EXELON CORP - Quarter Report: 2019 March (Form 10-Q)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2019



o	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

1-16169	EXELON CORPORATION	23-2990190
	(a Pennsylvania corporation) 10 South Dearborn Street P.O. Box 805379 Chicago, Illinois 60680-5379 (800) 483-3220

333-85496	EXELON GENERATION COMPANY, LLC	23-3064219
	(a Pennsylvania limited liability company) 300 Exelon Way Kennett Square, Pennsylvania 19348-2473 (610) 765-5959

1-1839	COMMONWEALTH EDISON COMPANY	36-0938600
	(an Illinois corporation) 440 South LaSalle Street Chicago, Illinois 60605-1028 (312) 394-4321

000-16844	PECO ENERGY COMPANY	23-0970240
	(a Pennsylvania corporation) P.O. Box 8699 2301 Market Street Philadelphia, Pennsylvania 19101-8699 (215) 841-4000

1-1910	BALTIMORE GAS AND ELECTRIC COMPANY	52-0280210
	(a Maryland corporation) 2 Center Plaza 110 West Fayette Street Baltimore, Maryland 21201-3708 (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	New York and Chicago
Series A Junior Debt Subordinated Debentures	EXC22	New York

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

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 and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted 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.



	Large Accelerated Filer	Accelerated Filer	Non-accelerated Filer	Smaller Reporting Company	Emerging Growth Company
Exelon Corporation	x
Exelon Generation Company, LLC			x
Commonwealth Edison Company			x
PECO Energy Company			x
Baltimore Gas and Electric Company			x
Pepco Holdings LLC			x
Potomac Electric Power Company			x
Delmarva Power & Light Company			x
Atlantic City Electric Company			x

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. o

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

The number of shares outstanding of each registrant’s common stock as of March 31, 2019 was:



Exelon Corporation Common Stock, without par value	970,954,879
Exelon Generation Company, LLC	not applicable
Commonwealth Edison Company Common Stock, $12.50 par value	127,021,331
PECO Energy Company Common Stock, without par value	170,478,507
Baltimore Gas and Electric Company Common Stock, without par value	1,000
Pepco Holdings LLC	not applicable
Potomac Electric Power Company Common Stock, $0.01 par value	100
Delmarva Power & Light Company Common Stock, $2.25 par value	1,000
Atlantic City Electric Company Common Stock, $3.00 par value	8,546,017

TABLE OF CONTENTS



		Page No.
GLOSSARY OF TERMS AND ABBREVIATIONS		4
FILING FORMAT		8
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION		8
WHERE TO FIND MORE INFORMATION		8
PART I.	FINANCIAL INFORMATION	9
ITEM 1.	FINANCIAL STATEMENTS	9
	Exelon Corporation
	Consolidated Statements of Operations and Comprehensive Income	10
	Consolidated Statements of Cash Flows	11
	Consolidated Balance Sheets	12
	Consolidated Statements of Changes in Shareholders’ Equity	14
	Exelon Generation Company, LLC
	Consolidated Statements of Operations and Comprehensive Income	15
	Consolidated Statements of Cash Flows	16
	Consolidated Balance Sheets	17
	Consolidated Statements of Changes in Equity	19
	Commonwealth Edison Company
	Consolidated Statements of Operations and Comprehensive Income	20
	Consolidated Statements of Cash Flows	21
	Consolidated Balance Sheets	22
	Consolidated Statements of Changes in Shareholders' Equity	24
	PECO Energy Company
	Consolidated Statements of Operations and Comprehensive Income	25
	Consolidated Statements of Cash Flows	26
	Consolidated Balance Sheets	27
	Consolidated Statements of Changes in Shareholder's Equity	29
	Baltimore Gas and Electric Company
	Statements of Operations and Comprehensive Income	30
	Statements of Cash Flows	31
	Balance Sheets	32
	Statements of Changes in Shareholder's Equity	34
	Pepco Holdings LLC
	Consolidated Statements of Operations and Comprehensive Income	35
	Consolidated Statements of Cash Flows	36
	Consolidated Balance Sheets	37
	Consolidated Statements of Changes in Equity	39



		Page No.
	Potomac Electric Power Company
	Statements of Operations and Comprehensive Income	40
	Statements of Cash Flows	41
	Balance Sheets	42
	Statements of Changes in Shareholder's Equity	44
	Delmarva Power & Light Company
	Statements of Operations and Comprehensive Income	45
	Statements of Cash Flows	46
	Balance Sheets	47
	Statements of Changes in Shareholder’s Equity	49
	Atlantic City Electric Company
	Consolidated Statements of Operations and Comprehensive Income	50
	Consolidated Statements of Cash Flows	51
	Consolidated Balance Sheets	52
	Consolidated Statements of Changes in Shareholder’s Equity	54
	Combined Notes to Consolidated Financial Statements	55
	1. Significant Accounting Policies	56
	2. Variable Interest Entities	58
	3. Mergers, Acquisitions and Dispositions	63
	4. Revenue from Contracts with Customers	64
	5. Leases	66
	6. Regulatory Matters	69
	7. Impairment of Long-Lived Assets	73
	8. Early Plant Retirements	73
	9. Fair Value of Financial Assets and Liabilities	76
	10. Derivative Financial Instruments	93
	11. Debt and Credit Agreements	103
	12. Income Taxes	105
	13. Nuclear Decommissioning	107
	14. Retirement Benefits	108
	15. Changes in Accumulated Other Comprehensive Income	110
	16. Commitments and Contingencies	113
	17. Supplemental Financial Information	120
	18. Segment Information	126



		Page No.
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	135
	Exelon Corporation	135
	Executive Overview	135
	Financial Results of Operations	136
	Significant 2019 Transactions and Developments	137
	Exelon's Strategy and Outlook for 2018 and Beyond	140
	Liquidity Considerations	141
	Other Key Business Drivers and Management Strategies	142
	Critical Accounting Policies and Estimates	147
	Results of Operations By Registrant	147
	Exelon Generation Company, LLC	148
	Commonwealth Edison Company	153
	PECO Energy Company	156
	Baltimore Gas and Electric Company	160
	Pepco Holdings LLC	163
	Potomac Electric Power Company	164
	Delmarva Power & Light Company	167
	Atlantic City Electric Company	171
	Liquidity and Capital Resources	174
	Contractual Obligations and Off-Balance Sheet Arrangements	180
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	181
ITEM 4.	CONTROLS AND PROCEDURES	187
PART II.	OTHER INFORMATION	188
ITEM 1.	LEGAL PROCEEDINGS	188
ITEM 1A.	RISK FACTORS	188
ITEM 4.	MINE SAFETY DISCLOSURES	188
ITEM 5.	OTHER INFORMATION	188
ITEM 6.	EXHIBITS	189
SIGNATURES		192
	Exelon Corporation	192
	Exelon Generation Company, LLC	193
	Commonwealth Edison Company	194
	PECO Energy Company	195
	Baltimore Gas and Electric Company	196
	Pepco Holdings LLC	197
	Potomac Electric Power Company	198
	Delmarva Power & Light Company	199
	Atlantic City Electric Company	200

Table of Contents



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
PCI		Potomac Capital Investment Corporation and its subsidiaries
Pepco Energy Services or PES		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

Table of Contents



GLOSSARY OF TERMS AND ABBREVIATIONS
Other Terms and Abbreviations
Note "—" of the 2018 Form 10-K		Reference to specific Combined Note to Consolidated Financial Statements within Exelon’s 2018 Annual Report on Form 10-K
AESO		Alberta Electric Systems Operator
AFUDC		Allowance for Funds Used During Construction
AMI		Advanced Metering Infrastructure
AOCI		Accumulated Other Comprehensive Income
ARC		Asset Retirement Cost
ARO		Asset Retirement Obligation
BGS		Basic Generation Service
CAISO		California Independent System Operator
CES		Clean Energy Standard
Clean Air Act		Clean Air Act of 1963, as amended
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		District of Columbia Public Service Commission
DOE		United States Department of Energy
DOEE		Department of Energy & Environment
DOJ		United States Department of Justice
DPSC		Delaware Public Service Commission
DSP		Default Service Provider
EDF		Electricite de France SA and its subsidiaries
EIMA		Energy Infrastructure Modernization Act (Illinois Senate Bill 1652 and Illinois House Bill 3036)
EmPower		A Maryland demand-side management program for Pepco and DPL
EPA		United States Environmental Protection Agency
EPSA		Electric Power Supply Association
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
GAAP		Generally Accepted Accounting Principles in the United States
GCR		Gas Cost Rate
GHG		Greenhouse Gas
GSA		Generation Supply Adjustment
IBEW		International Brotherhood of Electrical Workers
ICC		Illinois Commerce Commission
ICE		Intercontinental Exchange

Table of Contents



GLOSSARY OF TERMS AND ABBREVIATIONS
Other Terms and Abbreviations
Illinois EPA		Illinois Environmental Protection Agency
Illinois Settlement Legislation		Legislation enacted in 2007 affecting electric utilities in Illinois
IPA		Illinois Power Agency
IRC		Internal Revenue Code
IRS		Internal Revenue Service
ISO		Independent System Operator
ISO-NE		Independent System Operator New England Inc.
ISO-NY		Independent System Operator New York
LIBOR		London Interbank Offered Rate
MATS		U.S. EPA Mercury and Air Toxics Rule
MBR		Market Based Rates Incentive
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
Moody’s		Moody’s Investor Service
MOPR		Minimum Offer Price Rule
MW		Megawatt
NAAQS		National Ambient Air Quality Standards
NAV		Net Asset Value
NDT		Nuclear Decommissioning Trust
NEIL		Nuclear Electric Insurance Limited
NERC		North American Electric Reliability Corporation
NJBPU		New Jersey Board of Public Utilities
NLRB		National Labor Relations Board
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
NPDES		National Pollutant Discharge Elimination System
NRC		Nuclear Regulatory Commission
NSPS		New Source Performance Standards
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
Oyster Creek		Oyster Creek Generating Station
PA DEP		Pennsylvania Department of Environmental Protection
PAPUC		Pennsylvania Public Utility Commission
PGC		Purchased Gas Cost Clause
PJM		PJM Interconnection, LLC

Table of Contents



GLOSSARY OF TERMS AND ABBREVIATIONS
Other Terms and Abbreviations
POLR		Provider of Last Resort
POR		Purchase of Receivables
PPA		Power Purchase Agreement
Price-Anderson Act		Price-Anderson Nuclear Industries Indemnity Act of 1957
PRP		Potentially Responsible Parties
PSEG		Public Service Enterprise Group Incorporated
RCRA		Resource Conservation and Recovery Act of 1976, as amended
REC		Renewable Energy Credit which is issued for each megawatt hour of generation from a qualified renewable energy source
Regulatory Agreement Units		Nuclear generating units or portions thereof whose decommissioning-related activities are subject to contractual elimination under regulatory accounting
Rider		Reconcilable Surcharge Recovery Mechanism
RMC		Risk Management Committee
ROE		Return on equity
ROU		Right-of-use
RPS		Renewable Energy Portfolio Standards
RSSA		Reliability Support Services Agreement
RTO		Regional Transmission Organization
S&P		Standard & Poor’s Ratings Services
SEC		United States Securities and Exchange Commission
SERC		SERC Reliability Corporation (formerly Southeast Electric Reliability Council)
SNF		Spent Nuclear Fuel
SOS		Standard Offer Service
SPP		Southwest Power Pool
TCJA		Tax Cuts and Jobs Act
Transition Bond Charge		Revenue ACE receives, and pays to ACE Funding, to fund the principal and interest payments on Transition Bonds and related taxes, expenses and fees
Transition Bonds		Transition Bonds issued by ACE Funding
Upstream		Natural gas exploration and production activities
VIE		Variable Interest Entity
WECC		Western Electric Coordinating Council
ZEC		Zero Emission Credit, or Zero Emission Certificate
ZES		Zero Emission Standard

Table of Contents

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. 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 2018 Annual Report on Form 10-K in (a) ITEM 1A. Risk Factors, (b) ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) ITEM 8. Financial Statements and Supplementary Data: Note 22, Commitments and Contingencies; (2) this Quarterly Report on Form 10-Q in (a) Part II, Other Information, ITEM 1A. Risk Factors; (b) Part 1, Financial Information, ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) Part I, Financial Information, ITEM 1. Financial Statements: Note 16, Commitments and Contingencies; and (3) other factors discussed in filings with the SEC by the Registrants. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this 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.

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Table of Contents

EXELON CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)



	Three Months Ended March 31,
(In millions, except per share data)	2019			2018
Operating revenues
Competitive businesses revenues	$	4,979		$	5,113
Rate-regulated utility revenues	4,503			4,570
Revenues from alternative revenue programs	(5		)	10
Total operating revenues	9,477			9,693
Operating expenses
Competitive businesses purchased power and fuel	3,204			3,289
Rate-regulated utility purchased power and fuel	1,349			1,438
Operating and maintenance	2,189			2,384
Depreciation and amortization	1,075			1,091
Taxes other than income	445			446
Total operating expenses	8,262			8,648
Gain on sales of assets and businesses	3			56
Operating income	1,218			1,101
Other income and (deductions)
Interest expense, net	(397		)	(365		)
Interest expense to affiliates	(6		)	(6		)
Other, net	467			(28		)
Total other income and (deductions)	64			(399		)
Income before income taxes	1,282			702
Income taxes	310			59
Equity in losses of unconsolidated affiliates	(6		)	(7		)
Net income	966			636
Net income attributable to noncontrolling interests	59			51
Net income attributable to common shareholders	$	907		$	585
Comprehensive income, net of income taxes
Net income	$	966		$	636
Other comprehensive (loss) income, net of income taxes
Pension and non-pension postretirement benefit plans:
Prior service benefit reclassified to periodic benefit cost	(16		)	(17		)
Actuarial loss reclassified to periodic benefit cost	36			61
Pension and non-pension postretirement benefit plan valuation adjustment	(38		)	18
Unrealized gain on cash flow hedges	—			8
Unrealized (loss) gain on investments in unconsolidated affiliates	(2		)	1
Unrealized gain on foreign currency translation	2			1
Other comprehensive (loss) income	(18		)	72
Comprehensive income	948			708
Comprehensive income attributable to noncontrolling interests	58			52
Comprehensive income attributable to common shareholders	$	890		$	656

Average shares of common stock outstanding:
Basic	971			966
Assumed exercise and/or distributions of stock-based awards	1			2
Diluted^(a)	972			968

Earnings per average common share:
Basic	$	0.93		$	0.61
Diluted	$	0.93		$	0.60

__________


(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, 2019 and approximately 5 million for the three months ended March 31, 2018.

See the Combined Notes to Consolidated Financial Statements

Table of Contents

EXELON CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



	Three Months Ended March 31,
(In millions)	2019			2018
Cash flows from operating activities
Net income	$	966		$	636
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation, amortization and accretion, including nuclear fuel and energy contract amortization	1,460			1,501
Impairment of long-lived assets	7			—
Gain on sales of assets and businesses	—			(56		)
Deferred income taxes and amortization of investment tax credits	187			(14		)
Net fair value changes related to derivatives	31			259
Net realized and unrealized (gains) losses on NDT funds	(308		)	68
Other non-cash operating activities	127			240
Changes in assets and liabilities:
Accounts receivable	79			133
Inventories	128			167
Accounts payable and accrued expenses	(764		)	(451		)
Option premiums received (paid), net	6			(27		)
Collateral posted, net	(101		)	(214		)
Income taxes	141			86
Pension and non-pension postretirement benefit contributions	(328		)	(331		)
Other assets and liabilities	(587		)	(495		)
Net cash flows provided by operating activities	1,044			1,502
Cash flows from investing activities
Capital expenditures	(1,873		)	(1,880		)
Proceeds from NDT fund sales	3,713			1,189
Investment in NDT funds	(3,666		)	(1,248		)
Proceeds from sales of assets and businesses	8			79
Other investing activities	32			3
Net cash flows used in investing activities	(1,786		)	(1,857		)
Cash flows from financing activities
Changes in short-term borrowings	540			726
Proceeds from short-term borrowings with maturities greater than 90 days	—			1
Repayments on short-term borrowings with maturities greater than 90 days	—			(1		)
Issuance of long-term debt	402			1,130
Retirement of long-term debt	(352		)	(1,241		)
Dividends paid on common stock	(352		)	(333		)
Proceeds from employee stock plans	51			12
Other financing activities	(14		)	(30		)
Net cash flows provided by financing activities	275			264
Decrease in cash, cash equivalents and restricted cash	(467		)	(91		)
Cash, cash equivalents and restricted cash at beginning of period	1,781			1,190
Cash, cash equivalents and restricted cash at end of period	$	1,314		$	1,099

See the Combined Notes to Consolidated Financial Statements

Table of Contents

EXELON CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)



(In millions)	March 31, 2019		December 31, 2018
ASSETS
Current assets
Cash and cash equivalents	$	880	$	1,349
Restricted cash and cash equivalents	223		247
Accounts receivable, net
Customer	4,564		4,607
Other	1,062		1,256
Mark-to-market derivative assets	652		804
Unamortized energy contract assets	49		48
Inventories, net
Fossil fuel and emission allowances	179		334
Materials and supplies	1,380		1,351
Regulatory assets	1,191		1,222
Assets held for sale	890		904
Other	1,406		1,238
Total current assets	12,476		13,360
Property, plant and equipment, net	77,460		76,707
Deferred debits and other assets
Regulatory assets	8,222		8,237
Nuclear decommissioning trust funds	12,302		11,661
Investments	620		625
Goodwill	6,677		6,677
Mark-to-market derivative assets	454		452
Unamortized energy contract assets	365		372
Other	3,017		1,575
Total deferred debits and other assets	31,657		29,599
Total assets^(a)	$	121,593	$	119,666

See the Combined Notes to Consolidated Financial Statements

Table of Contents

EXELON CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)



(In millions)	March 31, 2019			December 31, 2018
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Short-term borrowings	$	1,254		$	714
Long-term debt due within one year	2,508			1,349
Accounts payable	3,327			3,800
Accrued expenses	1,725			2,112
Payables to affiliates	5			5
Regulatory liabilities	522			644
Mark-to-market derivative liabilities	345			475
Unamortized energy contract liabilities	151			149
Renewable energy credit obligation	348			344
Liabilities held for sale	799			777
Other	1,245			1,035
Total current liabilities	12,229			11,404
Long-term debt	32,960			34,075
Long-term debt to financing trusts	390			390
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits	11,642			11,330
Asset retirement obligations	9,967			9,679
Pension obligations	3,734			3,988
Non-pension postretirement benefit obligations	1,984			1,928
Spent nuclear fuel obligation	1,178			1,171
Regulatory liabilities	9,781			9,559
Mark-to-market derivative liabilities	434			479
Unamortized energy contract liabilities	432			463
Other	3,158			2,130
Total deferred credits and other liabilities	42,310			40,727
Total liabilities^(a)	87,889			86,596
Commitments and contingencies
Shareholders’ equity
Common stock (No par value, 2,000 shares authorized, 971 shares and 968 shares outstanding at March 31, 2019 and December 31, 2018, respectively)	19,171			19,116
Treasury stock, at cost (2 shares at March 31, 2019 and December 31, 2018)	(123		)	(123		)
Retained earnings	15,321			14,766
Accumulated other comprehensive loss, net	(3,012		)	(2,995		)
Total shareholders’ equity	31,357			30,764
Noncontrolling interests	2,347			2,306
Total equity	33,704			33,070
Total liabilities and shareholders’ equity	$	121,593		$	119,666

__________

(a)

Exelon’s consolidated assets include $9,546 million and $9,667 million at March 31, 2019 and December 31, 2018, respectively, of certain VIEs that can only be used to settle the liabilities of the VIE. Exelon’s consolidated liabilities include $3,572 million and $3,548 million at March 31, 2019 and December 31, 2018, respectively, of certain VIEs for which the VIE creditors do not have recourse to Exelon. See Note 2 — Variable Interest Entities for additional information.

See the Combined Notes to Consolidated Financial Statements

Table of Contents

EXELON CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)



	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, 2018	970,020	$	19,116		$	(123	)	$	14,766		$	(2,995	)	$	2,306		$	33,070
Net income	—	—			—			907			—			59			966
Long-term incentive plan activity	2,446	(3		)	—			—			—			—			(3		)
Employee stock purchase plan issuances	320	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 income, net of income taxes	—	—			—			—			(17		)	(1		)	(18		)
Balance, March 31, 2019	972,786	$	19,171		$	(123	)	$	15,321		$	(3,012	)	$	2,347		$	33,704



	Three Months Ended March 31, 2018
(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, 2017	965,168	$	18,964		$	(123	)	$	14,081		$	(3,026	)	$	2,291		$	32,187
Net income	—	—			—			585			—			51			636
Long-term incentive plan activity	1,685	(3		)	—			—			—			—			(3		)
Employee stock purchase plan issuances	361	12			—			—			—			—			12
Changes in equity of noncontrolling interests	—	—			—			—			—			(9		)	(9		)
Common stock dividends ($0.35/common share)	—	—			—			(334		)	—			—			(334		)
Other comprehensive income, net of income taxes	—	—			—			—			71			1			72
Impact of adoption of Recognition and Measurement of Financial Assets and Liabilities standard	—	—			—			14			(10		)	—			4
Balance, March 31, 2018	967,214	$	18,973		$	(123	)	$	14,346		$	(2,965	)	$	2,334		$	32,565

See the Combined Notes to Consolidated Financial Statements

Table of Contents

EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)



	Three Months Ended March 31,
(In millions)	2019			2018
Operating revenues
Operating revenues	$	4,979		$	5,114
Operating revenues from affiliates	317			398
Total operating revenues	5,296			5,512
Operating expenses
Purchased power and fuel	3,204			3,289
Purchased power and fuel from affiliates	1			4
Operating and maintenance	1,068			1,178
Operating and maintenance from affiliates	150			161
Depreciation and amortization	405			448
Taxes other than income	135			138
Total operating expenses	4,963			5,218
Gain on sales of assets and businesses	—			53
Operating income	333			347
Other income and (deductions)
Interest expense, net	(102		)	(91		)
Interest expense to affiliates	(9		)	(10		)
Other, net	430			(44		)
Total other income and (deductions)	319			(145		)
Income before income taxes	652			202
Income taxes	224			9
Equity in losses of unconsolidated affiliates	(6		)	(7		)
Net income	422			186
Net income attributable to noncontrolling interests	59			50
Net income attributable to membership interest	$	363		$	136
Comprehensive income, net of income taxes
Net income	$	422		$	186
Other comprehensive income (loss), net of income taxes
Unrealized gain on cash flow hedges	1			7
Unrealized (loss) gain on investments in unconsolidated affiliates	(2		)	1
Unrealized gain (loss) on foreign currency translation	2			(1		)
Other comprehensive income	1			7
Comprehensive income	423			193
Comprehensive income attributable to noncontrolling interests	58			51
Comprehensive income attributable to membership interest	$	365		$	142

See the Combined Notes to Consolidated Financial Statements

Table of Contents

EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



	Three Months Ended March 31,
(In millions)	2019			2018
Cash flows from operating activities
Net income	$	422		$	186
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation, amortization and accretion, including nuclear fuel and energy contract amortization	789			858
Impairment of long-lived assets	7			—
Gain on sales of assets and businesses	—			(53		)
Deferred income taxes and amortization of investment tax credits	108			(68		)
Net fair value changes related to derivatives	33			264
Net realized and unrealized (gains) losses on NDT funds	(308		)	68
Other non-cash operating activities	(90		)	45
Changes in assets and liabilities:
Accounts receivable	197			194
Receivables from and payables to affiliates, net	(5		)	(15		)
Inventories	103			122
Accounts payable and accrued expenses	(411		)	(317		)
Option premiums received (paid), net	6			(27		)
Collateral posted, net	(87		)	(214		)
Income taxes	146			79
Pension and non-pension postretirement benefit contributions	(141		)	(125		)
Other assets and liabilities	(187		)	(142		)
Net cash flows provided by operating activities	582			855
Cash flows from investing activities
Capital expenditures	(511		)	(628		)
Proceeds from NDT fund sales	3,713			1,189
Investment in NDT funds	(3,666		)	(1,248		)
Proceeds from sales of assets and businesses	8			79
Other investing activities	23			(7		)
Net cash flows used in investing activities	(433		)	(615		)
Cash flows from financing activities
Changes in short-term borrowings	—			165
Proceeds from short-term borrowings with maturities greater than 90 days	—			1
Repayments of short-term borrowings with maturities greater than 90 days	—			(1		)
Issuance of long-term debt	2			4
Retirement of long-term debt	(47		)	(29		)
Changes in Exelon intercompany money pool	(100		)	—
Distributions to member	(225		)	(188		)
Other financing activities	(6		)	(9		)
Net cash flows used in financing activities	(376		)	(57		)
(Decrease) increase in cash, cash equivalents and restricted cash	(227		)	183
Cash, cash equivalents and restricted cash at beginning of period	903			554
Cash, cash equivalents and restricted cash at end of period	$	676		$	737

See the Combined Notes to Consolidated Financial Statements

Table of Contents

EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)



(In millions)	March 31, 2019		December 31, 2018
ASSETS
Current assets
Cash and cash equivalents	$	537	$	750
Restricted cash and cash equivalents	139		153
Accounts receivable, net
Customer	2,800		2,941
Other	367		562
Mark-to-market derivative assets	652		804
Receivables from affiliates	163		173
Unamortized energy contract assets	49		49
Inventories, net
Fossil fuel and emission allowances	146		251
Materials and supplies	965		963
Assets held for sale	890		904
Other	1,013		883
Total current assets	7,721		8,433
Property, plant and equipment, net	24,034		23,981
Deferred debits and other assets
Nuclear decommissioning trust funds	12,302		11,661
Investments	404		414
Goodwill	47		47
Mark-to-market derivative assets	454		452
Prepaid pension asset	1,525		1,421
Unamortized energy contract assets	364		371
Deferred income taxes	18		21
Other	1,813		755
Total deferred debits and other assets	16,927		15,142
Total assets^(a)	$	48,682	$	47,556

See the Combined Notes to Consolidated Financial Statements

Table of Contents

EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)



(In millions)	March 31, 2019			December 31, 2018
LIABILITIES AND EQUITY
Current liabilities
Long-term debt due within one year	$	2,365		$	906
Accounts payable	1,566			1,847
Accrued expenses	675			898
Payables to affiliates	136			139
Borrowings from Exelon intercompany money pool	—			100
Mark-to-market derivative liabilities	318			449
Unamortized energy contract liabilities	28			31
Renewable energy credit obligation	348			343
Liabilities held for sale	799			777
Other	425			279
Total current liabilities	6,660			5,769
Long-term debt	5,487			6,989
Long-term debt to affiliates	895			898
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits	3,502			3,383
Asset retirement obligations	9,737			9,450
Non-pension postretirement benefit obligations	894			900
Spent nuclear fuel obligation	1,178			1,171
Payables to affiliates	2,870			2,606
Mark-to-market derivative liabilities	219			252
Unamortized energy contract liabilities	16			20
Other	1,528			610
Total deferred credits and other liabilities	19,944			18,392
Total liabilities^(a)	32,986			32,048
Commitments and contingencies
Equity
Member’s equity
Membership interest	9,525			9,518
Undistributed earnings	3,862			3,724
Accumulated other comprehensive loss, net	(36		)	(38		)
Total member’s equity	13,351			13,204
Noncontrolling interests	2,345			2,304
Total equity	15,696			15,508
Total liabilities and equity	$	48,682		$	47,556

__________

(a)

Generation’s consolidated assets include $9,515 million and $9,634 million at March 31, 2019 and December 31, 2018, respectively, of certain VIEs that can only be used to settle the liabilities of the VIE. Generation’s consolidated liabilities include $3,508 million and $3,480 million at March 31, 2019 and December 31, 2018, respectively, of certain VIEs for which the VIE creditors do not have recourse to Generation. See Note 2 — Variable Interest Entities for additional information.

See the Combined Notes to Consolidated Financial Statements

Table of Contents

EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)



	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 interests	7		—			—			—			7
Distributions to member	—		(225		)	—			—			(225		)
Other comprehensive income (loss), net of income taxes	—		—			2			(1		)	1
Balance, March 31, 2019	$	9,525	$	3,862		$	(36	)	$	2,345		$	15,696



	Three Months Ended March 31, 2018
	Member’s Equity
(In millions)	Membership Interest		Undistributed Earnings			Accumulated Other Comprehensive Loss, net			Noncontrolling Interests			Total Equity
Balance, December 31, 2017	$	9,357	$	4,349		$	(37	)	$	2,290		$	15,959
Net income	—		136			—			50			186
Changes in equity of noncontrolling interests	—		—			—			(9		)	(9		)
Distributions to member	—		(188		)	—			—			(188		)
Other comprehensive income, net of income taxes	—		—			6			1			7
Impact of adoption of Recognition and Measurement of Financial Assets and Liabilities standard	—		6			(3		)	—			3
Balance, March 31, 2018	$	9,357	$	4,303		$	(34	)	$	2,332		$	15,958

See the Combined Notes to Consolidated Financial Statements

Table of Contents

COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)



	Three Months Ended March 31,
(In millions)	2019			2018
Operating revenues
Electric operating revenues	$	1,432		$	1,493
Revenues from alternative revenue programs	(28		)	5
Operating revenues from affiliates	4			14
Total operating revenues	1,408			1,512
Operating expenses
Purchased power	388			411
Purchased power from affiliate	97			194
Operating and maintenance	259			253
Operating and maintenance from affiliate	62			60
Depreciation and amortization	251			228
Taxes other than income	78			77
Total operating expenses	1,135			1,223
Gain on sales of assets	3			3
Operating income	276			292
Other income and (deductions)
Interest expense, net	(84		)	(86		)
Interest expense to affiliates	(3		)	(3		)
Other, net	8			8
Total other income and (deductions)	(79		)	(81		)
Income before income taxes	197			211
Income taxes	40			46
Net income	$	157		$	165
Comprehensive income	$	157		$	165

See the Combined Notes to Consolidated Financial Statements

Table of Contents

COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



	Three Months Ended March 31,
(In millions)	2019			2018
Cash flows from operating activities
Net income	$	157		$	165
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization	251			228
Deferred income taxes and amortization of investment tax credits	34			50
Other non-cash operating activities	56			46
Changes in assets and liabilities:
Accounts receivable	14			39
Receivables from and payables to affiliates, net	(34		)	(19		)
Inventories	(3		)	5
Accounts payable and accrued expenses	(188		)	(158		)
Collateral posted, net	(13		)	(3		)
Income taxes	5			(5		)
Pension and non-pension postretirement benefit contributions	(67		)	(38		)
Other assets and liabilities	(121		)	(176		)
Net cash flows provided by operating activities	91			134
Cash flows from investing activities
Capital expenditures	(503		)	(531		)
Other investing activities	11			8
Net cash flows used in investing activities	(492		)	(523		)
Cash flows from financing activities
Changes in short-term borrowings	322			317
Issuance of long-term debt	400			800
Retirement of long-term debt	(300		)	(700		)
Contributions from parent	63			113
Dividends paid on common stock	(127		)	(114		)
Other financing activities	(9		)	(9		)
Net cash flows provided by financing activities	349			407
(Decrease) increase in cash, cash equivalents and restricted cash	(52		)	18
Cash, cash equivalents and restricted cash at beginning of period	330			144
Cash, cash equivalents and restricted cash at end of period	$	278		$	162

See the Combined Notes to Consolidated Financial Statements

Table of Contents

COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)



(In millions)	March 31, 2019		December 31, 2018
ASSETS
Current assets
Cash and cash equivalents	$	68	$	135
Restricted cash	17		29
Accounts receivable, net
Customer	539		539
Other	336		320
Receivables from affiliates	21		20
Inventories, net	152		148
Regulatory assets	285		293
Other	89		86
Total current assets	1,507		1,570
Property, plant and equipment, net	22,274		22,058
Deferred debits and other assets
Regulatory assets	1,338		1,307
Investments	6		6
Goodwill	2,625		2,625
Receivables from affiliates	2,412		2,217
Prepaid pension asset	1,073		1,035
Other	347		395
Total deferred debits and other assets	7,801		7,585
Total assets	$	31,582	$	31,213

See the Combined Notes to Consolidated Financial Statements

Table of Contents

COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)



(In millions)	March 31, 2019			December 31, 2018
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Short-term borrowings	$	322		$	—
Long-term debt due within one year	—			300
Accounts payable	491			607
Accrued expenses	229			373
Payables to affiliates	74			119
Customer deposits	112			111
Regulatory liabilities	241			293
Mark-to-market derivative liability	27			26
Other	98			96
Total current liabilities	1,594			1,925
Long-term debt	8,194			7,801
Long-term debt to financing trust	205			205
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits	3,870			3,813
Asset retirement obligations	119			118
Non-pension postretirement benefits obligations	196			201
Regulatory liabilities	6,269			6,050
Mark-to-market derivative liability	213			223
Other	582			630
Total deferred credits and other liabilities	11,249			11,035
Total liabilities	21,242			20,966
Commitments and contingencies
Shareholders’ equity
Common stock	1,588			1,588
Other paid-in capital	7,385			7,322
Retained deficit unappropriated	(1,639		)	(1,639		)
Retained earnings appropriated	3,006			2,976
Total shareholders’ equity	10,340			10,247
Total liabilities and shareholders’ equity	$	31,582		$	31,213

See the Combined Notes to Consolidated Financial Statements

Table of Contents

COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)



	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


	Three Months Ended March 31, 2018
(In millions)	Common Stock		Other Paid-In Capital		Retained Deficit Unappropriated			Retained Earnings Appropriated			Total Shareholders’ Equity
Balance, December 31, 2017	$	1,588	$	6,822	$	(1,639	)	$	2,771		$	9,542
Net income	—		—		165			—			165
Appropriation of retained earnings for future dividends	—		—		(165		)	165			—
Common stock dividends	—		—		—			(114		)	(114		)
Contributions from parent	—		113		—			—			113
Balance, March 31, 2018	$	1,588	$	6,935	$	(1,639	)	$	2,822		$	9,706

See the Combined Notes to Consolidated Financial Statements

Table of Contents

PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)



	Three Months Ended March 31,
(In millions)	2019			2018
Operating revenues
Electric operating revenues	$	622		$	633
Natural gas operating revenues	280			232
Revenues from alternative revenue programs	(3		)	(1		)
Operating revenues from affiliates	1			2
Total operating revenues	900			866
Operating expenses
Purchased power	152			199
Purchased fuel	135			98
Purchased power from affiliate	44			36
Operating and maintenance	187			233
Operating and maintenance from affiliates	38			42
Depreciation and amortization	81			75
Taxes other than income	41			41
Total operating expenses	678			724
Operating income	222			142
Other income and (deductions)
Interest expense, net	(30		)	(30		)
Interest expense to affiliates	(3		)	(3		)
Other, net	4			2
Total other income and (deductions)	(29		)	(31		)
Income before income taxes	193			111
Income taxes	25			(2		)
Net income	$	168		$	113
Comprehensive income	$	168		$	113

See the Combined Notes to Consolidated Financial Statements

Table of Contents

PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



	Three Months Ended March 31,
(In millions)	2019			2018
Cash flows from operating activities
Net income	$	168		$	113
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization	81			75
Deferred income taxes and amortization of investment tax credits	5			(4		)
Other non-cash operating activities	16			21
Changes in assets and liabilities:
Accounts receivable	(86		)	(51		)
Receivables from and payables to affiliates, net	7			7
Inventories	23			12
Accounts payable and accrued expenses	(13		)	6
Income taxes	20			5
Pension and non-pension postretirement benefit contributions	(25		)	(24		)
Other assets and liabilities	(119		)	(141		)
Net cash flows provided by operating activities	77			19
Cash flows from investing activities
Capital expenditures	(222		)	(217		)
Other investing activities	2			2
Net cash flows used in investing activities	(220		)	(215		)
Cash flows from financing activities
Changes in short-term borrowings	—			220
Issuance of long-term debt	—			325
Retirement of long-term debt	—			(500		)
Changes in Exelon intercompany money pool	—			194
Contributions from parent	145			—
Dividends paid on common stock	(90		)	(287		)
Other financing activities	—			(5		)
Net cash flows provided by (used in) financing activities	55			(53		)
Decrease in cash, cash equivalents and restricted cash	(88		)	(249		)
Cash, cash equivalents and restricted cash at beginning of period	135			275
Cash, cash equivalents and restricted cash at end of period	$	47		$	26

See the Combined Notes to Consolidated Financial Statements

Table of Contents

PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)



(In millions)	March 31, 2019		December 31, 2018
ASSETS
Current assets
Cash and cash equivalents	$	41	$	130
Restricted cash and cash equivalents	6		5
Accounts receivable, net
Customer	394		321
Other	148		151
Inventories, net
Fossil fuel	15		38
Materials and supplies	37		37
Prepaid utility taxes	100		—
Regulatory assets	54		81
Other	21		19
Total current assets	816		782
Property, plant and equipment, net	8,766		8,610
Deferred debits and other assets
Regulatory assets	491		460
Investments	25		25
Receivable from affiliates	457		389
Prepaid pension asset	372		349
Other	29		27
Total deferred debits and other assets	1,374		1,250
Total assets	$	10,956	$	10,642

See the Combined Notes to Consolidated Financial Statements

Table of Contents

PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)



(In millions)	March 31, 2019		December 31, 2018
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Accounts payable	379		370
Accrued expenses	119		113
Payables to affiliates	66		59
Customer deposits	68		68
Regulatory liabilities	123		175
Other	32		24
Total current liabilities	787		809
Long-term debt	3,084		3,084
Long-term debt to financing trusts	184		184
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits	1,974		1,933
Asset retirement obligations	27		27
Non-pension postretirement benefits obligations	288		288
Regulatory liabilities	488		421
Other	81		76
Total deferred credits and other liabilities	2,858		2,745
Total liabilities	6,913		6,822
Commitments and contingencies
Shareholder’s equity
Common stock	2,723		2,578
Retained earnings	1,320		1,242
Total shareholder’s equity	4,043		3,820
Total liabilities and shareholder's equity	$	10,956	$	10,642

See the Combined Notes to Consolidated Financial Statements

Table of Contents

PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY

(Unaudited)



	Three months ended March 31, 2019
(In millions)	Common Stock		Retained Earnings			Accumulated Other Comprehensive Income, net			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 parent	145		—			—			145
Balance, March 31, 2019	$	2,723	$	1,320		$	—		$	4,043

	Three months ended March 31, 2018
(In millions)	Common Stock		Retained Earnings			Accumulated Other Comprehensive Income, net			Total Shareholder's Equity
Balance, December 31, 2017	$	2,489	$	1,087		$	1		$	3,577
Net income	—		113			—			113
Common stock dividends	—		(287		)	—			(287		)
Impact of adoption of Recognition and Measurement of Financial Assets and Liabilities Standard	—		1			(1		)	—
Balance, March 31, 2018	$	2,489	$	914		$	—		$	3,403

See the Combined Notes to Consolidated Financial Statements

Table of Contents

BALTIMORE GAS AND ELECTRIC COMPANY

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)



	Three Months Ended March 31,
(In millions)	2019			2018
Operating revenues
Electric operating revenues	$	652		$	654
Natural gas operating revenues	308			330
Revenues from alternative revenue programs	10			(13		)
Operating revenues from affiliates	6			6
Total operating revenues	976			977
Operating expenses
Purchased power	190			192
Purchased fuel	95			123
Purchased power from affiliate	75			65
Operating and maintenance	153			184
Operating and maintenance from affiliates	39			37
Depreciation and amortization	136			134
Taxes other than income	68			65
Total operating expenses	756			800
Operating income	220			177
Other income and (deductions)
Interest expense, net	(29		)	(25		)
Other, net	5			4
Total other income and (deductions)	(24		)	(21		)
Income before income taxes	196			156
Income taxes	36			28
Net income	$	160		$	128
Comprehensive income	$	160		$	128

See the Combined Notes to Consolidated Financial Statements

Table of Contents

BALTIMORE GAS AND ELECTRIC COMPANY

STATEMENTS OF CASH FLOWS

(Unaudited)



	Three Months Ended March 31,
(In millions)	2019			2018
Cash flows from operating activities
Net income	$	160		$	128
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization	136			134
Deferred income taxes and amortization of investment tax credits	28			22
Other non-cash operating activities	27			20
Changes in assets and liabilities:
Accounts receivable	(39		)	(32		)
Receivables from and payables to affiliates, net	(10		)	—
Inventories	17			20
Accounts payable and accrued expenses	(27		)	(9		)
Collateral posted, net	(1		)	—
Income taxes	8			14
Pension and non-pension postretirement benefit contributions	(40		)	(45		)
Other assets and liabilities	(14		)	61
Net cash flows provided by operating activities	245			313
Cash flows from investing activities
Capital expenditures	(258		)	(224		)
Other investing activities	1			1
Net cash flows used in investing activities	(257		)	(223		)
Cash flows from financing activities
Changes in short-term borrowings	71			(32		)
Dividends paid on common stock	(56		)	(52		)
Net cash flows provided by (used in) financing activities	15			(84		)
Increase in cash, cash equivalents and restricted cash	3			6
Cash, cash equivalents and restricted cash at beginning of period	13			18
Cash, cash equivalents and restricted cash at end of period	$	16		$	24

See the Combined Notes to Consolidated Financial Statements

Table of Contents

BALTIMORE GAS AND ELECTRIC COMPANY

BALANCE SHEETS

(Unaudited)



(In millions)	March 31, 2019		December 31, 2018
ASSETS
Current assets
Cash and cash equivalents	$	12	$	7
Restricted cash and cash equivalents	4		6
Accounts receivable, net
Customer	385		353
Other	89		90
Receivables from affiliates	—		1
Inventories, net
Fossil fuel	16		36
Materials and supplies	42		39
Prepaid utility taxes	38		74
Regulatory assets	161		177
Other	6		3
Total current assets	753		786
Property, plant and equipment, net	8,408		8,243
Deferred debits and other assets
Regulatory assets	395		398
Investments	5		5
Prepaid pension asset	301		279
Other	105		5
Total deferred debits and other assets	806		687
Total assets	$	9,967	$	9,716

See the Combined Notes to Consolidated Financial Statements

Table of Contents

BALTIMORE GAS AND ELECTRIC COMPANY

BALANCE SHEETS

(Unaudited)



(In millions)	March 31, 2019		December 31, 2018
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Short-term borrowings	$	106	$	35
Accounts payable	291		295
Accrued expenses	142		155
Payables to affiliates	54		65
Customer deposits	120		120
Regulatory liabilities	67		77
Other	54		27
Total current liabilities	834		774
Long-term debt	2,876		2,876
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits	1,275		1,222
Asset retirement obligations	24		24
Non-pension postretirement benefits obligations	198		201
Regulatory liabilities	1,172		1,192
Other	130		73
Total deferred credits and other liabilities	2,799		2,712
Total liabilities	6,509		6,362
Commitments and contingencies
Shareholders’ equity
Common stock	1,714		1,714
Retained earnings	1,744		1,640
Total shareholders' equity	3,458		3,354
Total liabilities and shareholders’ equity	$	9,967	$	9,716

See the Combined Notes to Consolidated Financial Statements

Table of Contents

BALTIMORE GAS AND ELECTRIC COMPANY

STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY

(Unaudited)



	Three Months Ended March 31, 2019
(In millions)	Common Stock		Retained Earnings			Total Shareholders’ 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

	Three Months Ended March 31, 2018
(In millions)	Common Stock		Retained Earnings			Total Shareholders’ Equity
Balance, December 31, 2017	$	1,605	$	1,536		$	3,141
Net income	—		128			128
Common stock dividends	—		(52		)	(52		)
Balance, March 31, 2018	$	1,605	$	1,612		$	3,217

See the Combined Notes to Consolidated Financial Statements

Table of Contents

PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)



	Three Months Ended March 31,
(In millions)	2019		2018
Operating revenues
Electric operating revenues	$	1,139	$	1,151
Natural gas operating revenues	71		78
Revenues from alternative revenue programs	15		18
Operating revenues from affiliates	3		4
Total operating revenues	1,228		1,251
Operating expenses
Purchased power	355		374