flows used in investing activities(2,075)
(1,786)
Cash flows from financing activities   
Changes in short-term borrowings109
 540
Proceeds from short-term borrowings with maturities greater than 90 days500
 
Issuance of long-term debt2,652
 402
Retirement of long-term debt(1,032) (352)
Dividends paid on common stock(373) (352)
Proceeds from employee stock plans30
 51
Other financing activities(21) (14)
Net cash flows provided by financing activities1,865

275
Increase (decrease) in cash, cash equivalents and restricted cash870
 (467)
Cash, cash equivalents and restricted cash at beginning of period1,122
 1,781
Cash, cash equivalents and restricted cash at end of period$1,992

$1,314
    
Supplemental cash flow information   
Decrease in capital expenditures not paid$(180) $(229)
Increase in PPE related to ARO update
 301

See the Combined Notes to Consolidated Financial Statements
11


EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)March 31, 2020 December 31, 2019
ASSETS   
Current assets   
Cash and cash equivalents$1,457
 $587
Restricted cash and cash equivalents414
 358
Accounts receivable   
Customer accounts receivable4,320 4,835
Customer allowance for credit losses(278) (243)
Customer accounts receivable, net4,042
 4,592
Other accounts receivable1,391 1,631
Other allowance for credit losses(52) (48)
Other accounts receivable, net1,339
 1,583
Mark-to-market derivative assets656
 679
Unamortized energy contract assets47
 47
Inventories, net   
Fossil fuel and emission allowances224
 312
Materials and supplies1,463
 1,456
Regulatory assets1,205
 1,170
Other1,629
 1,253
Total current assets12,476

12,037
Property, plant and equipment (net of accumulated depreciation and amortization of $24,449 and $23,979 as of March 31, 2020 and December 31, 2019, respectively)81,017
 80,233
Deferred debits and other assets   
Regulatory assets8,360
 8,335
Nuclear decommissioning trust funds11,611
 13,190
Investments418
 464
Goodwill6,677
 6,677
Mark-to-market derivative assets625
 508
Unamortized energy contract assets329
 336
Other3,164
 3,197
Total deferred debits and other assets31,184

32,707
Total assets(a)
$124,677

$124,977

See the Combined Notes to Consolidated Financial Statements
12


EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)March 31, 2020 December 31, 2019
LIABILITIES AND SHAREHOLDERS’ EQUITY   
Current liabilities   
Short-term borrowings$1,979
 $1,370
Long-term debt due within one year2,848
 4,710
Accounts payable2,883
 3,560
Accrued expenses1,535
 1,981
Payables to affiliates5
 5
Regulatory liabilities412
 406
Mark-to-market derivative liabilities264
 247
Unamortized energy contract liabilities121
 132
Renewable energy credit obligation451
 443
Other1,276
 1,331
Total current liabilities11,774
 14,185
Long-term debt34,808
 31,329
Long-term debt to financing trusts390
 390
Deferred credits and other liabilities   
Deferred income taxes and unamortized investment tax credits12,242
 12,351
Asset retirement obligations10,951
 10,846
Pension obligations3,705
 4,247
Non-pension postretirement benefit obligations2,112
 2,076
Spent nuclear fuel obligation1,204
 1,199
Regulatory liabilities9,105
 9,986
Mark-to-market derivative liabilities436
 393
Unamortized energy contract liabilities317
 338
Other3,017
 3,064
Total deferred credits and other liabilities43,089
 44,500
Total liabilities(a)
90,061

90,404
Commitments and contingencies

 

Shareholders’ equity   
Common stock (No par value, 2,000 shares authorized, 974 shares and 973 shares outstanding at March 31, 2020 and December 31, 2019, respectively)19,303
 19,274
Treasury stock, at cost (2 shares at March 31, 2020 and December 31, 2019)(123) (123)
Retained earnings16,475
 16,267
Accumulated other comprehensive loss, net(3,173) (3,194)
Total shareholders’ equity32,482

32,224
Noncontrolling interests2,134
 2,349
Total equity34,616

34,573
Total liabilities and shareholders’ equity$124,677

$124,977
__________
(a)Exelon’s consolidated assets include $9,056 million and $9,532 million at March 31, 2020 and December 31, 2019, respectively, of certain VIEs that can only be used to settle the liabilities of the VIE. Exelon’s consolidated liabilities include $3,412 million and $3,473 million at March 31, 2020 and December 31, 2019, respectively, of certain VIEs for which the VIE creditors do not have recourse to Exelon. See Note 16 — Variable Interest Entities for additional information.

See the Combined Notes to Consolidated Financial Statements
13


EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
 Three Months Ended March 31, 2020
(In millions, shares
in thousands)
Issued
Shares
 
Common
Stock
 
Treasury
Stock
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Loss, net
 
Noncontrolling
Interests
 
Total Shareholders'
Equity
Balance, December 31, 2019974,416
 $19,274
 $(123) $16,267
 $(3,194) $2,349
 $34,573
Net income
 
 
 582
 
 (206) 376
Long-term incentive plan activity1,354
 (4) 
 
 
 
 (4)
Employee stock purchase plan issuances470
 31
 
 
 
 
 31
Changes in equity of noncontrolling interests
 

 
 
 
 (9) (9)
Sale of noncontrolling interests
 2
 
 
 
 
 2
Common stock dividends
($0.38/common share)

 
 
 (374) 
 
 (374)
Other comprehensive income, net of income taxes
 
 
 
 21
 


 21
Balance, March 31, 2020976,240

$19,303

$(123)
$16,475

$(3,173)
$2,134

$34,616


 Three Months Ended March 31, 2019
(In millions, shares
in thousands)
Issued
Shares
 
Common
Stock
 
Treasury
Stock
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Loss, net
 
Noncontrolling
Interests
 
Total Shareholders'
Equity
Balance, December 31, 2018970,020
 $19,116
 $(123) $14,766
 $(2,995) $2,306
 $33,070
Net income
 
 
 907
 
 59
 966
Long-term incentive plan activity2,446
 (3) 
 
 
 
 (3)
Employee stock purchase plan issuances320
 51
 
 
 
 
 51
Changes in equity of noncontrolling interests
 
 
 
 
 (17) (17)
Sale of noncontrolling interests
 7
 
 
 
 
 7
Common stock dividends
($0.36/common share)

 
 
 (352) 
 
 (352)
Other comprehensive loss, net of income taxes
 
 
 
 (17) (1) (18)
Balance, March 31, 2019972,786
 $19,171
 $(123) $15,321
 $(3,012) $2,347
 $33,704

See the Combined Notes to Consolidated Financial Statements
14



EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
 Three Months Ended
March 31,
(In millions)2020 2019
Operating revenues   
Operating revenues$4,403
 $4,979
Operating revenues from affiliates330
 317
Total operating revenues4,733

5,296
Operating expenses   
Purchased power and fuel2,710
 3,204
Purchased power and fuel from affiliates(6) 1
Operating and maintenance1,121
 1,068
Operating and maintenance from affiliates142
 150
Depreciation and amortization304
 405
Taxes other than income taxes129
 135
Total operating expenses4,400

4,963
Operating income333

333
Other income and (deductions)   
Interest expense, net(100) (102)
Interest expense to affiliates(9) (9)
Other, net(771) 430
Total other income and (deductions)(880)
319
(Loss) income before income taxes(547) 652
Income taxes(389) 224
Equity in losses of unconsolidated affiliates(3) (6)
Net (loss) income(161)
422
Net (loss) income attributable to noncontrolling interests(206) 59
Net income attributable to membership interest$45

$363
Comprehensive income, net of income taxes   
Net (loss) income$(161) $422
Other comprehensive (loss) income, net of income taxes   
Unrealized (loss) gain on cash flow hedges(1) 1
Unrealized loss on investments in unconsolidated affiliates
 (2)
Unrealized (loss) gain on foreign currency translation(8) 2
Other comprehensive (loss) income(9)
1
Comprehensive (loss) income(170)
423
Comprehensive (loss) income attributable to noncontrolling interests(206) 58
Comprehensive income attributable to membership interest$36
 $365

See the Combined Notes to Consolidated Financial Statements
15


EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Three Months Ended
March 31,
(In millions)2020 2019
Cash flows from operating activities   
Net (loss) income$(161) $422
Adjustments to reconcile net income to net cash flows provided by operating activities:   
Depreciation, amortization and accretion, including nuclear fuel and energy contract amortization661
 789
Asset impairments8
 7
Deferred income taxes and amortization of investment tax credits(329) 108
Net fair value changes related to derivatives(127) 33
Net realized and unrealized losses (gains) on NDT funds651
 (308)
Other non-cash operating activities205
 (90)
Changes in assets and liabilities:
 
Accounts receivable787
 197
Receivables from and payables to affiliates, net34
 (5)
Inventories39
 103
Accounts payable and accrued expenses(614) (411)
Option premiums (paid) received, net(38) 6
Collateral posted, net(22) (87)
Income taxes(58) 146
Pension and non-pension postretirement benefit contributions(232) (141)
Other assets and liabilities(184) (187)
Net cash flows provided by operating activities620

582
Cash flows from investing activities   
Capital expenditures(558) (511)
Proceeds from NDT fund sales1,183
 3,713
Investment in NDT funds(1,234) (3,666)
Proceeds from sales of assets and businesses
 8
Changes in Exelon intercompany money pool(254) 
Other investing activities(8) 23
Net cash flows used in investing activities(871)
(433)
Cash flows from financing activities   
Changes in short-term borrowings275
 
Proceeds from short-term borrowings with maturities greater than 90 days500
 
Issuance of long-term debt1,502
 2
Retirement of long-term debt(1,028) (47)
Changes in Exelon intercompany money pool
 (100)
Distributions to member(468) (225)
Other financing activities(8) (6)
Net cash flows provided by (used in) financing activities773

(376)
Increase (decrease) in cash, cash equivalents and restricted cash522
 (227)
Cash, cash equivalents and restricted cash at beginning of period449
 903
Cash, cash equivalents and restricted cash at end of period$971

$676
    
Supplemental cash flow information   
Decrease in capital expenditures not paid$(56) $(93)
Increase in PPE related to ARO update
 301

See the Combined Notes to Consolidated Financial Statements
16


EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)March 31, 2020 December 31, 2019
ASSETS   
Current assets   
Cash and cash equivalents$821
 $303
Restricted cash and cash equivalents150
 146
Accounts receivable   
Customer accounts receivable2,496 2,973
Customer allowance for credit losses(81) (80)
Customer accounts receivable, net2,415
 2,893
Other accounts receivable353 619
Other accounts receivable, net353
 619
Mark-to-market derivative assets650
 675
Receivables from affiliates167
 190
Receivable from Exelon intercompany money pool254
 
Unamortized energy contract assets47
 47
Inventories, net   
Fossil fuel and emission allowances186
 236
Materials and supplies1,038
 1,026
Other1,243
 941
Total current assets7,324

7,076
Property, plant and equipment (net of accumulated depreciation and amortization of $12,114 and $12,017 as of March 31, 2020 and December 31, 2019, respectively)24,169
 24,193
Deferred debits and other assets   
Nuclear decommissioning trust funds11,611
 13,190
Investments189
 235
Goodwill47
 47
Mark-to-market derivative assets625
 508
Prepaid pension asset1,638
 1,438
Unamortized energy contract assets328
 336
Deferred income taxes10
 12
Other1,941
 1,960
Total deferred debits and other assets16,389

17,726
Total assets(a)
$47,882

$48,995

See the Combined Notes to Consolidated Financial Statements
17


EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)March 31, 2020 December 31, 2019
LIABILITIES AND EQUITY   
Current liabilities   
Short-term borrowings$1,095
 $320
Long-term debt due within one year1,623
 2,624
Long-term debt to affiliates due within one year556
 558
Accounts payable1,195
 1,692
Accrued expenses603
 786
Payables to affiliates128
 117
Mark-to-market derivative liabilities229
 215
Unamortized energy contract liabilities12
 17
Renewable energy credit obligation450
 443
Other434
 517
Total current liabilities6,325
 7,289
Long-term debt5,943
 4,464
Long-term debt to affiliates327
 328
Deferred credits and other liabilities   
Deferred income taxes and unamortized investment tax credits3,424
 3,752
Asset retirement obligations10,709
 10,603
Non-pension postretirement benefit obligations873
 878
Spent nuclear fuel obligation1,204
 1,199
Payables to affiliates2,302
 3,103
Mark-to-market derivative liabilities158
 123
Unamortized energy contract liabilities10
 11
Other1,424
 1,415
Total deferred credits and other liabilities20,104
 21,084
Total liabilities(a)
32,699
 33,165
Commitments and contingencies

 

Equity   
Member’s equity   
Membership interest9,568
 9,566
Undistributed earnings3,527
 3,950
Accumulated other comprehensive loss, net(41) (32)
Total member’s equity13,054
 13,484
Noncontrolling interests2,129
 2,346
Total equity15,183
 15,830
Total liabilities and equity$47,882
 $48,995
__________
(a)Generation’s consolidated assets include $9,034 million and $9,512 million at March 31, 2020 and December 31, 2019, respectively, of certain VIEs that can only be used to settle the liabilities of the VIE. Generation’s consolidated liabilities include $3,369 million and $3,429 million at March 31, 2020 and December 31, 2019, respectively, of certain VIEs for which the VIE creditors do not have recourse to Generation. See Note 16 — Variable Interest Entities for additional information.

See the Combined Notes to Consolidated Financial Statements
18


EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
 Three Months Ended March 31, 2020
 Member’s Equity    
(In millions)
Membership
Interest
 
Undistributed
Earnings
 
Accumulated
Other
Comprehensive
Loss, net
 
Noncontrolling
Interests
 Total Equity
Balance, December 31, 2019$9,566
 $3,950
 $(32) $2,346
 $15,830
Net income (loss)
 45
 
 (206) (161)
Changes in equity of noncontrolling interests
 
 
 (11) (11)
Sale of noncontrolling interests2
 
 
 
 2
Distributions to member
 (468) 
 
 (468)
Other comprehensive loss, net of income taxes
 
 (9) 
 (9)
Balance, March 31, 2020$9,568

$3,527

$(41)
$2,129

$15,183

 Three Months Ended March 31, 2019
 Member’s Equity    
(In millions)
Membership
Interest
 
Undistributed
Earnings
 
Accumulated
Other
Comprehensive
Loss, net
 
Noncontrolling
Interests
 Total Equity
Balance, December 31, 2018$9,518
 $3,724
 $(38) $2,304
 $15,508
Net income
 363
 
 59
 422
Changes in equity of noncontrolling interests
 
 
 (17) (17)
Sale of noncontrolling interests7
 
 
 
 7
Distributions to member
 (225) 
 
 (225)
Other comprehensive income, net of income taxes
 
 2
 (1) 1
Balance, March 31, 2019$9,525
 $3,862
 $(36) $2,345
 $15,696


See the Combined Notes to Consolidated Financial Statements
19


COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
 Three Months Ended
March 31,
(In millions)2020 2019
Operating revenues   
Electric operating revenues$1,422
 $1,432
Revenues from alternative revenue programs12
 (28)
Operating revenues from affiliates5
 4
Total operating revenues1,439

1,408
Operating expenses   
Purchased power389
 388
Purchased power from affiliate97
 97
Operating and maintenance243
 259
Operating and maintenance from affiliate74
 62
Depreciation and amortization273
 251
Taxes other than income taxes75
 78
Total operating expenses1,151

1,135
Gain on sales of assets
 3
Operating income288

276
Other income and (deductions)   
Interest expense, net(91) (84)
Interest expense to affiliates(3) (3)
Other, net10
 8
Total other income and (deductions)(84)
(79)
Income before income taxes204
 197
Income taxes36
 40
Net income$168

$157
Comprehensive income$168
 $157

20


COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Three Months Ended
March 31,
(In millions)2020 2019
Cash flows from operating activities   
Net income$168
 $157
Adjustments to reconcile net income to net cash flows provided by operating activities:   
Depreciation, amortization and accretion273
 251
Deferred income taxes and amortization of investment tax credits42
 34
Other non-cash operating activities16
 56
Changes in assets and liabilities:   
Accounts receivable9
 14
Receivables from and payables to affiliates, net(6) (34)
Inventories(2) (3)
Accounts payable and accrued expenses(147) (188)
Counterparty collateral received (posted), net and cash deposits3
 (13)
Income taxes(7) 5
Pension and non-pension postretirement benefit contributions(143) (67)
Other assets and liabilities(132) (121)
Net cash flows provided by operating activities74

91
Cash flows from investing activities   
Capital expenditures(506) (503)
Other investing activities5
 11
Net cash flows used in investing activities(501)
(492)
Cash flows from financing activities   
Changes in short-term borrowings(130) 322
Issuance of long-term debt1,000
 400
Retirement of long-term debt
 (300)
Dividends paid on common stock(125) (127)
Contributions from parent125
 63
Other financing activities(13) (9)
Net cash flows provided by financing activities857

349
Increase (decrease) in cash, cash equivalents and restricted cash430
 (52)
Cash, cash equivalents and restricted cash at beginning of period403
 330
Cash, cash equivalents and restricted cash at end of period$833

$278
    
Supplemental cash flow information   
Decrease in capital expenditures not paid$(5) $(80)

See the Combined Notes to Consolidated Financial Statements
21


COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)March 31, 2020 December 31, 2019
ASSETS   
Current assets   
   Cash and cash equivalents$514
 $90
   Restricted cash and cash equivalents211
 150
   Accounts receivable   
   Customer accounts receivable600 604
   Customer allowance for credit losses(71) (59)
       Customer accounts receivable, net529
 545
   Other accounts receivable307 306
   Other allowance for credit losses(22) (20)
       Other accounts receivable, net285
 286
   Receivables from affiliates18
 28
   Inventories, net161
 159
   Regulatory assets290
 281
   Other51
 44
   Total current assets2,059

1,583
Property, plant and equipment (net of accumulated depreciation and amortization of $5,315 and $5,168 as of March 31, 2020 and December 31, 2019, respectively)23,390
 23,107
Deferred debits and other assets   
   Regulatory assets1,567
 1,480
   Investments6
 6
   Goodwill2,625
 2,625
   Receivables from affiliates2,040
 2,622
   Prepaid pension asset1,108
 995
   Other351
 347
   Total deferred debits and other assets7,697

8,075
Total assets$33,146

$32,765

See the Combined Notes to Consolidated Financial Statements
22


COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)March 31, 2020 December 31, 2019
LIABILITIES AND SHAREHOLDERS’ EQUITY   
Current liabilities   
   Short-term borrowings$
 $130
   Long-term debt due within one year500
 500
   Accounts payable503
 527
   Accrued expenses258
 385
   Payables to affiliates87
 103
   Customer deposits118
 118
   Regulatory liabilities186
 200
   Mark-to-market derivative liability36
 32
   Other117
 122
   Total current liabilities1,805
 2,117
Long-term debt8,978
 7,991
Long-term debt to financing trust205
 205
Deferred credits and other liabilities   
   Deferred income taxes and unamortized investment tax credits4,094
 4,021
   Asset retirement obligations128
 128
   Non-pension postretirement benefits obligations178
 180
   Regulatory liabilities5,960
 6,542
   Mark-to-market derivative liability278
 269
   Other675
 635
   Total deferred credits and other liabilities11,313
 11,775
   Total liabilities22,301
 22,088
Commitments and contingencies

 

Shareholders’ equity   
   Common stock1,588
 1,588
   Other paid-in capital7,697
 7,572
   Retained deficit unappropriated(1,639) (1,639)
   Retained earnings appropriated3,199
 3,156
   Total shareholders’ equity10,845
 10,677
Total liabilities and shareholders’ equity$33,146
 $32,765

See the Combined Notes to Consolidated Financial Statements
23


COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
 Three Months Ended March 31, 2020
(In millions)
Common
Stock
 
Other
Paid-In
Capital
 
Retained Deficit
Unappropriated
 
Retained
Earnings
Appropriated
 
Total
Shareholders’
Equity
Balance, December 31, 2019$1,588
 $7,572
 $(1,639) $3,156
 $10,677
Net income
 
 168
 
 168
Appropriation of retained earnings for future dividends
 
 (168) 168
 
Common stock dividends
 
 
 (125) (125)
Contributions from parent
 125
 
 
 125
Balance, March 31, 2020$1,588
 $7,697
 $(1,639) $3,199
 $10,845
          
 Three Months Ended March 31, 2019
(In millions)
Common
Stock
 
Other
Paid-In
Capital
 
Retained Deficit
Unappropriated
 
Retained
Earnings
Appropriated
 
Total
Shareholders’
Equity
Balance, December 31, 2018$1,588
 $7,322
 $(1,639) $2,976
 $10,247
Net income
 
 157
 
 157
Appropriation of retained earnings for future dividends
 
 (157) 157
 
Common stock dividends
 
 
 (127) (127)
Contributions from parent
 63
 
 
 63
Balance, March 31, 2019$1,588
 $7,385
 $(1,639) $3,006
 $10,340

See the Combined Notes to Consolidated Financial Statements
24



PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
 Three Months Ended
March 31,
(In millions)2020 2019
Operating revenues   
Electric operating revenues$600
 $622
Natural gas operating revenues209
 280
Revenues from alternative revenue programs2
 (3)
Operating revenues from affiliates2
 1
Total operating revenues813

900
Operating expenses   
Purchased power164
 152
Purchased fuel83
 135
Purchased power from affiliate36
 44
Operating and maintenance179
 187
Operating and maintenance from affiliates38
 38
Depreciation and amortization86
 81
Taxes other than income taxes39
 41
Total operating expenses625

678
Operating income188

222
Other income and (deductions)   
Interest expense, net(33) (30)
Interest expense to affiliates(3) (3)
Other, net3
 4
Total other income and (deductions)(33)
(29)
Income before income taxes155

193
Income taxes15
 25
Net income$140

$168
Comprehensive income$140
 $168

See the Combined Notes to Consolidated Financial Statements
25


PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Three Months Ended
March 31,
(In millions)2020 2019
Cash flows from operating activities   
Net income$140
 $168
Adjustments to reconcile net income to net cash flows provided by operating activities:   
Depreciation and amortization86
 81
Deferred income taxes and amortization of investment tax credits2
 5
Other non-cash operating activities22
 16
Changes in assets and liabilities:   
Accounts receivable14
 (86)
Receivables from and payables to affiliates, net(3) 7
Inventories15
 23
Accounts payable and accrued expenses(45) (13)
Income taxes14
 20
Pension and non-pension postretirement benefit contributions(16) (25)
Other assets and liabilities(84) (119)
Net cash flows provided by operating activities145

77
Cash flows from investing activities   
Capital expenditures(259) (222)
Changes in Exelon intercompany money pool(22) 
Other investing activities1
 2
Net cash flows used in investing activities(280)
(220)
Cash flows from financing activities   
Dividends paid on common stock(85) (90)
Contributions from parent231
 145
Net cash flows provided by financing activities146

55
Increase (decrease) in cash, cash equivalents and restricted cash11
 (88)
Cash, cash equivalents and restricted cash at beginning of period27
 135
Cash, cash equivalents and restricted cash at end of period$38

$47
    
Supplemental cash flow information   
(Decrease) Increase in capital expenditures not paid$(11) $8

See the Combined Notes to Consolidated Financial Statements
26


PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)March 31, 2020 December 31, 2019
ASSETS   
Current assets   
Cash and cash equivalents$31
 $21
Restricted cash and cash equivalents7
 6
Accounts receivable   
Customer accounts receivable394 412
Customer allowance for credit losses(66) (55)
Customer accounts receivable, net328
 357
Other accounts receivable128 145
Other allowance for credit losses(7) (7)
Other accounts receivable, net121
 138
Receivable from affiliates
 1
Receivable from Exelon intercompany pool90
 68
Inventories, net   
Fossil fuel21
 36
Materials and supplies35
 35
Prepaid utility taxes101
 
Regulatory assets35
 41
Other20
 19
Total current assets789

722
Property, plant and equipment (net of accumulated depreciation and amortization of $3,753 and $3,718 as of March 31, 2020 and December 31, 2019, respectively)9,462
 9,292
Deferred debits and other assets   
Regulatory assets588
 554
Investments25
 27
Receivable from affiliates261
 480
Prepaid pension asset380
 365
Other30
 29
Total deferred debits and other assets1,284

1,455
Total assets$11,535

$11,469

See the Combined Notes to Consolidated Financial Statements
27


PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)March 31, 2020 December 31, 2019
LIABILITIES AND SHAREHOLDER'S EQUITY   
Current liabilities   
Accounts payable$357
 $387
Accrued expenses76
 101
Payables to affiliates51
 55
Customer deposits70
 69
Regulatory liabilities104
 91
Other27
 19
Total current liabilities685
 722
Long-term debt3,406
 3,405
Long-term debt to financing trusts184
 184
Deferred credits and other liabilities   
Deferred income taxes and unamortized investment tax credits2,119
 2,080
Asset retirement obligations26
 28
Non-pension postretirement benefits obligations288
 288
Regulatory liabilities290
 510
Other73
 74
Total deferred credits and other liabilities2,796
 2,980
Total liabilities7,071
 7,291
Commitments and contingencies

 

Shareholder’s equity   
Common stock2,997
 2,766
Retained earnings1,467
 1,412
Total shareholder’s equity4,464
 4,178
Total liabilities and shareholder's equity$11,535
 $11,469

See the Combined Notes to Consolidated Financial Statements
28


PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY
(Unaudited)
 Three months ended March 31, 2020
(In millions)
Common
Stock
 
Retained
Earnings
 
Total
Shareholder's
Equity
Balance, December 31, 2019$2,766
 $1,412
 $4,178
Net income
 140
 140
Common stock dividends
 (85) (85)
Contributions from parent231
 
 231
Balance, March 31, 2020$2,997
 $1,467
 $4,464
      
 Three months ended March 31, 2019
(In millions)Common
Stock
 Retained
Earnings
 Total
Shareholder's
Equity
Balance, December 31, 2018$2,578
 $1,242
 $3,820
Net income
 168
 168
Common stock dividends
 (90) (90)
Contributions from parent145
 
 145
Balance, March 31, 2019$2,723
 $1,320
 $4,043

See the Combined Notes to Consolidated Financial Statements
29



BALTIMORE GAS AND ELECTRIC COMPANY
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
 Three Months Ended
March 31,
(In millions)2020 2019
Operating revenues   
Electric operating revenues$595
 $652
Natural gas operating revenues300
 308
Revenues from alternative revenue programs36
 10
Operating revenues from affiliates6
 6
Total operating revenues937

976
Operating expenses   
Purchased power114
 190
Purchased fuel76
 95
Purchased power from affiliate98
 75
Operating and maintenance146
 153
Operating and maintenance from affiliates42
 39
Depreciation and amortization143
 136
Taxes other than income taxes69
 68
Total operating expenses688

756
Operating income249

220
Other income and (deductions)   
Interest expense, net(32) (29)
Other, net5
 5
Total other income and (deductions)(27)
(24)
Income before income taxes222

196
Income taxes41
 36
Net income$181

$160
Comprehensive income$181
 $160

See the Combined Notes to Consolidated Financial Statements
30


BALTIMORE GAS AND ELECTRIC COMPANY
STATEMENTS OF CASH FLOWS
(Unaudited)
 Three Months Ended
March 31,
(In millions)2020 2019
Cash flows from operating activities   
Net income$181
 $160
Adjustments to reconcile net income to net cash flows provided by operating activities:   
Depreciation and amortization143
 136
Deferred income taxes and amortization of investment tax credits33
 28
Other non-cash operating activities(8) 27
Changes in assets and liabilities:   
Accounts receivable(28) (39)
Receivables from and payables to affiliates, net(13) (10)
Inventories20
 17
Accounts payable and accrued expenses(9) (27)
Collateral posted, net
 (1)
Income taxes7
 8
Pension and non-pension postretirement benefit contributions(64) (40)
Other assets and liabilities10
 (14)
Net cash flows provided by operating activities272

245
Cash flows from investing activities   
Capital expenditures(283) (258)
Other investing activities(6) 1
Net cash flows used in investing activities(289)
(257)
Cash flows from financing activities   
Changes in short-term borrowings66
 71
Dividends paid on common stock(62) (56)
Net cash flows provided by financing activities4

15
(Decrease) Increase in cash, cash equivalents and restricted cash(13) 3
Cash, cash equivalents and restricted cash at beginning of period25
 13
Cash, cash equivalents and restricted cash at end of period$12

$16
    
Supplemental cash flow information   
(Decrease) Increase in capital expenditures not paid$(35) $2

See the Combined Notes to Consolidated Financial Statements
31


BALTIMORE GAS AND ELECTRIC COMPANY
BALANCE SHEETS
(Unaudited)
(In millions)March 31, 2020 December 31, 2019
ASSETS   
Current assets   
Cash and cash equivalents$11
 $24
Restricted cash and cash equivalents1
 1
Accounts receivable   
Customer accounts receivable358 329
Customer allowance for credit losses(18) (12)
    Customer accounts receivable, net340
 317
Other accounts receivable143 152
Other allowance for credit losses(5) (5)
     Other accounts receivable, net138
 147
Receivables from affiliates1
 1
Inventories, net   
Fossil fuel13
 30
Materials and supplies43
 46
Prepaid utility taxes40
 78
Regulatory assets201
 183
Other5
 6
Total current assets793

833
Property, plant and equipment (net of accumulated depreciation and amortization of $3,898 and $3,834 as of March 31, 2020 and December 31, 2019, respectively)9,147
 8,990
Deferred debits and other assets   
Regulatory assets453
 454
Investments7
 7
Prepaid pension asset308
 264
Other81
 86
Total deferred debits and other assets849

811
Total assets$10,789

$10,634

See the Combined Notes to Consolidated Financial Statements
32


BALTIMORE GAS AND ELECTRIC COMPANY
BALANCE SHEETS
(Unaudited)
(In millions)March 31, 2020 December 31, 2019
LIABILITIES AND SHAREHOLDER'S EQUITY   
Current liabilities   
Short-term borrowings$141
 $76
Accounts payable224
 243
Accrued expenses127
 152
Payables to affiliates52
 66
Customer deposits119
 120
Regulatory liabilities39
 33
Other78
 63
Total current liabilities780
 753
Long-term debt3,271
 3,270
Deferred credits and other liabilities   
Deferred income taxes and unamortized investment tax credits1,457
 1,396
Asset retirement obligations22
 22
Non-pension postretirement benefits obligations194
 199
Regulatory liabilities1,163
 1,195
Other100
 116
Total deferred credits and other liabilities2,936
 2,928
Total liabilities6,987
 6,951
Commitments and contingencies

 

Shareholder's equity   
Common stock1,907
 1,907
Retained earnings1,895
 1,776
Total shareholder's equity3,802
 3,683
Total liabilities and shareholder's equity$10,789
 $10,634



See the Combined Notes to Consolidated Financial Statements
33


BALTIMORE GAS AND ELECTRIC COMPANY
STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(Unaudited)
 Three Months Ended March 31, 2020
(In millions)
Common
Stock
 
Retained
Earnings
 
Total
Shareholder's
Equity
Balance, December 31, 2019$1,907
 $1,776
 $3,683
Net income
 181
 181
Common stock dividends
 (62) (62)
Balance, March 31, 2020$1,907
 $1,895
 $3,802
      
 Three Months Ended March 31, 2019
(In millions)
Common
Stock
 
Retained
Earnings
 
Total
Shareholder's
Equity
Balance, December 31, 2018$1,714
 $1,640
 $3,354
Net income
 160
 160
Common stock dividends
 (56) (56)
Balance, March 31, 2019$1,714
 $1,744
 $3,458

See the Combined Notes to Consolidated Financial Statements
34



PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
  Three Months Ended
March 31,
(In millions) 2020 2019
Operating revenues    
Electric operating revenues $1,086
 $1,139
Natural gas operating revenues 64
 71
Revenues from alternative revenue programs 18
 15
Operating revenues from affiliates 3
 3
Total operating revenues 1,171
 1,228
Operating expenses    
Purchased power 300
 355
Purchased fuel 31
 34
Purchased power and fuel from affiliates 104
 101
Operating and maintenance 219
 239
Operating and maintenance from affiliates 38
 33
Depreciation and amortization 194
 180
Taxes other than income taxes 114
 111
Total operating expenses 1,000
 1,053
Gain on sales of assets 2
 
Operating income
173
 175
Other income and (deductions)    
Interest expense, net (67) (65)
Other, net 13
 12
Total other income and (deductions) (54) (53)
Income before income taxes 119
 122
Income taxes 11
 5
Net income $108
 $117
Comprehensive income $108
 $117

See the Combined Notes to Consolidated Financial Statements
35


PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Three Months Ended
March 31,
(In millions)2020 2019
Cash flows from operating activities  
Net income$108
 $117
Adjustments to reconcile net income to net cash flows provided by operating activities:   
Depreciation and amortization194
 180
Deferred income taxes and amortization of investment tax credits(4) 
Other non-cash operating activities7
 35
Changes in assets and liabilities:   
Accounts receivable36
 (11)
Receivables from and payables to affiliates, net(17) (8)
Inventories8
 (12)
Accounts payable and accrued expenses(16) (9)
Income taxes15
 4
Pension and non-pension postretirement benefit contributions(27) (6)
Other assets and liabilities(72) (61)
Net cash flows provided by operating activities232
 229
Cash flows from investing activities   
Capital expenditures(376) (358)
Other investing activities1
 1
Net cash flows used in investing activities(375)
(357)
Cash flows from financing activities   
Changes in short-term borrowings(100) 147
Issuance of long-term debt150
 
Retirement of long-term debt(6) (5)
Change in Exelon intercompany money pool7
 
Distributions to member(134) (128)
Contributions from member144
 19
Other financing activities(1) 
Net cash flows provided by financing activities60
 33
Decrease in cash, cash equivalents and restricted cash(83) (95)
Cash, cash equivalents and restricted cash at beginning of period181
 186
Cash, cash equivalents and restricted cash at end of period$98
 $91
    
Supplemental cash flow information   
Decrease in capital expenditures not paid$(57) $(55)

See the Combined Notes to Consolidated Financial Statements
36


PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)March 31, 2020 December 31, 2019
ASSETS   
Current assets   
Cash and cash equivalents$49
 $131
Restricted cash and cash equivalents37
 36
Accounts receivable   
Customer accounts receivable471 516
Customer allowance for credit losses(42) (37)
Customer accounts receivable, net429
 479
Other accounts receivable197 190
Other allowance for credit losses(18) (16)
Other accounts receivable, net179
 174
Receivable from affiliates1
 1
Inventories, net   
Fossil fuel3
 8
Materials and supplies187
 190
Regulatory assets427
 412
Other57
 49
Total current assets1,369

1,480
Property, plant and equipment (net of accumulated depreciation and amortization of $1,319 and $1,213 as of March 31, 2020 and December 31, 2019, respectively)14,491
 14,296
Deferred debits and other assets   
Regulatory assets2,012
 2,061
Investments135
 135
Goodwill4,005
 4,005
Prepaid pension asset412
 406
Deferred income taxes13
 13
Other316
 323
Total deferred debits and other assets6,893

6,943
Total assets(a)
$22,753

$22,719

See the Combined Notes to Consolidated Financial Statements
37


PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)March 31, 2020 December 31, 2019
LIABILITIES AND MEMBER'S EQUITY   
Current liabilities   
Short-term borrowings$108
 $208
Long-term debt due within one year144
 103
Accounts payable423
 462
Accrued expenses280
 296
Payables to affiliates82
 98
Borrowings from Exelon intercompany money pool19
 12
Customer deposits117
 117
Regulatory liabilities70
 70
Unamortized energy contract liabilities109
 115
Other129
 131
Total current liabilities1,481
 1,612
Long-term debt6,564
 6,460
Deferred credits and other liabilities   
Deferred income taxes and unamortized investment tax credits2,302
 2,278
Asset retirement obligations57
 57
Non-pension postretirement benefit obligations89
 93
Regulatory liabilities1,675
 1,707
Unamortized energy contract liabilities307
 327
Other552
 577
Total deferred credits and other liabilities4,982
 5,039
Total liabilities(a)
13,027
 13,111
Commitments and contingencies

 

Member's equity   
Membership interest9,762
 9,618
Undistributed losses(36) (10)
Total member's equity9,726

9,608
Total liabilities and member's equity$22,753

$22,719
__________
(a)PHI’s consolidated total assets include $22 million and $20 million at March 31, 2020 and December 31, 2019, respectively, of PHI's consolidated VIE that can only be used to settle the liabilities of the VIE. PHI’s consolidated total liabilities include $43 million and $44 million at March 31, 2020 and December 31, 2019, respectively, of PHI's consolidated VIE for which the VIE creditors do not have recourse to PHI. See Note 16 — Variable Interest Entities for additional information.

See the Combined Notes to Consolidated Financial Statements
38


PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
 Three Months Ended March 31, 2020
(In millions)Membership Interest Undistributed Earnings (Losses) Member's Equity
Balance, December 31, 2019$9,618
 $(10) $9,608
Net income
 108
 108
Distributions to member
 (134) (134)
Contributions from member144
 
 144
Balance, March 31, 2020$9,762
 $(36) $9,726
 Three Months Ended March 31, 2019
(In millions)Membership Interest Undistributed Earnings (Losses) Member's Equity
Balance, December 31, 2018$9,220
 $62
 $9,282
Net income
 117
 117
Distributions to member
 (128) (128)
Contributions from member19
 
 19
Balance, March 31, 2019$9,239
 $51
 $9,290
      

See the Combined Notes to Consolidated Financial Statements
39



POTOMAC ELECTRIC POWER COMPANY
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
 Three Months Ended
March 31,
(In millions)2020 2019
Operating revenues   
Electric operating revenues$528
 $559
Revenues from alternative revenue programs15
 14
Operating revenues from affiliates1
 2
Total operating revenues544
 575
Operating expenses   
Purchased power85
 117
Purchased power from affiliates79
 70
Operating and maintenance60
 64
Operating and maintenance from affiliates51
 54
Depreciation and amortization95
 94
Taxes other than income taxes92
 92
Total operating expenses462
 491
Operating income82
 84
Other income and (deductions)   
Interest expense, net(34) (34)
Other, net9
 7
Total other income and (deductions)(25) (27)
Income before income taxes57
 57
Income taxes5
 2
Net income$52
 $55
Comprehensive income$52
 $55

See the Combined Notes to Consolidated Financial Statements
40


POTOMAC ELECTRIC POWER COMPANY
STATEMENTS OF CASH FLOWS
(Unaudited)
 Three Months Ended
March 31,
(In millions)2020 2019
Cash flows from operating activities   
Net income$52
 $55
Adjustments to reconcile net income to net cash flows provided by operating activities:   
Depreciation and amortization95
 94
Deferred income taxes and amortization of investment tax credits(2) (2)
Other non-cash operating activities(11) 3
Changes in assets and liabilities:   
Accounts receivable14
 (19)
Receivables from and payables to affiliates, net(11) 3
Inventories3
 (14)
Accounts payable and accrued expenses6
 (2)
Income taxes6
 4
Pension and non-pension postretirement benefit contributions(4) (4)
Other assets and liabilities(38) (37)
Net cash flows provided by operating activities110
 81
Cash flows from investing activities   
Capital expenditures(180) (144)
Changes in PHI intercompany money pool(114) 
Other investing activities(4) 1
Net cash flows used in investing activities(298) (143)
Cash flows from financing activities   
Changes in short-term borrowings(82) 65
Issuance of long-term debt150
 
Dividends paid on common stock(28) (24)
Contributions from parent137
 14
Other financing activities(1) 
Net cash flows provided by financing activities176
 55
Decrease in cash, cash equivalents and restricted cash(12) (7)
Cash, cash equivalents and restricted cash at beginning of period63
 53
Cash, cash equivalents and restricted cash at end of period$51
 $46
    
Supplemental cash flow information   
Decrease in capital expenditures not paid$(43) $(15)

See the Combined Notes to Consolidated Financial Statements
41


POTOMAC ELECTRIC POWER COMPANY
BALANCE SHEETS
(Unaudited)
(In millions)March 31, 2020
December 31, 2019
ASSETS   
Current assets   
Cash and cash equivalents$18
 $30
Restricted cash and cash equivalents33
 33
Accounts receivable   
Customer accounts receivable225 244
Customer allowance for credit losses(15) (13)
Customer accounts receivable, net210
 231
Other accounts receivable102 98
Other allowance for credit losses(8) (7)
Other accounts receivable, net94
 91
Receivable from PHI intercompany money pool114
 
Inventories, net109
 112
Regulatory assets198
 188
Other24
 11
Total current assets800

696
Property, plant and equipment (net of accumulated depreciation and amortization of $3,561 and $3,517 as of March 31, 2020 and December 31, 2019, respectively)7,002
 6,909
Deferred debits and other assets   
Regulatory assets567
 584
Investments111
 110
Prepaid pension asset293
 296
Other64
 66
Total deferred debits and other assets1,035

1,056
Total assets$8,837

$8,661

See the Combined Notes to Consolidated Financial Statements
42


POTOMAC ELECTRIC POWER COMPANY
BALANCE SHEETS
(Unaudited)
(In millions)March 31, 2020 December 31, 2019
LIABILITIES AND SHAREHOLDER'S EQUITY   
Current liabilities   
Short-term borrowings$
 $82
Long-term debt due within one year3
 2
Accounts payable171
 195
Accrued expenses151
 156
Payables to affiliates55
 66
Customer deposits57
 57
Regulatory liabilities12
 8
Merger related obligation39
 39
Current portion of DC PLUG obligation30
 30
Other22
 22
Total current liabilities540

657
Long-term debt3,012
 2,862
Deferred credits and other liabilities   
Deferred income taxes and unamortized investment tax credits1,143
 1,131
Asset retirement obligations41
 41
Non-pension postretirement benefit obligations16
 20
Regulatory liabilities731
 746
Other286
 297
Total deferred credits and other liabilities2,217

2,235
Total liabilities5,769

5,754
Commitments and contingencies

 

Shareholder's equity   
Common stock1,933
 1,796
Retained earnings1,135
 1,111
Total shareholder's equity3,068
 2,907
Total liabilities and shareholder's equity$8,837
 $8,661

See the Combined Notes to Consolidated Financial Statements
43


POTOMAC ELECTRIC POWER COMPANY
STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(Unaudited)
 Three Months Ended March 31, 2020
(In millions)Common Stock Retained Earnings Total Shareholder's Equity
Balance, December 31, 2019$1,796
 $1,111
 $2,907
Net income
 52
 52
Common stock dividends
 (28) (28)
Contributions from parent137
 
 137
Balance, March 31, 2020$1,933
 $1,135
 $3,068
 Three Months Ended March 31, 2019
(In millions)Common Stock Retained Earnings Total Shareholder's Equity
Balance, December 31, 2018$1,636
 $1,104
 $2,740
Net income
 55
 55
Common stock dividends
 (24) (24)
Contributions from parent14
 
 14
Balance, March 31, 2019$1,650
 $1,135
 $2,785


See the Combined Notes to Consolidated Financial Statements
44



DELMARVA POWER & LIGHT COMPANY
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
 Three Months Ended
March 31,
(In millions)2020
2019
Operating revenues   
Electric operating revenues$283
 $307
Natural gas operating revenues64
 71
Revenues from alternative revenue programs1
 
Operating revenues from affiliates2
 2
Total operating revenues350

380
Operating expenses   
Purchased power88
 107
Purchased fuel31
 34
Purchased power from affiliate22
 23
Operating and maintenance42
 45
Operating and maintenance from affiliates37
 39
Depreciation and amortization48
 46
Taxes other than income taxes16
 14
Total operating expenses284

308
Operating income66

72
Other income and (deductions)   
Interest expense, net(16) (15)
Other, net2
 3
Total other income and (deductions)(14)
(12)
Income before income taxes52
 60
Income taxes7
 7
Net income$45

$53
Comprehensive income$45
 $53

See the Combined Notes to Consolidated Financial Statements
45


DELMARVA POWER & LIGHT COMPANY
STATEMENTS OF CASH FLOWS
(Unaudited)
 Three Months Ended
March 31,
(In millions)2020
2019
Cash flows from operating activities   
Net income$45
 $53
Adjustments to reconcile net income to net cash flows provided by operating activities:   
Depreciation and amortization48
 46
Deferred income taxes and amortization of investment tax credits
 1
Other non-cash operating activities2
 11
Changes in assets and liabilities:   
Accounts receivable14
 (5)
Receivables from and payables to affiliates, net(9) (15)
Inventories3
 1
Accounts payable and accrued expenses4
 11
Income taxes7
 5
Other assets and liabilities(10) (10)
Net cash flows provided by operating activities104

98
Cash flows from investing activities   
Capital expenditures(95) (78)
Other investing activities(4) 
Net cash flows used in investing activities(99)
(78)
Cash flows from financing activities   
Changes in short-term borrowings(2) 5
Changes in PHI intercompany money pool37
 
Dividends paid on common stock(52) (41)
Contributions from parent6
 
Net cash flows used in financing activities(11)
(36)
Decrease in cash, cash equivalents and restricted cash(6) (16)
Cash, cash equivalents and restricted cash at beginning of period13
 24
Cash, cash equivalents and restricted cash at end of period$7

$8
    
Supplemental cash flow information   
Decrease in capital expenditures not paid$(9) $(17)

See the Combined Notes to Consolidated Financial Statements
46


DELMARVA POWER & LIGHT COMPANY
BALANCE SHEETS
(Unaudited)
(In millions)March 31, 2020 December 31, 2019
ASSETS   
Current assets   
Cash and cash equivalents$7
 $13
Accounts receivable   
Customer accounts receivable139 152
Customer allowance for credit losses(13) (11)
Customer accounts receivable, net126
 141
Other accounts receivable40 42
Other allowance for credit losses(4) (4)
Other accounts receivable, net36
 38
Receivables from affiliates1
 
Inventories, net   
Fossil fuel3
 8
Materials and supplies46
 44
Prepaid utility taxes9
 18
Regulatory assets50
 52
Renewable energy credits16
 9
Other2
 2
Total current assets296

325
Property, plant and equipment (net of accumulated depreciation and amortization of $1,452 and $1,425 as of March 31, 2020 and December 31, 2019, respectively)4,088
 4,035
Deferred debits and other assets   
Regulatory assets221
 222
Goodwill8
 8
Prepaid pension asset169
 171
Other67
 69
Total deferred debits and other assets465

470
Total assets$4,849

$4,830

See the Combined Notes to Consolidated Financial Statements
47


DELMARVA POWER & LIGHT COMPANY
BALANCE SHEETS
(Unaudited)
(In millions)March 31, 2020 December 31, 2019
LIABILITIES AND SHAREHOLDER'S EQUITY   
Current liabilities   
Short-term borrowings$54
 $56
Long-term debt due within one year81
 80
Accounts payable98
 112
Accrued expenses62
 46
Payables to affiliates21
 32
Borrowings from PHI intercompany money pool37
 
Customer deposits35
 36
Regulatory liabilities35
 37
Other14
 15
Total current liabilities437
 414
Long-term debt1,494
 1,487
Deferred credits and other liabilities   
Deferred income taxes and unamortized investment tax credits665
 655
Non-pension postretirement benefits obligations15
 16
Regulatory liabilities561
 574
Other98
 104
Total deferred credits and other liabilities1,339

1,349
Total liabilities3,270

3,250
Commitments and contingencies

 

Shareholder's equity   
Common stock983
 977
Retained earnings596
 603
Total shareholder's equity1,579

1,580
Total liabilities and shareholder's equity$4,849

$4,830

See the Combined Notes to Consolidated Financial Statements
48


DELMARVA POWER & LIGHT COMPANY
STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(Unaudited)
 Three Months Ended March 31, 2020
(In millions)Common Stock Retained Earnings Total Shareholder's Equity
Balance, December 31, 2019$977
 $603
 $1,580
Net income
 45
 45
Common stock dividends
 (52) (52)
Contributions from parent6
 
 6
Balance, March 31, 2020$983
 $596
 $1,579

 Three Months Ended March 31, 2019
(In millions)Common Stock Retained Earnings Total Shareholder's Equity
Balance, December 31, 2018$914
 $595
 $1,509
Net income
 53
 53
Common stock dividends
 (41) (41)
Balance, March 31, 2019$914
 $607
 $1,521


See the Combined Notes to Consolidated Financial Statements
49



ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
 Three Months Ended
March 31,
(In millions)2020 2019
Operating revenues   
Electric operating revenues$274
 $271
Revenues from alternative revenue programs1
 1
Operating revenues from affiliates1
 1
Total operating revenues276
 273
Operating expenses   
Purchased power126
 131
Purchased power from affiliates2
 8
Operating and maintenance45
 47
Operating and maintenance from affiliates33
 34
Depreciation and amortization43
 31
Taxes other than income taxes2
 1
Total operating expenses251
 252
Gain on sale of assets2
 
Operating income27
 21
Other income and (deductions)   
Interest expense, net(14) (14)
Interest expense to affiliates, net(1) 
Other, net2
 3
Total other income and (deductions)(13) (11)
Income before income taxes14
 10
Income taxes1
 
Net income$13
 $10
Comprehensive income$13
 $10

See the Combined Notes to Consolidated Financial Statements
50


ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Three Months Ended
March 31,
(In millions)2020
2019
Cash flows from operating activities   
Net income$13
 $10
Adjustments to reconcile net income to net cash flows provided by operating activities:   
Depreciation and amortization43
 31
Deferred income taxes and amortization of investment tax credits(1) 
Other non-cash operating activities4
 5
Changes in assets and liabilities:   
Accounts receivable11
 13
Receivables from and payables to affiliates, net3
 (4)
Inventories2
 1
Accounts payable and accrued expenses3
 12
Income taxes2
 (1)
Pension and non-pension postretirement benefit contributions(2) 
Other assets and liabilities(22) (7)
Net cash flows provided by operating activities56
 60
Cash flows from investing activities   
Capital expenditures(101) (128)
Other investing activities6
 
Net cash flows used in investing activities(95) (128)
Cash flows from financing activities   
Changes in short-term borrowings(16) 77
Retirement of long-term debt(5) (4)
Changes in PHI intercompany money pool77
 
Dividends paid on common stock(23) (12)
Contributions from parent1
 5
Net cash flows provided by financing activities34
 66
Decrease in cash, cash equivalents and restricted cash(5) (2)
Cash, cash equivalents and restricted cash at beginning of period28
 30
Cash, cash equivalents and restricted cash at end of period$23

$28
    
Supplemental cash flow information   
Decrease in capital expenditures not paid$(4) $(24)

See the Combined Notes to Consolidated Financial Statements
51


ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)March 31, 2020 December 31, 2019
ASSETS   
Current assets   
Cash and cash equivalents$8
 $12
Restricted cash and cash equivalents3
 2
Accounts receivable   
Customer accounts receivable106 121
Customer allowance for credit losses(14) (13)
Customer accounts receivable, net92
 108
Other accounts receivable54 53
Other allowance for credit losses(6) (5)
Other accounts receivable, net48
 48
Receivables from affiliates4
 4
Inventories, net32
 34
Regulatory assets71
 57
Other3
 5
Total current assets261
 270
Property, plant and equipment (net of accumulated depreciation and amortization of $1,236 and $1,210 as of March 31, 2020 and December 31, 2019, respectively)3,249
 3,190
Deferred debits and other assets   
Regulatory assets366
 368
Prepaid pension asset51
 52
Other51
 53
Total deferred debits and other assets468
 473
Total assets(a)
$3,978
 $3,933

See the Combined Notes to Consolidated Financial Statements
52


ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY
CONSOLIDATED BALANCE SHEETS
(Unaudited)

(In millions)March 31, 2020 December 31, 2019
LIABILITIES AND SHAREHOLDER'S EQUITY   
Current liabilities   
Short-term borrowings$54
 $70
Long-term debt due within one year60
 20
Accounts payable145
 144
Accrued expenses40
 42
Payables to affiliates27
 25
Borrowings from PHI intercompany money pool

77
 
Customer deposits25
 25
Regulatory liabilities24
 25
Other8
 9
Total current liabilities460
 360
Long-term debt1,265
 1,307
Deferred credits and other liabilities   
Deferred income taxes and unamortized investment tax credits580
 577
Non-pension postretirement benefit obligations17
 17
Regulatory liabilities352
 357
Other37
 39
Total deferred credits and other liabilities986
 990
Total liabilities(a)
2,711
 2,657
Commitments and contingencies

 

Shareholder's equity   
Common stock1,155
 1,154
Retained earnings112
 122
Total shareholder's equity1,267

1,276
Total liabilities and shareholder's equity$3,978

$3,933
__________
(a)ACE’s consolidated total assets include $15 million and $17 million at March 31, 2020 and December 31, 2019, respectively, of ACE's consolidated VIE that can only be used to settle the liabilities of the VIE. ACE’s consolidated total liabilities include $36 million and $41 million at March 31, 2020 and December 31, 2019, respectively, of ACE's consolidated VIE for which the VIE creditors do not have recourse to ACE. See Note 16 — Variable Interest Entities for additional information.

See the Combined Notes to Consolidated Financial Statements
53


ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(Unaudited)
 Three Months Ended March 31, 2020
(In millions)Common Stock Retained Earnings Total Shareholder's Equity
Balance, December 31, 2019$1,154
 $122
 $1,276
Net income
 13
 13
Common stock dividends
 (23) (23)
Contributions from parent1
 
 1
Balance, March 31, 2020$1,155
 $112
 $1,267

 Three Months Ended March 31, 2019
(In millions)Common Stock Retained Earnings Total Shareholder's Equity
Balance, December 31, 2018$979
 $147
 $1,126
Net income
 10
 10
Common stock dividends
 (12) (12)
Contributions from parent5
 
 5
Balance, March 31, 2019$984
 $145
 $1,129


See the Combined Notes to Consolidated Financial Statements
54

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share data, unless otherwise noted)

Note 1 — Significant Accounting Policies


1. Significant Accounting Policies (All Registrants)
Description of Business (All Registrants)
Exelon is a utility services holding company engaged in the generation, delivery and marketing of energy through Generation and the energy distribution and transmission businesses through ComEd, PECO, BGE, Pepco, DPL and ACE.
Name of Registrant  Business  Service Territories
Exelon Generation
Company, LLC
 Generation, physical delivery and marketing of power across multiple geographical regions through its customer-facing business, Constellation, which sells electricity to both wholesale and retail customers. Generation also sells natural gas, renewable energy and other energy-related products and services. Five reportable segments: Mid-Atlantic, Midwest, New York, ERCOT and Other Power Regions
     
Commonwealth Edison Company Purchase and regulated retail sale of electricity Northern Illinois, including the City of Chicago
  Transmission and distribution of electricity to retail customers  
PECO Energy Company Purchase and regulated retail sale of electricity and natural gas Southeastern Pennsylvania, including the City of Philadelphia (electricity)
  Transmission and distribution of electricity and distribution of natural gas to retail customers Pennsylvania counties surrounding the City of Philadelphia (natural gas)
Baltimore Gas and Electric Company Purchase and regulated retail sale of electricity and natural gas Central Maryland, including the City of Baltimore (electricity and natural gas)
  Transmission and distribution of electricity and distribution of natural gas to retail customers  
Pepco Holdings LLC Utility services holding company engaged, through its reportable segments Pepco, DPL and ACE Service Territories of Pepco, DPL and ACE
     
Potomac Electric 
Power Company
  Purchase and regulated retail sale of electricity  District of Columbia, and major portions of Montgomery and Prince George’s Counties, Maryland
  Transmission and distribution of electricity to retail customers  
Delmarva Power &
Light Company
 Purchase and regulated retail sale of electricity and natural gas Portions of Delaware and Maryland (electricity)
  Transmission and distribution of electricity and distribution of natural gas to retail customers Portions of New Castle County, Delaware (natural gas)
Atlantic City Electric Company Purchase and regulated retail sale of electricity Portions of Southern New Jersey
  Transmission and distribution of electricity to retail customers  

Basis of Presentation (All Registrants)
Each of the Registrant’s Consolidated Financial Statements includes the accounts of its subsidiaries. All intercompany transactions have been eliminated.
Through its business services subsidiary, BSC, Exelon provides its subsidiaries with a variety of support services at cost, including legal, human resources, financial, information technology and supply management services. PHI also has a business services subsidiary, PHISCO, which provides a variety of support services at cost, including legal, accounting, engineering, customer operations, distribution and transmission planning, asset management, system operations, and power procurement, to PHI operating companies. The costs of BSC and PHISCO are directly charged or allocated to the applicable subsidiaries. The results of Exelon’s corporate operations are presented as “Other” within the consolidated financial statements and include intercompany eliminations unless otherwise disclosed.
The accompanying consolidated financial statements as of March 31, 2020 and 2019 and for the three months then ended are unaudited but, in the opinion of the management of each Registrant include all adjustments that are considered necessary for a fair statement of the Registrants’ respective financial statements in accordance with GAAP. All adjustments are of a normal, recurring nature, except as otherwise disclosed. The December 31, 2019 Consolidated Balance Sheets were derived from audited financial statements. Financial results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the fiscal year ending

55

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share data, unless otherwise noted)

Note 1 — Significant Accounting Policies

December 31, 2020. These Combined Notes to Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the SEC for Quarterly Reports on Form 10-Q. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.
COVID-19 (All Registrants)
The Registrants are responding to the global outbreak (pandemic) of the 2019 novel coronavirus (COVID-19) and have taken steps to mitigate the potential risks to the Registrants posed by its spread. The Registrants provide a critical service to their customers and have taken measures to keep employees who operate the business safe and minimize unnecessary risk of exposure to the virus, including extra precautions for employees who work in the field. The Registrants have implemented work from home policies where appropriate and imposed travel limitations on employees. In addition, the Registrants have updated their existing business continuity plans.

Management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and accompanying notes, and the amounts of revenues and expenses reported during the periods covered by those financial statements and accompanying notes. We assessed certain accounting matters that require consideration of forecasted financial information, including, but not limited to, our allowance for credit losses, the carrying value of our goodwill and other long-lived assets, in context with the information reasonably available to us and the unknown future impacts of COVID-19 as of March 31, 2020 and through the date of this report. While there were no material increases in the Registrants’ allowance for credit losses and no material impairments resulting from these assessments as of and for the quarter ended March 31, 2020, our future assessment of our current expectations at that time of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to our consolidated financial statements in future reporting periods.
New Accounting Standards (All Registrants)
New Accounting Standards Adopted as of January 1, 2020: The following new authoritative accounting guidance issued by the FASB was adopted as of January 1, 2020 and will be reflected by the Registrants in their consolidated financial statements beginning in the first quarter of 2020.
Impairment of Financial Instruments (Issued June 2016). Provides for a new Current Expected Credit Loss (CECL) impairment model for specified financial instruments including loans, trade receivables, debt securities classified as held-to-maturity investments and net investments in leases recognized by a lessor. Under the new guidance, on initial recognition and at each reporting period, an entity is required to recognize an allowance that reflects its current estimate of credit losses expected to be incurred over the life of the financial instrument based on historical experience, current conditions and reasonable and supportable forecasts. The standard was effective January 1, 2020 and requires a modified retrospective transition approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. This standard is primarily applicable to Generation's and the Utility Registrants' Customer accounts receivables balances. This guidance did not have a significant impact on the Registrants’ consolidated financial statements.
Goodwill Impairment (Issued January 2017). Simplifies the accounting for goodwill impairment by removing Step 2 of the current test, which requires calculation of a hypothetical purchase price allocation. Under the revised guidance, goodwill impairment will be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill (currently Step 1 of the two-step impairment test). Entities will continue to have the option to perform a qualitative assessment to determine if a quantitative impairment test is necessary. The standard was effective January 1, 2020 and must be applied on a prospective basis. Exelon, Generation, ComEd, PHI and DPL will apply the new guidance for their goodwill impairment assessments in 2020 and do not expect the updated guidance to have a material impact to their financial statements.
Allowance for Credit Losses on Accounts Receivables (All Registrants)

The allowance for credit losses reflects the Registrants’ best estimates of losses on the customers' accounts receivable balances based on historical experience, current information, and reasonable and supportable forecasts.

The allowance for credit losses for Generation’s retail customers is based on accounts receivable aging historical experience coupled with specific identification through a credit monitoring process, which considers current

56

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share data, unless otherwise noted)

Note 1 — Significant Accounting Policies

conditions and forward-looking information such as industry trends, macroeconomic factors, changes in the regulatory environment, external credit ratings, publicly available news, payment status, payment history, and the exercise of collateral calls. The allowance for credit losses for Generation wholesale customers is developed using a credit monitoring process, similar to that used for retail customers. When a wholesale customer’s risk characteristics are no longer aligned with the pooled population, Generation uses specific identification to develop an allowance for credit losses. Adjustments to the allowance for credit losses are recorded in Operating and maintenance expense on Generation’s Consolidated Statements of Operations and Comprehensive Income.

The allowance for credit losses for the Utility Registrants’ customers is developed by applying loss rates for each Utility Registrant, based on historical loss experience, current conditions and forward-looking risk factors, to the outstanding receivable balance by customer risk segment. Utility Registrants' customer accounts are written off consistent with approved regulatory requirements. Adjustments to the allowance for credit losses are primarily recorded to Operating and maintenance expense on the Utility Registrants' Consolidated Statements of Operations and Comprehensive Income and Regulatory assets on ComEd, BGE and ACE’s Consolidated Balance Sheets. See Note 3 - Regulatory Matters of the 2019 Form 10-K for additional information regarding the regulatory recovery of credit losses on customer accounts receivable at ComEd, BGE and ACE.

The Registrants have certain non-customer receivables in Other Deferred debits and other assets which primarily are with governmental agencies and other high-quality counterparties with no history of default.  As such, the allowance for credit losses related to these receivables is immaterial.  The Registrants monitor these balances and will record an allowance if there are indicators of a decline in credit quality.

2. Regulatory Matters (All Registrants)
As discussed in Note 3 — Regulatory Matters of the Exelon 2019 Form 10-K, the Registrants are involved in rate and regulatory proceedings at the FERC and their state commissions. The following discusses developments in 2020 and updates to the 2019 Form 10-K.
Utility Regulatory Matters (Exelon and the Utility Registrants)
Distribution Base Rate Case Proceedings
The following tables show the completed and pending distribution base rate case proceedings in 2020.

57

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 2 — Regulatory Matters

Completed Distribution Base Rate Case Proceedings
Registrant/JurisdictionFiling DateRequested Revenue Requirement (Decrease) Increase Approved Revenue Requirement (Decrease) Increase Approved ROE Approval DateRate Effective Date
ComEd - Illinois (Electric)(a)
April 8, 2019$(6) $(17) 8.91% December 4, 2019January 1, 2020

__________
(a)Reflects an increase of $51 million for the initial revenue requirement for 2019 and a decrease of $68 million related to the annual reconciliation for 2018. The revenue requirement for 2019 and annual reconciliation for 2018 provides for a weighted average debt and equity return on distribution rate base of 6.51%, inclusive of an allowed ROE of 8.91%, reflecting the average rate on 30-year treasury notes plus 580 basis points.
Pending Distribution Base Rate Case Proceedings
Registrant/JurisdictionFiling DateRequested Revenue Requirement (Decrease) IncreaseRequested ROEExpected Approval Timing
ComEd - Illinois (Electric)(a)
April 16, 2020$(11)8.38%Fourth quarter of 2020
Pepco - District of Columbia (Electric)(b)
May 30, 2019 (amended April 8, 2020)147
10.3%Fourth quarter of 2020
DPL - Maryland (Electric)December 5, 2019 (amended April 23, 2020)17
10.3%Third quarter of 2020
DPL - Delaware (Gas)(c)
February 21, 2020 (amended March 17, 2020)9
10.3%First quarter of 2021
DPL - Delaware (Electric)(d)
March 6, 2020 (amended April 16, 2020)24
10.3%First quarter of 2021
__________
(a)Reflects an increase of $51 million for the initial revenue requirement for 2020 and a decrease of $62 million related to the annual reconciliation for 2019. The revenue requirement for 2020 and annual reconciliation for 2019 provides for a weighted average debt and equity return on distribution rate base of 6.28%, inclusive of an allowed ROE of 8.38%, reflecting the average rate on 30-year treasury notes plus 580 basis points.
(b)Reflects a three-year cumulative multi-year plan and total requested revenue requirement increases of $77 million, $37 million and $33 million for years 2020, 2021, and 2022, respectively, to recover capital investments made in 2018 and 2019 and planned capital investments from 2020 to 2022.
(c)The rates will go into effect on September 21, 2020, subject to refund.
(d)The rates will go into effect on October 6, 2020, subject to refund.
Other Federal Regulatory Matters
Transmission-Related Income Tax Regulatory Assets (Exelon, ComEd, BGE, PHI, Pepco, DPL and ACE). On December 13, 2016 (and as amended on March 13, 2017), BGE filed with FERC to begin recovering certain existing and future transmission-related income tax regulatory assets through its transmission formula rate. BGE’s existing regulatory assets included (1) amounts that, if BGE’s transmission formula rate provided for recovery, would have been previously amortized and (2) amounts that would be amortized and recovered prospectively. On November 16, 2017, FERC issued an order rejecting BGE’s proposed revisions to its transmission formula rate to recover

58

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 2 — Regulatory Matters

these transmission-related income tax regulatory assets. In the fourth quarter of 2017, ComEd, BGE, Pepco, DPL, and ACE fully impaired their associated transmission-related income tax regulatory asset for the portion of the income tax regulatory asset that would have been previously amortized.
On February 23, 2018 (as amended on July 9, 2018), ComEd, Pepco, DPL, and ACE each filed with FERC to revise their transmission formula rate mechanisms to permit recovery of transmission-related income tax regulatory assets, including those amounts that would have been previously amortized and recovered through rates had the transmission formula rate provided for such recovery.
On September 7, 2018, FERC issued orders rejecting 1) BGE's rehearing request of FERC's November 16, 2017 order; and 2) February 23, 2018 (as amended on July 9, 2018) filing by ComEd, Pepco, DPL and ACE for similar recovery.
On November 2, 2018, BGE filed an appeal of FERC’s September 7, 2018 order to the Court of Appeals for the D.C. Circuit. On March 27, 2020, the Court of Appeals denied BGE’s November 2, 2018 appeal.
On October 1, 2018, ComEd, BGE, Pepco, DPL, and ACE submitted filings to recover only ongoing non-TCJA amortization amounts and credit TCJA transmission-related income tax regulatory liabilities to customers for the prospective period starting on October 1, 2018. On April 26, 2019, FERC issued an order accepting ComEd’s, BGE’s, Pepco’s, DPL’s, and ACE’s October 1, 2018 filings, effective October 1, 2018, subject to refund and established hearing and settlement judge procedures. On April 24, 2020, ComEd, BGE, Pepco, DPL, ACE and other parties filed a settlement agreement with FERC. The settlement agreement provides for the recovery of ongoing transmission-related income tax regulatory assets and establishes the amount and amortization period for excess deferred income taxes resulting from TCJA. The accelerated amortization will result in a reduction to Operating revenues and an offsetting reduction to Income tax expense over the remaining amortization period.
While FERC has no deadline by which it must rule on the settlement, a final order from FERC is expected before the end of the third quarter of 2020. Exelon cannot predict the outcome of this proceeding. If FERC ultimately rules that the future, ongoing non-TCJA amortization amounts are not recoverable, Exelon, ComEd, BGE, PHI, Pepco, DPL and ACE would record additional charges to Income tax expense, which could be up to approximately $81 million, $51 million, $18 million, $12 million, $4 million, $6 million and $2 million, respectively, as of March 31, 2020.
Regulatory Assets and Liabilities
The Utility Registrants' regulatory assets and liabilities have not changed materially since December 31, 2019, unless noted below. See Note 3 — Regulatory Matters of the Exelon 2019 Form 10-K for additional information on the specific regulatory assets and liabilities.
ComEd. Regulatory assets increased $96 million primarily due to an increase of $45 million in Energy Efficiency Costs, $22 million in Electric Distribution Formula Rate Annual Reconciliations and $15 million due to increased Electric Energy Costs. Regulatory liabilities decreased $596 million primarily due to a decrease of $582 million in Nuclear Decommissioning.
PECO. Regulatory liabilities decreased $207 million primarily due to a decrease of $219 million in Nuclear Decommissioning offset by a $16 million increase in Electric Energy and Natural Gas Costs.

59

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 2 — Regulatory Matters

Capitalized Ratemaking Amounts Not Recognized (Exelon and the Utility Registrants)
The following table presents authorized amounts capitalized for ratemaking purposes related to earnings on shareholders’ investment that are not recognized for financial reporting purposes in Exelon's and the Utility Registrant's Consolidated Balance Sheets. These amounts will be recognized as revenues in the related Consolidated Statements of Operations and Comprehensive Income in the periods they are billable to our customers.
 Exelon 
ComEd(a)
 PECO 
BGE(b)
 PHI 
Pepco(c)
 
DPL(c)
 ACE
March 31, 2020$60
 $2
 $
 $51
 $7
 $4
 $3
 $
December 31, 201963
 3
 
 53
 7
 4
 3
 
_________
(a)Reflects ComEd's unrecognized equity returns earned for ratemaking purposes on its electric distribution formula rate regulatory assets.
(b)BGE's authorized amounts capitalized for ratemaking purposes primarily relate to earnings on shareholders' investment on its AMI programs.
(c)Pepco's and DPL's authorized amounts capitalized for ratemaking purposes relate to earnings on shareholders' investment on their respective AMI Programs and Energy Efficiency and Demand Response Programs. The earnings on energy efficiency are on Pepco DC and DPL DE programs only.
Generation Regulatory Matters (Exelon and Generation)
New Jersey Regulatory Matters
New Jersey Clean Energy Legislation. On May 23, 2018, New Jersey enacted legislation that established a ZEC program that provides compensation for nuclear plants that demonstrate to the NJBPU that they meet certain requirements, including that they make a significant contribution to air quality in the state and that their revenues are insufficient to cover their costs and risks. Under the legislation, the NJBPU will issue ZECs to qualifying nuclear power plants and the electric distribution utilities in New Jersey, including ACE, will be required to purchase those ZECs. On April 18, 2019, the NJBPU approved the award of ZECs to Salem 1 and Salem 2. Upon approval, Generation began recognizing revenue for the sale of New Jersey ZECs in the month they are generated and has recognized $18 million for the three months ended March 31, 2020. On May 15, 2019, New Jersey Rate Counsel appealed the NJBPU's decision to the New Jersey Superior Court. Exelon and Generation cannot predict the outcome of the appeal. See Note 6 — Early Plant Retirements for additional information related to Salem.
New York Regulatory Matters
New York Clean Energy Standard. On August 1, 2016, the NYPSC issued an order establishing the New York CES, a component of which is a Tier 3 ZEC program targeted at preserving the environmental attributes of zero-emissions nuclear-powered generating facilities that meet the criteria demonstrating public necessity as determined by the NYPSC to be Generation's FitzPatrick, Ginna and Nine Mile Point nuclear facilities.
On November 30, 2016 (as amended on January 13, 2017), a group of parties filed a Petition in New York State court seeking to invalidate the ZEC program, which argued that the NYPSC did not have authority to establish the program, that it violated state environmental law and that it violated certain technical provisions of the State Administrative Procedures Act when adopting the ZEC program. On January 22, 2018, the court dismissed the environmental claims and the majority of the plaintiffs from the case but denied the motions to dismiss with respect to the remaining five plaintiffs and claims, without commenting on the merits of the case. On October 8, 2019, the court dismissed all remaining claims. The petitioners filed a notice of appeal on November 4, 2019 and originally had until May 4, 2020 to file their brief. However, on March 17, 2020, the court suspended all filing deadlines indefinitely due to COVID-19, so the new deadline will not be known until the court lifts the suspension.
See Note 6 — Early Plant Retirements for additional information related to Ginna and Nine Mile Point.

60

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 2 — Regulatory Matters

Federal Regulatory Matters
PJM and NYISO MOPR Proceedings. PJM and NYISO capacity markets include a Minimum Offer Price Rule (MOPR). If a resource is subjected to a MOPR, its offer is adjusted to effectively remove the revenues it receives through a government-provided financial support program - resulting in a higher offer that may not clear the capacity market. Prior to December 19, 2019, the MOPR in PJM applied only to certain new gas-fired resources. Currently, the MOPR in NYISO applies only to certain resources in downstate New York.
For Generation’s facilities in PJM and NYISO that are currently receiving ZEC compensation, an expanded MOPR would require exclusion of ZEC compensation when bidding into future capacity auctions, resulting in an increased risk of these facilities not receiving capacity revenues in future auctions. While FERC issued a set of orders on MOPR in NYISO on February 20, 2020, it did not expand mitigation to include Generation's nuclear assets in upstate New York. However, FERC has taken action to expand the MOPR in PJM.
Specifically, on December 19, 2019, FERC issued an order in the PJM MOPR proceeding that broadly applies the MOPR to all new and existing resources including nuclear, renewables, demand response, energy efficiency, storage and all resources owned by vertically-integrated utilities, greatly expanding the breadth and scope of PJM’s MOPR, effective as of PJM’s next capacity auction. While FERC included some limited exemptions (generally available to existing renewable, energy efficiency, demand response, storage and existing vertically-integrated utility resources) in its order, no exemptions were available to state-supported nuclear resources. In addition, FERC provided no new mechanism for accommodating state-supported resources other than the existing FRR mechanism under which an entire utility zone would be removed from PJM’s capacity auction along with sufficient resources to support the load in such zone. FERC directed PJM to make a compliance filing within 90 days, which was filed on March 18, 2020. In that filing, PJM proposes tariff language interpreting and implementing FERC's directives and proposes a schedule for resuming capacity auctions that is contingent on the timing of FERC's action on the compliance filing. FERC has no deadline for such action, and FERC could accept, reject or direct further revisions to all or part of PJM's proposed tariff revisions and auction schedule. In addition, on April 16, 2020, FERC issued orders largely denying requests for rehearing of FERC's December 2019 order and another order in this proceeding. In those orders, FERC also granted a few clarifications that will require an additional PJM compliance filing that could also delay the timing for FERC to issue its compliance order(s) and PJM to resume its capacity auctions.
Unless Illinois and New Jersey can implement an FRR program in their PJM zones, the MOPR will apply to Generation's owned or jointly owned nuclear plants in those states receiving a benefit under the Illinois ZES or the New Jersey ZEC program, as applicable, increasing the risk that those units may not clear the capacity market.
Exelon is currently working with PJM and other stakeholders to pursue the FRR option prior to the next capacity auction in PJM. If Illinois implements the FRR option, Generation’s Illinois nuclear plants could be removed from PJM’s capacity auction and instead supply capacity and be compensated under the FRR program, which has the potential to mitigate the current economic distress being experienced by Generation's nuclear plants in Illinois, as discussed in Note 6 - Early Plant Retirements. Implementing the FRR program in Illinois will require both legislative and regulatory changes. Legislation may be introduced in New Jersey as well. Exelon cannot predict whether such legislative and regulatory changes can be implemented prior to the next capacity auction in PJM.
If Generation’s state-supported nuclear plants in PJM are subjected to the MOPR or equivalent without compensation under an FRR or similar program, it could have a material adverse impact on Exelon's and Generation's financial statements, which Exelon and Generation cannot reasonably estimate at this time.
Operating License Renewals
Conowingo Hydroelectric Project. On August 29, 2012, Generation submitted a hydroelectric license application to FERC for a new license for the Conowingo Hydroelectric Project (Conowingo). In connection with Generation’s efforts to obtain a water quality certification pursuant to Section 401 of the Clean Water Act (401 Certification) from MDE for Conowingo, Generation has been working with MDE and other stakeholders to resolve water quality licensing issues, including: (1) water quality, (2) fish habitat, and (3) sediment.

61

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 2 — Regulatory Matters

On October 29, 2019, Generation and MDE filed with FERC a Joint Offer of Settlement (Offer of Settlement) that would resolve all outstanding issues relating to the 401 Certification. Pursuant to the Offer of Settlement, the parties submitted Proposed License Articles to FERC to be incorporated by FERC into the new license in accordance with FERC’s discretionary authority under the Federal Power Act. Among the Proposed License Articles are modifications to river flows to improve aquatic habitat, eel passage improvements and initiatives to support rare, threatened and endangered wildlife. If FERC approves the Offer of Settlement and incorporates the Proposed License Articles into the new license without modification, then MDE would waive its rights to issue a 401 Certification and Generation would agree, pursuant to a separate agreement with MDE (MDE Settlement), to implement additional environmental protection, mitigation and enhancement measures over the anticipated 50-year term of the new license. These measures address mussel restoration and other ecological and water quality matters, among other commitments. Exelon’s commitments under the various provisions of the Offer of Settlement and MDE Settlement are not effective unless and until FERC approves the Offer of Settlement and issues the new license with the Proposed License Articles. Generation cannot currently predict when FERC will issue the new license.
Peach Bottom Units 2 and 3. On July 10, 2018, Generation submitted a second 20-year license renewal application with the NRC for Peach Bottom Units 2 and 3, which was approved on March 6, 2020. Peach Bottom Units 2 and 3 are now licensed to operate through 2053 and 2054, respectively.
3. Revenue from Contracts with Customers (All Registrants)
The Registrants recognize revenue from contracts with customers to depict the transfer of goods or services to customers at an amount that the entities expect to be entitled to in exchange for those goods or services. Generation’s primary sources of revenue include competitive sales of power, natural gas, and other energy-related products and services. The Utility Registrants’ primary sources of revenue include regulated electric and gas tariff sales, distribution and transmission services.
See Note 4 — Revenue from Contracts with Customers of the Exelon 2019 Form 10-K for additional information regarding the primary sources of revenue for the Registrants.
Contract Balances (All Registrants)
Contract Assets and Liabilities
Generation records contract assets for the revenue recognized on the construction and installation of energy efficiency assets and new power generating facilities before Generation has an unconditional right to bill for and receive the consideration from the customer. These contract assets are subsequently reclassified to receivables when the right to payment becomes unconditional. Generation records contract assets and contract receivables within Other current assets and Customer accounts receivable, net, respectively, within Exelon’s and Generation’s Consolidated Balance Sheets.
Generation records contract liabilities when consideration is received or due prior to the satisfaction of the performance obligations. These contract liabilities primarily relate to upfront consideration received or due for equipment service plans, solar panel leases and the Illinois ZEC program that introduces a cap on the total consideration to be received by Generation. Generation records contract liabilities within Other current liabilities and Other noncurrent liabilities within Exelon's and Generation's Consolidated Balance Sheets.

62

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 3 — Revenue from Contracts with Customers

The following table provides a rollforward of the contract assets and liabilities reflected in Exelon's and Generation's Consolidated Balance Sheets for the three months ended March 31, 2019 and March 31, 2020
  Contract Assets Contract Liabilities
  Exelon Generation Exelon Generation
Balance as of December 31, 2018 $187
 $187
 $27
 $42
Consideration received or due (26) (26) 21
 63
Revenues recognized (a)
 26
 26
 (23) (66)
Balance at March 31, 2019 $187
 $187
 $25
 $39
         
Balance as of December 31, 2019 $174
 $174
 $33
 $71
Consideration received or due (19) (19) 20
 55
Revenues recognized (b)
 17
 17
 (24) (70)
Balance at March 31, 2020 $172
 $172
 $29
 $56

__________
(a)Revenues recognized in the three months ended March 31, 2019, which were included in contract liabilities at December 31, 2018, were approximately $5 million for both Exelon and Generation.
(b)Revenues recognized in the three months ended March 31, 2020, which were included in contract liabilities at December 31, 2019, were approximately $9 million and $19 million for Exelon and Generation, respectively.
The Utility Registrants do not have any contract assets. The Utility Registrants also record contract liabilities when consideration is received prior to the satisfaction of the performance obligations. As of March 31, 2020 and December 31, 2019, the Utility Registrants' contract liabilities were immaterial.
Transaction Price Allocated to Remaining Performance Obligations (All Registrants)
The following table shows the amounts of future revenues expected to be recorded in each year for performance obligations that are unsatisfied or partially unsatisfied as of March 31, 2020. This disclosure only includes contracts for which the total consideration is fixed and determinable at contract inception. The average contract term varies by customer type and commodity but ranges from one month to several years.
This disclosure excludes Generation's power and gas sales contracts as they contain variable volumes and/or variable pricing. This disclosure also excludes the Utility Registrants' gas and electric tariff sales contracts and transmission revenue contracts as they generally have an original expected duration of one year or less and, therefore, do not contain any future, unsatisfied performance obligations to be included in this disclosure.
 2020 2021 2022 2023 2024 and thereafter Total
Exelon$273
 $144
 $64
 $45
 $198
 $724
Generation330
 200
 79
 45
 198
 852

Revenue Disaggregation (All Registrants)
The Registrants disaggregate revenue recognized from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. See Note 4 — Segment Information for the presentation of the Registrant's revenue disaggregation.
4. Segment Information (All Registrants)
Operating segments for each of the Registrants are determined based on information used by the CODM in deciding how to evaluate performance and allocate resources at each of the Registrants.
Exelon has 11 reportable segments, which include Generation's 5 reportable segments consisting of the Mid-Atlantic, Midwest, New York, ERCOT and all other power regions referred to collectively as “Other Power Regions”

63

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 4 — Segment Information

and ComEd, PECO, BGE, and PHI's 3 reportable segments consisting of Pepco, DPL and ACE. ComEd, PECO, BGE, Pepco, DPL and ACE each represent a single reportable segment, and as such, no separate segment information is provided for these Registrants. Exelon, ComEd, PECO, BGE, Pepco, DPL and ACE's CODMs evaluate the performance of and allocate resources to ComEd, PECO, BGE, Pepco, DPL and ACE based on net income.
The basis for Generation's reportable segments is the integrated management of its electricity business that is located in different geographic regions, and largely representative of the footprints of ISO/RTO and/or NERC regions, which utilize multiple supply sources to provide electricity through various distribution channels (wholesale and retail). Generation's hedging strategies and risk metrics are also aligned to these same geographic regions. Descriptions of each of Generation’s 5 reportable segments are as follows:
Mid-Atlantic represents operations in the eastern half of PJM, which includes New Jersey, Maryland, Virginia, West Virginia, Delaware, the District of Columbia and parts of Pennsylvania and North Carolina.
Midwest represents operations in the western half of PJM and the United States footprint of MISO, excluding MISO’s Southern Region.
New York represents operations within NYISO.
ERCOT represents operations within Electric Reliability Council of Texas.
Other Power Regions:
New England represents the operations within ISO-NE.
South represents operations in the FRCC, MISO’s Southern Region, and the remaining portions of the SERC not included within MISO or PJM.
West represents operations in the WECC, which includes California ISO.
Canada represents operations across the entire country of Canada and includes AESO, OIESO and the Canadian portion of MISO.
The CODMs for Exelon and Generation evaluate the performance of Generation’s electric business activities and allocate resources based on RNF. Generation believes that RNF is a useful measurement of operational performance. RNF is not a presentation defined under GAAP and may not be comparable to other companies’ presentations or deemed more useful than the GAAP information provided elsewhere in this report. Generation’s operating revenues include all sales to third parties and affiliated sales to the Utility Registrants. Purchased power costs include all costs associated with the procurement and supply of electricity including capacity, energy and ancillary services. Fuel expense includes the fuel costs for Generation’s owned generation and fuel costs associated with tolling agreements. The results of Generation's other business activities are not regularly reviewed by the CODM and are therefore not classified as operating segments or included in the regional reportable segment amounts. These activities include natural gas, as well as other miscellaneous business activities that are not significant to Generation's overall operating revenues or results of operations. Further, Generation’s unrealized mark-to-market gains and losses on economic hedging activities and its amortization of certain intangible assets and liabilities relating to commodity contracts recorded at fair value from mergers and acquisitions are also excluded from the regional reportable segment amounts. Exelon and Generation do not use a measure of total assets in making decisions regarding allocating resources to or assessing the performance of these reportable segments.
An analysis and reconciliation of the Registrants’ reportable segment information to the respective information in the consolidated financial statements for the three months ended March 31, 2020 and 2019 is as follows:

64

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 4 — Segment Information

Three Months Ended March 31, 2020 and 2019
 
Generation(a)
 ComEd PECO BGE PHI 
Other(b)
 Intersegment
Eliminations
 Exelon
Operating revenues(c):
2020               
Competitive businesses electric revenues$3,752
 $
 $
 $
 $
 $
 $(326) $3,426
Competitive businesses natural gas revenues672
 
 
 
 
 
 (3) 669
Competitive businesses other revenues309
 
 
 
 
 
 (1) 308
Rate-regulated electric revenues
 1,439
 604
 613
 1,104
 
 (12) 3,748
Rate-regulated natural gas revenues
 
 209
 324
 64
 
 (2) 595
Shared service and other revenues
 
 
 
 3
 480
 (482) 1
Total operating revenues$4,733
 $1,439
 $813
 $937
 $1,171
 $480
 $(826) $8,747
2019               
Competitive businesses electric revenues$4,337
 $
 $
 $
 $
 $
 $(315) $4,022
Competitive businesses natural gas revenues879
 
 
 
 
 
 (1) 878
Competitive businesses other revenues80
 
 
 
 
 
 (1) 79
Rate-regulated electric revenues
 1,408
 620
 658
 1,153
 
 (8) 3,831
Rate-regulated natural gas revenues
 
 280
 318
 71
 
 (4) 665
Shared service and other revenues
 
 
 
 4
 455
 (457) 2
Total operating revenues$5,296
 $1,408
 $900
 $976
 $1,228
 $455
 $(786) $9,477
Intersegment revenues(d):
               
2020$330
 $5
 $2
 $6
 $3
 $479
 $(824) $1
2019317
 4
 1
 6
 4
 453
 (785) 
Depreciation and amortization:               
2020$304
 $273
 $86
 $143
 $194
 $21
 $
 $1,021
2019405
 251
 81
 136
 180
 22
 
 1,075
Operating expenses:               
2020$4,400
 $1,151
 $625
 $688
 $1,000
 $481
 $(816) $7,529
20194,963
 1,135
 678
 756
 1,054
 459
 (783) 8,262
Interest expense, net:               
2020$109
 $94
 $36
 $32
 $67
 $72
 $
 $410
2019111
 87
 33
 29
 65
 78
 
 403

65

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 4 — Segment Information

 
Generation(a)
 ComEd PECO BGE PHI 
Other(b)
 Intersegment
Eliminations
 Exelon
Income (loss) before income taxes:               
2020$(547) $204
 $155
 $222
 $119
 $(69) $1
 $85
2019652
 197
 193
 196
 122
 (78) 
 1,282
Income Taxes:               
2020$(389) $36
 $15
 $41
 $11
 $(8) $
 $(294)
2019224
 40
 25
 36
 5
 (20) 
 310
Net income (loss):               
2020$(161) $168
 $140
 $181
 $108
 $(61) $1
 $376
2019422
 157
 168
 160
 117
 (58) 
 966
Capital Expenditures               
2020$558
 $506
 $259
 $283
 $376
 $34
 $
 $2,016
2019511
 503
 222
 258
 358
 21
 
 1,873
Total assets:               
March 31, 2020$47,882
 $33,146
 $11,535
 $10,789
 $22,753
 $8,337
 $(9,765) $124,677
December 31, 201948,995
 32,765
 11,469
 10,634
 22,719
 8,484
 (10,089) 124,977
__________
(a)See Note 18 — Related Party Transactions for additional information on intersegment revenues.
(b)Other primarily includes Exelon’s corporate operations, shared service entities and other financing and investment activities.
(c)Includes gross utility tax receipts from customers. The offsetting remittance of utility taxes to the governing bodies is recorded in expenses in the Registrants’ Consolidated Statements of Operations and Comprehensive Income. See Note 17 — Supplemental Financial Information for additional information on total utility taxes.
(d)Intersegment revenues exclude sales to unconsolidated affiliates. The intersegment profit associated with Generation’s sale of certain products and services by and between Exelon’s segments is not eliminated in consolidation due to the recognition of intersegment profit in accordance with regulatory accounting guidance. For Exelon, these amounts are included in Operating revenues in the Consolidated Statements of Operations and Comprehensive Income.


66

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 4 — Segment Information

PHI:
 Pepco DPL ACE 
Other(b)
 Intersegment
Eliminations
 PHI
Operating revenues(a):
           
2020           
Rate-regulated electric revenues$544
 $286
 $276
 $
 $(2) $1,104
Rate-regulated natural gas revenues
 64
 
 
 
 64
Shared service and other revenues
 
 
 93
 (90) 3
Total operating revenues$544
 $350
 $276
 $93
 $(92) $1,171
2019           
Rate-regulated electric revenues$575
 $310
 $273
 $
 $(5) $1,153
Rate-regulated natural gas revenues
 70
 
 
 1
 71
Shared service and other revenues
 
 
 106
 (102) 4
Total operating revenues$575
 $380
 $273
 $106
 $(106) $1,228
Intersegment revenues:           
2020$1
 $2
 $1
 $92
 $(93) $3
20192
 2
 1
 105
 (106) 4
Depreciation and amortization:           
2020$95
 $48
 $43
 $9
 $(1) $194
201994
 46
 31
 10
 (1) 180
Operating expenses:           
2020$462
 $284
 $251
 $93
 $(90) $1,000
2019491
 308
 252
 108
 (105) 1,054
Interest expense, net:           
2020$34
 $16
 $15
 $3
 $(1) $67
201934
 15
 14
 3
 (1) 65
Income (loss) before income taxes:           
2020$57
 $52
 $14
 $106
 $(110) $119
201957
 60
 10
 113
 (118) 122
Income Taxes:           
2020$5
 $7
 $1
 $(2) $
 $11
20192
 7
 
 (4) 
 5
Net income (loss):           
2020$52
 $45
 $13
 $(5) $3
 $108
201955
 53
 10
 (5) 4
 117
Capital Expenditures           
2020$180
 $95
 $101
 $
 $
 $376
2019144
 78
 128
 8
 
 358
Total assets:           
March 31, 2020$8,837
 $4,849
 $3,978
 $11,241
 $(6,152) $22,753
December 31, 20198,661
 4,830
 3,933
 11,105
 (5,810) 22,719
__________
(a)Includes gross utility tax receipts from customers. The offsetting remittance of utility taxes to the governing bodies is recorded in expenses in the Registrants’ Consolidated Statements of Operations and Comprehensive Income. See Note 17 — Supplemental Financial Information for additional information on total utility taxes.
(b)Other primarily includes PHI’s corporate operations, shared service entities and other financing and investment activities.

67

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 4 — Segment Information


The following tables disaggregate the Registrants' revenue recognized from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. For Generation, the disaggregation of revenues reflects Generation’s two primary products of power sales and natural gas sales, with further disaggregation of power sales provided by geographic region. For the Utility Registrants, the disaggregation of revenues reflects the two primary utility services of rate-regulated electric sales and rate-regulated natural gas sales (where applicable), with further disaggregation of these tariff sales provided by major customer groups. Exelon’s disaggregated revenues are consistent with Generation and the Utility Registrants, but exclude any intercompany revenues.
Competitive Business Revenues (Generation):
 Three Months Ended March 31, 2020
 
Revenues from external customers(a)
 
Intersegment
Revenues
 
Total
Revenues
 Contracts with customers 
Other(b)
 Total  
Mid-Atlantic$1,264
 $(96) $1,168
 $6
 $1,174
Midwest944
 64
 1,008
 (6) 1,002
New York335
 (21) 314
 
 314
ERCOT155
 28
 183
 7
 190
Other Power Regions1,007
 72
 1,079
 (7) 1,072
Total Competitive Businesses Electric Revenues3,705
 47
 3,752
 
 3,752
Competitive Businesses Natural Gas Revenues503
 169
 672
 
 672
Competitive Businesses Other Revenues(c)
99
 210
 309
 
 309
Total Generation Consolidated Operating Revenues$4,307
 $426
 $4,733
 $
 $4,733
 Three Months Ended March 31, 2019
 
Revenues from external customers(a)
 Intersegment
revenues
 Total
Revenues
 Contracts with customers 
Other(b)
 Total  
Mid-Atlantic$1,286
 $(24) $1,262
 $(6) $1,256
Midwest1,055
 59
 1,114
 (6) 1,108
New York409
 (16) 393
 
 393
ERCOT130
 79
 209
 3
 212
Other Power Regions1,165
 194
 1,359
 (6) 1,353
Total Competitive Businesses Electric Revenues4,045
 292
 4,337
 (15) 4,322
Competitive Businesses Natural Gas Revenues584
 295
 879
 15
 894
Competitive Businesses Other Revenues(c)
120
 (40) 80
 
 80
Total Generation Consolidated Operating Revenues$4,749
 $547
 $5,296
 $
 $5,296
__________
(a)Includes all wholesale and retail electric sales to third parties and affiliated sales to the Utility Registrants.
(b)Includes revenues from derivatives and leases.
(c)Other represents activities not allocated to a region. See text above for a description of included activities. Includes unrealized mark-to-market gains of $179 million and losses of $52 million in 2020 and 2019, respectively, and elimination of intersegment revenues.


68

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 4 — Segment Information

Revenues net of purchased power and fuel expense (Generation):
 Three Months Ended March 31, 2020 Three Months Ended March 31, 2019
 
RNF
from external
customers(a)
 
Intersegment
RNF
 Total RNF 
RNF
from external
customers(a)
 
Intersegment
RNF
 Total RNF
Mid-Atlantic$559
 $8
 $567
 $679
 $4
 $683
Midwest732
 (5) 727
 769
 2
 771
New York189
 4
 193
 262
 3
 265
ERCOT76
 4
 80
 98
 (24) 74
Other Power Regions177
 (19) 158
 174
 (18) 156
Total Revenues net of purchased power and fuel expense for Reportable Segments1,733

(8)
1,725

1,982

(33)
1,949
Other(b)
296
 8
 304
 109
 33
 142
Total Generation Revenues net of purchased power and fuel expense$2,029

$

$2,029

$2,091

$

$2,091

__________
(a)Includes purchases and sales from/to third parties and affiliated sales to the Utility Registrants.
(b)Other represents activities not allocated to a region. See text above for a description of included activities. Includes unrealized mark-to-market gains of $132 million and losses of $28 million in 2020 and 2019, respectively and the elimination of intersegment RNF.



69

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 4 — Segment Information

Electric and Gas Revenue by Customer Class (Utility Registrants):
 Three Months Ended March 31, 2020
Revenues from contracts with customersComEd PECO BGE PHI Pepco DPL ACE
Rate-regulated electric revenues             
Residential$701
 $382
 $339
 $534
 $236
 $161
 $137
Small commercial & industrial362
 99
 67
 115
 35
 43
 37
Large commercial & industrial134
 53
 103
 253
 188
 23
 42
Public authorities & electric railroads13
 7
 7
 15
 9
 3
 3
Other(a)
211
 58
 79
 169
 60
 54
 55
Total rate-regulated electric revenues(b)
$1,421
 $599
 $595
 $1,086
 $528
 $284
 $274
Rate-regulated natural gas revenues             
Residential$
 $150
 $206
 $40
 $
 $40
 $
Small commercial & industrial
 51
 34
 17
 
 17
 
Large commercial & industrial
 
 51
 1
 
 1
 
Transportation
 6
 
 4
 
 4
 
Other(c)

 1
 9
 2
 
 2
 
Total rate-regulated natural gas revenues(d)
$
 $208
 $300
 $64
 $
 $64
 $
Total rate-regulated revenues from contracts with customers$1,421
 $807
 $895
 $1,150
 $528
 $348
 $274
              
Other revenues             
Revenues from alternative revenue programs$12
 $2
 $36
 $18
 $15
 $1
 $1
Other rate-regulated electric revenues(e)
6
 3
 3
 3
 1
 1
 1
Other rate-regulated natural gas revenues(e)

 1
 3
 
 
 
 
Total other revenues$18
 $6
 $42
 $21
 $16
 $2
 $2
Total rate-regulated revenues for reportable segments$1,439
 $813
 $937
 $1,171
 $544
 $350
 $276


70

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 4 — Segment Information

 Three Months Ended March 31, 2019
Revenues from contracts with customersComEd PECO BGE PHI Pepco DPL ACE
Rate-regulated electric revenues             
Residential$710
 $409
 $385
 $579
 $256
 $185
 $138
Small commercial & industrial360
 96
 70
 120
 38
 48
 34
Large commercial & industrial132
 48
 110
 267
 204
 24
 39
Public authorities & electric railroads13
 7
 7
 14
 8
 3
 3
Other(a)
217
 62
 80
 157
 53
 47
 57
Total rate-regulated electric revenues(b)
$1,432
 $622
 $652
 $1,137
 $559
 $307
 $271
Rate-regulated natural gas revenues             
Residential$
 $198
 $219
 $44
 $
 $44
 $
Small commercial & industrial
 72
 35
 19
 
 19
 
Large commercial & industrial
 1
 50
 1
 
 1
 
Transportation
 7
 
 4
 
 4
 
Other(c)

 2
 4
 3
 
 3
 
Total rate-regulated natural gas revenues(d)
$
 $280
 $308
 $71
 $
 $71
 $
Total rate-regulated revenues from contracts with customers$1,432
 $902
 $960
 $1,208
 $559
 $378
 $271
              
Other revenues             
Revenues from alternative revenue programs$(28) $(3) $10
 $15
 $14
 $
 $1
Other rate-regulated electric revenues(e)
4
 1
 3
 4
 2
 1
 1
Other rate-regulated natural gas revenues(e)

 
 3
 1
 
 1
 
Total other revenues$(24) $(2) $16
 $20
 $16
 $2
 $2
Total rate-regulated revenues for reportable segments$1,408
 $900
 $976
 $1,228
 $575
 $380
 $273

__________
(a)Includes revenues from transmission revenue from PJM, wholesale electric revenue and mutual assistance revenue.
(b)
Includes operating revenues from affiliates of $5 million, $2 million, $6 million, $3 million, $1 million, $2 million and $1 million at ComEd, PECO, BGE, PHI, Pepco, DPL and ACE, respectively, in 2020 and $4 million, $1 million, $2 million, $3 million, $2 million, $2 million and $1 million at ComEd, PECO, BGE, PHI, Pepco, DPL and ACE, respectively, in 2019.
(c)Includes revenues from off-system natural gas sales.
(d)Includes operating revenues from affiliates of less than $1 million and $3 million at PECO and BGE, respectively, in 2020 and less than $1 million and $4 million at PECO and BGE, respectively, in 2019.
(e)Includes late payment charge revenues.


71

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 5 — Accounts Receivable

5. Accounts Receivable (All Registrants)
Unbilled Customer Revenue
The following table provides additional information about unbilled customer revenues recorded in the Registrants' Consolidated Balance Sheets.
 
Unbilled customer revenues(a)
 Exelon Generation ComEd PECO BGE PHI Pepco DPL ACE
March 31, 2020$1,225
 $698
 $160
 $96
 $134
 $137
 $75
 $42
 $20
December 31, 20191,535
 807
 218
 146
 170
 194
 100
 61
 33
_________
(a)Unbilled customer revenues are classified in customer accounts receivables, net in the Registrants' Consolidated Balance Sheets.
Allowance for Credit Losses on Accounts Receivable
The following table presents the rollforward of Allowance for Credit Losses on Customer Accounts Receivable.
 Three Months Ended March 31, 2020
 Exelon Generation ComEd PECO BGE PHI Pepco DPL ACE
Balance as of December 31, 2019$243
 $80
 $59
 $55
 $12
 $37
 $13
 $11
 $13
Plus: Current Period Provision for Expected Credit Losses55
 4
 18
 18
 8
 7
 3
 2
 2
Less: Write-offs, net of recoveries(a)
20
 3
 6
 7
 2
 2
 1
 
 1
Balance as of March 31, 2020$278
 $81
 $71
 $66
 $18
 $42
 $15
 $13
 $14
_________
(a)Recoveries were not material to the Registrants.

The following table presents the rollforward of Allowance for Credit Losses on Other Accounts Receivable.
 Three Months Ended March 31, 2020
 Exelon Generation ComEd PECO BGE PHI Pepco DPL ACE
Balance as of December 31, 2019$48
 $
 $20
 $7
 $5
 $16
 $7
 $4
 $5
Plus: Current Period Provision for Expected Credit Losses8
 
 3
 1
 2
 2
 1
 
 1
Less: Write-offs, net of recoveries(a)
4
 
 1
 1
 2
 
 
 
 
Balance as of March 31, 2020$52
 $
 $22
 $7
 $5
 $18
 $8
 $4
 $6
_________
(a)Recoveries were not material to the Registrants.


72

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 5 — Accounts Receivable

Purchases and Sales of Customer and Other Accounts Receivables
Generation is required, under supplier tariffs in ISO-NE, MISO, NYISO and PJM, to sell customer and other receivables to utility companies, which include the Utility Registrants. The Utility Registrants are required, under separate legislation and regulations in Illinois, Pennsylvania, Maryland, District of Columbia and New Jersey, to purchase certain receivables from alternative retail electric and, as applicable, natural gas suppliers that participate in the utilities' consolidated billing. The following tables present the total receivables purchased and sold.
 Three Months Ended March 31, 2020
 Exelon Generation ComEd PECO BGE PHI Pepco DPL ACE
Total Receivables Purchased$781
 $
 $280
 $284
 $195
 $264
 $165
 $53
 $46
Total Receivables Sold507
 749
 
 
 
 
 
 
 
                  
Related Party Transactions:                 
Receivables purchased from Generation
 
 34
 67
 69
 72
 51
 13
 8
Receivables sold to the Utility Registrants
 242
 
 
 
 
 
 
 

6. Early Plant Retirements (Exelon and Generation)
Exelon and Generation continuously evaluate factors that affect the current and expected economic value of Generation’s plants, including, but not limited to: market power prices, results of capacity auctions, potential legislative and regulatory solutions to ensure plants are fairly compensated for benefits they provide through their carbon-free emissions, reliability, or fuel security, and the impact of potential rules from the EPA requiring reduction of carbon and other emissions and the efforts of states to implement those final rules. The precise timing of an early retirement date for any plant, and the resulting financial statement impacts, may be affected by many factors, including the status of potential regulatory or legislative solutions, results of any transmission system reliability study assessments, the nature of any co-owner requirements and stipulations, and NDT fund requirements for nuclear plants, among other factors. However, the earliest retirement date for any plant would usually be the first year in which the unit does not have capacity or other obligations, and where applicable, just prior to its next scheduled nuclear refueling outage.
Nuclear Generation
In 2015 and 2016, Generation identified the Clinton and Quad Cities nuclear plants in Illinois, Ginna and Nine Mile Point nuclear plants in New York and Three Mile Island nuclear plant in Pennsylvania as having the greatest risk of early retirement based on economic valuation and other factors. In 2017, PSEG made public similar financial challenges facing its New Jersey nuclear plants, including Salem, of which Generation owns a 42.59% ownership interest. PSEG is the operator of Salem and also has the decision-making authority to retire Salem.
Assuming the continued effectiveness of the Illinois ZES, New Jersey ZEC program and the New York CES, Generation and CENG, through its ownership of Ginna and Nine Mile Point, no longer consider Clinton, Quad Cities, Salem, Ginna or Nine Mile Point to be at heightened risk for early retirement. However, to the extent the Illinois ZES, New Jersey ZEC program or the New York CES do not operate as expected over their full terms, each of these plants could again be at heightened risk for early retirement, which could have a material impact on Exelon’s and Generation’s future financial statements. In addition, FERC’s December 19, 2019 order on the MOPR in PJM may undermine the continued effectiveness of the Illinois ZES and the New Jersey ZEC program unless Illinois and New Jersey implement an FRR mechanism under which the Generation plants in these states would be removed from PJM’s capacity auction. See Note 2 — Regulatory Matters for additional information on the New Jersey ZEC program, New York CES and FERC's December 19, 2019 order and Note 3 — Regulatory Matters of the 2019 Form 10-K for additional information on the Illinois ZES.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 6 — Early Plant Retirements

In Pennsylvania, the TMI nuclear plant did not clear in the May 2017 PJM capacity auction for the 2020-2021 planning year, the third consecutive year that TMI failed to clear the PJM base residual capacity auction and on May 30, 2017, based on these capacity auction results, prolonged periods of low wholesale power prices, and the absence of federal or state policies that place a value on nuclear energy for its ability to produce electricity without air pollution, Generation announced that it would permanently cease generation operations at TMI. On September 20, 2019, Generation permanently ceased generation operations at TMI.
As a result of the early nuclear plant retirement decision at TMI, Exelon and Generation recognized incremental non-cash charges to earnings stemming from shortening the expected economic useful lives primarily related to accelerated depreciation of plant assets (including any ARC) and accelerated amortization of nuclear fuel, as well as operating and maintenance expenses. The total impact for the three months ended March 31, 2019 are summarized in the table below.
Income statement expense (pre-tax) Three Months Ended March 31, 2019
Depreciation and amortization  
Accelerated depreciation $74
Accelerated nuclear fuel amortization 5
Operating and maintenance(a)
 (83)
Total $(4)
_________
(a)Primarily reflects the net impacts associated with the remeasurement of the TMI ARO. See Note 9 — Asset Retirement Obligations of the 2019 Form 10-K for additional information.
Generation’s Dresden, Byron and Braidwood nuclear plants in Illinois are also showing increased signs of economic distress, which could lead to an early retirement, in a market that does not currently compensate them for their unique contribution to grid resiliency and their ability to produce large amounts of energy without carbon and air pollution. The May 2018 PJM capacity auction for the 2021-2022 planning year resulted in the largest volume of nuclear capacity ever not selected in the auction, including all of Dresden, and portions of Byron and Braidwood. Exelon continues to work with stakeholders on state policy solutions, while also advocating for broader market reforms at the regional and federal level.
The following table provides the balance sheet amounts as of March 31, 2020 for Exelon's and Generation's significant assets and liabilities associated with these three nuclear plants. Depreciation provisions are based on the estimated useful lives of these nuclear generating stations, which reflect the first renewal of the operating licenses.
  Dresden Byron Braidwood Total
Asset Balances        
Materials and supplies inventory, net $68
 $68
 $81
 $217
Nuclear fuel inventory, net 204
 172
 203
 579
Completed plant, net 1,084
 1,343
 1,390
 3,817
Construction work in progress 16
 22
 32
 70
Liability Balances        
Asset retirement obligation (1,301) (596) (554) (2,451)
         
NRC License First Renewal Term 2029 (Unit 2)
 2044 (Unit 1)
 2046 (Unit 1)
  
 2031 (Unit 3)
 2046 (Unit 2)
 2047 (Unit 2)
  


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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 6 — Early Plant Retirements

Other Generation
On March 29, 2018, Generation notified grid operator ISO-NE of its plans to early retire its Mystic Units 8 and 9 absent regulatory reforms on June 1, 2022, at the end of the then-current capacity commitment for Mystic Units 7 and 8. Mystic Unit 9 was then committed through May 2021.
On May 16, 2018, Generation made a filing with FERC to establish cost-of-service compensation and terms and conditions of service for Mystic Units 8 and 9 for the period between June 1, 2022 - May 31, 2024. On December 20, 2018, FERC issued an order accepting the cost of service agreement, reflecting a number of adjustments to the annual fixed revenue requirement and allowing for recovery of a substantial portion of the costs associated with the Everett Marine Terminal. Those adjustments were reflected in a compliance filing filed March 1, 2019. In the December 20, 2018 order, FERC also directed a paper hearing on ROE using a new methodology. On January 22, 2019, Exelon and several other parties filed requests for rehearing of certain findings in the order.
On March 25, 2019, ISO-NE filed the Inventoried Energy Program (IEP), which is intended to provide an interim fuel security program pending conclusion of the stakeholder process to develop a long-term, market-based solution to address fuel security. The IEP went into effect by operation of law on August 5, 2019 because FERC did not have a quorum at that time. On October 7, 2019, requests for rehearing were denied and several parties appealed to the D.C. Circuit Court. On April 14, 2020, FERC filed an unopposed motion asking the court for a voluntary remand of the IEP order, noting that FERC now has a quorum of Commissioners who can participate in the consideration of ISO-NE’s IEP filing.
On April 15, 2020, ISO-NE filed its long-term, market-based fuel security proposal, proposing three new, day-ahead ancillary services products intended to compensate generators for operational capabilities that provide fuel security to the region. In the filing, ISO-NE also proposed to sunset the Fuel Security Retention Mechanism, through which Mystic has been retained for fuel security, and the IEP by June 1, 2024. In addition, the filing includes an alternate proposal sponsored by New England Power Pool, which includes substantive amendments to the ISO-NE proposal. ISO-NE requested a 30-day comment period and a November 1, 2020 effective date.
The following table provides the balance sheet amounts as of March 31, 2020 for Exelon's and Generation’s significant assets and liabilities associated with the Mystic Units 8 and 9 and Everett Marine Terminal assets that would potentially be impacted by the failure to adopt long-term solutions for reliability and fuel security.
  March 31, 2020
Asset Balances  
Materials and supplies inventory $32
Fuel inventory 12
Property, plant and equipment, net 902
Liability Balances  
Asset retirement obligation (3)

See Note 8 — Asset Impairments for impairment assessment considerations on the New England Asset Group.
7. Nuclear Decommissioning (Exelon and Generation)
Nuclear Decommissioning Asset Retirement Obligations
Generation has a legal obligation to decommission its nuclear power plants following the expiration of their operating licenses. To estimate its decommissioning obligation related to its nuclear generating stations for financial accounting and reporting purposes, Generation uses a probability-weighted, discounted cash flow model which, on a unit-by-unit basis, considers multiple outcome scenarios that include significant estimates and assumptions, and are based on decommissioning cost studies, cost escalation rates, probabilistic cash flow models and discount rates. Generation updates its ARO annually, unless circumstances warrant more frequent updates, based on its review of updated cost studies and its annual evaluation of cost escalation factors and probabilities assigned to various scenarios.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 7 — Nuclear Decommissioning

The financial statement impact for changes in the ARO, on an individual unit basis, due to the changes in and timing of estimated cash flows generally result in a corresponding change in the unit’s ARC within Property, plant and equipment on Exelon’s and Generation’s Consolidated Balance Sheets. If the ARO decreases for a Non-Regulatory Agreement unit without any remaining ARC, the corresponding change is recorded as decrease in Operating and maintenance expense within Exelon’s and Generation’s Consolidated Statements of Operations and Comprehensive Income.
The following table provides a rollforward of the nuclear decommissioning ARO reflected in Exelon’s and Generation’s Consolidated Balance Sheets from December 31, 2019 to March 31, 2020:
Nuclear decommissioning ARO at December 31, 2019 (a)
$10,504
Accretion expense121
Costs incurred related to decommissioning plants(20)
Nuclear decommissioning ARO at March 31, 2020 (a)
$10,605
_________
(a)Includes $107 million and $112 million as the current portion of the ARO at March 31, 2020 and December 31, 2019, respectively, which is included in Other current liabilities in Exelon’s and Generation’s Consolidated Balance Sheets.

NDT Funds
Exelon and Generation had NDT funds totaling $11,824 million and $13,353 million at March 31, 2020 and December 31, 2019, respectively. The NDT funds also include $213 million and $163 million for the current portion of the NDT funds at March 31, 2020 and December 31, 2019, respectively, which are included in Other current assets in Exelon's and Generation's Consolidated Balance Sheets. See Note 17 — Supplemental Financial Information for additional information on activities of the NDT funds.
NRC Minimum Funding Requirements
NRC regulations require that licensees of nuclear generating facilities demonstrate reasonable assurance that funds will be available in specified minimum amounts to decommission the facility at the end of its life.
Generation filed its biennial decommissioning funding status report with the NRC on April 1, 2019 for all units, including its shutdown units, except for Zion Station which is included in a separate report to the NRC submitted by ZionSolutions, LLC. The status report demonstrated adequate decommissioning funding assurance as of December 31, 2018 for all units except for Clinton and Peach Bottom Unit 1. As of February 28, 2019, Clinton demonstrated adequate minimum funding assurance due to market recovery and no further action is required. This demonstration was also included in the April 1, 2019 submittal. On March 31, 2020, Generation filed its annual decommissioning funding status report with the NRC for Generation’s shutdown units (excluding Zion Station for the reason noted above). The annual status report demonstrated adequate decommissioning funding assurance as of December 31, 2019, for all of its shutdown reactors except for Peach Bottom Unit 1. As a former PECO plant, financial assurance for decommissioning Peach Bottom Unit 1 is provided by the NDT fund, collections from PECO ratepayers, and the ability to adjust those collections in accordance with the approved PAPUC tariff. No additional actions are required aside from the PAPUC filing in accordance with the tariff.  See Note 9 — Asset Retirement Obligations of the Exelon 2019 Form 10-K for information regarding the amount collected from PECO ratepayers for decommissioning cost.
8. Asset Impairments (Exelon and Generation)
The Registrants evaluate the carrying value of long-lived assets or asset groups for recoverability whenever events or changes in circumstances indicate that the carrying value of those assets may not be recoverable. Indicators of impairment may include a deteriorating business climate, including, but not limited to, declines in energy prices, condition of the asset, specific regulatory disallowance, or plans to dispose of a long-lived asset significantly before the end of its useful life. The Registrants determine if long-lived assets or asset groups are impaired by comparing the undiscounted expected future cash flows to the carrying value. When the undiscounted cash flow analysis indicates a long-lived asset or asset group is not recoverable, the amount of the impairment loss is determined by measuring the excess of the carrying amount of the long-lived asset or asset group over its fair value. The fair value

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 8 — Asset Impairments

analysis is primarily based on the income approach using significant unobservable inputs (Level 3) including revenue and generation forecasts, projected capital and maintenance expenditures and discount rates. A variation in the assumptions used could lead to a different conclusion regarding the recoverability of an asset or asset group and, thus, could potentially result in material future impairments of the Registrant's long-lived assets.
Antelope Valley Solar Facility
Generation’s Antelope Valley, a 242 MW solar facility in Lancaster, CA, sells all of its output to PG&E through a PPA. As of March 31, 2020, Generation had approximately $717 million of net long-lived assets related to Antelope Valley. As a result of the PG&E bankruptcy filing in the first quarter of 2019, Generation completed a comprehensive review of Antelope Valley's estimated undiscounted future cash flows and no impairment charge was recorded. Significant changes in assumptions such as the likelihood of the PPA being rejected as part of the bankruptcy proceedings could potentially result in future impairments of Antelope Valley’s net long-lived assets, which could be material.
Antelope Valley is a wholly owned indirect subsidiary of EGR IV, which had approximately $1,865 million of additional net long-lived assets as of March 31, 2020. EGR IV is a wholly owned indirect subsidiary of Exelon and Generation and includes Generation's interest in EGRP and other projects with non-controlling interests. To date, there have been no indicators to suggest that the carrying amount of other net long-lived assets of EGR IV may not be recoverable.
Generation will continue to monitor the bankruptcy proceedings for any changes in circumstances that may indicate the carrying amount of the net long-lived assets of Antelope Valley or other long-lived assets of EGR IV may not be recoverable.
See Note 12 - Debt and Credit Agreements for additional information on the PG&E bankruptcy.
New England Asset Group
During the first quarter of 2018, Mystic Unit 9 did not clear in the ISO-NE capacity auction for the 2021 - 2022 planning year. On March 29, 2018, Generation notified ISO-NE of the early retirement of its Mystic Generating Station's Units 7, 8, 9 and the Mystic Jet Unit (Mystic Generating Station assets) absent regulatory reforms. These events suggested that the carrying value of its New England asset group may be impaired. In the second quarter of 2018, Generation completed a comprehensive review of the estimated undiscounted future cash flows of the New England asset group and no impairment charge was required. Generation continues to monitor developments in the region that would indicate a potential triggering event for impairment and continues to look for solutions that appropriately compensate both Mystic 8 and 9 and the Everett Marine Terminal for their contributions to the region. Further developments such as the failure of ISO-NE to adopt long-term solutions for reliability and fuel security could potentially result in material future impairments of the New England asset group. See Note 6 - Early Plant Retirements for additional information.


77

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 9 — Income Taxes

9. Income Taxes (All Registrants)
Rate Reconciliation
The effective income tax rate from continuing operations varies from the U.S. Federal statutory rate principally due to the following:
 Three Months Ended March 31, 2020
 
Exelon(a)

Generation(a)

ComEd
PECO
BGE PHI Pepco DPL ACE
U.S. Federal statutory rate21.0% 21.0% 21.0% 21.0% 21.0% 21.0% 21.0% 21.0% 21.0%
Increase (decrease) due to:                 
State income taxes, net of Federal income tax benefit34.0 0.7 8.3 0.1 5.7 5.8 4.7 6.6 6.7
Qualified NDT fund income(235.8) 36.4       
Amortization of investment tax credit, including deferred taxes on basis difference(4.5) 0.5 (0.2)  (0.1) (0.1)  (0.2) (0.2)
Plant basis differences(23.0)  (1.1) (8.4) (1.2) (1.4) (2.1) (0.7) (0.8)
Production tax credits and other credits(9.9) 1.3 (0.2)  (0.2)    
Noncontrolling interests10.6 (1.6)       
Excess deferred tax amortization(71.7)  (10.5) (3.0) (7.3) (15.5) (14.2) (12.7) (18.8)
Tax Settlements(79.1) 12.2       
Other12.5 0.6 0.3  0.6 (0.6) (0.6) (0.5) (0.8)
Effective income tax rate(345.9)% 71.1% 17.6% 9.7% 18.5% 9.2% 8.8% 13.5% 7.1%
_________
(a)Generation recognized a loss before income taxes for the quarter ended March 31, 2020. As a result, positive percentages represent an income tax benefit for the period presented. At the consolidated level, positive percentages represent income tax expense.



78

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 9 — Income Taxes

 Three Months Ended March 31, 2019
 Exelon Generation ComEd PECO BGE PHI Pepco DPL ACE
U.S. Federal statutory rate21.0% 21.0% 21.0% 21.0% 21.0% 21.0% 21.0% 21.0% 21.0%
Increase (decrease) due to:                 
State income taxes, net of Federal income tax benefit3.9 3.1 8.2 1.0 6.3 4.7 2.1 6.5 6.7
Qualified NDT fund income7.2 14.2       
Amortization of investment tax credit, including deferred taxes on basis difference(0.5) (0.9) (0.2)  (0.1) (0.2) (0.1) (0.2) (0.3)
Plant basis differences(1.4)  (0.5) (6.7) (0.9) (1.7) (2.0) (0.7) (2.3)
Production tax credits and other credits(0.8) (1.5)       
Noncontrolling interests(0.6) (1.1)       
Excess deferred tax amortization(4.7)  (8.5) (2.5) (7.9) (19.4) (17.9) (15.6) (23.9)
Other0.1 (0.5) 0.3 0.2  (0.3) 0.4 0.7 (1.2)
Effective income tax rate24.2% 34.3% 20.3% 13.0% 18.4% 4.1% 3.5% 11.7% —%


79

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 9 — Income Taxes

Accounting for Uncertainty in Income Taxes
Exelon, Generation, PHI and ACE have the following unrecognized tax benefits as of March 31, 2020 and December 31, 2019. ComEd, PECO, BGE, Pepco and DPL's amounts are not material.
 Exelon Generation PHI ACE
March 31, 2020$98
 $32
 $49
 $14
December 31, 2019507
 441
 48
 14

Exelon's and Generation's unrecognized federal and state tax benefits decreased in the first quarter of 2020 by approximately $411 million due to the settlement of a federal refund claim with IRS Appeals. The recognition of these tax benefits resulted in an increase to Exelon's and Generation’s net income of $76 million and $73 million, respectively, for the quarter ended March 31, 2020, reflecting a decrease to Exelon's and Generation's income tax expense of $67 million.
Reasonably possible the total amount of unrecognized tax benefits could significantly increase or decrease within 12 months after the reporting date
Settlement of Income Tax Audits, Refund Claims, and Litigation
The following table represents Exelon's, PHI's and ACE's unrecognized federal and state tax benefits that could significantly decrease within the 12 months after the reporting date as a result of completing audits, potential settlements, refund claims, and the outcomes of pending court cases as of March 31, 2020. Generation's, ComEd's, PECO's, BGE's, Pepco's and DPL's amounts are not material.
Exelon PHI 
ACE(a)
$14
 $14
 $14
_________
(a)The unrecognized tax benefit related to ACE, if recognized, may be included in future base rates and that portion would have no impact to the effective tax rate.
Other Income Tax Matters
State Income Tax Law Changes
On June 5, 2019, the Governor of Illinois signed a tax bill which would increase the Illinois corporate income tax rate from 9.50% to 10.49% effective for tax years beginning on or after January 1, 2021. The tax rate is contingent upon ratification of state constitutional amendments in November 2020. The effect of the rate change will be recognized in the period in which the new legislation is enacted. Exelon, Generation and ComEd do not expect a material impact to their financial statements as a result of the rate change.
10. Retirement Benefits (All Registrants)
Defined Benefit Pension and OPEB
During the first quarter of 2020, Exelon received an updated valuation of its pension and OPEB to reflect actual census data as of January 1, 2020. This valuation resulted in an increase to the pension and OPEB obligations of $8 million and $31 million, respectively. Additionally, accumulated other comprehensive income increased by $7 million (after-tax) and regulatory assets and liabilities increased by $19 million and decreased by $10 million, respectively.
The majority of the 2020 pension benefit cost for Exelon-sponsored plans is calculated using an expected long-term rate of return on plan assets of 7.00% and a discount rate of 3.34%. The majority of the 2020 OPEB cost is calculated using an expected long-term rate of return on plan assets of 6.69% for funded plans and a discount rate of 3.31%.

80

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 10 — Retirement Benefits

A portion of the net periodic benefit cost for all plans is capitalized within the Consolidated Balance Sheets. The following table presents the components of Exelon's net periodic benefit costs, prior to capitalization, for the three months ended March 31, 2020 and 2019.
        


Pension Benefits
Three Months Ended March 31,
 OPEB
Three Months Ended March 31,
 2020 2019 2020 2019
Components of net periodic benefit cost:

 

 

 

Service cost$97
 $89
 $23
 $24
Interest cost189
 221
 38
 47
Expected return on assets(318) (307) (41) (38)
Amortization of:       
Prior service cost (benefit)1
 
 (31) (45)
Actuarial loss128
 104
 12
 11
Net periodic benefit cost$97

$107

$1

$(1)

The amounts below represent the Registrants' allocated pension and OPEB plan costs. For Exelon, the service cost component is included in Operating and maintenance expense and Property, plant and equipment, net while the non-service cost components are included in Other, net and Regulatory assets. For Generation and the Utility Registrants, the service cost and non-service cost components are included in Operating and maintenance expense and Property, plant and equipment, net in their consolidated financial statements.
  Three Months Ended March 31,
Pension and OPEB Costs 2020 2019
Exelon $98
 $106
Generation 27
 31
ComEd 28
 24
PECO 1
 2
BGE 16
 16
PHI 17
 23
Pepco 3
 6
DPL 1
 4
ACE 3
 4


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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 10 — Retirement Benefits

Defined Contribution Savings Plans
The Registrants participate in various 401(k) defined contribution savings plans that are sponsored by Exelon. The plans are qualified under applicable sections of the IRC and allow employees to contribute a portion of their pre-tax and/or after-tax income in accordance with specified guidelines. All Registrants match a percentage of the employee contributions up to certain limits. The following table presents the matching contributions to the savings plans during the three months ended March 31, 2020 and 2019, respectively.
  Three Months Ended March 31,
Savings Plan Matching Contributions 2020 2019
Exelon $33

$31
Generation 13
 13
ComEd 7
 7
PECO 3
 2
BGE 2
 2
PHI 3
 4
Pepco 1
 1
DPL 1
 1
ACE 
 1

11. Derivative Financial Instruments (All Registrants)
The Registrants use derivative instruments to manage commodity price risk, interest rate risk and foreign exchange risk related to ongoing business operations.
Authoritative guidance requires that derivative instruments be recognized as either assets or liabilities at fair value, with changes in fair value of the derivative recognized in earnings immediately. Other accounting treatments are available through special election and designation, provided they meet specific, restrictive criteria both at the time of designation and on an ongoing basis. These alternative permissible accounting treatments include NPNS, cash flow hedges and fair value hedges. All derivative economic hedges related to commodities, referred to as economic hedges, are recorded at fair value through earnings at Generation and are offset by a corresponding regulatory asset or liability at ComEd. For all NPNS derivative instruments, accounts receivable or accounts payable are recorded when derivative settles and revenue or expense is recognized in earnings as the underlying physical commodity is sold or consumed.
Authoritative guidance about offsetting assets and liabilities requires the fair value of derivative instruments to be shown in the Combined Notes to Consolidated Financial Statements on a gross basis, even when the derivative instruments are subject to legally enforceable master netting agreements and qualify for net presentation in the Consolidated Balance Sheets. A master netting agreement is an agreement between two counterparties that may have derivative and non-derivative contracts with each other providing for the net settlement of all referencing contracts via one payment stream, which takes place as the contracts deliver, when collateral is requested or in the event of default. In the tables below that present fair value balances, Generation’s energy-related economic hedges and proprietary trading derivatives are shown gross. The impact of the netting of fair value balances with the same counterparty that are subject to legally enforceable master netting agreements, as well as netting of cash collateral, including margin on exchange positions, is aggregated in the collateral and netting columns.
Generation’s and ComEd’s use of cash collateral is generally unrestricted unless Generation or ComEd are downgraded below investment grade. Cash collateral held by PECO, BGE, Pepco, DPL and ACE must be deposited in an unaffiliated major U.S. commercial bank or foreign bank with a U.S. branch office that meet certain qualifications.
Commodity Price Risk (All Registrants)
Each of the Registrants employ established policies and procedures to manage their risks associated with market fluctuations in commodity prices by entering into physical and financial derivative contracts, including swaps, futures, forwards, options and short-term and long-term commitments to purchase and sell energy and commodity products.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 11 — Derivative Financial Instruments

The Registrants believe these instruments, which are either determined to be non-derivative or classified as economic hedges, mitigate exposure to fluctuations in commodity prices.
Generation. To the extent the amount of energy Generation produces differs from the amount of energy it has contracted to sell, Exelon and Generation are exposed to market fluctuations in the prices of electricity, fossil fuels and other commodities. Within Exelon, Generation has the most exposure to commodity price risk. As such, Generation uses a variety of derivative and non-derivative instruments to manage the commodity price risk of its electric generation facilities, including power and gas sales, fuel and power purchases, natural gas transportation and pipeline capacity agreements and other energy-related products marketed and purchased. To manage these risks, Generation may enter into fixed-price derivative or non-derivative contracts to hedge the variability in future cash flows from expected sales of power and gas and purchases of power and fuel. The objectives for executing such hedges include fixing the price for a portion of anticipated future electricity sales at a level that provides an acceptable return. Generation is also exposed to differences between the locational settlement prices of certain economic hedges and the hedged generating units. This price difference is actively managed through other instruments which include derivative congestion products, whose changes in fair value are recognized in earnings each period, and auction revenue rights, which are accounted for on an accrual basis.
Additionally, Generation is exposed to certain market risks through its proprietary trading activities. The proprietary trading activities are a complement to Generation’s energy marketing portfolio but represent a small portion of Generation’s overall energy marketing activities and are subject to limits established by Exelon’s RMC.
Utility Registrants. The Utility Registrants procure electric and natural gas supply through a competitive procurement process approved by each of the respective state utility commissions. The Utility Registrants’ hedging programs are intended to reduce exposure to energy and natural gas price volatility and have no direct earnings impact as the costs are fully recovered from customers through regulatory-approved recovery mechanisms. The following table provides a summary of the Utility Registrants’ primary derivative hedging instruments, listed by commodity and accounting treatment.
RegistrantCommodityAccounting TreatmentHedging instrument
ComEdElectricityNPNSFixed price contracts based on all requirements in the IPA procurement plans.
Electricity
Changes in fair value of economic hedge recorded to an offsetting regulatory asset or liability(a)
20-year floating-to-fixed energy swap contracts beginning June 2012 based on the renewable energy resource procurement requirements in the Illinois Settlement Legislation of approximately 1.3 million MWhs per year.
PECO(b)
GasNPNSFixed price contracts to cover about 20% of planned natural gas purchases in support of projected firm sales.
BGEElectricityNPNSFixed price contracts for all SOS requirements through full requirements contracts.
GasNPNSFixed price contracts for between 10-20% of forecasted system supply requirements for flowing (i.e., non-storage) gas for the November through March period.
PepcoElectricityNPNSFixed price contracts for all SOS requirements through full requirements contracts.
DPLElectricityNPNSFixed price contracts for all SOS requirements through full requirements contracts.
GasNPNSFixed price contracts through full requirements contracts.
Changes in fair value of economic hedge recorded to an offsetting regulatory asset or liability (c)
Exchange traded future contracts for 50% of estimated monthly purchase requirements each month, including purchases for storage injections.
ACEElectricityNPNSFixed price contracts for all BGS requirements through full requirements contracts.
__________
(a)See Note 2 - Regulatory Matters for additional information.
(b)As part of its hedging program, PECO enters into electric supply procurement contracts that do not meet the definition of a derivative instrument.
(c)The fair value of the DPL economic hedge is not material as of March 31, 2020 and December 31, 2019 and is not presented in the fair value tables below.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 11 — Derivative Financial Instruments

The following table provides a summary of the derivative fair value balances recorded by Exelon, Generation and ComEd as of March 31, 2020 and December 31, 2019:
March 31, 2020 Exelon Generation ComEd
Derivatives Total
Derivatives
 
Economic
Hedges
 
Proprietary
Trading
 
Collateral

 (a)(b)
 
Netting (a)
 Subtotal 
Economic
Hedges
Mark-to-market derivative assets
(current assets)
 $649
 $4,010
 $63
 $277
 $(3,701) $649
 $
Mark-to-market derivative assets
(noncurrent assets)
 625
 1,878
 23
 112
 (1,388) 625
 
Total mark-to-market derivative assets 1,274
 5,888
 86
 389
 (5,089) 1,274
 
Mark-to-market derivative liabilities
(current liabilities)
 (252) (4,219) (37) 339
 3,701
 (216) (36)
Mark-to-market derivative liabilities
(noncurrent liabilities)
 (416) (1,676) (11) 161
 1,388
 (138) (278)
Total mark-to-market derivative liabilities (668) (5,895) (48) 500
 5,089
 (354) (314)
Total mark-to-market derivative net assets (liabilities) $606
 $(7) $38
 $889
 $
 $920
 $(314)
December 31, 2019 Exelon Generation ComEd
Description Total
Derivatives
 Economic
Hedges
 Proprietary
Trading
 Collateral

(a)(b)
 Netting (a) Subtotal Economic
Hedges
Mark-to-market derivative assets
(current assets)
 $675
 $3,506
 $72
 $287
 $(3,190) $675
 $
Mark-to-market derivative assets
(noncurrent assets)
 508
 1,238
 25
 122
 (877) 508
 
Total mark-to-market derivative assets 1,183
 4,744
 97
 409
 (4,067) 1,183
 
Mark-to-market derivative liabilities
(current liabilities)
 (236) (3,713) (38) 357
 3,190
 (204) (32)
Mark-to-market derivative liabilities
(noncurrent liabilities)
 (380) (1,140) (11) 163
 877
 (111) (269)
Total mark-to-market derivative liabilities (616) (4,853) (49) 520
 4,067
 (315) (301)
Total mark-to-market derivative net assets (liabilities) $567
 $(109) $48
 $929
 $
 $868
 $(301)
_________
(a)Exelon and Generation net all available amounts allowed under the derivative authoritative guidance in the balance sheet. These amounts include unrealized derivative transactions with the same counterparty under legally enforceable master netting agreements and cash collateral. In some cases Exelon and Generation may have other offsetting exposures, subject to a master netting or similar agreement, such as trade receivables and payables, transactions that do not qualify as derivatives, letters of credit and other forms of non-cash collateral. These amounts are immaterial and not reflected in the table above.
(b)Of the collateral posted/(received), $644 million and $511 million represents variation margin on the exchanges at March 31, 2020 and December 31, 2019 respectively.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 11 — Derivative Financial Instruments

Economic Hedges (Commodity Price Risk)
Generation. For the three months ended March 31, 2020 and 2019, Exelon and Generation recognized the following net pre-tax commodity mark-to-market gains (losses) which are also located in the Net fair value changes related to derivatives line in the Consolidated Statements of Cash Flows.
  Three Months Ended
March 31,
  2020 2019
Income Statement Location Gain (Loss)
Operating revenues $175
 $(50)
Purchased power and fuel (47) 30
Total Exelon and Generation $128
 $(20)

In general, increases and decreases in forward market prices have a positive and negative impact, respectively, on Generation’s owned and contracted generation positions that have not been hedged. Generation hedges commodity price risk on a ratable basis over three-year periods. As of March 31, 2020, the percentage of expected generation hedged for the Mid-Atlantic, Midwest, New York and ERCOT reportable segments is 89%-92% and 70%-73% for 2020 and 2021, respectively.
Proprietary Trading (Commodity Price Risk)
Generation also executes commodity derivatives for proprietary trading purposes. Proprietary trading includes all contracts executed with the intent of benefiting from shifts or changes in market prices as opposed to those executed with the intent of hedging or managing risk. Gains and losses associated with proprietary trading are reported as Operating revenues in Exelon’s and Generation’s Consolidated Statements of Operations and Comprehensive Income and are included in the Net fair value changes related to derivatives line in the Consolidated Statements of Cash Flows. For the three months ended March 31, 2020 and 2019, net pre-tax commodity mark-to-market gains (losses) for Exelon and Generation were not material. The Utility Registrants do not execute derivatives for proprietary trading purposes.
Interest Rate and Foreign Exchange Risk (Exelon and Generation)
Exelon and Generation utilize interest rate swaps, which are treated as economic hedges, to manage their interest rate exposure. On July 1, 2018, Exelon de-designated its fair value hedges related to interest rate risk and Generation de-designated its cash flow hedges related to interest rate risk. The notional amounts were $1,268 million and $1,269 million at March 31, 2020 and December 31, 2019, respectively, for Exelon and $568 million and $569 million at March 31, 2020 and December 31, 2019, respectively, for Generation.
Generation utilizes foreign currency derivatives to manage foreign exchange rate exposure associated with international commodity purchases in currencies other than U.S. dollars, which are treated as economic hedges. The notional amounts were $144 million and $231 million at March 31, 2020 and December 31, 2019, respectively.
The mark-to-market derivative assets and liabilities as of March 31, 2020 and December 31, 2019 and the mark-to-market gains and losses for the three months ended March 31, 2020 and 2019 were not material for Exelon and Generation.
Credit Risk (All Registrants)
The Registrants would be exposed to credit-related losses in the event of non-performance by counterparties on executed derivative instruments. The credit exposure of derivative contracts, before collateral, is represented by the fair value of contracts at the reporting date.
Generation. For commodity derivatives, Generation enters into enabling agreements that allow for payment netting with its counterparties, which reduces Generation’s exposure to counterparty risk by providing for the offset of amounts payable to the counterparty against amounts receivable from the counterparty. Typically, each enabling agreement is for a specific commodity and so, with respect to each individual counterparty, netting is limited to transactions involving that specific commodity product, except where master netting agreements exist with a

85

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 11 — Derivative Financial Instruments

counterparty that allow for cross product netting. In addition to payment netting language in the enabling agreement, Generation’s credit department establishes credit limits, margining thresholds and collateral requirements for each counterparty, which are defined in the derivative contracts. Counterparty credit limits are based on an internal credit review process that considers a variety of factors, including the results of a scoring model, leverage, liquidity, profitability, credit ratings by credit rating agencies, and risk management capabilities. To the extent that a counterparty’s margining thresholds are exceeded, the counterparty is required to post collateral with Generation as specified in each enabling agreement. Generation’s credit department monitors current and forward credit exposure to counterparties and their affiliates, both on an individual and an aggregate basis.
The following tables provide information on Generation’s credit exposure for all derivative instruments, NPNS and payables and receivables, net of collateral and instruments that are subject to master netting agreements, as of March 31, 2020. The tables further delineate that exposure by credit rating of the counterparties and provide guidance on the concentration of credit risk to individual counterparties. The figures in the tables below exclude credit risk exposure from individual retail counterparties, nuclear fuel procurement contracts and exposure through RTOs, ISOs, NYMEX, ICE, NASDAQ, NGX and Nodal commodity exchanges. 
Rating as of March 31, 2020 Total Exposure Before Credit Collateral 
Credit Collateral(a)
 Net Exposure Number of Counterparties Greater than 10% of Net Exposure Net Exposure of Counterparties Greater than 10% of Net Exposure
Investment grade $915
 $22
 $893
 
 $
Non-investment grade 60
 49
 11
    
No external ratings          
Internally rated — investment grade 228
 1
 227
    
Internally rated — non-investment grade 157
 22
 135
    
Total $1,360
 $94
 $1,266
 
 $
 
Net Credit Exposure by Type of Counterparty As of
March 31, 2020
Financial institutions $18
Investor-owned utilities, marketers, power producers 983
Energy cooperatives and municipalities 224
Other 41
Total $1,266
_________ 
(a)As of March 31, 2020, credit collateral held from counterparties where Generation had credit exposure included $29 million of cash and $65 million of letters of credit. The credit collateral does not include non-liquid collateral.
Utility Registrants. The Utility Registrants have contracts to procure electric and natural gas supply that provide suppliers with a certain amount of unsecured credit. If the exposure on the supply contract exceeds the amount of unsecured credit, the suppliers may be required to post collateral. The net credit exposure is mitigated primarily by the ability to recover procurement costs through customer rates. As of March 31, 2020, the Utility Registrants’ counterparty credit risk with suppliers was immaterial.
Credit-Risk-Related Contingent Features (All Registrants)
Generation. As part of the normal course of business, Generation routinely enters into physically or financially settled contracts for the purchase and sale of electric capacity, electricity, fuels, emissions allowances and other energy-related products. Certain of Generation’s derivative instruments contain provisions that require Generation to post collateral. Generation also enters into commodity transactions on exchanges where the exchanges act as the counterparty to each trade. Transactions on the exchanges must adhere to comprehensive collateral and margining requirements. This collateral may be posted in the form of cash or credit support with thresholds contingent upon Generation’s credit rating from each of the major credit rating agencies. The collateral and credit support

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 11 — Derivative Financial Instruments

requirements vary by contract and by counterparty. These credit-risk-related contingent features stipulate that if Generation were to be downgraded or lose its investment grade credit rating (based on its senior unsecured debt rating), it would be required to provide additional collateral. This incremental collateral requirement allows for the offsetting of derivative instruments that are assets with the same counterparty, where the contractual right of offset exists under applicable master netting agreements. In the absence of expressly agreed-to provisions that specify the collateral that must be provided, collateral requested will be a function of the facts and circumstances of the situation at the time of the demand. In this case, Generation believes an amount of several months of future payments (i.e., capacity payments) rather than a calculation of fair value is the best estimate for the contingent collateral obligation, which has been factored into the disclosure below.
The aggregate fair value of all derivative instruments with credit-risk related contingent features in a liability position that are not fully collateralized (excluding transactions on the exchanges that are fully collateralized) is detailed in the table below:
Credit-Risk Related Contingent Features March 31, 2020 December 31, 2019
Gross fair value of derivative contracts containing this feature(a)
 $(1,002) $(956)
Offsetting fair value of in-the-money contracts under master netting arrangements(b)
 699
 649
Net fair value of derivative contracts containing this feature(c)
 $(303) $(307)
_________
(a)Amount represents the gross fair value of out-of-the-money derivative contracts containing credit-risk related contingent features ignoring the effects of master netting agreements.
(b)Amount represents the offsetting fair value of in-the-money derivative contracts under legally enforceable master netting agreements with the same counterparty, which reduces the amount of any liability for which a Registrant could potentially be required to post collateral.
(c)Amount represents the net fair value of out-of-the-money derivative contracts containing credit-risk related contingent features after considering the mitigating effects of offsetting positions under master netting arrangements and reflects the actual net liability upon which any potential contingent collateral obligations would be based.
As of March 31, 2020 and December 31, 2019, Exelon and Generation posted or held the following amounts of cash collateral and letters of credit on derivative contracts with external counterparties, after giving consideration to offsetting derivative and non-derivative positions under master netting agreements.
  March 31, 2020 December 31, 2019
Cash collateral posted $977
 $982
Letters of credit posted 256
 264
Cash collateral held 105
 103
Letters of credit held 115
 112
Additional collateral required in the event of a credit downgrade below investment grade 1,468
 1,509

Generation entered into supply forward contracts with certain utilities, including PECO and BGE, with one-sided collateral postings only from Generation. If market prices fall below the benchmark price levels in these contracts, the utilities are not required to post collateral. However, when market prices rise above the benchmark price levels, counterparty suppliers, including Generation, are required to post collateral once certain unsecured credit limits are exceeded.
Utility Registrants
The Utility Registrants’ electric supply procurement contracts do not contain provisions that would require them to post collateral.
PECO’s, BGE’s, and DPL’s natural gas procurement contracts contain provisions that could require PECO, BGE, and DPL to post collateral in the form of cash or credit support, which vary by contract and counterparty, with thresholds contingent upon PECO’s, BGE, and DPL’s credit rating. As of March 31, 2020, PECO, BGE, and DPL were not required to post collateral for any of these agreements. If PECO, BGE or DPL lost their investment grade

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 11 — Derivative Financial Instruments

credit ratings as of March 31, 2020, they could have been required to post incremental collateral to its counterparties of $33 million, $34 million and $12 million, respectively.
12. Debt and Credit Agreements (All Registrants)
Short-Term Borrowings
Exelon Corporate, ComEd and BGE meet their short-term liquidity requirements primarily through the issuance of commercial paper. Generation and PECO meet their short-term liquidity requirements primarily through the issuance of commercial paper and borrowings from the Exelon intercompany money pool. Pepco, DPL, and ACE meet their short-term liquidity requirements primarily through the issuance of commercial paper and borrowings from the PHI intercompany money pool. PHI Corporate meets its short-term liquidity requirements primarily through the issuance of short-term notes and the Exelon intercompany money pool. The Registrants may use their respective credit facilities for general corporate purposes, including meeting short-term funding requirements and the issuance of letters of credit.
Commercial Paper
The following table reflects the Registrants' commercial paper programs as of March 31, 2020 and December 31, 2019. PECO had no commercial paper borrowings as of both March 31, 2020 and December 31, 2019.
 Outstanding Commercial
Paper as of
 Average Interest Rate on
Commercial Paper Borrowings as of
Commercial Paper IssuerMarch 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019
Exelon(a)
$979
 $870
 2.91% 2.25%
Generation595
 320
 2.01% 1.84%
ComEd
 130
 % 2.38%
BGE141
 76
 4.45% 2.46%
PHI(b)
108
 208
 4.25% N/A
PEPCO
 82
 % 2.56%
DPL54
 56
 4.17% 2.02%
ACE54
 70
 4.32% 2.43%

__________
(a)
Includes outstanding commercial paper at Exelon Corporate of $135 million and $136 million with average interest rates on commercial paper borrowings of 4.20% and 1.92% at March 31, 2020 and December 31, 2019, respectively.
(b)Includes the consolidated amounts of Pepco, DPL, and ACE.
On March 19, 2020, Generation borrowed $1.5 billion on its revolving credit facility due to disruptions in the commercial paper markets as a result of COVID-19, which is recorded in Long-term debt on Exelon’s and Generation’s Consolidated Balance Sheet. The funds were used to refinance commercial paper. Generation repaid the $1.5 billion borrowed on the revolving credit facility on April 3, 2020. As of March 31, 2020, the available capacity on Generation’s revolving credit facility was $2.4 billion. See Note 16— Debt and Credit Agreements of the Exelon 2019 Form 10-K for additional information on the Registrants’ credit facilities.
Short-Term Loan Agreements
On March 23, 2017, Exelon Corporate entered into a term loan agreement for $500 million. The loan agreement was renewed on March 19, 2020 and will expire on March 18, 2021. Pursuant to the loan agreement, loans made thereunder bear interest at a variable rate equal to LIBOR plus 0.65% and all indebtedness thereunder is unsecured. The loan agreement is reflected in Exelon's Consolidated Balance Sheet within Short-Term borrowings.
On March 19, 2020, Generation entered into a term loan agreement for $200 million. The loan agreement has an expiration of March 18, 2021. Pursuant to the loan agreement, loans made thereunder bear interest at a variable rate equal to LIBOR plus 0.50% and all indebtedness thereunder is unsecured. The loan agreement is reflected in Generation's Consolidated Balance Sheet within Short-term borrowings.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 12 — Debt and Credit Agreements

On March 31, 2020, Generation entered into a term loan agreement for $300 million. The loan agreement has an expiration of March 30, 2021. Pursuant to the loan agreement, loans made thereunder bear interest at a variable rate equal to LIBOR plus 0.75% and all indebtedness thereunder is unsecured. The loan agreement is reflected in Generation's Consolidated Balance Sheet within Short-term borrowings.
Credit Agreements
On April 24, 2020, Exelon Corporate entered into a credit agreement establishing a $550 million 364-day revolving credit facility at a variable interest rate of LIBOR plus 1.75%. This facility will be used by Exelon as an additional source of short-term liquidity over the next 12 months.
Long-Term Debt
Issuance of Long-Term Debt
During the three months ended March 31, 2020, the following long-term debt was issued:
Company Type Interest Rate Maturity Amount Use of Proceeds
Generation 
Energy Efficiency Project Financing(a) 
 3.95% August 31, 2020 $2
 Funding to install energy conservation measures for the Fort Meade project.
Generation 
Energy Efficiency Project Financing(a)
 2.53% April 30, 2021 1
 Funding to install energy conservation measures for the Fort AP Hill project.
ComEd First Mortgage Bonds, Series 129 3.00% March 1, 2050 650
 Repay a portion of outstanding commercial paper obligations and to fund general corporate purposes.
ComEd First Mortgage Bonds, Series 128 2.20% March 1, 2030 350
 Repay a portion of outstanding commercial paper obligations and fund other general corporate purposes.
Pepco(b)
 First Mortgage Bonds 2.53% February 25, 2030 150
 Repay existing indebtedness and for general corporate purposes.

__________
(a)For Energy Efficiency Project Financing, the maturity dates represent the expected date of project completion, upon which the respective customer assumes the outstanding debt.
(b)
On February 25, 2020, Pepco entered into a purchase agreement of First Mortgage Bonds for $150 million at 3.28% due on September 23, 2050. The closing date of the issuance is expected to occur in September 2020.
On April 1, 2020, Exelon Corporate issued notes for $1.25 billion at 4.05%, which are due in 2030 and notes for $750 million at 4.70%, which are due in 2050. A portion of the net proceeds from the sale of these notes, together with available cash balances, will be used to repay $900 million of Exelon Corporate notes maturing in June of 2020. The remainder of the net proceeds will be used for general corporate purposes.
Debt Covenants
As of March 31, 2020, the Registrants are in compliance with debt covenants, except for Antelope Valley's ongoing nonrecourse debt event of default as discussed below.
Nonrecourse Debt
Exelon and Generation have issued nonrecourse debt financing. Borrowings under these agreements are secured by the assets and equity of each respective project. The lenders do not have recourse against Exelon or Generation in the event of a default.
Antelope Valley Solar Ranch One.  In December 2011, the DOE Loan Programs Office issued a guarantee for up to $646 million for a nonrecourse loan from the Federal Financing Bank to support the financing of the construction of the Antelope Valley facility. The project became fully operational in 2014. The loan will mature on January 5, 2037. As of March 31, 2020, approximately $479 million was outstanding. In addition, Generation has issued letters of credit to support its equity investment in the project. As of March 31, 2020, Generation had $37 million in letters of

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 12 — Debt and Credit Agreements

credit outstanding related to the project. In 2017, Generation’s interests in Antelope Valley were also contributed to and are pledged as collateral for the EGR IV financing structure referenced below.
Antelope Valley sells all of its output to PG&E through a PPA. On January 29, 2019, PG&E filed for protection under Chapter 11 of the U.S. Bankruptcy Code, which created an event of default for Antelope Valley’s nonrecourse debt that provides the lender with a right to accelerate amounts outstanding under the loan such that they would become immediately due and payable. As a result of the ongoing event of default and the absence of a waiver from the lender foregoing their acceleration rights, the debt was reclassified as current in Exelon’s and Generation’s Consolidated Balance Sheets in the first quarter of 2019 and continues to be classified as current as of March 31, 2020. Further, distributions from Antelope Valley to EGR IV are currently suspended.
ExGen Renewables IV.  In November 2017, EGR IV, an indirect subsidiary of Exelon and Generation, entered into an $850 million nonrecourse senior secured term loan credit facility agreement. Generation’s interests in EGRP, Antelope Valley, SolGen, and Albany Green Energy were all contributed to and are pledged as collateral for this financing. The loan is scheduled to mature on November 28, 2024. As of March 31, 2020, $796 million was outstanding.
Although Antelope Valley’s debt is in default, it is nonrecourse to EGR IV. However, if in the future Antelope Valley were to file for bankruptcy protection as a result of events culminating from PG&E’s bankruptcy proceedings this would represent an event of default for EGR IV’s debt that would provide the lender with an opportunity to accelerate EGR IV’s debt.
See Note 16— Debt and Credit Agreements  of the Exelon 2019 Form 10-K for additional information on nonrecourse debt.
13. Fair Value of Financial Assets and Liabilities (All Registrants)
Exelon measures and classifies fair value measurements in accordance with the hierarchy as defined by GAAP. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:
Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities that the Registrants have the ability to liquidate as of the reporting date.
Level 2 - inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.
Level 3 - unobservable inputs, such as internally developed pricing models or third-party valuations for the asset or liability due to little or no market activity for the asset or liability.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 13 — Fair Value of Financial Assets and Liabilities

Fair Value of Financial Liabilities Recorded at Amortized Cost
The following tables present the carrying amounts and fair values of the Registrants’ short-term liabilities, long-term debt, SNF obligation and trust preferred securities (long-term debt to financing trusts or junior subordinated debentures) as of March 31, 2020 and December 31, 2019. The Registrants have no financial liabilities classified as Level 1.
The carrying amounts of the Registrants’ short-term liabilities as presented on their Consolidated Balance Sheets are representative of their fair value (Level 2) because of the short-term nature of these instruments.
  March 31, 2020 December 31, 2019
  Carrying Amount Fair Value Carrying Amount Fair Value
   Level 2 Level 3 Total  Level 2 Level 3 Total
Long-Term Debt, including amounts due within one year(a)

Exelon $37,656
 $36,908
 $2,556
 $39,464
 $36,039
 $37,453
 $2,580
 $40,033
Generation 8,449
 7,034
 1,330
 8,364
 7,974
 7,304
 1,366
 8,670
ComEd 9,478
 10,483
 
 10,483
 8,491
 9,848
 
 9,848
PECO 3,406
 3,762
 50
 3,812
 3,405
 3,868
 50
 3,918
BGE 3,271
 3,572
 
 3,572
 3,270
 3,649
 
 3,649
PHI 6,708
 5,602
 1,176
 6,778
 6,563
 5,902
 1,164
 7,066
Pepco 3,015
 3,009
 483
 3,492
 2,864
 3,198
 388
 3,586
DPL 1,575
 1,334
 271
 1,605
 1,567
 1,408
 311
 1,719
ACE 1,325
 991
 421
 1,412
 1,327
 1,026
 464
 1,490
Long-Term Debt to Financing Trusts(a)

Exelon $390
 $
 $387
 $387
 $390
 $
 $428
 $428
ComEd 205
 
 204
 204
 205
 
 227
 227
PECO 184
 
 183
 183
 184
 
 201
 201
SNF Obligation
Exelon $1,204
 $723
 $
 $723
 $1,199
 $1,055
 $
 $1,055
Generation 1,204
 723
 
 723
 1,199
 1,055
 
 1,055
____
(a)Includes unamortized debt issuance costs which are not fair valued.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 13 — Fair Value of Financial Assets and Liabilities

Recurring Fair Value Measurements
The following tables present assets and liabilities measured and recorded at fair value in the Registrants' Consolidated Balance Sheets on a recurring basis and their level within the fair value hierarchy as of March 31, 2020 and December 31, 2019:
Exelon and Generation
 Exelon Generation
As of March 31, 2020Level 1 Level 2 Level 3 Not subject to leveling Total Level 1 Level 2 Level 3 Not subject to leveling Total
Assets                   
Cash equivalents(a)
$1,399
 $
 $
 $
 $1,399
 $591
 $
 $
 $
 $591
NDT fund investments        
         
Cash equivalents(b)
373
 79
 
 
 452
 373
 79
 
 
 452
Equities2,603
 1,377
 

1,080
 5,060
 2,603
 1,377
 

1,080
 5,060
Fixed income                   
Corporate debt
 1,412
 258
 
 1,670
 
 1,412
 258
 
 1,670
U.S. Treasury and agencies1,723
 141
 
 
 1,864
 1,723
 141
 
 
 1,864
Foreign governments
 37
 
 
 37
 
 37
 
 
 37
State and municipal debt
 87
 
 
 87
 
 87
 
 
 87
Other(c)

 26
 
 872
 898
 
 26
 
 872
 898
Fixed income subtotal1,723

1,703

258
 872

4,556

1,723

1,703

258
 872

4,556
Private credit
 
 240
 546
 786
 
 
 240
 546
 786
Private equity
 
 
 444
 444
 
 
 
 444
 444
Real estate
 
 
 636
 636
 
 
 
 636
 636
NDT fund investments subtotal(d)
4,699

3,159

498
 3,578

11,934

4,699

3,159

498
 3,578

11,934
Rabbi trust investments        
         
Cash equivalents51
 
 
 
 51
 4
 
 
 
 4
Mutual funds75
 
 
 
 75
 23
 
 
 
 23
Fixed income
 11
 
 
 11
 
 
 
 
 
Life insurance contracts
 72
 42
 
 114
 
 22
 
 
 22
Rabbi trust investments subtotal126

83

42
 

251

27

22


 

49
Commodity derivative assets                   
Economic hedges714
 3,135
 2,039
 
 5,888
 714
 3,135
 2,039
 
 5,888
Proprietary trading
 29
 57
 
 86
 
 29
 57
 
 86
Effect of netting and allocation of collateral(e)(f)
(868) (2,770) (1,062) 
 (4,700) (868) (2,770) (1,062) 
 (4,700)
Commodity derivative assets subtotal(154)
394

1,034
 

1,274

(154)
394

1,034
 

1,274
Total assets6,070

3,636

1,574

3,578

14,858

5,163

3,575

1,532

3,578

13,848

92

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 13 — Fair Value of Financial Assets and Liabilities

 Exelon Generation
As of March 31, 2020Level 1 Level 2 Level 3 Not subject to leveling Total Level 1 Level 2 Level 3 Not subject to leveling Total
Liabilities                   
Commodity derivative liabilities                   
Economic hedges(990) (3,476) (1,743) 
 (6,209) (990) (3,476) (1,429) 
 (5,895)
Proprietary trading
 (28) (20) 
 (48) 
 (28) (20) 
 (48)
Effect of netting and allocation of collateral(e)(f)
994
 3,318
 1,277
 
 5,589
 994
 3,318
 1,277
 
 5,589
Commodity derivative liabilities subtotal4
 (186) (486) 
 (668) 4
 (186) (172) 
 (354)
Deferred compensation obligation
 (126) 
 
 (126) 
 (34) 
 
 (34)
Total liabilities4

(312)
(486) 

(794)
4

(220)
(172) 

(388)
Total net assets$6,074

$3,324

$1,088
 $3,578

$14,064

$5,167

$3,355

$1,360
 $3,578

$13,460

93

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 13 — Fair Value of Financial Assets and Liabilities

 Exelon Generation
As of December 31, 2019Level 1 Level 2 Level 3 Not subject to leveling Total Level 1
Level 2
Level 3 Not subject to leveling
Total
Assets                   
Cash equivalents(a)
$639
 $
 $
 $
 $639
 $214
 $
 $
 $
 $214
NDT fund investments                  

Cash equivalents(b)
365
 87
 
 
 452
 365
 87
 
 
 452
Equities3,353

1,753



1,388

6,494

3,353

1,753



1,388

6,494
Fixed income                   
Corporate debt
 1,469
 257
 
 1,726
 
 1,469
 257
 
 1,726
U.S. Treasury and agencies1,808
 131
 
 
 1,939
 1,808
 131
 
 
 1,939
Foreign governments
 42
 
 
 42
 
 42
 
 
 42
State and municipal debt
 90
 
 
 90
 
 90
 
 
 90
Other(c)

 33
 
 953
 986
 
 33
 
 953
 986
Fixed income subtotal1,808

1,765

257
 953

4,783

1,808

1,765

257
 953

4,783
Private credit
 
 254
 508
 762
 
 
 254
 508
 762
Private equity
 
 
 402
 402
 
 
 
 402
 402
Real estate
 
 
 607
 607
 
 
 
 607
 607
NDT fund investments subtotal(d)
5,526

3,605

511
 3,858

13,500

5,526

3,605

511
 3,858
 13,500
Rabbi trust investments                   
Cash equivalents50
 
 
 
 50
 4
 
 
 
 4
Mutual funds81
 
 
 
 81
 25
 
 
 
 25
Fixed income
 12
 
 
 12
 
 
 
 
 
Life insurance contracts
 78
 41
 
 119
 
 25
 
 
 25
Rabbi trust investments subtotal131

90

41
 

262

29

25


 

54
Commodity derivative assets                   
Economic hedges768
 2,491
 1,485
 
 4,744
 768
 2,491
 1,485
 
 4,744
Proprietary trading
 37
 60
 
 97
 
 37
 60
 
 97
Effect of netting and allocation of collateral(e)(f)
(908) (2,162) (588) 
 (3,658) (908) (2,162) (588) 
 (3,658)
Commodity derivative assets subtotal(140)
366

957
 

1,183

(140)
366

957
 

1,183
Total assets6,156

4,061

1,509

3,858

15,584

5,629

3,996

1,468

3,858

14,951

94

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 13 — Fair Value of Financial Assets and Liabilities

 Exelon Generation
As of December 31, 2019Level 1 Level 2 Level 3 Not subject to leveling Total Level 1
Level 2
Level 3 Not subject to leveling
Total
Liabilities        
         
Commodity derivative liabilities                   
Economic hedges(1,071) (2,855) (1,228) 
 (5,154) (1,071) (2,855) (927) 
 (4,853)
Proprietary trading
 (34) (15) 
 (49) 
 (34) (15) 
 (49)
Effect of netting and allocation of collateral(e)(f)
1,071
 2,714
 802
 
 4,587
 1,071
 2,714
 802
 
 4,587
Commodity derivative liabilities subtotal

(175)
(441) 

(616)


(175)
(140) 

(315)
Deferred compensation obligation
 (147) 
 
 (147) 
 (41) 
 
 (41)
Total liabilities

(322)
(441) 

(763)


(216)
(140) 

(356)
Total net assets$6,156

$3,739

$1,068
 $3,858

$14,821

$5,629

$3,780

$1,328
 $3,858

$14,595
_________
(a)Exelon excludes cash of $483 million and $373 million at March 31, 2020 and December 31, 2019, respectively, and restricted cash of $110 million at both March 31, 2020 and December 31, 2019, and includes long-term restricted cash of $121 million and $177 million at March 31, 2020 and December 31, 2019, respectively, which is reported in Other deferred debits in the Consolidated Balance Sheets. Generation excludes cash of $317 million and $177 million at March 31, 2020 and December 31, 2019, respectively, and restricted cash of $63 million and $58 million at March 31, 2020 and December 31, 2019, respectively. 
(b)Includes $78 million and $90 million of cash received from outstanding repurchase agreements at March 31, 2020 and December 31, 2019, respectively, and is offset by an obligation to repay upon settlement of the agreement as discussed in (d) below.
(c)Includes a derivative liability of $2 million and a derivative asset of $2 million, which have total notional amounts of $826 million and $724 million at March 31, 2020 and December 31, 2019, respectively. The notional principal amounts for these instruments provide one measure of the transaction volume outstanding as of the fiscal years ended and do not represent the amount of Exelon and Generation's exposure to credit or market loss.
(d)Excludes net liabilities of $110 million and $147 million at March 31, 2020 and December 31, 2019, respectively. These items consist of receivables related to pending securities sales, interest and dividend receivables, repurchase agreement obligations, and payables related to pending securities purchases. The repurchase agreements are generally short-term in nature with durations generally of 30 days or less.
(e)Collateral posted/(received) from counterparties totaled $126 million, $548 million and $215 million allocated to Level 1, Level 2 and Level 3 mark-to-market derivatives, respectively, as of March 31, 2020. Collateral posted/(received) from counterparties, net of collateral paid to counterparties, totaled $163 million, $551 million and $214 million allocated to Level 1, Level 2 and Level 3 mark-to-market derivatives, respectively, as of December 31, 2019.
(f)Of the collateral posted/(received), $644 million and $511 million represents variation margin on the exchanges as of March 31, 2020 and December 31, 2019, respectively.
As of March 31, 2020, Exelon and Generation have outstanding commitments to invest in fixed income, private credit, private equity and real estate investments of approximately $80 million, $131 million, $338 million, and $428 million, respectively. These commitments will be funded by Generation’s existing NDT funds.
Exelon and Generation hold investments without readily determinable fair values with carrying amounts of $76 million and $66 million as of March 31, 2020, respectively. Changes in fair value, cumulative adjustments and impairments were not material for the three months ended March 31, 2020.

95

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)

Note 13 — Fair Value of Financial Assets and Liabilities

ComEd, PECO and BGE
 ComEd PECO BGE
As of March 31, 2020Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Assets                       
Cash equivalents(a)
$729
 $
 $
 $729
 $8
 $
 $
 $8
 $
 $
 $
 $
Rabbi trust investments      
       
       
Mutual funds
 
 
 
 7
 
 
 7
 8
 
 
 8
Life insurance contracts
 
 
 
 
 10
 
 10
 
 
 1
 1
Rabbi trust investments subtotal







7

10



17

8



1

9
Total assets729





729

15

10



25

8



1

9
Liabilities      
       
       
Deferred compensation obligation
 (7) 
 (7) 
 (8) 
 (8) 
 (5) 
 (5)
Mark-to-market derivative liabilities(b)

 
 (314) (314) 
 
 
 
 
 
 
 
Total liabilities
 (7) (314) (321) 
 (8) 
 (8) 
 (5) 
 (5)
Total net assets (liabilities)$729
 $(7) $(314) $408
 $15
 $2
 $
 $17
 $8
 $(5) $1
 $4
 ComEd PECO BGE
As of December 31, 2019Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Assets                       
Cash equivalents(a)
$280
 $
 $
 $280
 $15
 $
 $
 $15
 $
 $
 $
 $
Rabbi trust investments      
       
       
Mutual funds
 
 
 
 8
 
 
 8
 8
 
 
 8
Life insurance contracts
 
 
 
 
 11
 
 11
 
 
 
 
Rabbi trust investments subtotal







8

11



19

8





8
Total assets280





280

23

11



34

8





8
Liabilities      
       
       
Deferred compensation obligation
 (8) 
 (8) 
 (9) 
 (9) 
 (5) 
 (5)
Mark-to-market derivative liabilities(b)

 
 (301) (301) 
 
 
 
 
 
 
 
Total liabilities
 (8) (301) (309) 
 (9) 
 (9) 
 (5) 
 (5)
Total net assets (liabilities)$280
 $(8) $(301) $(29) $23
 $2
 $
 $25
 $8
 $(5) $
 $3
_________
(a)ComEd excludes cash of $67 million and $90 million at March 31, 2020 and December 31, 2019, respectively, and restricted cash of $38 million and $33 million at March 31, 2020 and December 31, 2019, respectively, and includes long-term restricted cash of $108 million and $163 million at March 31, 2020 and December 31, 2019, respectively, which is reported in Other deferred debits in the Consolidated Balance Sheets.  PECO excludes cash of $30 million and $12 million at March 31, 2020 and December 31, 2019, respectively.  BGE excludes cash of $11 million and $24 million at March 31, 2020 and December 31, 2019, respectively, and restricted cash of $1 million at both March 31, 2020 and December 31, 2019.
(b)The Level 3 balance consists of the current and noncurrent liability of $36 million and $278 million, respectively, at March 31, 2020, and $32 million and $269 million, respectively, at December 31, 2019, related to floating-to-fixed energy swap contracts with unaffiliated suppliers.




96

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in millions, except per share data, unless otherwise noted)