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 September 30, 2022

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
001-01839						COMMONWEALTH EDISON COMPANY						36-0938600
						(an Illinois corporation) 10 South Dearborn Street Chicago, Illinois 60603-2300 (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 20068-0001 (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 20068-001 (202) 872-2000
001-01405						DELMARVA POWER & LIGHT COMPANY						51-0084283
						(a Delaware and Virginia corporation) 500 North Wakefield Drive Newark, Delaware 19702-5440 (202) 872-2000
001-03559						ATLANTIC CITY ELECTRIC COMPANY						21-0398280
						(a New Jersey corporation) 500 North Wakefield Drive Newark, Delaware 19702-5440 (202) 872-2000

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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 Corporation

Large Accelerated Filer

x

Accelerated Filer

☐

Non-accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

Commonwealth Edison Company

Large Accelerated Filer

☐

Accelerated Filer

☐

Non-accelerated Filer

x

Smaller Reporting Company

☐

Emerging Growth Company

☐

PECO Energy Company

Large Accelerated Filer

☐

Accelerated Filer

☐

Non-accelerated Filer

x

Smaller Reporting Company

☐

Emerging Growth Company

☐

Baltimore Gas and Electric Company

Large Accelerated Filer

☐

Accelerated Filer

☐

Non-accelerated Filer

x

Smaller Reporting Company

☐

Emerging Growth Company

☐

Pepco Holdings LLC

Large Accelerated Filer

☐

Accelerated Filer

☐

Non-accelerated Filer

x

Smaller Reporting Company

☐

Emerging Growth Company

☐

Potomac Electric Power Company

Large Accelerated Filer

☐

Accelerated Filer

☐

Non-accelerated Filer

x

Smaller Reporting Company

☐

Emerging Growth Company

☐

Delmarva Power & Light Company

Large Accelerated Filer

☐

Accelerated Filer

☐

Non-accelerated Filer

x

Smaller Reporting Company

☐

Emerging Growth Company

☐

Atlantic City Electric Company

Large Accelerated Filer

☐

Accelerated Filer

☐

Non-accelerated Filer

x

Smaller Reporting Company

☐

Emerging 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 September 30, 2022 was:

Exelon Corporation Common Stock, without par value			993,742,030
Commonwealth Edison Company Common Stock, $12.50 par value			127,021,394
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

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TABLE OF CONTENTS

						Page No.
GLOSSARY OF TERMS AND ABBREVIATIONS						4
FILING FORMAT						7
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION						7
WHERE TO FIND MORE INFORMATION						7
PART I.			FINANCIAL INFORMATION			8
ITEM 1.			FINANCIAL STATEMENTS			8
			Exelon Corporation
			Consolidated Statements of Operations and Comprehensive Income			9
			Consolidated Statements of Cash Flows			10
			Consolidated Balance Sheets			11
			Consolidated Statements of Changes in Shareholders’ Equity			13
			Commonwealth Edison Company
			Consolidated Statements of Operations and Comprehensive Income			15
			Consolidated Statements of Cash Flows			16
			Consolidated Balance Sheets			17
			Consolidated Statements of Changes in Shareholders' Equity			19
			PECO Energy Company
			Consolidated Statements of Operations and Comprehensive Income			20
			Consolidated Statements of Cash Flows			21
			Consolidated Balance Sheets			22
			Consolidated Statements of Changes in Shareholder's Equity			24
			Baltimore Gas and Electric Company
			Statements of Operations and Comprehensive Income			25
			Statements of Cash Flows			26
			Balance Sheets			27
			Statements of Changes in Shareholder's Equity			29
			Pepco Holdings LLC
			Consolidated Statements of Operations and Comprehensive Income			30
			Consolidated Statements of Cash Flows			31
			Consolidated Balance Sheets			32
			Consolidated Statements of Changes in Member's Equity			34

1

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						Page No.
			Potomac Electric Power Company
			Statements of Operations and Comprehensive Income			35
			Statements of Cash Flows			36
			Balance Sheets			37
			Statements of Changes in Shareholder's Equity			39
			Delmarva Power & Light Company
			Statements of Operations and Comprehensive Income			40
			Statements of Cash Flows			41
			Balance Sheets			42
			Statements of Changes in Shareholder’s Equity			44
			Atlantic City Electric Company
			Consolidated Statements of Operations and Comprehensive Income			45
			Consolidated Statements of Cash Flows			46
			Consolidated Balance Sheets			47
			Consolidated Statements of Changes in Shareholder’s Equity			49
			Combined Notes to Consolidated Financial Statements
			1. Significant Accounting Policies			50
			2. Discontinued Operations			51
			3. Regulatory Matters			56
			4. Revenue from Contracts with Customers			61
			5. Segment Information			62
			6. Accounts Receivable			72
			7. Asset Impairments			74
			8. Income Taxes			75
			9. Retirement Benefits			78
			10. Derivative Financial Instruments			82
			11. Debt and Credit Agreements			84
			12. Fair Value of Financial Assets and Liabilities			88
			13. Commitments and Contingencies			94
			14. Shareholders' Equity			101
			15. Changes in Accumulated Other Comprehensive Income			102
			16. Supplemental Financial Information			103
			17. Related Party Transactions			107

2

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						Page No.
ITEM 2.			MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			111
			Exelon Corporation			111
			Executive Overview			111
			Financial Results of Operations			111
			Significant 2022 Transactions and Developments			115
			Other Key Business Drivers and Management Strategies			118
			Critical Accounting Policies and Estimates			118
			Results of Operations By Registrant			119
			Commonwealth Edison Company			119
			PECO Energy Company			122
			Baltimore Gas and Electric Company			126
			Pepco Holdings LLC			129
			Potomac Electric Power Company			130
			Delmarva Power & Light Company			133
			Atlantic City Electric Company			137
			Liquidity and Capital Resources			141
ITEM 3.			QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			149
ITEM 4.			CONTROLS AND PROCEDURES			150
PART II.			OTHER INFORMATION			150
ITEM 1.			LEGAL PROCEEDINGS			150
ITEM 1A.			RISK FACTORS			150
ITEM 5.			OTHER INFORMATION			151
ITEM 6.			EXHIBITS			152
SIGNATURES						154
			Exelon Corporation			154
			Commonwealth Edison Company			155
			PECO Energy Company			156
			Baltimore Gas and Electric Company			157
			Pepco Holdings LLC			158
			Potomac Electric Power Company			159
			Delmarva Power & Light Company			160
			Atlantic City Electric Company			161

3

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Table of Contents

GLOSSARY OF TERMS AND ABBREVIATIONS
Exelon Corporation and Related Entities
Exelon						Exelon Corporation
ComEd						Commonwealth Edison Company
PECO						PECO Energy Company
BGE						Baltimore Gas and Electric Company
Pepco Holdings or PHI						Pepco Holdings LLC
Pepco						Potomac Electric Power Company
DPL						Delmarva Power & Light Company
ACE						Atlantic City Electric Company
Registrants						Exelon, ComEd, PECO, BGE, PHI, Pepco, DPL, and ACE, collectively
Utility Registrants						ComEd, PECO, BGE, Pepco, DPL, and ACE, collectively
BSC						Exelon Business Services Company, LLC
Exelon Corporate						Exelon in its corporate capacity as a holding company
PCI						Potomac Capital Investment Corporation and its subsidiaries
PECO Trust III						PECO Energy Capital Trust III
PECO Trust IV						PECO Energy Capital Trust IV
PHI Corporate						PHI in its corporate capacity as a holding company
PHISCO						PHI Service Company
Former Related Entities
Constellation						Constellation Energy Corporation
Generation						Constellation Energy Generation, LLC (formerly Exelon Generation Company, LLC, a subsidiary of Exelon prior to separation on February 1, 2022)

4

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Table of Contents

GLOSSARY OF TERMS AND ABBREVIATIONS
Other Terms and Abbreviations
2021 Form 10-K						The Registrants' Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 25, 2022
2021 Recast Form 10-K						The Registrants' Current Report on Form 8-K filed with the SEC on June 30, 2022 to recast Exelon's consolidated financial statements and certain other financial information originally included in the 2021 Form 10-K
Note - of the 2021 Recast Form 10-K						Reference to specific Combined Note to Consolidated Financial Statements in the 2021 Recast Form 10-K
AEC						Alternative Energy Credit that is issued for each megawatt hour of generation from a qualified alternative energy source
AFUDC						Allowance for Funds Used During Construction
AMI						Advanced Metering Infrastructure
AOCI						Accumulated Other Comprehensive Income (Loss)
ARO						Asset Retirement Obligation
BGS						Basic Generation Service
CEJA (formerly Clean Energy Law in the Exelon 2021 Form 10-K)						Climate and Equitable Jobs Act; Illinois Public Act 102-0662 signed into law on September 15, 2021
CERCLA						Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended
CIP						Conservation Incentive Program
CMC						Carbon Mitigation Credit
CODM						Chief Operating Decision Maker(s)
DC PLUG						District of Columbia Power Line Undergrounding Initiative
DCPSC						Public Service Commission of the District of Columbia
DEPSC						Delaware Public Service Commission
DOEE						District of Columbia Department of Energy & Environment
DPP						Deferred Purchase Price
DSIC						Distribution System Improvement Charge
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
ERISA						Employee Retirement Income Security Act of 1974, as amended
ETAC						Energy Transition Assistance Charge
FEJA						Illinois Public Act 99-0906 or Future Energy Jobs Act
FERC						Federal Energy Regulatory Commission
GAAP						Generally Accepted Accounting Principles in the United States
GCR						Gas Cost Rate
GSA						Generation Supply Adjustment
GWh						Gigawatt hour
ICC						Illinois Commerce Commission
Illinois Settlement Legislation						Legislation enacted in 2007 affecting electric utilities in Illinois
IPA						Illinois Power Agency
IRC						Internal Revenue Code
IRS						Internal Revenue Service
LIBOR						London Interbank Offered Rate
MDPSC						Maryland Public Service Commission
MGP						Manufactured Gas Plant

5

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Table of Contents

GLOSSARY OF TERMS AND ABBREVIATIONS
Other Terms and Abbreviations
mmcf						Million Cubic Feet
MW						Megawatt
MWh						Megawatt hour
N/A						Not applicable
NDT						Nuclear Decommissioning Trust
NJBPU						New Jersey Board of Public Utilities
NPNS						Normal Purchase Normal Sale scope exception
NPS						National Park Service
OCI						Other Comprehensive Income
OPEB						Other Postretirement Employee Benefits
PAPUC						Pennsylvania Public Utility Commission
PGC						Purchased Gas Cost Clause
PJM						PJM Interconnection, LLC
POLR						Provider of Last Resort
PPA						Power Purchase Agreement
PP&E						Property, plant, and equipment
PRP						Potentially Responsible Parties
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
RFP						Request for Proposal
Rider						Reconcilable Surcharge Recovery Mechanism
ROE						Return on equity
ROU						Right-of-use
RPS						Renewable Energy Portfolio Standards
RTO						Regional Transmission Organization
SEC						United States Securities and Exchange Commission
SOFR						Secured Overnight Financing Rate
SOS						Standard Offer Service
STRIDE						Maryland Strategic Infrastructure Development and Enhancement Program
TCJA						Tax Cuts and Jobs Act
Transition Bonds						Transition Bonds issued by Atlantic City Electric Transition Funding LLC
ZEC						Zero Emission Credit or Zero Emission Certificate

6

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Table of Contents

FILING FORMAT

This combined Form 10-Q is being filed separately by Exelon Corporation, 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. Words such as “could,” “may,” “expects,” “anticipates,” “will,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “predicts,” "should," 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 2021 Form 10-K in Part I, ITEM 1A. Risk Factors; (2) the 2021 Recast Form 10-K in (a) Part II, ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (b) Part II, ITEM 8. Financial Statements and Supplementary Data: Note 17, Commitments and Contingencies; (3) 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 13, Commitments and Contingencies; and (4) other factors discussed in filings with the SEC by the Registrants.

Investors 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.

7

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Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

8

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Table of Contents

EXELON CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

			Three Months Ended September 30,												Nine Months Ended September 30,
(In millions, except per share data)			2022						2021						2022						2021
Operating revenues
Electric operating revenues			$	4,557					$	4,736					$	12,972					$	12,344
Natural gas operating revenues			224						174						1,348						1,041
Revenues from alternative revenue programs			64						(47)						92						129
Total operating revenues			4,845						4,863						14,412						13,514
Operating expenses
Purchased power			1,404						1,452						4,152						3,598
Purchased fuel			80						40						524						316
Purchased power and fuel from affiliates			—						317						159						867
Operating and maintenance			1,148						1,187						3,436						3,340
Depreciation and amortization			825						758						2,472						2,253
Taxes other than income taxes			377						353						1,061						983
Total operating expenses			3,834						4,107						11,804						11,357
(Loss) gain on sales of assets and businesses			—						—						(2)						3
Operating income			1,011						756						2,606						2,160
Other income and (deductions)
Interest expense, net			(359)						(318)						(1,044)						(947)
Interest expense to affiliates			(6)						(6)						(19)						(20)
Other, net			122						60						435						190
Total other income and (deductions)			(243)						(264)						(628)						(777)
Income from continuing operations before income taxes			768						492						1,978						1,383
Income taxes			92						35						356						76
Net income from continuing operations after income taxes			676						457						1,622						1,307
Net income from discontinued operations after income taxes (Note 2)			—						772						117						134
Net income			676						1,229						1,739						1,441
Net income attributable to noncontrolling interests			—						26						1						126
Net income attributable to common shareholders			$	676					$	1,203					$	1,738					$	1,315
Amounts attributable to common shareholders:
Net income from continuing operations			676						457						1,622						1,307
Net income from discontinued operations			—						746						116						8
Net income attributable to common shareholders			$	676					$	1,203					$	1,738					$	1,315
Comprehensive income, net of income taxes
Net income			$	676					$	1,229					$	1,739					$	1,441
Other comprehensive income (loss), net of income taxes
Pension and non-pension postretirement benefit plans:
Prior service benefit reclassified to periodic benefit cost			—						(1)						—						(4)
Actuarial loss reclassified to periodic benefit cost			9						56						33						167
Pension and non-pension postretirement benefit plan valuation adjustment			—						14						2						15
Unrealized gain on foreign currency translation			—						(3)						—						(1)
Other comprehensive income			9						66						35						177
Comprehensive income			685						1,295						1,774						1,618
Comprehensive income attributable to noncontrolling interests			—						26						1						126
Comprehensive income attributable to common shareholders			$	685					$	1,269					$	1,773					$	1,492
Average shares of common stock outstanding:
Basic			988						979						983						978
Assumed exercise and/or distributions of stock-based awards			1						1						1						1
Diluted(a)			989						980						984						979
Earnings per average common share from continuing operations
Basic			$	0.68					$	0.47					$	1.65					$	1.33
Diluted			$	0.68					$	0.47					$	1.65					$	1.33
Earnings per average common share from discontinued operations
Basic			$	—					$	0.76					$	0.12					$	0.01
Diluted			$	—					$	0.76					$	0.12					$	0.01

__________

(a)The number of stock options not included in the calculation of diluted common shares outstanding due to their antidilutive effect were none for the three and nine months ended September 30, 2022 and 2021, respectively.

See the Combined Notes to Consolidated Financial Statements

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Table of Contents

EXELON CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

			Nine Months Ended September 30,
(In millions)			2022						2021
Cash flows from operating activities
Net income			$	1,739					$	1,441
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation, amortization, and accretion, including nuclear fuel and energy contract amortization			2,679						6,204
Asset impairments			46						541
Gain on sales of assets and businesses			(8)						(147)
Deferred income taxes and amortization of investment tax credits			256						(45)
Net fair value changes related to derivatives			(59)						(1,244)
Net realized and unrealized losses (gains) on NDT funds			205						(383)
Net unrealized losses on equity investments			16						83
Other non-cash operating activities			265						(293)
Changes in assets and liabilities:
Accounts receivable			(1,049)						(254)
Inventories			(121)						(101)
Accounts payable and accrued expenses			823						354
Option premiums paid, net			(39)						(186)
Collateral received, net			1,456						2,111
Income taxes			3						250
Regulatory assets and liabilities, net			(689)						(367)
Pension and non-pension postretirement benefit contributions			(596)						(602)
Other assets and liabilities			(786)						(3,221)
Net cash flows provided by operating activities			4,141						4,141
Cash flows from investing activities
Capital expenditures			(5,179)						(5,970)
Proceeds from NDT fund sales			488						5,766
Investment in NDT funds			(516)						(5,900)
Collection of DPP			169						3,052
Proceeds from sales of assets and businesses			16						801
Other investing activities			36						40
Net cash flows used in investing activities			(4,986)						(2,211)
Cash flows from financing activities
Changes in short-term borrowings			(335)						(744)
Proceeds from short-term borrowings with maturities greater than 90 days			1,150						1,380
Repayments on short-term borrowings with maturities greater than 90 days			(925)						—
Issuance of long-term debt			5,801						3,406
Retirement of long-term debt			(2,067)						(1,618)
Issuance of common stock			563						—
Dividends paid on common stock			(999)						(1,121)
Acquisition of CENG noncontrolling interest			—						(885)
Proceeds from employee stock plans			26						63
Transfer of cash, restricted cash, and cash equivalents to Constellation			(2,594)						—
Other financing activities			(121)						(93)
Net cash flows provided by financing activities			499						388
(Decrease) increase in cash, restricted cash, and cash equivalents			(346)						2,318
Cash, restricted cash, and cash equivalents at beginning of period			1,619						1,166
Cash, restricted cash, and cash equivalents at end of period			$	1,273					$	3,484
Supplemental cash flow information
Decrease in capital expenditures not paid			$	(147)					$	(334)
Increase in DPP			348						2,933
Increase in PP&E related to ARO update			331						574

See the Combined Notes to Consolidated Financial Statements

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Table of Contents

EXELON CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions)			September 30, 2022						December 31, 2021
ASSETS
Current assets
Cash and cash equivalents			$	446					$	672
Restricted cash and cash equivalents			744						321
Accounts receivable
Customer accounts receivable			2,129						2,189
Customer allowance for credit losses			(341)						(320)
Customer accounts receivable, net			1,788						1,869
Other accounts receivable			1,726						1,068
Other allowance for credit losses			(84)						(72)
Other accounts receivable, net			1,642						996
Inventories, net
Fossil fuel			235						105
Materials and supplies			522						476
Regulatory assets			1,300						1,296
Other			378						387
Current assets of discontinued operations			—						7,835
Total current assets			7,055						13,957
Property, plant, and equipment (net of accumulated depreciation and amortization of $15,517 and $14,430 as of September 30, 2022 and December 31, 2021, respectively)			67,572						64,558
Deferred debits and other assets
Regulatory assets			8,224						8,224
Goodwill			6,630						6,630
Receivable related to Regulatory Agreement Units			2,658						—
Investments			230						250
Other			1,086						885
Property, plant, and equipment, deferred debits, and other assets of discontinued operations			—						38,509
Total deferred debits and other assets			18,828						54,498
Total assets			$	93,455					$	133,013

See the Combined Notes to Consolidated Financial Statements

11

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Table of Contents

EXELON CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions)			September 30, 2022						December 31, 2021
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Short-term borrowings			$	1,690					$	1,248
Long-term debt due within one year			1,300						2,153
Accounts payable			2,693						2,379
Accrued expenses			1,213						1,137
Payables to affiliates			5						5
Regulatory liabilities			493						376
Mark-to-market derivative liabilities			—						18
Unamortized energy contract liabilities			10						89
Other			1,313						766
Current liabilities of discontinued operations			—						7,940
Total current liabilities			8,717						16,111
Long-term debt			35,283						30,749
Long-term debt to financing trusts			390						390
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits			11,113						10,611
Regulatory liabilities			8,844						9,628
Pension obligations			1,366						2,051
Non-pension postretirement benefit obligations			796						811
Asset retirement obligations			266						271
Mark-to-market derivative liabilities			67						201
Unamortized energy contract liabilities			37						146
Other			1,994						1,573
Long-term debt, deferred credits, and other liabilities of discontinued operations			—						25,676
Total deferred credits and other liabilities			24,483						50,968
Total liabilities			68,873						98,218
Commitments and contingencies
Shareholders’ equity
Common stock (No par value, 2,000 shares authorized, 994 shares and 979 shares outstanding at September 30, 2022 and December 31, 2021, respectively)			20,895						20,324
Treasury stock, at cost (2 shares at September 30, 2022 and December 31, 2021)			(123)						(123)
Retained earnings			4,502						16,942
Accumulated other comprehensive loss, net			(692)						(2,750)
Total shareholders’ equity			24,582						34,393
Noncontrolling interests			—						402
Total equity			24,582						34,795
Total liabilities and shareholders’ equity			$	93,455					$	133,013

See the Combined Notes to Consolidated Financial Statements

12

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EXELON CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

			Nine Months Ended September 30, 2022
(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, 2021			981,291						$	20,324					$	(123)					$	16,942					$	(2,750)					$	402					$	34,795
Net income			—						—						—						597						—						1						598
Long-term incentive plan activity			540						(13)						—						—						—						—						(13)
Employee stock purchase plan issuances			211						9						—						—						—						—						9
Changes in equity of noncontrolling interests			—						—						—						—						—						(7)						(7)
Distribution of Constellation (Note 2)			—						(21)						—						(13,179)						2,023						(396)						(11,573)
Common stock dividends ($0.34/common share)			—						—						—						(332)						—						—						(332)
Other comprehensive income, net of income taxes			—						—						—						—						14						—						14
Balance, March 31, 2022			982,042						$	20,299					$	(123)					$	4,028					$	(713)					$	—					$	23,491
Net income			—						—						—						465						—						—						465
Long-term incentive plan activity			21						10						—						—						—						—						10
Employee stock purchase plan issuances			242						10						—						—						—						—						10
Changes in equity of noncontrolling interests			—						—						—						—						—						—						—
Common stock dividends ($0.34/common share)			—						—						—						(332)						—						—						(332)
Other comprehensive income, net of income taxes			—						—						—						—						12						—						12
Balance, June 30, 2022			982,305						$	20,319					$	(123)					$	4,161					$	(701)					$	—					$	23,656
Net income			—						—						—						676						—						—						676
Long-term incentive plan activity			—						3						—						—						—						—						3
Employee stock purchase plan issuances			275						10						—						—						—						—						10
Issuance of common stock			12,995						563						—						—						—						—						563
Changes in equity of noncontrolling interests			—						—						—						—						—						—						—
Common stock dividends ($0.34/common share)			—						—						—						(335)						—						—						(335)
Other comprehensive income net of income taxes			—						—						—						—						9						—						9
Balance, September 30, 2022			995,575						$	20,895					$	(123)					$	4,502					$	(692)					$	—					$	24,582

See the Combined Notes to Consolidated Financial Statements

13

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EXELON CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

			Nine Months Ended September 30, 2021
(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, 2020			977,466						$	19,373					$	(123)					$	16,735					$	(3,400)					$	2,283					$	34,868
Net (loss) income			—						—						—						(289)						—						25						(264)
Long-term incentive plan activity			640						5						—						—						—						—						5
Employee stock purchase plan issuances			902						34						—						—						—						—						34
Changes in equity of noncontrolling interests			—						—						—						—						—						(10)						(10)
Common stock dividends ($0.38/common share)			—						—						—						(374)						—						—						(374)
Other comprehensive income, net of income taxes			—						—						—						—						54						—						54
Balance, March 31, 2021			979,008						$	19,412					$	(123)					$	16,072					$	(3,346)					$	2,298					$	34,313
Net income			—						—						—						401						—						75						476
Long-term incentive plan activity			237						24						—						—						—						—						24
Employee stock purchase plan issuances			420						18						—						—						—						—						18
Changes in equity of noncontrolling interests			—						—						—						—						—						(13)						(13)
Common stock dividends ($0.38/common share)			—						—						—						(375)						—						—						(375)
Other comprehensive income, net of income taxes			—						—						—						—						57						—						57
Balance, June 30, 2021			979,665						$	19,454					$	(123)					$	16,098					$	(3,289)					$	2,360					$	34,500
Net Income			—						—						—						1,203						—						26						1,229
Long-term incentive plan activity			94						9						—						—						—						—						9
Employee stock purchase plan issuances			391						18						—						—						—						—						18
Changes in equity of noncontrolling interests			—						—						—						—						—						(13)						(13)
Acquisition of CENG noncontrolling interest			—						1,080						—						—						—						(1,965)						(885)
Deferred tax adjustment related to acquisition of CENG noncontrolling interest			—						(290)						—						—						—						—						(290)
Common stock dividends ($0.38/common share)			—						—						—						(375)						—						—						(375)
Other comprehensive income, net of income taxes			—						—						—						—						66						—						66
Balance, September 30, 2021			980,150						$	20,271					$	(123)					$	16,926					$	(3,223)					$	408					$	34,259

See the Combined Notes to Consolidated Financial Statements

14

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COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

			Three Months Ended September 30,												Nine Months Ended September 30,
(In millions)			2022						2021						2022						2021
Operating revenues
Electric operating revenues			$	1,284					$	1,812					$	4,359					$	4,789
Revenues from alternative revenue programs			88						(32)						163						32
Operating revenues from affiliates			6						9						14						19
Total operating revenues			1,378						1,789						4,536						4,840
Operating expenses
Purchased power			121						610						982						1,472
Purchased power from affiliate			—						93						59						256
Operating and maintenance			286						257						809						752
Operating and maintenance from affiliates			69						73						236						217
Depreciation and amortization			333						304						982						893
Taxes other than income taxes			104						91						289						243
Total operating expenses			913						1,428						3,357						3,833
Loss on sales of assets			—						—						(2)						—
Operating income			465						361						1,177						1,007
Other income and (deductions)
Interest expense, net			(101)						(95)						(298)						(282)
Interest expense to affiliates			(3)						(3)						(10)						(10)
Other, net			14						13						40						35
Total other income and (deductions)			(90)						(85)						(268)						(257)
Income before income taxes			375						276						909						750
Income taxes			84						56						203						141
Net income			$	291					$	220					$	706					$	609
Comprehensive income			$	291					$	220					$	706					$	609

See the Combined Notes to Consolidated Financial Statements

15

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COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

			Nine Months Ended September 30,
(In millions)			2022						2021
Cash flows from operating activities
Net income			$	706					$	609
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization			982						893
Deferred income taxes and amortization of investment tax credits			192						211
Other non-cash operating activities			(89)						95
Changes in assets and liabilities:
Accounts receivable			(351)						(72)
Receivables from and payables to affiliates, net			(54)						(16)
Inventories			(9)						(6)
Accounts payable and accrued expenses			226						(36)
Collateral received, net			69						68
Income taxes			—						(9)
Regulatory assets and liabilities, net			(499)						(250)
Pension and non-pension postretirement benefit contributions			(179)						(176)
Other assets and liabilities			(152)						(126)
Net cash flows provided by operating activities			842						1,185
Cash flows from investing activities
Capital expenditures			(1,801)						(1,723)
Other investing activities			21						20
Net cash flows used in investing activities			(1,780)						(1,703)
Cash flows from financing activities
Changes in short-term borrowings			233						(323)
Issuance of long-term debt			750						1,150
Retirement of long-term debt			—						(350)
Dividends paid on common stock			(434)						(380)
Contributions from parent			503						593
Other financing activities			(10)						(16)
Net cash flows provided by financing activities			1,042						674
Increase in cash, restricted cash, and cash equivalents			104						156
Cash, restricted cash, and cash equivalents at beginning of period			384						405
Cash, restricted cash, and cash equivalents at end of period			$	488					$	561
Supplemental cash flow information
Decrease in capital expenditures not paid			$	(30)					$	(118)

See the Combined Notes to Consolidated Financial Statements

16

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COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions)			September 30, 2022						December 31, 2021
ASSETS
Current assets
Cash and cash equivalents			$	63					$	131
Restricted cash and cash equivalents			342						210
Accounts receivable
Customer accounts receivable			511						647
Customer allowance for credit losses			(74)						(73)
Customer accounts receivable, net			437						574
Other accounts receivable			690						227
Other allowance for credit losses			(18)						(17)
Other accounts receivable, net			672						210
Receivables from affiliates			3						16
Inventories, net			178						170
Regulatory assets			384						335
Other			110						76
Total current assets			2,189						1,722
Property, plant, and equipment (net of accumulated depreciation and amortization of $6,521 and $6,099 as of September 30, 2022 and December 31, 2021, respectively)			27,040						25,995
Deferred debits and other assets
Regulatory assets			2,489						1,870
Goodwill			2,625						2,625
Receivables from affiliates			—						2,761
Receivable related to Regulatory Agreement Units			2,469						—
Investments			6						6
Prepaid pension asset			1,219						1,086
Other			545						405
Total deferred debits and other assets			9,353						8,753
Total assets			$	38,582					$	36,470

See the Combined Notes to Consolidated Financial Statements

17

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COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions)			September 30, 2022						December 31, 2021
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Short-term borrowings			$	233					$	—
Accounts payable			876						647
Accrued expenses			351						384
Payables to affiliates			54						121
Customer deposits			104						99
Regulatory liabilities			297						185
Mark-to-market derivative liabilities			—						18
Other			191						133
Total current liabilities			2,106						1,587
Long-term debt			10,517						9,773
Long-term debt to financing trust			205						205
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits			4,951						4,685
Regulatory liabilities			6,668						6,759
Asset retirement obligations			146						144
Non-pension postretirement benefits obligations			168						169
Mark-to-market derivative liabilities			67						201
Other			624						592
Total deferred credits and other liabilities			12,624						12,550
Total liabilities			25,452						24,115
Commitments and contingencies
Shareholders’ equity
Common stock			1,588						1,588
Other paid-in capital			9,579						9,076
Retained earnings			1,963						1,691
Total shareholders’ equity			13,130						12,355
Total liabilities and shareholders’ equity			$	38,582					$	36,470

    

See the Combined Notes to Consolidated Financial Statements

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COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

			Nine Months Ended September 30, 2022
(In millions)			Common Stock						Other Paid-In Capital						Retained Earnings						Total Shareholders’ Equity
Balance, December 31, 2021			$	1,588					$	9,076					$	1,691					$	12,355
Net income			—						—						188						188
Common stock dividends			—						—						(144)						(144)
Contributions from parent			—						167						—						167
Balance, March 31, 2022			$	1,588					$	9,243					$	1,735					$	12,566
Net income			—						—						227						227
Common stock dividends			—						—						(145)						(145)
Contributions from parent			—						168						—						168
Balance, June 30, 2022			$	1,588					$	9,411					$	1,817					$	12,816
Net income			—						—						291						291
Common stock dividends			—						—						(145)						(145)
Contributions from parent			—						168						—						168
Balance, September 30, 2022			$	1,588					$	9,579					$	1,963					$	13,130
			Nine Months Ended September 30, 2021
(In millions)			Common Stock						Other Paid-In Capital						Retained Earnings						Total Shareholders’ Equity
Balance, December 31, 2020			$	1,588					$	8,285					$	1,456					$	11,329
Net income			—						—						197						197
Common stock dividends			—						—						(127)						(127)
Contributions from parent			—						198						—						198
Balance, March 31, 2021			$	1,588					$	8,483					$	1,526					$	11,597
Net income			—						—						192						192
Common stock dividends			—						—						(126)						(126)
Contributions from parent			—						197						—						197
Balance, June 30, 2021			$	1,588					$	8,680					$	1,592					$	11,860
Net income			—						—						220						220
Common stock dividends			—						—						(127)						(127)
Contributions from parent			—						198						—						198
Balance, September 30, 2021			$	1,588					$	8,878					$	1,685					$	12,151

See the Combined Notes to Consolidated Financial Statements

19

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PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

			Three Months Ended September 30,												Nine Months Ended September 30,
(In millions)			2022						2021						2022						2021
Operating revenues
Electric operating revenues			$	943					$	757					$	2,384					$	2,008
Natural gas operating revenues			73						56						487						365
Revenues from alternative revenue programs			(5)						3						1						20
Operating revenues from affiliates			3						2						5						6
Total operating revenues			1,014						818						2,877						2,399
Operating expenses
Purchased power			377						206						850						540
Purchased fuel			26						11						210						119
Purchased power from affiliate			—						60						33						141
Operating and maintenance			197						220						561						580
Operating and maintenance from affiliates			46						43						144						126
Depreciation and amortization			92						86						277						259
Taxes other than income taxes			60						51						155						143
Total operating expenses			798						677						2,230						1,908
Operating income			216						141						647						491
Other income and (deductions)
Interest expense, net			(42)						(37)						(120)						(110)
Interest expense to affiliates			(3)						(3)						(9)						(9)
Other, net			8						7						23						20
Total other income and (deductions)			(37)						(33)						(106)						(99)
Income before income taxes			179						108						541						392
Income taxes			44						(3)						67						9
Net income			$	135					$	111					$	474					$	383
Comprehensive income			$	135					$	111					$	474					$	383

See the Combined Notes to Consolidated Financial Statements

20

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PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

			Nine Months Ended September 30,
(In millions)			2022						2021
Cash flows from operating activities
Net income			$	474					$	383
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization			277						259
Deferred income taxes and amortization of investment tax credits			49						19
Other non-cash operating activities			14						4
Changes in assets and liabilities:
Accounts receivable			(49)						47
Receivables from and payables to affiliates, net			(34)						16
Inventories			(59)						(21)
Accounts payable and accrued expenses			25						(23)
Income taxes			30						55
Regulatory assets and liabilities, net			(27)						(16)
Pension and non-pension postretirement benefit contributions			(13)						(15)
Other assets and liabilities			(31)						(71)
Net cash flows provided by operating activities			656						637
Cash flows from investing activities
Capital expenditures			(991)						(878)
Other investing activities			8						5
Net cash flows used in investing activities			(983)						(873)
Cash flows from financing activities
Issuance of long-term debt			775						750
Retirement of long-term debt			(350)						(300)
Changes in Exelon intercompany money pool			—						(40)
Dividends paid on common stock			(299)						(254)
Contributions from parent			274						414
Other financing activities			(14)						(8)
Net cash flows provided by financing activities			386						562
Increase in cash, restricted cash, and cash equivalents			59						326
Cash, restricted cash, and cash equivalents at beginning of period			44						26
Cash, restricted cash, and cash equivalents at end of period			$	103					$	352
Supplemental cash flow information
Increase in capital expenditures not paid			$	7					$	25

See the Combined Notes to Consolidated Financial Statements

21

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PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions)			September 30, 2022						December 31, 2021
ASSETS
Current assets
Cash and cash equivalents			$	94					$	36
Restricted cash and cash equivalents			9						8
Accounts receivable
Customer accounts receivable			490						489
Customer allowance for credit losses			(103)						(105)
Customer accounts receivable, net			387						384
Other accounts receivable			147						116
Other allowance for credit losses			(11)						(7)
Other accounts receivable, net			136						109
Receivables from affiliates			1						1
Inventories, net
Fossil fuel			106						51
Materials and supplies			48						45
Prepaid utility taxes			34						1
Regulatory assets			59						48
Other			30						28
Total current assets			904						711
Property, plant, and equipment (net of accumulated depreciation and amortization of $4,031 and $3,964 as of September 30, 2022 and December 31, 2021, respectively)			11,853						11,117
Deferred debits and other assets
Regulatory assets			631						943
Receivables from affiliates			—						597
Receivable related to Regulatory Agreement Units			188						—
Investments			31						34
Prepaid pension asset			408						386
Other			33						36
Total deferred debits and other assets			1,291						1,996
Total assets			$	14,048					$	13,824

See the Combined Notes to Consolidated Financial Statements

22

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PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions)			September 30, 2022						December 31, 2021
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Long-term debt due within one year			$	50					$	350
Accounts payable			555						494
Accrued expenses			150						136
Payables to affiliates			36						70
Customer deposits			59						48
Regulatory liabilities			69						94
Other			27						35
Total current liabilities			946						1,227
Long-term debt			4,562						3,847
Long-term debt to financing trusts			184						184
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits			2,170						2,421
Regulatory liabilities			224						635
Asset retirement obligations			28						29
Non-pension postretirement benefits obligations			289						286
Other			84						83
Total deferred credits and other liabilities			2,795						3,454
Total liabilities			8,487						8,712
Commitments and contingencies
Shareholder’s equity
Common stock			3,702						3,428
Retained earnings			1,859						1,684
Total shareholder’s equity			5,561						5,112
Total liabilities and shareholder's equity			$	14,048					$	13,824

See the Combined Notes to Consolidated Financial Statements

23

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PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY

(Unaudited)

			Nine Months Ended September 30, 2022
(In millions)			Common Stock						Retained Earnings												Total Shareholder's Equity
Balance, December 31, 2021			$	3,428					$	1,684											$	5,112
Net income			—						206												206
Common stock dividends			—						(100)												(100)
Contributions from parent			227						—												227
Balance, March 31, 2022			$	3,655					$	1,790											$	5,445
Net income			—						133												133
Common stock dividends			—						(100)												(100)
Balance, June 30, 2022			$	3,655					$	1,823											$	5,478
Net income			—						135												135
Common stock dividends			—						(99)												(99)
Contributions from parent			47						—												47
Balance, September 30, 2022			$	3,702					$	1,859											$	5,561
			Nine Months Ended September 30, 2021
(In millions)			Common Stock						Retained Earnings												Total Shareholder's Equity
Balance, December 31, 2020			$	3,014					$	1,519											$	4,533
Net income			—						167												167
Common stock dividends			—						(85)												(85)
Balance, March 31, 2021			$	3,014					$	1,601											$	4,615
Net income			—						104												104
Common stock dividends			—						(84)												(84)
Contributions from parent			395						—												395
Balance, June 30, 2021			$	3,409					$	1,621											$	5,030
Net income			—						111												111
Common stock dividends			—						(85)												(85)
Contributions from parent			19						—												19
Balance, September 30, 2021			$	3,428					$	1,647											$	5,075

See the Combined Notes to Consolidated Financial Statements

24

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BALTIMORE GAS AND ELECTRIC COMPANY

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

			Three Months Ended September 30,												Nine Months Ended September 30,
(In millions)			2022						2021						2022						2021
Operating revenues
Electric operating revenues			$	761					$	694					$	2,138					$	1,874
Natural gas operating revenues			114						93						699						549
Revenues from alternative revenue programs			(8)						(24)						(40)						(17)
Operating revenues from affiliates			3						7						13						20
Total operating revenues			870						770						2,810						2,426
Operating expenses
Purchased power			320						206						846						501
Purchased fuel			30						20						229						146
Purchased power and fuel from affiliate			—						64						18						193
Operating and maintenance			185						159						506						458
Operating and maintenance from affiliates			50						46						152						137
Depreciation and amortization			148						142						470						434
Taxes other than income taxes			77						72						225						211
Total operating expenses			810						709						2,446						2,080
Operating income			60						61						364						346
Other income and (deductions)
Interest expense, net			(39)						(36)						(110)						(103)
Other, net			5						7						16						23
Total other income and (deductions)			(34)						(29)						(94)						(80)
Income before income taxes			26						32						270						266
Income taxes			(7)						(4)						3						(24)
Net income			$	33					$	36					$	267					$	290
Comprehensive income			$	33					$	36					$	267					$	290

See the Combined Notes to Consolidated Financial Statements

25

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BALTIMORE GAS AND ELECTRIC COMPANY

STATEMENTS OF CASH FLOWS

(Unaudited)

			Nine Months Ended September 30,
(In millions)			2022						2021
Cash flows from operating activities
Net income			$	267					$	290
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization			470						434
Asset impairments			46						—
Deferred income taxes and amortization of investment tax credits			1						7
Other non-cash operating activities			101						77
Changes in assets and liabilities:
Accounts receivable			18						92
Receivables from and payables to affiliates, net			(9)						(13)
Inventories			(74)						(30)
Accounts payable and accrued expenses			15						14
Collateral received, net			125						20
Income taxes			(20)						3
Regulatory assets and liabilities, net			(113)						(106)
Pension and non-pension postretirement benefit contributions			(64)						(76)
Other assets and liabilities			14						(43)
Net cash flows provided by operating activities			777						669
Cash flows from investing activities
Capital expenditures			(918)						(907)
Other investing activities			7						13
Net cash flows used in investing activities			(911)						(894)
Cash flows from financing activities
Changes in short-term borrowings			26						—
Issuance of long-term debt			500						600
Retirement of long-term debt			(250)						(300)
Dividends paid on common stock			(225)						(219)
Contributions from parent			186						257
Other financing activities			(8)						(6)
Net cash flows provided by financing activities			229						332
Increase in cash, restricted cash, and cash equivalents			95						107
Cash, restricted cash, and cash equivalents at beginning of period			55						145
Cash, restricted cash, and cash equivalents at end of period			$	150					$	252
Supplemental cash flow information
Increase (decrease) in capital expenditures not paid			$	12					$	(70)

See the Combined Notes to Consolidated Financial Statements

26

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BALTIMORE GAS AND ELECTRIC COMPANY

BALANCE SHEETS

(Unaudited)

(In millions)			September 30, 2022						December 31, 2021
ASSETS
Current assets
Cash and cash equivalents			$	20					$	51
Restricted cash and cash equivalents			130						4
Accounts receivable
Customer accounts receivable			423						436
Customer allowance for credit losses			(54)						(38)
Customer accounts receivable, net			369						398
Other accounts receivable			120						124
Other allowance for credit losses			(12)						(9)
Other accounts receivable, net			108						115
Receivables from affiliates			—						1
Inventories, net
Fossil fuel			109						42
Materials and supplies			60						53
Prepaid utility taxes			—						49
Regulatory assets			185						215
Other			9						8
Total current assets			990						936
Property, plant, and equipment (net of accumulated depreciation and amortization of $4,509 and $4,299 as of September 30, 2022 and December 31, 2021, respectively)			11,103						10,577
Deferred debits and other assets
Regulatory assets			503						477
Investments			7						14
Prepaid pension asset			299						276
Other			30						44
Total deferred debits and other assets			839						811
Total assets			$	12,932					$	12,324

See the Combined Notes to Consolidated Financial Statements

27

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BALTIMORE GAS AND ELECTRIC COMPANY

BALANCE SHEETS

(Unaudited)

(In millions)			September 30, 2022						December 31, 2021
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Short-term borrowings			$	156					$	130
Long-term debt due within one year			300						250
Accounts payable			344						349
Accrued expenses			188						176
Payables to affiliates			32						48
Customer deposits			102						97
Regulatory liabilities			37						26
Other			158						48
Total current liabilities			1,317						1,124
Long-term debt			3,907						3,711
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits			1,787						1,686
Regulatory liabilities			853						934
Asset retirement obligations			29						26
Non-pension postretirement benefits obligations			168						175
Other			73						98
Total deferred credits and other liabilities			2,910						2,919
Total liabilities			8,134						7,754
Commitments and contingencies
Shareholder's equity
Common stock			2,761						2,575
Retained earnings			2,037						1,995
Total shareholder's equity			4,798						4,570
Total liabilities and shareholder's equity			$	12,932					$	12,324

See the Combined Notes to Consolidated Financial Statements

28

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BALTIMORE GAS AND ELECTRIC COMPANY

STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY

(Unaudited)

			Nine Months Ended September 30, 2022
(In millions)			Common Stock						Retained Earnings						Total Shareholder's Equity
Balance, December 31, 2021			$	2,575					$	1,995					$	4,570
Net income			—						198						198
Common stock dividends			—						(76)						(76)
Balance, March 31, 2022			$	2,575					$	2,117					$	4,692
Net income			—						37						37
Common stock dividends			—						(75)						(75)
Contributions from parent			186						—						186
Balance, June 30, 2022			$	2,761					$	2,079					$	4,840
Net income			—						33						33
Common stock dividends			—						(75)						(75)
Balance, September 30, 2022			$	2,761					$	2,037					$	4,798
			Nine Months Ended September 30, 2021
(In millions)			Common Stock						Retained Earnings						Total Shareholder's Equity
Balance, December 31, 2020			$	2,318					$	1,879					$	4,197
Net income			—						209						209
Common stock dividends			—						(74)						(74)
Balance, March 31, 2021			$	2,318					$	2,014					$	4,332
Net income			—						45						45
Common stock dividends			—						(72)						(72)
Balance, June 30, 2021			$	2,318					$	1,987					$	4,305
Net income			—						36						36
Common stock dividends			—						(73)						(73)
Contributions from parent			257						—						257
Balance, September 30, 2021			$	2,575					$	1,950					$	4,525

See the Combined Notes to Consolidated Financial Statements

29

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PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

			Three Months Ended September 30,												Nine Months Ended September 30,
(In millions)			2022						2021						2022						2021
Operating revenues
Electric operating revenues			$	1,568					$	1,438					$	4,090					$	3,632
Natural gas operating revenues			38						23						157						118
Revenues from alternative revenue programs			(11)						6						(33)						94
Operating revenues from affiliates			3						3						9						10
Total operating revenues			1,598						1,470						4,223						3,854
Operating expenses
Purchased power			586						431						1,474						1,087
Purchased fuel			24						9						85						50
Purchased power from affiliates			—						100						50						277
Operating and maintenance			237						235						729						668
Operating and maintenance from affiliates			40						43						138						122
Depreciation and amortization			238						210						697						614
Taxes other than income taxes			129						127						362						349
Total operating expenses			1,254						1,155						3,535						3,167
Operating income			344						315						688						687
Other income and (deductions)
Interest expense, net			(72)						(67)						(216)						(201)
Other, net			19						16						56						52
Total other income and (deductions)			(53)						(51)						(160)						(149)
Income before income taxes			291						264						528						538
Income taxes			2						(2)						10						3
Net income			$	289					$	266					$	518					$	535
Comprehensive income			$	289					$	266					$	518					$	535

See the Combined Notes to Consolidated Financial Statements

30

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PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

			Nine Months Ended September 30,
(In millions)			2022						2021
Cash flows from operating activities
Net income			$	518					$	535
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization			697						614
Deferred income taxes and amortization of investment tax credits			(2)						—
Other non-cash operating activities			112						(35)
Changes in assets and liabilities:
Accounts receivable			(143)						(112)
Receivables from and payables to affiliates, net			(49)						(19)
Inventories			(35)						(13)
Accounts payable and accrued expenses			(15)						19
Collateral received, net			230						25
Income taxes			(3)						17
Regulatory assets and liabilities, net			(82)						(45)
Pension and non-pension postretirement benefit contributions			(75)						(43)
Other assets and liabilities			(71)						(100)
Net cash flows provided by operating activities			1,082						843
Cash flows from investing activities
Capital expenditures			(1,174)						(1,299)
Other investing activities			5						(1)
Net cash flows used in investing activities			(1,169)						(1,300)
Cash flows from financing activities
Changes in short-term borrowings			(468)						(81)
Issuance of long-term debt			925						750
Retirement of long-term debt			(310)						(255)
Changes in Exelon intercompany money pool			36						(5)
Distributions to member			(625)						(605)
Contributions from member			787						667
Other financing activities			(18)						(12)
Net cash flows provided by financing activities			327						459
Increase in cash, restricted cash, and cash equivalents			240						2
Cash, restricted cash, and cash equivalents at beginning of period			213						160
Cash, restricted cash, and cash equivalents at end of period			$	453					$	162
Supplemental cash flow information
Decrease in capital expenditures not paid			$	(8)					$	(74)

See the Combined Notes to Consolidated Financial Statements

31

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PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions)			September 30, 2022						December 31, 2021
ASSETS
Current assets
Cash and cash equivalents			$	219					$	136
Restricted cash and cash equivalents			234						77
Accounts receivable
Customer accounts receivable			707						616
Customer allowance for credit losses			(111)						(104)
Customer accounts receivable, net			596						512
Other accounts receivable			301						283
Other allowance for credit losses			(43)						(39)
Other accounts receivable, net			258						244
Receivables from affiliates			1						2
Inventories, net
Fossil fuel			20						11
Materials and supplies			235						209
Regulatory assets			431						432
Other			58						69
Total current assets			2,052						1,692
Property, plant, and equipment (net of accumulated depreciation and amortization of $2,496 and $2,108 as of September 30, 2022 and December 31, 2021, respectively)			17,177						16,498
Deferred debits and other assets
Regulatory assets			1,669						1,794
Goodwill			4,005						4,005
Investments			138						145
Prepaid pension asset			367						344
Deferred income taxes			6						8
Other			241						258
Total deferred debits and other assets			6,426						6,554
Total assets			$	25,655					$	24,744

See the Combined Notes to Consolidated Financial Statements

32

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PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions)			September 30, 2022						December 31, 2021
LIABILITIES AND MEMBER'S EQUITY
Current liabilities
Short-term borrowings			$	—					$	468
Long-term debt due within one year			91						399
Accounts payable			565						578
Accrued expenses			275						281
Payables to affiliates			54						104
Borrowings from Exelon intercompany money pool			43						7
Customer deposits			85						81
Regulatory liabilities			85						68
Unamortized energy contract liabilities			10						89
PPA termination obligation			87						—
Other			434						171
Total current liabilities			1,729						2,246
Long-term debt			8,039						7,148
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits			2,864						2,675
Regulatory liabilities			1,038						1,238
Asset retirement obligations			58						70
Non-pension postretirement benefit obligations			53						66
Unamortized energy contract liabilities			37						146
Other			571						570
Total deferred credits and other liabilities			4,621						4,765
Total liabilities			14,389						14,159
Commitments and contingencies
Member's equity
Membership interest			11,582						10,795
Undistributed losses			(316)						(210)
Total member's equity			11,266						10,585
Total liabilities and member's equity			$	25,655					$	24,744

See the Combined Notes to Consolidated Financial Statements

33

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PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CHANGES IN MEMBER'S EQUITY

(Unaudited)

			Nine Months Ended September 30, 2022
(In millions)			Membership Interest						Undistributed (Losses)/Earnings												Total Member's Equity
Balance, December 31, 2021			$	10,795					$	(210)											$	10,585
Net income			—						130												130
Distributions to member			—						(102)												(102)
Contributions from member			704						—												704
Balance, March 31, 2022			$	11,499					$	(182)											$	11,317
Net income			—						100												100
Distributions to member			—						(293)												(293)
Balance, June 30, 2022			$	11,499					$	(375)											$	11,124
Net income			—						289												289
Distributions to member			—						(230)												(230)
Contributions from member			83						—												83
Balance, September 30, 2022			$	11,582					$	(316)											$	11,266

			Nine Months Ended September 30, 2021
(In millions)			Membership Interest						Undistributed (Losses)/Earnings												Total Member's Equity
Balance, December 31, 2020			$	10,112					$	(68)											$	10,044
Net income			—						128												128
Distributions to member			—						(81)												(81)
Contributions from member			560						—												560
Balance, March 31, 2021			$	10,672					$	(21)											$	10,651
Net income			—						141												141
Distributions to member			—						(333)												(333)
Balance, June 30, 2021			$	10,672					$	(213)											$	10,459
Net income			—						266												266
Distributions to member			—						(191)												(191)
Contribution from member			107						—												107
Balance, September 30, 2021			$	10,779					$	(138)											$	10,641

See the Combined Notes to Consolidated Financial Statements

34

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POTOMAC ELECTRIC POWER COMPANY

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

			Three Months Ended September 30,												Nine Months Ended September 30,
(In millions)			2022						2021						2022						2021
Operating revenues
Electric operating revenues			$	730					$	649					$	1,930					$	1,678
Revenues from alternative revenue programs			(8)						9						(15)						54
Operating revenues from affiliates			2						2						4						4
Total operating revenues			724						660						1,919						1,736
Operating expenses
Purchased power			230						103						566						271
Purchased power from affiliate			—						69						39						200
Operating and maintenance			69						68						214						186
Operating and maintenance from affiliates			52						52						166						155
Depreciation and amortization			99						104						312						302
Taxes other than income taxes			105						105						291						282
Total operating expenses			555						501						1,588						1,396
Operating income			169						159						331						340
Other income and (deductions)
Interest expense, net			(37)						(35)						(111)						(104)
Other, net			14						12						39						37
Total other income and (deductions)			(23)						(23)						(72)						(67)
Income before income taxes			146						136						259						273
Income taxes			1						6						(2)						9
Net income			$	145					$	130					$	261					$	264
Comprehensive income			$	145					$	130					$	261					$	264

See the Combined Notes to Consolidated Financial Statements

35

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POTOMAC ELECTRIC POWER COMPANY

STATEMENTS OF CASH FLOWS

(Unaudited)

			Nine Months Ended September 30,
(In millions)			2022						2021
Cash flows from operating activities
Net income			$	261					$	264
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization			312						302
Deferred income taxes and amortization of investment tax credits			(5)						12
Other non-cash operating activities			20						(54)
Changes in assets and liabilities:
Accounts receivable			(87)						(57)
Receivables from and payables to affiliates, net			(31)						(2)
Inventories			(19)						(6)
Accounts payable and accrued expenses			11						14
Collateral received, net			46						—
Income taxes			(25)						(10)
Regulatory assets and liabilities, net			(44)						(55)
Pension and non-pension postretirement benefit contributions			(9)						(9)
Other assets and liabilities			(29)						(59)
Net cash flows provided by operating activities			401						340
Cash flows from investing activities
Capital expenditures			(595)						(641)
Other investing activities			2						(2)
Net cash flows used in investing activities			(593)						(643)
Cash flows from financing activities
Changes in short-term borrowings			(175)						5
Issuance of long-term debt			625						275
Retirement of long-term debt			(310)						(1)
Changes in PHI intercompany money pool			25						—
Dividends paid on common stock			(400)						(221)
Contributions from parent			465						244
Other financing activities			(8)						(4)
Net cash flows provided by financing activities			222						298
Increase (decrease) in cash, restricted cash, and cash equivalents			30						(5)
Cash, restricted cash, and cash equivalents at beginning of period			68						65
Cash, restricted cash, and cash equivalents at end of period			$	98					$	60
Supplemental cash flow information
Increase (decrease) in capital expenditures not paid			$	2					$	(16)

See the Combined Notes to Consolidated Financial Statements

36

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POTOMAC ELECTRIC POWER COMPANY

BALANCE SHEETS

(Unaudited)

(In millions)			September 30, 2022						December 31, 2021
ASSETS
Current assets
Cash and cash equivalents			$	21					$	34
Restricted cash and cash equivalents			77						34
Accounts receivable
Customer accounts receivable			340						277
Customer allowance for credit losses			(44)						(37)
Customer accounts receivable, net			296						240
Other accounts receivable			179						160
Other allowance for credit losses			(22)						(16)
Other accounts receivable, net			157						144
Inventories, net			138						119
Regulatory assets			225						213
Other			12						25
Total current assets			926						809
Property, plant, and equipment (net of accumulated depreciation and amortization of $4,016 and $3,875 as of September 30, 2022 and December 31, 2021, respectively)			8,518						8,104
Deferred debits and other assets
Regulatory assets			452						532
Investments			118						120
Prepaid pension asset			275						279
Other			60						59
Total deferred debits and other assets			905						990
Total assets			$	10,349					$	9,903

See the Combined Notes to Consolidated Financial Statements

37

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POTOMAC ELECTRIC POWER COMPANY

BALANCE SHEETS

(Unaudited)

(In millions)			September 30, 2022						December 31, 2021
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Short-term borrowings			$	—					$	175
Long-term debt due within one year			4						313
Accounts payable			290						272
Accrued expenses			138						160
Payables to affiliates			28						59
Borrowings from PHI intercompany money pool			25						—
Customer deposits			37						35
Regulatory liabilities			11						14
Merger related obligation			24						27
Current portion of DC PLUG obligation			34						30
Other			81						25
Total current liabilities			672						1,110
Long-term debt			3,748						3,132
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits			1,369						1,275
Regulatory liabilities			460						549
Asset retirement obligations			38						45
Non-pension postretirement benefit obligations			—						3
Other			261						314
Total deferred credits and other liabilities			2,128						2,186
Total liabilities			6,548						6,428
Commitments and contingencies
Shareholder's equity
Common stock			2,767						2,302
Retained earnings			1,034						1,173
Total shareholder's equity			3,801						3,475
Total liabilities and shareholder's equity			$	10,349					$	9,903

See the Combined Notes to Consolidated Financial Statements

38

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POTOMAC ELECTRIC POWER COMPANY

STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY

(Unaudited)

			Nine Months Ended September 30, 2022
(In millions)			Common Stock												Retained Earnings						Total Shareholder's Equity
Balance, December 31, 2021			$	2,302											$	1,173					$	3,475
Net income			—												46						46
Common stock dividends			—												(42)						(42)
Contributions from parent			387												—						387
Balance, March 31, 2022			$	2,689											$	1,177					$	3,866
Net income			—												70						70
Common stock dividends			—												(258)						(258)
Balance, June 30, 2022			$	2,689											$	989					$	3,678
Net income			—												145						145
Common stock dividends			—												(100)						(100)
Contributions from parent			78												—						78
Balance, September 30, 2022			$	2,767											$	1,034					$	3,801

			Nine Months Ended September 30, 2021
(In millions)			Common Stock												Retained Earnings						Total Shareholder's Equity
Balance, December 31, 2020			$	2,058											$	1,145					$	3,203
Net income			—												59						59
Common stock dividends			—												(28)						(28)
Contributions from parent			138												—						138
Balance, March 31, 2021			$	2,196											$	1,176					$	3,372
Net income			—												75						75
Common stock dividends			—												(95)						(95)
Balance, June 30, 2021			$	2,196											$	1,156					$	3,352
Net income			—												130						130
Common stock dividends			—												(98)						(98)
Contributions from parent			106												—						106
Balance, September 30, 2021			$	2,302											$	1,188					$	3,490

See the Combined Notes to Consolidated Financial Statements

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DELMARVA POWER & LIGHT COMPANY

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

			Three Months Ended September 30,												Nine Months Ended September 30,
(In millions)			2022						2021						2022						2021
Operating revenues
Electric operating revenues			$	373					$	337					$	1,017					$	899
Natural gas operating revenues			38						23						157						118
Revenues from alternative revenue programs			—						(2)						(3)						17
Operating revenues from affiliates			1						2						5						6
Total operating revenues			412						360						1,176						1,040
Operating expenses
Purchased power			159						103						412						289
Purchased fuel			24						9						85						50
Purchased power from affiliates			—						26						10						63
Operating and maintenance			45						47						142						132
Operating and maintenance from affiliates			39						40						124						117
Depreciation and amortization			59						53						172						157
Taxes other than income taxes			19						17						54						50
Total operating expenses			345						295						999						858
Operating income			67						65						177						182
Other income and (deductions)
Interest expense, net			(16)						(15)						(48)						(47)
Other, net			3						3						9						9
Total other income and (deductions)			(13)						(12)						(39)						(38)
Income before income taxes			54						53						138						144
Income taxes			2						3						8						9
Net income			$	52					$	50					$	130					$	135
Comprehensive income			$	52					$	50					$	130					$	135

See the Combined Notes to Consolidated Financial Statements

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DELMARVA POWER & LIGHT COMPANY

STATEMENTS OF CASH FLOWS

(Unaudited)

			Nine Months Ended September 30,
(In millions)			2022						2021
Cash flows from operating activities
Net income			$	130					$	135
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization			172						157
Deferred income taxes and amortization of investment tax credits			9						5
Other non-cash operating activities			22						(2)
Changes in assets and liabilities:
Accounts receivable			(3)						26
Receivables from and payables to affiliates, net			(8)						(12)
Inventories			(11)						(5)
Accounts payable and accrued expenses			—						17
Collateral received, net			114						25
Income taxes			4						19
Regulatory assets and liabilities, net			(23)						(20)
Pension and non-pension postretirement benefit contributions			(1)						(1)
Other assets and liabilities			23						(12)
Net cash flows provided by operating activities			428						332
Cash flows from investing activities
Capital expenditures			(294)						(320)
Changes in PHI intercompany money pool			(25)						—
Other investing activities			2						1
Net cash flows used in investing activities			(317)						(319)
Cash flows from financing activities
Changes in short-term borrowings			(149)						(124)
Issuance of long-term debt			125						125
Dividends paid on common stock			(95)						(106)
Contributions from parent			147						120
Other financing activities			(4)						(4)
Net cash flows provided by financing activities			24						11
Increase in cash, restricted cash, and cash equivalents			135						24
Cash, restricted cash, and cash equivalents at beginning of period			71						15
Cash, restricted cash, and cash equivalents at end of period			$	206					$	39
Supplemental cash flow information
Increase (decrease) in capital expenditures not paid			$	2					$	(24)

    

See the Combined Notes to Consolidated Financial Statements

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DELMARVA POWER & LIGHT COMPANY

BALANCE SHEETS

(Unaudited)

(In millions)			September 30, 2022						December 31, 2021
ASSETS
Current assets
Cash and cash equivalents			$	49					$	28
Restricted cash and cash equivalents			157						43
Accounts receivable
Customer accounts receivable			147						149
Customer allowance for credit losses			(20)						(18)
Customer accounts receivable, net			127						131
Other accounts receivable			51						58
Other allowance for credit losses			(7)						(8)
Other accounts receivable, net			44						50
Receivables from affiliates			—						1
Receivable from PHI intercompany pool			25						—
Inventories, net
Fossil fuel			20						11
Materials and supplies			56						54
Prepaid utility taxes			17						20
Regulatory assets			71						68
Other			9						16
Total current assets			575						422
Property, plant, and equipment (net of accumulated depreciation and amortization of $1,740 and $1,635 as of September 30, 2022 and December 31, 2021, respectively)			4,718						4,560
Deferred debits and other assets
Regulatory assets			205						212
Prepaid pension asset			154						157
Other			58						61
Total deferred debits and other assets			417						430
Total assets			$	5,710					$	5,412

See the Combined Notes to Consolidated Financial Statements

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DELMARVA POWER & LIGHT COMPANY

BALANCE SHEETS

(Unaudited)

(In millions)			September 30, 2022						December 31, 2021
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Short-term borrowings			$	—					$	149
Long-term debt due within one year			84						83
Accounts payable			120						131
Accrued expenses			53						40
Payables to affiliates			24						33
Customer deposits			28						28
Regulatory liabilities			39						25
Other			198						59
Total current liabilities			546						548
Long-term debt			1,854						1,727
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits			853						803
Regulatory liabilities			392						441
Asset retirement obligations			13						16
Non-pension postretirement benefits obligations			9						11
Other			85						89
Total deferred credits and other liabilities			1,352						1,360
Total liabilities			3,752						3,635
Commitments and contingencies
Shareholder's equity
Common stock			1,356						1,209
Retained earnings			602						568
Total shareholder's equity			1,958						1,777
Total liabilities and shareholder's equity			$	5,710					$	5,412

See the Combined Notes to Consolidated Financial Statements

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DELMARVA POWER & LIGHT COMPANY

STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY

(Unaudited)

			Nine Months Ended September 30, 2022
(In millions)			Common Stock												Retained Earnings						Total Shareholder's Equity
Balance, December 31, 2021			$	1,209											$	568					$	1,777
Net income			—												56						56
Common stock dividends			—												(41)						(41)
Contributions from parent			144												—						144
Balance, March 31, 2022			$	1,353											$	583					$	1,936
Net income			—												21						21
Common stock dividends			—												(15)						(15)
Balance, June 30, 2022			$	1,353											$	589					$	1,942
Net income			—												52						52
Common stock dividends			—												(39)						(39)
Contributions from parent			3												—						3
Balance, September 30, 2022			$	1,356											$	602					$	1,958

			Nine Months Ended September 30, 2021
(In millions)			Common Stock												Retained Earnings						Total Shareholder's Equity
Balance, December 31, 2020			$	1,089											$	587					$	1,676
Net income			—												56						56
Common stock dividends			—												(40)						(40)
Contributions from parent			120												—						120
Balance, March 31, 2021			$	1,209											$	603					$	1,812
Net income			—												30						30
Common stock dividends			—												(23)						(23)
Balance, June 30, 2021			$	1,209											$	610					$	1,819
Net income			—												50						50
Common stock dividends			—												(43)						(43)
Balance, September 30, 2021			$	1,209											$	617					$	1,826

See the Combined Notes to Consolidated Financial Statements

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ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

			Three Months Ended September 30,												Nine Months Ended September 30,
(In millions)			2022						2021						2022						2021
Operating revenues
Electric operating revenues			$	465					$	450					$	1,132					$	1,055
Revenues from alternative revenue programs			(3)						—						(14)						23
Operating revenues from affiliates			—						1						2						2
Total operating revenues			462						451						1,120						1,080
Operating expenses
Purchased power			197						225						495						527
Purchased power from affiliate			—						5						2						14
Operating and maintenance			47						46						145						128
Operating and maintenance from affiliates			33						35						106						103
Depreciation and amortization			74						46						192						133
Taxes other than income taxes			2						2						7						6
Total operating expenses			353						359						947						911
Operating income			109						92						173						169
Other income and (deductions)
Interest expense, net			(17)						(14)						(49)						(43)
Other, net			3						1						9						3
Total other income and (deductions)			(14)						(13)						(40)						(40)
Income before income taxes			95						79						133						129
Income taxes			1						(11)						2						(12)
Net income			$	94					$	90					$	131					$	141
Comprehensive income			$	94					$	90					$	131					$	141

See the Combined Notes to Consolidated Financial Statements

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ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

			Nine Months Ended September 30,
(In millions)			2022						2021
Cash flows from operating activities
Net income			$	131					$	141
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization			192						133
Deferred income taxes and amortization of investment tax credits			2						(20)
Other non-cash operating activities			36						(8)
Changes in assets and liabilities:
Accounts receivable			(53)						(81)
Receivables from and payables to affiliates, net			(10)						—
Inventories			(6)						(1)
Accounts payable and accrued expenses			(10)						(3)
Collateral received, net			70						—
Income taxes			7						10
Regulatory assets and liabilities, net			(6)						29
Pension and non-pension postretirement benefit contributions			(7)						(3)
Other assets and liabilities			(54)						(14)
Net cash flows provided by operating activities			292						183
Cash flows from investing activities
Capital expenditures			(284)						(336)
Other investing activities			1						1
Net cash flows used in investing activities			(283)						(335)
Cash flows from financing activities
Changes in short-term borrowings			(144)						38
Issuance of long-term debt			175						350
Retirement of long-term debt			—						(254)
Dividends paid on common stock			(128)						(280)
Contributions from parent			175						303
Other financing activities			(4)						(5)
Net cash flows provided by financing activities			74						152
Increase in cash, restricted cash, and cash equivalents			83						—
Cash, restricted cash, and cash equivalents at beginning of period			29						30
Cash, restricted cash, and cash equivalents at end of period			$	112					$	30
Supplemental cash flow information
Decrease in capital expenditures not paid			$	(12)					$	(34)

See the Combined Notes to Consolidated Financial Statements

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ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions)			September 30, 2022						December 31, 2021
ASSETS
Current assets
Cash and cash equivalents			$	112					$	29
Accounts receivable
Customer accounts receivable			221						190
Customer allowance for credit losses			(47)						(49)
Customer accounts receivable, net			174						141
Other accounts receivable			70						76
Other allowance for credit losses			(14)						(15)
Other accounts receivable, net			56						61
Receivables from affiliates			1						2
Inventories, net			42						36
Prepaid utility taxes			12						—
Regulatory assets			125						61
Other			4						3
Total current assets			526						333
Property, plant, and equipment (net of accumulated depreciation and amortization of $1,523 and $1,420 as of September 30, 2022 and December 31, 2021, respectively)			3,858						3,729
Deferred debits and other assets
Regulatory assets			525						430
Prepaid pension asset			22						27
Other			35						37
Total deferred debits and other assets			582						494
Total assets			$	4,966					$	4,556

See the Combined Notes to Consolidated Financial Statements

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ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions)			September 30, 2022						December 31, 2021
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Short-term borrowings			$	—					$	144
Long-term debt due within one year			3						3
Accounts payable			147						165
Accrued expenses			40						44
Payables to affiliates			20						31
Customer deposits			19						18
Regulatory liabilities			34						28
PPA termination obligation			87						—
Other			81						12
Total current liabilities			431						445
Long-term debt			1,755						1,579
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits			733						682
Regulatory liabilities			164						214
Non-pension postretirement benefit obligations			9						12
Other			121						49
Total deferred credits and other liabilities			1,027						957
Total liabilities			3,213						2,981
Commitments and contingencies
Shareholder's equity
Common stock			1,765						1,590
Retained deficit			(12)						(15)
Total shareholder's equity			1,753						1,575
Total liabilities and shareholder's equity			$	4,966					$	4,556

See the Combined Notes to Consolidated Financial Statements

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ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY

(Unaudited)

			Nine Months Ended September 30, 2022
(In millions)			Common Stock												Retained Deficit						Total Shareholder's Equity
Balance, December 31, 2021			$	1,590											$	(15)					$	1,575
Net income			—												26						26
Common stock dividends			—												(19)						(19)
Contributions from parent			173												—						173
Balance, March 31, 2022			$	1,763											$	(8)					$	1,755
Net income			—												11						11
Common stock dividends			—												(19)						(19)
Balance, June 30, 2022			$	1,763											$	(16)					$	1,747
Net income			—												94						94
Common stock dividends			—												(90)						(90)
Contributions from parent			2												—						2
Balance, September 30, 2022			$	1,765											$	(12)					$	1,753

			Nine Months Ended September 30, 2021
(In millions)			Common Stock												Retained Earnings (Deficit)						Total Shareholder's Equity
Balance, December 31, 2020			$	1,271											$	127					$	1,398
Net income			—												14						14
Common stock dividends			—												(14)						(14)
Contributions from parent			303												—						303
Balance, March 31, 2021			$	1,574											$	127					$	1,701
Net income			—												37						37
Common stock dividends			—												(215)						(215)
Balance, June 30, 2021			$	1,574											$	(51)					$	1,523
Net income			—												90						90
Common stock dividends			—												(51)						(51)
Balance, September 30, 2021			$	1,574											$	(12)					$	1,562

See the Combined Notes to Consolidated Financial Statements

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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

Exelon is a utility services holding company engaged in the energy distribution and transmission businesses through ComEd, PECO, BGE, Pepco, DPL, and ACE.

On February 21, 2021, Exelon's Board of Directors approved a plan to separate the Utility Registrants and Generation. The separation was completed on February 1, 2022, creating two publicly traded companies, Exelon and Constellation. See Note 2 — Discontinued Operations for additional information.

Name of Registrant

Business

Service Territories

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

This is a combined quarterly report of all Registrants. The Notes to the Consolidated Financial Statements apply to the Registrants as indicated parenthetically next to each corresponding disclosure. When appropriate, the Registrants are named specifically for their related activities and disclosures. Each of the Registrant’s Consolidated Financial Statements includes the accounts of its subsidiaries. All intercompany transactions have been eliminated, except for the historical transactions between the Utility Registrants and Generation for the purposes of presenting discontinued operations in all periods presented in the Consolidated Statements of Operations and Comprehensive Income.

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” in the consolidated financial statements and include intercompany eliminations unless otherwise disclosed.

The accompanying consolidated financial statements as of September 30, 2022 and for the three and nine months ended September 30, 2022 and 2021 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,

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share data, unless otherwise noted)

Note 1 — Significant Accounting Policies

except as otherwise disclosed. The December 31, 2021 Consolidated Balance Sheets were derived from audited financial statements. The interim financial statements are to be read in conjunction with prior annual financial statements and notes. Additionally, 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 December 31, 2022. 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.

The separation of Constellation, including Generation and its subsidiaries, meets the criteria for discontinued operations and as such, results of operations are presented as discontinued operations and have been excluded from continuing operations for all periods presented. Accounting rules require that certain BSC costs previously allocated to Generation be presented as part of Exelon’s continuing operations as these costs do not qualify as expenses of the discontinued operations. Comprehensive income, shareholders' equity, and cash flows related to Constellation have not been segregated and are included in the Consolidated Statements of Operations and Comprehensive Income, Consolidated Statements of Changes in Shareholders’ Equity, and Consolidated Statements of Cash Flows, respectively, for all periods presented. See Note 2 — Discontinued Operations for additional information.

2. Discontinued Operations (Exelon)

On February 21, 2021, Exelon's Board of Directors approved a plan to separate the Utility Registrants and Generation, creating two publicly traded companies ("the separation"). Exelon completed the separation on February 1, 2022, through the distribution of 326,663,937 common stock shares of Constellation, the new publicly traded company, to Exelon shareholders. Under the separation plan, Exelon shareholders retained their current shares of Exelon stock and received one share of Constellation common stock for every three shares of Exelon common stock held on January 20, 2022, the record date for the distribution, in a transaction that is tax-free to Exelon and its shareholders for U.S. federal income tax purposes.

Constellation was newly formed and incorporated in Pennsylvania on June 15, 2021 for the purposes of separation and holds Generation (including Generation's subsidiaries).

Pursuant to the separation:

•Exelon entered into four term loans consisting of a 364-day term loan for $1.15 billion and three 18-month term loans for $300 million, $300 million and $250 million, respectively. Exelon issued these term loans primarily to fund the cash payment to Constellation and for general corporate purposes. See Note 11 — Debt and Credit Agreements for additional information.

•Exelon made a cash payment of $1.75 billion to Constellation on January 31, 2022.

•Exelon contributed its equity ownership interest in Generation to Constellation. Exelon no longer retains any equity ownership interest in Generation or Constellation.

•Exelon transferred certain corporate assets and employee-related obligations to Constellation.

•Exelon received cash from Generation of $258 million to settle the intercompany loan on January 31, 2022. See Note 11 — Debt and Credit Agreements for additional information.

Continuing Involvement

In order to govern the ongoing relationships between Exelon and Constellation after the separation, and to facilitate an orderly transition, Exelon and Constellation have entered into several agreements, including the following:

•Separation Agreement – governs the rights and obligations between Exelon and Constellation regarding certain actions to be taken in connection with the separation, among others, including the allocation of assets and liabilities between Exelon and Constellation.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 2 — Discontinued Operations

•Transition Services Agreement (TSA) – governs the terms and conditions of the services that Exelon will provide to Constellation and Constellation will provide to Exelon for an expected period of two years, provided that certain services may be longer than the term and services may be extended with approval from both parties. The services include specified accounting, finance, information technology, human resources, employee benefits and other services that have historically been provided on a centralized basis by BSC. For the three months ended September 30, 2022, the amounts Exelon billed Constellation and Constellation billed Exelon for these services were $68 million recorded in Other income, net and $12 million recorded in Operating and maintenance expense, respectively. Additionally, for the period from February 1, 2022 to September 30, 2022, the amounts Exelon billed Constellation and Constellation billed Exelon for these services were $193 million recorded in Other income, net and $32 million recorded in Operating and maintenance expense, respectively.

•Tax Matters Agreement (TMA) – governs the respective rights, responsibilities and obligations of Exelon and Constellation with respect to all tax matters, including tax liabilities and benefits, tax attributes, tax returns, tax contests and other tax sharing regarding U.S. federal, state, local and foreign income taxes, other tax matters and related tax returns. See Note 8. Income Taxes for additional information.

In addition, the Utility Registrants will continue to incur expenses from transactions with Generation after the separation. Prior to the separation, such expenses were primarily recorded as Purchased power from affiliates and an immaterial amount recorded as Operating and maintenance expense from affiliates at the Utility Registrants. After the separation, such expenses are primarily recorded as Purchased power and an immaterial amount recorded as Operating and maintenance expense at the Utility Registrants.

•ComEd had an ICC-approved RFP contract with Generation to provide a portion of ComEd’s electric supply requirements. ComEd also purchased RECs and ZECs from Generation.

•PECO received electric supply from Generation under contracts executed through PECO’s competitive procurement process. In addition, PECO had a ten-year agreement with Generation to sell solar AECs.

•BGE received a portion of its energy requirements from Generation under its MDPSC-approved market-based SOS and gas commodity programs.

•Pepco received electric supply from Generation under contracts executed through Pepco’s competitive procurement process approved by the MDPSC and DCPSC.

•DPL received a portion of its energy requirements from Generation under its MDPSC and DEPSC approved market-based SOS commodity programs.

•ACE received electric supply from Generation under contracts executed through ACE’s competitive procurement process approved by the NJBPU.

ComEd and PECO also have receivables with Generation as a result of the nuclear decommissioning contractual construct whereby, to the extent NDT funds are greater than the underlying ARO at the end of decommissioning, such amounts are due back to ComEd and PECO, as applicable, for payment to their respective customers. See Note 9 — Asset Retirement Obligations of the Combined Notes to Consolidated Financial Statements of the 2021 Recast Form 10-K and Note 17 — Related Party Transactions for additional information.

Discontinued Operations

The separation represented a strategic shift that would have a major effect on Exelon’s operations and financial results. Accordingly, the separation meets the criteria for discontinued operations.

The following table presents the results of Constellation that have been reclassified from continuing operations and included in discontinued operations within Exelon’s Consolidated Statements of Operations and Comprehensive Income for the three months ended September 30, 2021 and the nine months ended September 30, 2022 and September 30, 2021.

These results are primarily Generation, which is comprised of Exelon’s Mid-Atlantic, Midwest, New York, ERCOT, and Other Power Regions reportable segments, and include the impact of transaction costs, certain BSC costs, including any transition costs, that were historically allocated and directly attributable to Generation, transactions

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(Dollars in millions, except per share data, unless otherwise noted)

Note 2 — Discontinued Operations

between Generation and the Utility Registrants, and tax-related adjustments. Transaction costs include costs for external bankers, accountants, appraisers, lawyers, external counsels and other advisors, among others, who are involved in the negotiation, appraisal, due diligence and regulatory approval of the separation. Transition costs are primarily employee-related costs such as recruitment expenses, costs to establish certain stand-alone functions and information technology systems, professional services fees and other separation-related costs during the transition to separate Generation. For the purposes of reporting discontinued operations, these results also include transactions between Generation and the Utility Registrants that were historically eliminated within Exelon’s Consolidated Statements of Operations as these transactions will be ongoing after the separation. Certain BSC costs that were historically allocated to Generation are presented as part of continuing operations in Exelon’s Consolidated Statements of Operations as these costs do not qualify as expenses of the discontinued operations per the accounting rules.

									Three Months Ended September 30,						Nine Months Ended September 30,
									2021						2022						2021
Operating revenues
Competitive business revenues									$	4,083					$	1,855					$	13,250
Competitive business revenues from affiliates									325						161						873
Total operating revenues									4,408						2,016						14,123
Operating expenses
Competitive businesses purchased power and fuel									1,545						1,138						8,102
Operating and maintenance(a)									845						371						3,132
Depreciation and amortization									866						94						2,735
Taxes other than income taxes									115						44						354
Total operating expenses									3,371						1,647						14,323
Gain on sales of assets and businesses									65						10						144
Operating income (loss)									1,102						379						(56)
Other income and (deductions)
Interest expense, net									(73)						(20)						(214)
Other, net									(115)						(281)						561
Total other (deductions) and income									(188)						(301)						347
Income before income taxes									914						78						291
Income taxes									139						(40)						152
Equity in losses of unconsolidated affiliates									(3)						(1)						(5)
Net income									772						117						134
Net income attributable to noncontrolling interests									26						1						126
Net income from discontinued operations									$	746					$	116					$	8

__________

(a)Includes transaction and transition costs related to the separation of $52 million for the nine months ended September 30, 2022 and $13 million and $19 million for the three and nine months ended September 30, 2021, respectively. See discussion above for additional information.

There were no assets and liabilities of discontinued operations included in Exelon’s Consolidated Balance Sheet as of September 30, 2022. Constellation had net assets of $11,573 million that separated on February 1, 2022 that resulted in a reduction to Exelon’s equity during the nine months ended September 30, 2022. Refer to the Distribution of Constellation line in Exelon’s Consolidated Statement of Changes in Shareholders’ Equity for further information.

The following table presents the assets and liabilities of discontinued operations in Exelon’s Consolidated Balance Sheet as of December 31, 2021:

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(Dollars in millions, except per share data, unless otherwise noted)

Note 2 — Discontinued Operations

						December 31, 2021
ASSETS
Current assets
Cash and cash equivalents						$	510
Restricted cash and cash equivalents						72
Accounts receivable
Customer accounts receivable						1,724
Customer allowance for credit losses						(55)
Customer accounts receivable, net						1,669
Other accounts receivable						596
Other allowance for credit losses						(4)
Other accounts receivable, net						592
Mark-to-market derivative assets						2,169
Inventories, net
Fossil fuel and emission allowances						284
Materials and supplies						1,004
Renewable energy credits						529
Assets held for sale						13
Other						993
Total current assets of discontinued operations						7,835
Property, plant, and equipment (net of accumulated depreciation and amortization of $15,888)						19,661
Deferred debits and other assets
Nuclear decommissioning trust funds						15,938
Investments						193
Mark-to-market derivative assets						949
Other						1,768
Total property, plant, and equipment, deferred debits, and other assets of discontinued operations						38,509
Total assets of discontinued operations						$	46,344

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(Dollars in millions, except per share data, unless otherwise noted)

Note 2 — Discontinued Operations

						December 31, 2021
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Short-term borrowings						$	2,082
Long-term debt due within one year						1,220
Accounts payable						1,757
Accrued expenses						818
Mark-to-market derivative liabilities						981
Renewable energy credit obligation						779
Liabilities held for sale						3
Other						300
Total current liabilities of discontinued operations						7,940
Long-term debt						4,575
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits						3,583
Asset retirement obligations						12,819
Pension obligations						939
Non-pension postretirement benefit obligations						876
Spent nuclear fuel obligation						1,210
Mark-to-market derivative liabilities						513
Other						1,161
Total long-term debt, deferred credits, and other liabilities of discontinued operations						25,676
Total liabilities of discontinued operations						$	33,616

The following table presents selected financial information regarding cash flows of the discontinued operations that are included within Exelon’s Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and September 30, 2021.

			Nine Months Ended September 30,
			2022						2021
Non-cash items included in net income from discontinued operations:
Depreciation, amortization, and accretion, including nuclear fuel and energy contract amortization			$	207					$	3,951
Asset impairments			—						537
Loss (gain) on sales of assets and businesses			9						(144)
Deferred income taxes and amortization of investment tax credits			(143)						(242)
Net fair value changes related to derivatives			(59)						(1,244)
Net realized and unrealized losses (gains) on NDT fund investments			205						(383)
Net unrealized losses on equity investments			16						83
Other decommissioning-related activity			36						(810)
Cash flows from investing activities:
Capital expenditures			(227)						(1,098)
Collection of DPP			169						3,052
Supplemental cash flow information:
Decrease in capital expenditures not paid			(128)						(77)
Increase in DPP			348						2,933
Increase in PP&E related to ARO update			335						550

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(Dollars in millions, except per share data, unless otherwise noted)

Note 3 — Regulatory Matters

3. Regulatory Matters (All Registrants)

As discussed in Note 3 — Regulatory Matters of the 2021 Recast Form 10-K, the Registrants are involved in rate and regulatory proceedings at FERC and their state commissions. The following discusses developments in 2022 and updates to the 2021 Recast Form 10-K.

Distribution Base Rate Case Proceedings

The following tables show the completed and pending distribution base rate case proceedings in 2022.

Completed Distribution Base Rate Case Proceedings

Registrant/Jurisdiction						Filing Date						Service						Requested Revenue Requirement Increase						Approved Revenue Requirement Increase						Approved ROE						Approval Date						Rate Effective Date
ComEd - Illinois(a)						April 16, 2021						Electric						$	51					$	46					7.36		%				December 1, 2021						January 1, 2022
PECO - Pennsylvania						March 30, 2021						Electric						246						132						N/A(b)						November 18, 2021						January 1, 2022
						March 31, 2022						Natural Gas						82						55												October 27, 2022						January 1, 2023
BGE - Maryland(c)						May 15, 2020 (amended September 11, 2020)						Electric						203						140						9.50		%				December 16, 2020						January 1, 2021
												Natural Gas						108						74						9.65		%
Pepco - District of Columbia(d)						May 30, 2019 (amended June 1, 2020)						Electric						136						109						9.275		%				June 8, 2021						July 1, 2021
Pepco - Maryland(e)						October 26, 2020 (amended March 31, 2021)						Electric						104						52						9.55		%				June 28, 2021						June 28, 2021
DPL - Maryland(f)						September 1, 2021 (amended December 23, 2021)						Electric						27						13						9.60		%				March 2, 2022						March 2, 2022
DPL - Delaware						January 14, 2022 (amended August 15, 2022)						Natural Gas						13						8						9.60		%				October 12, 2022						November 1, 2022
ACE - New Jersey(g)						December 9, 2020 (amended February 26, 2021)						Electric						67						41						9.60		%				July 14, 2021						January 1, 2022

__________

(a)ComEd's 2022 approved revenue requirement reflects an increase of $37 million for the initial year revenue requirement for 2022 and an increase of $9 million related to the annual reconciliation for 2020. The revenue requirement for 2022 provides for a weighted average debt and equity return on distribution rate base of 5.72%, inclusive of an allowed ROE of 7.36%, reflecting the monthly average yields for 30-year treasury bonds plus 580 basis points. The reconciliation revenue requirement for 2020 provides for a weighted average debt and equity return on distribution rate base of 5.69%, inclusive of an allowed ROE of 7.29%, reflecting the monthly yields on 30-year treasury bonds plus 580 basis points less a performance metrics penalty of 7 basis points.

(b)The PECO electric and natural gas base rate case proceedings were resolved through settlement agreements, which did not specify an approved ROE.

(c)Reflects a three-year cumulative multi-year plan for 2021 through 2023. BGE proposed to use certain tax benefits to fully offset the increases in 2021 and 2022 and partially offset the increase in 2023. The MDPSC awarded BGE electric revenue requirement increases of $59 million, $39 million, and $42 million, before offsets, in 2021, 2022, and 2023, respectively, and natural gas revenue requirement increases of $53 million, $11 million, and $10 million, before offsets, in 2021, 2022, and 2023, respectively. However, the MDPSC utilized the tax benefits to fully offset the increases in 2021 and January 2022 such that customer rates remained unchanged. For the remainder of 2022, the MDPSC chose to offset only 25% of the cumulative 2021 and 2022 electric revenue requirement increases and 50% of the cumulative gas revenue

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(Dollars in millions, except per share data, unless otherwise noted)

Note 3 — Regulatory Matters

requirement increases. In 2021, the MDPSC deferred a decision on whether to use certain tax benefits to offset the revenue requirement increases in 2023 and directed BGE to make another proposal at the end of 2022. In September 2022 BGE proposed that tax benefits not be used to offset the 2023 revenue requirement increases. On October 26, 2022, the MDPSC accepted BGE's recommendation to not use tax benefits to offset the 2023 revenue requirement increases.

(d)Reflects a cumulative multi-year plan with 18-months remaining in 2021 through 2022. The DCPSC awarded Pepco electric incremental revenue requirement increases of $42 million and $67 million, before offsets, for 2021 and 2022, respectively. However, the DCPSC utilized the acceleration of refunds for certain tax benefits along with other rate relief to partially offset the customer rate increases by $22 million and $40 million for 2021 and 2022, respectively.

(e)Reflects a three-year cumulative multi-year plan for April 1, 2021 through March 31, 2024. The MDPSC awarded Pepco electric incremental revenue requirement increases of $21 million, $16 million, and $15 million, before offsets, for the 12-month periods ending March 31, 2022, 2023, and 2024, respectively. Pepco proposed to utilize certain tax benefits to fully offset the increase through 2023 and partially offset customer rate increases in 2024. However, the MDPSC only utilized the acceleration of refunds for certain tax benefits to fully offset the increases such that customer rates remain unchanged through March 31, 2022. On February 23, 2022, the MDPSC chose to offset 25% of the cumulative revenue requirement increase for the 12-month period ending March 31, 2023. Whether certain tax benefits will be used to offset the customer rate increases for the 12-month period ending March 31, 2024 has not been decided, and Pepco cannot predict the outcome.

(f)The approved settlement reflects a 9.60% ROE, which is solely for the purposes of calculating AFUDC and regulatory asset carrying costs.

(g)Requested and approved increases are before New Jersey sales and use tax. The order allows ACE to retain approximately $11 million of certain tax benefits which resulted in a decrease to income tax expense in Exelon's, PHI's, and ACE's Consolidated Statements of Operations and Comprehensive Income in the third quarter of 2021.

Pending Distribution Base Rate Case Proceedings

Registrant/Jurisdiction

Filing Date

Service

Requested Revenue Requirement Increase

Requested ROE

Expected Approval Timing

ComEd - Illinois(a)

April 15, 2022

Electric

$

199

7.85

%

Fourth quarter of 2022

DPL - Maryland(b)

May 19, 2022

Electric

38

10.25

%

Fourth quarter of 2022

__________

(a)ComEd's 2023 requested revenue requirement reflects an increase of $144 million for the initial year revenue requirement for 2023 and an increase of $55 million related to the annual reconciliation for 2021. The revenue requirement for 2023 provides for a weighted average debt and equity return on distribution rate base of 5.94%, inclusive of an allowed ROE of 7.85%, reflecting the average monthly yields for 30-year treasury bonds plus 580 basis points. The reconciliation revenue requirement for 2021 provides for a weighted average debt and equity return on distribution rate base of 5.91%, inclusive of an allowed ROE of 7.78%, reflecting the average monthly yields for 30-year treasury bonds plus 580 basis points less a performance metrics penalty of 7 basis points. This is ComEd's last performance-based electric distribution formula rate update filing under EIMA as a result of the law authorizing the rate setting process sunsetting at the end of 2022. See Note 3 - Regulatory Matters of the 2021 Recast Form 10-K for additional information on ComEd's transition away from the electric distribution formula rate.

(b)Reflects a three-year cumulative multi-year plan for January 1, 2023 to December 31, 2025 and total requested revenue requirement increases, before offsets, of $23 million effective January 1, 2023, $8 million effective January 1, 2024, and $7 million effective January 1, 2025, to recover capital investments made in 2021 and planned capital investments through the end of 2025. DPL proposed the acceleration of refunds for certain tax benefits to partially offset the customer rate increases by $12 million and $8 million in 2023 and 2024, respectively.

On October 7, 2022, DPL filed a partial settlement agreement with the MDPSC. The partial settlement provides for a total requested revenue requirement increase of $29 million and requested ROE of 9.60%. The partial settlement reflects a three-year cumulative multi-year plan for January 1, 2023 to December 31, 2025 and total requested revenue increases of $17 million effective January 1, 2023, $6 million effective January 1, 2024, and $6 million effective January 1, 2025. While the pending base rate case filing is partially settled, there are no issues unsettled related to the requested revenue requirement increase and the requested ROE. While there will likely be no changes to the amended requested revenue requirement increase and requested ROE, DPL cannot predict the outcome of any unforeseen proceedings.

Transmission Formula Rates

The Utility Registrants' transmission rates are each established based on a FERC-approved formula. ComEd, BGE, Pepco, DPL, and ACE are required to file an annual update to the FERC-approved formula on or before May 15, and PECO is required to file on or before May 31, with the resulting rates effective on June 1 of the same year. The annual update for ComEd is based on prior year actual costs and current year projected capital

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(Dollars in millions, except per share data, unless otherwise noted)

Note 3 — Regulatory Matters

additions (initial year revenue requirement). The update for ComEd also reconciles any differences between the revenue requirement in effect beginning June 1 of the prior year and actual costs incurred for that year (annual reconciliation). The annual update for PECO is based on prior year actual costs and current year projected capital additions, accumulated depreciation, and accumulated deferred income taxes. The annual update for BGE, Pepco, DPL, and ACE is based on prior year actual costs and current year projected capital additions, accumulated depreciation, depreciation and amortization expense, and accumulated deferred income taxes. The update for PECO, BGE, Pepco, DPL, and ACE also reconciles any differences between the actual costs and actual revenues for the calendar year (annual reconciliation).

For 2022, the following total increases/(decreases) were included in the Utility Registrants' electric transmission formula rate updates:

Registrant(a)						Initial Revenue Requirement Increase						Annual Reconciliation (Decrease) Increase						Total Revenue Requirement Increase						Allowed Return on Rate Base(b)						Allowed ROE(c)
ComEd						$	24					$	(24)					$	—					8.11		%				11.50		%
PECO						23						16						39						7.30		%				10.35		%
BGE						25						(4)						16			(d)			7.30		%				10.50		%
Pepco						16						15						31						7.60		%				10.50		%
DPL						9						2						11						7.09		%				10.50		%
ACE						21						13						34						7.18		%				10.50		%

__________

(a)All rates are effective June 1, 2022 - May 31, 2023, subject to review by interested parties pursuant to review protocols of each Utility Registrants' tariff.

(b)Represents the weighted average debt and equity return on transmission rate bases. For ComEd and PECO, the common equity component of the ratio used to calculate the weighted average debt and equity return on the transmission formula rate base is currently capped at 55% and 55.75%, respectively.

(c)The rate of return on common equity for each Utility Registrant includes a 50-basis-point incentive adder for being a member of a RTO.

(d)The increase in BGE's transmission revenue requirement includes a $5 million reduction related to a FERC-approved dedicated facilities charge to recover the costs of providing transmission service to specifically designated load by BGE.

Other State Regulatory Matters

Illinois Regulatory Matters

CEJA (Exelon and ComEd). On September 15, 2021, the Governor of Illinois signed into law CEJA. CEJA includes, among other features, (1) procurement of CMCs from qualifying nuclear-powered generating facilities, (2) a requirement to file a general rate case or a new four-year multi-year plan no later than January 20, 2023 to establish rates effective after ComEd’s existing performance-based distribution formula rate sunsets, (3) an extension of and certain adjustments to ComEd’s energy efficiency MWh savings goals, (4) revisions to the Illinois RPS requirements, including expanded charges for the procurement of RECs from wind and solar generation, (5) a requirement to accelerate amortization of ComEd’s unprotected excess deferred income taxes ("EDIT") that ComEd was previously directed by the ICC to amortize using the average rate assumption method which equates to approximately 39.5 years, and (6) requirements that ComEd and the ICC initiate and conduct various regulatory proceedings on subjects including ethics, spending, grid investments, and performance metrics. Regulatory or legal challenges regarding the validity or implementation of CEJA are possible and Exelon and ComEd cannot reasonably predict the outcome of any such challenges.

ComEd Electric Distribution Rates

ComEd filed its last performance-based electric distribution formula rate update filing under EIMA in April 2022. Those rates will take effect in 2023. Also during 2023, ComEd will file with the ICC a petition to reconcile is 2022 actual costs with the approved revenue requirement in effect in 2022.

Under CEJA, ComEd will recover from retail customers, subject to certain exceptions, the costs it incurs to provide electric delivery services either through its electric distribution rate or other recovery mechanisms. On November 3, 2022, ComEd announced it plans on filing a four-year multi-year plan (“MRP”) in January 2023. The

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(Dollars in millions, except per share data, unless otherwise noted)

Note 3 — Regulatory Matters

MRP will set rates for 2024 – 2027, based on forecasted revenue requirements and an ICC determined rate of return on rate base, including the cost of common equity. Costs incurred during each year of the multi-year plan are subject to ICC review and the plan’s revenue requirement for each year will be reconciled with the actual costs that the ICC determines are prudently and reasonably incurred for that year. That reconciliation is subject to adjustment for certain expenses and, unless the plan is modified, to a 5% cap on increases in certain costs over the costs in the previously approved multi-year rate plan revenue requirement. Thus, for example, the rate adjustments necessary to reconcile 2024 revenues to ComEd’s actual 2024 costs incurred would take effect in January 2026 after the ICC’s review during 2025.

In January 2022, ComEd filed a request with the ICC proposing performance metrics that would be used in determining ROE incentives and penalties in the event ComEd filed a MRP in January 2023. On September 27, 2022, the ICC issued a final order approving seven performance metrics that provide symmetrical performance adjustments of 32 total basis points to ComEd’s rate of return on common equity based on the extent to which ComEd achieves the annual performance goals. On October 27, 2022, ComEd filed for rehearing concerning certain aspects of three of those metrics; the ICC must rule on that rehearing request within 20 days. ComEd will make its initial filing in 2025 to assess performance achieved under the metrics in 2024, and to determine any ROE adjustment, which would take effect in 2026.

Carbon Mitigation Credit

CEJA establishes decarbonization requirements for Illinois as well as programs to support the retention and development of emissions-free sources of electricity. ComEd is required to purchase CMCs from participating nuclear-powered generating facilities between June 1, 2022 and May 31, 2027 and all its costs of doing so will be recovered through a new rider. The price to be paid for each CMC was established through a competitive bidding process that included consumer-protection measures that capped the maximum acceptable bid amount and a formula that reduces CMC prices by an energy price index, the base residual auction capacity price in the ComEd zone of PJM, and the monetized value of any federal tax credit or other subsidy if applicable. The consumer protection measures contained in CEJA will result in net payments to ComEd ratepayers if the energy index, the capacity price and applicable federal tax credits or subsidy exceed the CMC contract price. ComEd began issuing credits to its retail customers under its new CMC rider in the June 2022 billing period and recorded a regulatory asset of $534 million as of September 30, 2022 for the difference between customer credits issued and the credit to be received from the participating nuclear-powered generating facilities.

Excess Deferred Income Taxes

The ICC initiated a docket to accelerate and fully credit to customers TCJA unprotected property-related EDIT no later than December 31, 2025. On July 7, 2022, the ICC issued a final order on the schedule for the acceleration of EDIT amortization, adopting the proposal as submitted by several parties, including ComEd, ICC Staff, the Illinois Attorney General's Office, and the Citizens Utility Board. EDIT amortization will be credited to customers through a new rider from January 1, 2023 through December 31, 2025.

Beneficial Electrification Plan

On July 1, 2022, ComEd filed a proposed plan to promote beneficial electrification efforts in its Northern Illinois service area with the ICC as required by CEJA. ComEd's plan is designed to meaningfully reduce barriers to beneficial electrification, including those related to electric vehicles, such as upfront technology adoption costs, charging costs, and charging availability; promote equity and environmental justice; reduce carbon emissions and surface-level pollutants; and support customer education and awareness of electrification options. As proposed, ComEd could expend approximately $300 million in total over the three-year period 2023 through 2025. The beneficial electrification plan requests recovery of all those costs through a rider mechanism, under which certain of the costs would be amortized over ten years with a return on the unrecovered balance. Certain legal questions regarding the permissible scope of the plan's activities and applicable budget have been raised by motion, and the ICC may decide those issues in an interim order. A final order is expected to be issued by the ICC no later than the first quarter of 2023. At this time, ComEd cannot predict the outcome of these proceedings.

See Note 3 — Regulatory Matters of the 2021 Recast Form 10-K for additional information on CEJA (referred to as Clean Energy Law).

Energy Efficiency Formula Rate (Exelon and ComEd). During 2022, the ICC approved the following total increases in ComEd's requested energy efficiency revenue requirement:

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(Dollars in millions, except per share data, unless otherwise noted)

Note 3 — Regulatory Matters

Filing Date						Requested Revenue Requirement Increase						Approved Revenue Requirement Increase(a)						Approved ROE						Approval Date						Rate Effective Date
May 25, 2022						$	50					$	50					7.85		%				October 27, 2022						January 1, 2023

__________

(a)ComEd’s 2023 approved revenue requirement above reflects an increase of $66 million for the initial year revenue requirement for 2023 and a decrease of $16 million related to the annual reconciliation for 2021. The revenue requirement for 2023 provides for a weighted average debt and equity return on the energy efficiency regulatory asset and rate base of 5.94% inclusive of an allowed ROE of 7.85%, reflecting the monthly average yields for 30-year treasury bonds plus 580 basis points. The revenue requirement for the 2021 reconciliation year provides for a weighted average debt and equity return on the energy efficiency regulatory asset and rate base of 5.52% inclusive of an allowed ROE of 6.99%, which includes a downward performance adjustment that decreased the ROE. The performance adjustment can either increase or decrease the ROE based upon the achievement of energy efficiency savings goals.

New Jersey Regulatory Matters

Termination of Energy Procurement Provisions of PPAs (Exelon, PHI, and ACE).

On December 22, 2021, ACE filed with the NJBPU a petition to terminate the provisions in the PPAs to purchase electricity from two coal-powered generation facilities located in the state of New Jersey. The petition was approved by the NJBPU on March 23, 2022. Upon closing of the transaction on March 31, 2022, ACE recognized a liability of $203 million for the contract termination fee, which is to be paid by the end of 2024, and recognized a corresponding regulatory asset of $203 million.

As of September 30, 2022, the $158 million liability for the contract termination fee consists of $87 million and $71 million included in Other current liabilities and Other deferred credits and other liabilities, respectively, in Exelon's Consolidated Balance Sheet. The current and noncurrent liability is included in PPA termination obligation and Other deferred credits and other liabilities, respectively, in PHI's and ACE's Consolidated Balance Sheets. For the nine months ended September 30, 2022, ACE has paid $45 million of the liability, which is recorded in Changes in Other assets and liabilities in Exelon's, PHI's, and ACE's Consolidated Statements of Cash Flows.

Regulatory Assets and Liabilities

The Utility Registrants' regulatory assets and liabilities have not changed materially since December 31, 2021, unless noted below. See Note 3 — Regulatory Matters of the 2021 Recast Form 10-K for additional information on the specific regulatory assets and liabilities.

ComEd. Regulatory assets increased $668 million primarily due to increases of $534 million in the CMC regulatory asset, as discussed in CEJA above, and $161 million in the Electric Distribution Formula Rate Annual Reconciliations regulatory asset, partially offset by a decrease of $152 million in the Renewable Energy regulatory asset.

PECO. Regulatory assets decreased $301 million primarily due to a decrease of $300 million in the Deferred Income Taxes regulatory asset. Regulatory liabilities decreased $436 million primarily due to decreases of $409 million in the Decommissioning the Regulatory Agreement Units regulatory liability and $19 million in the Electric Energy and Natural Gas Costs regulatory liability.

BGE. Regulatory liabilities decreased $70 million primarily due to a decrease of $100 million in the Deferred Income Taxes regulatory liability.

Pepco. Regulatory assets decreased $68 million primarily due to decreases of $25 million in the DC PLUG Charge regulatory asset, $16 million in the Under-Recovered Revenue Decoupling regulatory asset, and $13 million in the Energy Efficiency and Demand Response Programs regulatory asset. Regulatory liabilities decreased $92 million primarily due to a decrease of $99 million in the Deferred Income Taxes regulatory liability.

DPL. Regulatory liabilities decreased $35 million primarily due to a decrease of $41 million in the Deferred Income Taxes regulatory liability.

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(Dollars in millions, except per share data, unless otherwise noted)

Note 3 — Regulatory Matters

ACE. Regulatory assets increased $159 million primarily due to an increase of $140 million in the Electric Energy Costs regulatory asset as a result of the PPA termination. Regulatory liabilities decreased $44 million primarily due to a decrease of $49 million in the Deferred Income Taxes regulatory liability, partially offset by a $12 million increase in the Over-Recovered Revenue Decoupling regulatory liability.

Capitalized Ratemaking Amounts Not Recognized

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 the Registrants' 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 the Utility Registrants' customers.

			Exelon						ComEd(a)						PECO						BGE(b)						PHI						Pepco(c)						DPL(c)						ACE(b)
September 30, 2022			$	49					$	5					$	—					$	30					$	14					$	11					$	2					$	1
December 31, 2021			43						1						—						37						5						3						2						—

__________

(a)Reflects ComEd's unrecognized equity returns earned for ratemaking purposes on its energy efficiency and electric distribution formula rate regulatory assets.

(b)BGE's and ACE's authorized amounts capitalized for ratemaking purposes primarily relate to earnings on shareholder's investment on their respective AMI programs.

(c)Pepco's and DPL's authorized amounts capitalized for ratemaking purposes relate to earnings on shareholder's investment on their respective AMI Programs and Energy Efficiency and Demand Response Programs, and for Pepco District of Columbia revenue decoupling program. The earnings on energy efficiency are on Pepco District of Columbia and DPL Delaware programs only.

4. 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. The 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 2021 Recast Form 10-K for additional information regarding the primary sources of revenue for the Registrants.

Contract Liabilities

The Registrants record contract liabilities when consideration is received or due prior to the satisfaction of the performance obligations. The Registrants record contract liabilities in Other current liabilities and Other noncurrent liabilities in their Consolidated Balance Sheets.

For PHI, Pepco, DPL, and ACE these contract liabilities primarily relate to upfront consideration received in the third quarter of 2020 for a collaborative arrangement with an unrelated owner and manager of communication infrastructure. The revenue attributable to this arrangement will be recognized as operating revenue over the 35 years under the collaborative arrangement.

The following table provides a rollforward of the contract liabilities reflected in Exelon's, PHI's, Pepco's, DPL's, and ACE's Consolidated Balance Sheets for the three and nine months ended September 30, 2022 and 2021. As of September 30, 2022 and December 31, 2021, ComEd's, PECO's, and BGE's contract liabilities were immaterial.

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(Dollars in millions, except per share data, unless otherwise noted)

Note 4 — Revenue from Contracts with Customers

						Exelon(a)						PHI(a)						Pepco(a)						DPL(a)						ACE(a)
Balance as of December 31, 2021						$	109					$	109					$	87					$	11					$	11
Revenues recognized						(2)						(2)						(2)						—						—
Balance as of March 31, 2022						107						107						85						11						11
Revenues recognized						(2)						(2)						(1)						—						(1)
Balance as of June 30, 2022						105						105						84						11						10
Revenues recognized						(2)						(2)						(1)						(1)						—
Balance as of September 30, 2022						$	103					$	103					$	83					$	10					$	10
						Exelon(a)						PHI(a)						Pepco(a)						DPL(a)						ACE(a)
Balance as of December 31, 2020						$	118					$	118					$	94					$	12					$	12
Revenues recognized						(2)						(2)						(2)						—						—
Balance as of March 31, 2021						116						116						92						12						12
Revenues recognized						(3)						(3)						(1)						(1)						(1)
Balance as of June 30, 2021						113						113						91						11						11
Revenues recognized						(2)						(2)						(2)						—						—
Balance as of September 30, 2021						$	111					$	111					$	89					$	11					$	11

__________

(a)Revenues recognized in the three and nine months ended September 30, 2022 and 2021, were included in the contract liabilities at December 31, 2021 and 2020, respectively.

Transaction Price Allocated to Remaining Performance Obligations

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 September 30, 2022. 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 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.

			2022						2023						2024						2025						2026 and thereafter						Total
Exelon			$	2					$	8					$	6					$	5					$	82					$	103
PHI			2						8						6						5						82						103
Pepco			2						6						5						5						65						83
DPL			—						1						—						—						9						10
ACE			—						1						1						—						8						10

Revenue Disaggregation

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 5 — Segment Information for the presentation of the Registrant's revenue disaggregation.

5. Segment Information (All Registrants)

Operating segments for each of the Registrants are determined based on information used by the CODMs in deciding how to evaluate performance and allocate resources at each of the Registrants.

Exelon has six reportable segments, which include ComEd, PECO, BGE, and PHI's three 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,

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 5 — Segment Information

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.

An analysis and reconciliation of the Registrants’ reportable segment information to the respective information in the consolidated financial statements for the three and nine months ended September 30, 2022 and 2021 is as follows:

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 5 — Segment Information

Three Months Ended September 30, 2022 and 2021

			ComEd						PECO						BGE						PHI						Other(a)						Intersegment Eliminations						Exelon
Operating revenues(b):
2022
Electric revenues			$	1,378					$	941					$	757					$	1,557					$	—					$	(12)					$	4,621
Natural gas revenues			—						73						113						38						—						—						224
Shared service and other revenues			—						—						—						3						381						(384)						—
Total operating revenues			$	1,378					$	1,014					$	870					$	1,598					$	381					$	(396)					$	4,845
2021
Electric revenues			$	1,789					$	762					$	677					$	1,444					$	—					$	20					$	4,692
Natural gas revenues			—						56						93						23						—						(1)						171
Shared service and other revenues			—						—						—						3						534						(537)						—
Total operating revenues			$	1,789					$	818					$	770					$	1,470					$	534					$	(518)					$	4,863
Intersegment revenues(c):
2022			$	6					$	3					$	3					$	3					$	378					$	(393)					$	—
2021			9						2						7						3						531						(516)						36
Depreciation and amortization:
2022			$	333					$	92					$	148					$	238					$	14					$	—					$	825
2021			304						86						142						210						16						—						758
Operating expenses:
2022			$	913					$	798					$	810					$	1,254					$	439					$	(380)					$	3,834
2021			1,428						677						709						1,155						491						(353)						4,107
Interest expense, net:
2022			$	104					$	45					$	39					$	72					$	105					$	—					$	365
2021			98						40						36						67						83						—						324
Income (loss) from continuing operations before income taxes:
2022			$	375					$	179					$	26					$	291					$	(103)					$	—					$	768
2021			276						108						32						264						(34)						(154)						492
Income Taxes:
2022			$	84					$	44					$	(7)					$	2					$	(31)					$	—					$	92
2021			56						(3)						(4)						(2)						(6)						(6)						35
Net income (loss) from continuing operations:
2022			$	291					$	135					$	33					$	289					$	(71)					$	(1)					$	676
2021			220						111						36						266						(27)						(149)						457
Capital Expenditures:
2022			$	593					$	333					$	340					$	398					$	8					$	—					$	1,672
2021			561						301						287						410						4						—						1,563

__________

(a)Other primarily includes Exelon’s corporate operations, shared service entities, and other financing and investment activities.

(b)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 16 — Supplemental Financial Information for additional information on total utility taxes.

(c)See Note 17 — Related Party Transactions for additional information on intersegment revenues.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 5 — Segment Information

PHI:

			Pepco						DPL						ACE						Other(a)						Intersegment Eliminations						PHI
Operating revenues(b):
2022
Electric revenues			$	724					$	374					$	462					$	—					$	(3)					$	1,557
Natural gas revenues			—						38						—						—						—						38
Shared service and other revenues			—						—						—						94						(91)						3
Total operating revenues			$	724					$	412					$	462					$	94					$	(94)					$	1,598
2021
Electric revenues			$	660					$	337					$	451					$	—					$	(4)					$	1,444
Natural gas revenues			—						23						—						—						—						23
Shared service and other revenues			—						—						—						92						(89)						3
Total operating revenues			$	660					$	360					$	451					$	92					$	(93)					$	1,470
Intersegment revenues(c):
2022			$	2					$	1					$	—					$	94					$	(94)					$	3
2021			2						2						1						91						(93)						3
Depreciation and amortization:
2022			$	99					$	59					$	74					$	6					$	—					$	238
2021			104						53						46						7						—						210
Operating expenses:
2022			$	555					$	345					$	353					$	96					$	(95)					$	1,254
2021			501						295						359						93						(93)						1,155
Interest expense, net:
2022			$	37					$	16					$	17					$	1					$	1					$	72
2021			35						15						14						3						—						67
Income (loss) before income taxes:
2022			$	146					$	54					$	95					$	(4)					$	—					$	291
2021			136						53						79						(4)						—						264
Income Taxes:
2022			$	1					$	2					$	1					$	(2)					$	—					$	2
2021			6						3						(11)						—						—						(2)
Net income (loss):
2022			$	145					$	52					$	94					$	(2)					$	—					$	289
2021			130						50						90						(4)						—						266
Capital Expenditures:
2022			$	193					$	100					$	105					$	—					$	—					$	398
2021			202						109						97						2						—						410

__________

(a)Other primarily includes PHI’s corporate operations, shared service entities, and other financing and investment activities.

(b)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 16 — Supplemental Financial Information for additional information on total utility taxes.

(c)Includes intersegment revenues with ComEd, BGE, and PECO, which are eliminated at Exelon.

The following tables disaggregate the Registrants' revenues 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 the Utility Registrants, the disaggregation of revenues reflects the two primary utility services of electric sales and natural gas sales (where applicable), with further disaggregation of these tariff sales provided by major customer groups. Exelon’s disaggregated revenues are consistent with the Utility Registrants, but exclude any intercompany revenues.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 5 — Segment Information

			Three Months Ended September 30, 2022
Revenues from contracts with customers			ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Electric revenues
Residential			$	935					$	620					$	406					$	808					$	318					$	207					$	283
Small commercial & industrial			217						149						88						179						44						65						70
Large commercial & industrial			(117)						93						158						401						303						43						55
Public authorities & electric railroads			3						8						7						16						9						4						3
Other(a)			246						71						101						166						57						55						54
Total electric revenues(b)			$	1,284					$	941					$	760					$	1,570					$	731					$	374					$	465
Natural gas revenues
Residential			$	—					$	46					$	70					$	10					$	—					$	10					$	—
Small commercial & industrial			—						20						13						6						—						6						—
Large commercial & industrial			—						—						28						3						—						3						—
Transportation			—						5						—						3						—						3						—
Other(c)			—						2						2						16						—						16						—
Total natural gas revenues(d)			$	—					$	73					$	113					$	38					$	—					$	38					$	—
Total revenues from contracts with customers			$	1,284					$	1,014					$	873					$	1,608					$	731					$	412					$	465
Other revenues
Revenues from alternative revenue programs			$	88					$	(5)					$	(8)					$	(11)					$	(8)					$	—					$	(3)
Other electric revenues(e)			6						5						4						1						1						—						—
Other natural gas revenues(e)			—						—						1						—						—						—						—
Total other revenues			$	94					$	—					$	(3)					$	(10)					$	(7)					$	—					$	(3)
Total revenues for reportable segments			$	1,378					$	1,014					$	870					$	1,598					$	724					$	412					$	462

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(Dollars in millions, except per share data, unless otherwise noted)

Note 5 — Segment Information

			Three Months Ended September 30, 2021
Revenues from contracts with customers			ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Electric revenues
Residential			$	978					$	509					$	383					$	782					$	309					$	198					$	275
Small commercial & industrial			433						113						73						150						36						53						61
Large commercial & industrial			148						67						128						320						244						27						49
Public authorities & electric railroads			11						7						7						15						8						4						3
Other(a)			245						61						104						172						53						56						63
Total electric revenues(b)			$	1,815					$	757					$	695					$	1,439					$	650					$	338					$	451
Natural gas revenues
Residential			$	—					$	36					$	57					$	10					$	—					$	10					$	—
Small commercial & industrial			—						13						10						5						—						5						—
Large commercial & industrial			—						—						22						2						—						2						—
Transportation			—						5						—						3						—						3						—
Other(c)			—						2						6						3						—						3						—
Total natural gas revenues(d)			$	—					$	56					$	95					$	23					$	—					$	23					$	—
Total revenues from contracts with customers			$	1,815					$	813					$	790					$	1,462					$	650					$	361					$	451
Other revenues
Revenues from alternative revenue programs			$	(32)					$	3					$	(24)					$	6					$	9					$	(2)					$	—
Other electric revenues(e)			6						2						3						2						1						1						—
Other natural gas revenues(e)			—						—						1						—						—						—						—
Total other revenues			$	(26)					$	5					$	(20)					$	8					$	10					$	(1)					$	—
Total revenues for reportable segments			$	1,789					$	818					$	770					$	1,470					$	660					$	360					$	451

__________

(a)Includes revenues from transmission revenue from PJM, wholesale electric revenue and mutual assistance revenue.

(b)Includes operating revenues from affiliates in 2022 and 2021 respectively of:

•$6 million, $9 million at ComEd

•$3 million, $2 million at PECO

•$2 million, $4 million at BGE

•$3 million, $3 million at PHI

•$2 million, $2 million at Pepco

•$1 million, $2 million at DPL

•less than $1 million, $1 million at ACE

(c)Includes revenues from off-system natural gas sales.

(d)Includes operating revenues from affiliates in 2022 and 2021 respectively of:

•less than $1 million, less than $1 million at PECO

•$1 million, $3 million at BGE

(e)Includes late payment charge revenues.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 5 — Segment Information

Nine Months Ended September 30, 2022 and 2021

			ComEd						PECO						BGE						PHI						Other(a)						Intersegment Eliminations						Exelon
Operating revenues(b):
2022
Electric revenues			$	4,536					$	2,390					$	2,122					$	4,058					$	—					$	(24)					$	13,082
Natural gas revenues			—						487						688						157						—						(2)						1,330
Shared service and other revenues			—						—						—						8						1,342						(1,350)						—
Total operating revenues			$	4,536					$	2,877					$	2,810					$	4,223					$	1,342					$	(1,376)					$	14,412
2021
Electric revenues			$	4,840					$	2,033					$	1,866					$	3,726					$	—					$	5					$	12,470
Natural gas revenues			—						366						560						118						—						—						1,044
Shared service and other revenues			—						—						—						10						1,549						(1,559)						—
Total operating revenues			$	4,840					$	2,399					$	2,426					$	3,854					$	1,549					$	(1,554)					$	13,514
Intersegment revenues(c):
2022			$	14					$	5					$	13					$	9					$	1,342					$	(1,377)					$	6
2021			19						6						20						10						1,542						(1,549)						48
Depreciation and amortization:
2022			$	982					$	277					$	470					$	697					$	46					$	—					$	2,472
2021			893						259						434						614						52						1						2,253
Operating expenses:
2022			$	3,357					$	2,230					$	2,446					$	3,535					$	1,524					$	(1,288)					$	11,804
2021			3,833						1,908						2,080						3,167						1,436						(1,067)						11,357
Interest expense, net:
2022			$	308					$	129					$	110					$	216					$	300					$	—					$	1,063
2021			292						119						103						201						253						(1)						967
Income (loss) from continuing operations before income taxes:
2022			$	909					$	541					$	270					$	528					$	(228)					$	(42)					$	1,978
2021			750						392						266						538						(116)						(447)						1,383
Income Taxes:
2022			$	203					$	67					$	3					$	10					$	82					$	(9)					$	356
2021			141						9						(24)						3						(27)						(26)						76
Net income (loss) from continuing operations:
2022			$	706					$	474					$	267					$	518					$	(310)					$	(33)					$	1,622
2021			609						383						290						535						(88)						(422)						1,307
Capital Expenditures:
2022			$	1,801					$	991					$	918					$	1,174					$	68					$	—					$	4,952
2021			1,723						878						907						1,299						65						—						4,872
Total assets:
September 30, 2022			$	38,582					$	14,048					$	12,932					$	25,655					$	6,341					$	(4,103)					$	93,455
December 31, 2021			36,470						13,824						12,324						24,744						7,626						(8,319)						86,669

__________

(a)Other primarily includes Exelon’s corporate operations, shared service entities, and other financing and investment activities.

(b)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 16 — Supplemental Financial Information for additional information on total utility taxes.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 5 — Segment Information

(c)See Note 17 — Related Party Transactions for additional information on intersegment revenues.

PHI:

			Pepco						DPL						ACE						Other(a)						Intersegment Eliminations						PHI
Operating revenues(b):
2022
Electric revenues			$	1,919					$	1,019					$	1,120					$	—					$	—					$	4,058
Natural gas revenues			—						157						—						—						—						157
Shared service and other revenues			—						—						—						298						(290)						8
Total operating revenues			$	1,919					$	1,176					$	1,120					$	298					$	(290)					$	4,223
2021
Electric revenues			$	1,736					$	922					$	1,080					$	—					$	(12)					$	3,726
Natural gas revenues			—						118						—						—						—						118
Shared service and other revenues			—						—						—						281						(271)						10
Total operating revenues			$	1,736					$	1,040					$	1,080					$	281					$	(283)					$	3,854
Intersegment revenues(c):
2022			$	4					$	5					$	2					$	288					$	(290)					$	9
2021			4						6						2						281						(283)						10
Depreciation and amortization:
2022			$	312					$	172					$	192					$	21					$	—					$	697
2021			302						157						133						22						—						614
Operating expenses:
2022			$	1,588					$	999					$	947					$	291					$	(290)					$	3,535
2021			1,396						858						911						285						(283)						3,167
Interest expense, net:
2022			$	111					$	48					$	49					$	7					$	1					$	216
2021			104						47						43						7						—						201
Income (loss) before income taxes:
2022			$	259					$	138					$	133					$	(2)					$	—					$	528
2021			273						144						129						(8)						—						538
Income Taxes:
2022			$	(2)					$	8					$	2					$	2					$	—					$	10
2021			9						9						(12)						(3)						—						3
Net income (loss):
2022			$	261					$	130					$	131					$	(4)					$	—					$	518
2021			264						135						141						(5)						—						535
Capital Expenditures:
2022			$	595					$	294					$	284					$	1					$	—					$	1,174
2021			641						320						336						2						—						1,299
Total assets:
September 30, 2022			$	10,349					$	5,710					$	4,966					$	4,716					$	(86)					$	25,655
December 31, 2021			9,903						5,412						4,556						4,933						(60)						24,744

__________

(a)Other primarily includes PHI’s corporate operations, shared service entities, and other financing and investment activities.

(b)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 16 — Supplemental Financial Information for additional information on total utility taxes.

(c)Includes intersegment revenues with ComEd, BGE, and PECO, which are eliminated at Exelon.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 5 — Segment Information

The following tables disaggregate the Registrants' revenues 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 the Utility Registrants, the disaggregation of revenues reflects the two primary utility services of electric sales and natural gas sales (where applicable), with further disaggregation of these tariff sales provided by major customer groups. Exelon’s disaggregated revenues are consistent with the Utility Registrants, but exclude any intercompany revenues.

			Nine Months Ended September 30, 2022
Revenues from contracts with customers			ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Electric revenues
Residential			$	2,610					$	1,538					$	1,158					$	2,007					$	826					$	570					$	611
Small commercial & industrial			953						386						239						461						117						173						171
Large commercial & industrial			48						229						418						1,056						806						99						151
Public authorities & electric railroads			22						23						20						47						25						11						11
Other(a)			718						202						297						524						157						168						190
Total electric revenues(b)			$	4,351					$	2,378					$	2,132					$	4,095					$	1,931					$	1,021					$	1,134
Natural gas revenues
Residential			$	—					$	335					$	448					$	77					$	—					$	77					$	—
Small commercial & industrial			—						125						77						35						—						35						—
Large commercial & industrial			—						—						128						9						—						9						—
Transportation			—						19						—						11						—						11						—
Other(c)			—						7						50						25						—						25						—
Total natural gas revenues(d)			$	—					$	486					$	703					$	157					$	—					$	157					$	—
Total revenues from contracts with customers			$	4,351					$	2,864					$	2,835					$	4,252					$	1,931					$	1,178					$	1,134
Other revenues
Revenues from alternative revenue programs			$	163					$	1					$	(40)					$	(33)					$	(15)					$	(3)					$	(14)
Other electric revenues(e)			22						11						11						4						3						1						—
Other natural gas revenues(e)			—						1						4						—						—						—						—
Total other revenues			$	185					$	13					$	(25)					$	(29)					$	(12)					$	(2)					$	(14)
Total revenues for reportable segments			$	4,536					$	2,877					$	2,810					$	4,223					$	1,919					$	1,176					$	1,120

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 5 — Segment Information

			Nine Months Ended September 30, 2021
Revenues from contracts with customers			ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Electric revenues
Residential			$	2,479					$	1,325					$	1,044					$	1,924					$	785					$	535					$	604
Small commercial & industrial			1,176						312						202						392						101						145						146
Large commercial & industrial			420						183						342						825						616						70						139
Public authorities & electric railroads			33						24						20						45						24						11						10
Other(a)			676						167						269						453						154						143						158
Total electric revenues(b)			$	4,784					$	2,011					$	1,877					$	3,639					$	1,680					$	904					$	1,057
Natural gas revenues
Residential			$	—					$	251					$	354					$	67					$	—					$	67					$	—
Small commercial & industrial			—						94						59						29						—						29						—
Large commercial & industrial			—						—						103						5						—						5						—
Transportation			—						17						—						11						—						11						—
Other(c)			—						4						41						6						—						6						—
Total natural gas revenues(d)			$	—					$	366					$	557					$	118					$	—					$	118					$	—
Total revenues from contracts with customers			$	4,784					$	2,377					$	2,434					$	3,757					$	1,680					$	1,022					$	1,057
Other revenues
Revenues from alternative revenue programs			$	32					$	20					$	(17)					$	94					$	54					$	17					$	23
Other electric revenues(e)			24						2						7						3						2						1						—
Other natural gas revenues(e)			—						—						2						—						—						—						—
Total other revenues			$	56					$	22					$	(8)					$	97					$	56					$	18					$	23
Total revenues for reportable segments			$	4,840					$	2,399					$	2,426					$	3,854					$	1,736					$	1,040					$	1,080

__________

(a)Includes revenues from transmission revenue from PJM, wholesale electric revenue and mutual assistance revenue.

(b)Includes operating revenues from affiliates in 2022 and 2021 respectively of:

•$14 million, $19 million at ComEd

•$5 million, $5 million at PECO

•$5 million, $10 million at BGE

•$9 million, $10 million at PHI

•$4 million, $4 million at Pepco

•$5 million, $6 million at DPL

•$2 million, $2 million at ACE

(c)Includes revenues from off-system natural gas sales.

(d)Includes operating revenues from affiliates in 2022 and 2021 respectively of:

•$1 million, $1 million at PECO

•$7 million, $10 million at BGE

(e)Includes late payment charge revenues.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 6 — Accounts Receivable

6. Accounts Receivable (All Registrants)

Allowance for Credit Losses on Accounts Receivable

The following tables present the rollforward of Allowance for Credit Losses on Customer Accounts Receivable.

			Three Months Ended September 30, 2022
			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Balance as of June 30, 2022			$	354					$	81					$	107					$	57					$	109					$	42					$	22					$	45
Plus: Current period provision for expected credit losses(a)			38						10						12						2						14						6						1						7
Less: Write-offs, net of recoveries(b)			51						17						16						5						12						4						3						5
Balance as of September 30, 2022			$	341					$	74					$	103					$	54					$	111					$	44					$	20					$	47
			Three Months Ended September 30, 2021
			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Balance as of June 30, 2021			$	320					$	89					$	111					$	27					$	93					$	38					$	19					$	36
Plus: Current period provision for expected credit losses(c)			37						11						1						7						18						5						3						10
Less: Write-offs, net of recoveries(b)			32						12						11						3						6						2						4						—
Balance as of September 30, 2021			$	325					$	88					$	101					$	31					$	105					$	41					$	18					$	46
			Nine Months Ended September 30, 2022
			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Balance as of December 31, 2021			$	320					$	73					$	105					$	38					$	104					$	37					$	18					$	49
Plus: Current period provision for expected credit losses(d)(e)			141						31						33						30						47						23						8						16
Less: Write-offs, net of recoveries(b)(f)			120						30						35						14						40						16						6						18
Balance as of September 30, 2022			$	341					$	74					$	103					$	54					$	111					$	44					$	20					$	47
			Nine Months Ended September 30, 2021
			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Balance as of December 31, 2020			$	334					$	97					$	116					$	35					$	86					$	32					$	22					$	32
Plus: Current period provision for expected credit losses(g)			65						23						7						2						33						15						4						14
Less: Write-offs, net of recoveries(b)			74						32						22						6						14						6						8						—
Balance as of September 30, 2021			$	325					$	88					$	101					$	31					$	105					$	41					$	18					$	46

__________

(a)For ACE, the increase is primarily a result of increased receivable balances.

(b)Recoveries were not material to the Registrants.

(c)For ACE, the increase is primarily a result of increased aging of receivables and a slight decrease in the expected recovery rate.

(d)For PECO, BGE, and DPL, the increase is primarily a result of increased receivable balances due to the increased aging of receivables.

(e)For PHI, Pepco and ACE, the increase is primarily as a result of increased receivable balances.

(f)For PECO, PHI, Pepco, and ACE, the increase in 2022 is primarily related to the termination of the moratoriums in Pennsylvania, the District of Columbia, and New Jersey, which beginning in March 2020, prevented customer disconnections for non-payment. With disconnection activities restarting in January 2022, write-offs of aging accounts receivable increased throughout the year.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 6 — Accounts Receivable

(g)For PHI, Pepco, and ACE, the increase is primarily a result of increased aging of receivables and a slight decrease in the expected recovery rate.

The following tables present the rollforward of Allowance for Credit Losses on Other Accounts Receivable.

			Three Months Ended September 30, 2022
			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Balance as of June 30, 2022			$	81					$	18					$	10					$	11					$	42					$	20					$	8					$	14
Plus: Current period provision (benefit) for expected credit losses			8						2						2						2						2						2						(1)						1
Less: Write-offs, net of recoveries(a)			5						2						1						1						1						—						—						1
Balance as of September 30, 2022			$	84					$	18					$	11					$	12					$	43					$	22					$	7					$	14
			Three Months Ended September 30, 2021
			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Balance as of June 30, 2021			$	71					$	18					$	7					$	8					$	38					$	16					$	9					$	13
Plus: Current period provision (benefit) for expected credit losses			6						2						1						1						2						1						(1)						2
Less: Write-offs, net of recoveries(a)			4						1						1						1						—						—						—						—
Balance as of September 30, 2021			$	73					$	19					$	7					$	8					$	40					$	17					$	8					$	15
			Nine Months Ended September 30, 2022
			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Balance as of December 31, 2021			$	72					$	17					$	7					$	9					$	39					$	16					$	8					$	15
Plus: Current period provision (benefit) for expected credit losses			24						5						6						6						7						6						(1)						2
Less: Write-offs, net of recoveries(a)			12						4						2						3						3						—						—						3
Balance as of September 30, 2022			$	84					$	18					$	11					$	12					$	43					$	22					$	7					$	14
			Nine Months Ended September 30, 2021
			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Balance as of December 31, 2020			$	71					$	21					$	8					$	9					$	33					$	13					$	9					$	11
Plus: Current period provision (benefit) for expected credit losses			11						—						2						2						7						4						(1)						4
Less: Write-offs, net of recoveries(a)			9						2						3						3						—						—						—						—
Balance as of September 30, 2021			$	73					$	19					$	7					$	8					$	40					$	17					$	8					$	15

__________

(a)Recoveries were not material to the Registrants.

Unbilled Customer Revenue

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 6 — Accounts Receivable

The following table provides additional information about unbilled customer revenues recorded in the Registrants' Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021.

			Unbilled customer revenues(a)
			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
September 30, 2022			$	500					$	126					$	121					$	102					$	151					$	74					$	35					$	42
December 31, 2021			747						240						161						171						175						82						53						40

__________

(a)Unbilled customer revenues are classified in Customer accounts receivables, net in the Registrants' Consolidated Balance Sheets.

Other Purchases of Customer and Other Accounts Receivables

The Utility Registrants are required, under separate legislation and regulations in Illinois, Pennsylvania, Maryland, District of Columbia, Delaware, 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 table presents the total receivables purchased.

			Total receivables purchased
			Exelon(a)						ComEd						PECO						BGE(a)						PHI						Pepco						DPL						ACE
Nine months ended September 30, 2022			$	3,088					$	753					$	832					$	607					$	896					$	559					$	168					$	169
Nine months ended September 30, 2021			2,962						810						795						531						826						504						166						156

__________

(a)Includes $4 million of receivables purchased from Generation prior to the separation on February 1, 2022 for the nine months ended September 30, 2022 and $17 million of receivables purchased from Generation for the nine months ended September 30, 2021.

7. Asset Impairments (Exelon and BGE)

Asset Impairment

In the third quarter of 2022, a review of the impacts of COVID-19 on office use resulted in plans to cease the renovation and dispose of an office building at BGE before the asset was placed into service. BGE determined that the carrying value was not recoverable and that its fair value was less than carrying value. As a result, in the third quarter of 2022, a pre-tax impairment charge of $46 million was recorded in Operating and maintenance expense in Exelon’s and BGE’s Consolidated Statements of Operations and Comprehensive Income. The office building did not meet all of the criteria for classification as held for sale as of September 30, 2022, and therefore continues to be reported within Property, plant and equipment in Exelon’s and BGE’s Balance Sheets as of September 30, 2022.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 8 — Income Taxes

8. 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 September 30, 2022(a)
			Exelon						ComEd						PECO(b)						BGE(b)						PHI(b)						Pepco(b)						DPL(b)						ACE(b)
U.S. Federal statutory rate			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 benefit			9.0						8.0						20.7						6.8						1.4						(2.7)						6.5						7.0
Plant basis differences			(5.3)						(0.4)						(14.2)						(2.6)						(1.7)						(2.3)						(0.8)						(1.0)
Excess deferred tax amortization			(11.6)						(5.6)						(3.2)						(47.3)						(19.3)						(14.6)						(21.7)						(25.5)
Amortization of investment tax credit, including deferred taxes on basis difference			(0.1)						(0.1)						—						(0.2)						(0.1)						—						(0.2)						(0.2)
Tax credits			(0.6)						(0.4)						—						(1.9)						(0.9)						(0.8)						(1.3)						(0.7)
Other			(0.4)						(0.1)						0.3						(2.7)						0.3						0.1						0.2						0.5
Effective income tax rate			12.0		%				22.4		%				24.6		%				(26.9)		%				0.7		%				0.7		%				3.7		%				1.1		%

			Three Months Ended September 30, 2021(a)
			Exelon						ComEd						PECO(c)						BGE(c)						PHI						Pepco						DPL						ACE(c)
U.S. Federal statutory rate			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 benefit			7.1						8.0						(4.1)						(13.0)						5.0						3.4						6.4						7.0
Plant basis differences			(4.7)						(0.8)						(16.2)						(1.4)						(1.3)						(2.0)						(0.6)						(0.6)
Excess deferred tax amortization			(15.5)						(7.6)						(3.4)						(17.3)						(24.9)						(17.6)						(19.9)						(41.4)
Amortization of investment tax credit, including deferred taxes on basis difference			(0.1)						(0.1)						—						(0.1)						(0.1)						—						(0.2)						(0.2)
Tax credits			(0.6)						(0.5)						—						(0.9)						(0.5)						(0.5)						(0.4)						(0.5)
Other			(0.1)						0.3						(0.1)						(0.8)						—						0.1						(0.6)						0.8
Effective income tax rate			7.1		%				20.3		%				(2.8)		%				(12.5)		%				(0.8)		%				4.4		%				5.7		%				(13.9)		%

__________

(a)Positive percentages represent income tax expense. Negative percentages represent income tax benefit.

(b)For PECO, the higher effective tax rate is related to a one-time state income expense, net of federal income tax benefit, of $38 million attributable to the change in the Pennsylvania corporate income tax rate partially offset by plant basis differences attributable to tax repair deductions. For BGE, PHI, Pepco, DPL, and ACE, the lower effective tax rate is primarily related to the acceleration of certain income tax benefits due to distribution and transmission rate case settlements.

(c)For PECO, the income tax benefit is primarily due to plant basis differences attributable to tax repair deductions. For BGE and ACE, the income tax benefit is primarily related to the acceleration of certain income tax benefits due to distribution rate case settlements.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 8 — Income Taxes

			Nine Months Ended September 30, 2022(a)
			Exelon						ComEd						PECO(b)						BGE(b)						PHI(b)						Pepco(b)						DPL(b)						ACE(b)
U.S. Federal statutory rate			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 benefit(c)			9.5						7.9						6.6						2.8						2.0						(3.2)						6.5						6.9
Plant basis differences			(4.2)						(0.5)						(12.2)						(1.1)						(1.7)						(2.4)						(0.7)						(1.1)
Excess deferred tax amortization			(11.3)						(5.7)						(3.2)						(20.7)						(18.8)						(15.4)						(20.4)						(24.7)
Amortization of investment tax credit, including deferred taxes on basis difference			(0.1)						(0.1)						—						(0.1)						(0.1)						—						(0.2)						(0.2)
Tax credits(d)			0.3						(0.3)						—						(0.7)						(0.7)						(0.6)						(0.7)						(0.6)
Other(e)			2.8						—						0.2						(0.1)						0.2						(0.2)						0.3						0.2
Effective income tax rate			18.0		%				22.3		%				12.4		%				1.1		%				1.9		%				(0.8)		%				5.8		%				1.5		%

			Nine Months Ended September 30, 2021(a)
			Exelon						ComEd						PECO(f)						BGE(f)						PHI						Pepco						DPL						ACE(f)
U.S. Federal statutory rate			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 benefit			3.8						7.6						(2.6)						(10.8)						4.6						2.5						6.5						7.3
Plant basis differences			(4.0)						(0.7)						(12.6)						(1.5)						(1.3)						(1.9)						(0.7)						(0.6)
Excess deferred tax amortization			(13.5)						(7.2)						(3.3)						(16.0)						(22.8)						(17.4)						(19.7)						(36.3)
Amortization of investment tax credit, including deferred taxes on basis difference			(0.1)						(0.1)						—						(0.1)						(0.1)						—						(0.2)						(0.2)
Tax credits			(0.6)						(0.5)						—						(0.9)						(0.5)						(0.5)						(0.4)						(0.5)
Other			(1.1)						(1.3)						(0.2)						(0.7)						(0.3)						(0.4)						(0.2)						—
Effective income tax rate			5.5		%				18.8		%				2.3		%				(9.0)		%				0.6		%				3.3		%				6.3		%				(9.3)		%

__________

(a)Positive percentages represent income tax expense. Negative percentages represent income tax benefit.

(b)For PECO, the lower effective tax rate is primarily related to plant basis differences attributable to tax repair deductions partially offset by higher state income taxes, net of federal income tax benefit, related to a one-time expense of $38 million attributable to the change in the Pennsylvania corporate income tax rate. For BGE, PHI, Pepco, DPL and ACE, the lower effective tax rate is primarily related to the acceleration of certain income tax benefits due to distribution and transmission rate case settlements.

(c)For Exelon, the higher state income taxes, net of federal income tax benefit, is primarily due to the long-term marginal state income tax rate change of $67 million and the recognition of a valuation allowance of $40 million against the net deferred tax asset position for certain standalone state filing jurisdictions, partially offset by a one-time impact associated with a state tax benefit of $43 million and indemnification adjustments pursuant to the Tax Matters Agreement of $4 million as a result of the separation. For PECO, the higher state income taxes, net of federal income tax benefit, related to a one-time expense of $38 million attributable to the change in the Pennsylvania corporate income tax rate.

(d)For Exelon, reflects the income tax expense related to the write-off of federal tax credits subject to recapture of $15 million as a result of the separation.

(e)For Exelon, primarily reflects the nondeductible transaction costs of approximately $19 million arising as part of the separation and indemnification adjustments pursuant to the Tax Matters Agreement of $40 million.

(f)For PECO, the lower effective tax rate is primarily due to plant basis differences attributable to tax repair deductions. For BGE and ACE, the income tax benefit is primarily related to the acceleration of certain income tax benefits due to distribution rate case settlements.

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(Dollars in millions, except per share data, unless otherwise noted)

Note 8 — Income Taxes

Unrecognized Tax Benefits

Exelon, PHI and ACE have the following unrecognized tax benefits as of September 30, 2022 and December 31, 2021. ComEd's, PECO's, BGE's, Pepco's, and DPL's amounts are not material.

			Exelon(a)												PHI						ACE
September 30, 2022			$	148											$	59					$	17
December 31, 2021			143												56						16

__________

(a)As of September 30, 2022, Exelon recorded a receivable of $50 million in Noncurrent other assets in the Consolidated Balance Sheet for Constellation’s share of unrecognized tax benefits for periods prior to the separation.

Reasonably possible the total amount of unrecognized tax benefits could significantly increase or decrease within 12 months after the reporting date

As of September 30, 2022, ACE has $14 million of unrecognized state tax benefits that could significantly decrease within the 12 months after the reporting date based on the outcome of pending court cases involving other taxpayers. The unrecognized tax benefit, if recognized, may be included in future base rates and that portion would have no impact to the effective tax rate.

Other Tax Matters

Separation (Exelon)

In the first quarter of 2022, in connection with the separation, Exelon recorded an income tax expense related to continuing operations of $148 million primarily due to the long-term marginal state income tax rate change of $67 million discussed further below, the recognition of valuation allowances of approximately $40 million against the net deferred tax assets positions for certain standalone state filing jurisdictions, the write-off of federal and state tax credits subject to recapture of $17 million, and nondeductible transaction costs for federal and state taxes of $24 million.

Tax Matters Agreement (Exelon)

In connection with the separation, Exelon entered into a TMA with Constellation. The TMA governs the respective rights, responsibilities, and obligations between Exelon and Constellation after the separation with respect to tax liabilities, refunds and attributes for open tax years that Constellation was part of Exelon’s consolidated group for U.S. federal, state, and local tax purposes.

Indemnification for Taxes. As a former subsidiary of Exelon, Constellation has joint and several liability with Exelon to the IRS and certain state jurisdictions relating to the taxable periods prior to the separation. The TMA specifies that Constellation is liable for their share of taxes required to be paid by Exelon with respect to taxable periods prior to the separation to the extent Constellation would have been responsible for such taxes under the existing Exelon tax sharing agreement. As a result, Exelon recorded a receivable of $55 million in Current other assets in the Consolidated Balance Sheet for Constellation’s share of taxes for periods prior to the separation, as of March 31, 2022. As of September 30, 2022, the remaining amount of the receivable is $55 million.

Tax Refunds. The TMA specifies that Constellation is entitled to their share of any future tax refunds claimed by Exelon with respect to taxable periods prior to the separation to the extent that Constellation would have received such tax refunds under the existing Exelon tax sharing agreement.

Tax Attributes. At the date of separation certain tax attributes, primarily pre-closing tax credit carryforwards, that were generated by Constellation were required by law to be allocated to Exelon. The TMA provides that Exelon will reimburse Constellation when those allocated tax credit carryforwards are utilized. As of March 31, 2022, Exelon recorded a payable of $11 million and $484 million in Current other liabilities and Noncurrent other liabilities, respectively, in the Consolidated Balance Sheet for tax credit carryforwards that are expected to be utilized and reimbursed to Constellation. As of September 30, 2022, the current and noncurrent payable amounts are $102 million and $392 million, respectively.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 8 — Income Taxes

Long-Term Marginal State Income Tax Rate (All Registrants)

In the first quarter of 2022, Exelon updated its marginal state income tax rates for changes in state apportionment due to the separation, which resulted in an increase of $67 million to the deferred tax liability at Exelon, and a corresponding adjustment to income tax expense, net of federal taxes.

Pennsylvania Corporate Income Tax Rate Change (Exelon and PECO)

On July 8, 2022, Pennsylvania enacted House Bill 1342, which will permanently reduce the corporate income tax rate from 9.99% to 4.99%. The tax rate will be reduced to 8.99% for the 2023 tax year. Starting with the 2024 tax year, the rate is reduced by 0.50% annually until it reaches 4.99% in 2031. As a result of the rate change, in the third quarter of 2022, Exelon and PECO recorded a one-time decrease to deferred income taxes of $390 million with a corresponding decrease to the deferred income taxes regulatory asset of $428 million for the amounts that are expected to be settled through future customer rates and an increase to income tax expense of $38 million (net of federal taxes). The tax rate decrease is not expected to have a material ongoing impact to Exelon’s and PECO’s financial statements.

Allocation of Tax Benefits (All Registrants)

The Utility Registrants are party to an agreement with Exelon that provides for the allocation of consolidated tax liabilities and benefits (Tax Sharing Agreement). The Tax Sharing Agreement provides that each party is allocated an amount of tax similar to that which would be owed had the party been separately subject to tax. In addition, any net benefit attributable to Exelon is reallocated to the Utility Registrants. That allocation is treated as a contribution to capital from Exelon to the party receiving the benefit.

The following table presents the allocation of tax benefits from Exelon under the Tax Sharing Agreement, for the nine months ended September 30, 2022 and 2021.

						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
September 30, 2022						$	1					$	47					$	—					$	28					$	23					$	3					$	2
September 30, 2021						1						19						—						17						16						—						—

Inflation Reduction Act (Exelon)

On August 16, 2022, the Inflation Reduction Act (IRA) was signed into law. The bill extends tax benefits for renewable technologies like solar and wind, creates new tax benefits for alternative clean energy sources like nuclear and hydrogen and it focuses on energy efficiency, electrification, and equity. However, the bill also implements a new 15.0% corporate minimum tax based on adjusted GAAP net income. Exelon estimates the IRA could result in an increase in cash taxes for Exelon of approximately $200 million per year starting in 2023. Exelon is continuing to assess the impacts of the IRA on the financial statements and will update estimates based on guidance to be issued by the U.S. Treasury and IRS in the future.

9. Retirement Benefits (All Registrants)

Defined Benefit Pension and OPEB

Effective February 1, 2022, in connection with the separation, pension and OPEB obligations and assets for current and former employees of the Constellation business and certain other former employees of Exelon and its subsidiaries transferred to pension and OPEB plans and trusts maintained by Constellation or its subsidiaries. The Exelon New England Union Employees Pension Plan and Constellation Mystic Power, LLC Union Employees Pension Plan Including Plan A and Plan B were transferred. The following OPEB plans were also transferred: Constellation Mystic Power, LLC Post-Employment Medical Savings Account Plan, Exelon New England Union Post-Employment Medical Savings Account Plan, and the Nine Mile Point Nuclear Station, LLC Medical Care and Prescription Drug Plan for Retired Employees.

As a result of the separation, Exelon restructured certain of its qualified pension plans. Pension obligations and assets for current and former employees continuing with Exelon and who were participants in the Exelon Employee Pension Plan for Clinton, TMI, and Oyster Creek, Pension Plan of Constellation Energy Nuclear

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(Dollars in millions, except per share data, unless otherwise noted)

Note 9 — Retirement Benefits

Group, LLC, and Nine Mile Point Pension Plan were merged into the Pension Plan of Constellation Energy Group, Inc, which was subsequently renamed, Exelon Pension Plan (EPP). Exelon employees who participated in these plans prior to the separation now participate in the EPP. The merging of the plans did not change the benefits offered to the plan participants and, thus, had no impact on Exelon's pension obligations.

The tables below show the pension and OPEB plans in which employees of each operating company participated as of September 30, 2022:

Operating Company(a)

Name of Plan:

ComEd

PECO

BGE

PHI

Pepco

DPL

ACE

Qualified Pension Plans:

Exelon Corporation Retirement Program

X

X

X

X

X

X

X

Exelon Corporation Pension Plan for Bargaining Unit Employees

X

Exelon Pension Plan

X

X

X

X

X

X

X

Pepco Holdings LLC Retirement Plan

X

X

X

X

X

X

X

Non-Qualified Pension Plans:

Exelon Corporation Supplemental Pension Benefit Plan and 2000 Excess Benefit Plan

X

X

X

Exelon Corporation Supplemental Management Retirement Plan

X

X

X

X

X

Constellation Energy Group, Inc. Senior Executive Supplemental Plan

X

X

Constellation Energy Group, Inc. Supplemental Pension Plan

X

X

Constellation Energy Group, Inc. Benefits Restoration Plan

X

X

X

Baltimore Gas & Electric Company Executive Benefit Plan

X

Baltimore Gas & Electric Company Manager Benefit Plan

X

X

Pepco Holdings LLC 2011 Supplemental Executive Retirement Plan

X

X

X

X

Conectiv Supplemental Executive Retirement Plan

X

X

X

Pepco Holdings LLC Combined Executive Retirement Plan

X

X

Atlantic City Electric Director Retirement Plan

X

X

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(Dollars in millions, except per share data, unless otherwise noted)

Note 9 — Retirement Benefits

Operating Company(a)

Name of Plan:

ComEd

PECO

BGE

PHI

Pepco

DPL

ACE

OPEB Plans:

PECO Energy Company Retiree Medical Plan

X

X

X

X

X

X

X

Exelon Corporation Health Care Program

X

X

X

X

X

X

X

Exelon Corporation Employees’ Life Insurance Plan

X

X

X

Exelon Corporation Health Reimbursement Arrangement Plan

X

X

X

BGE Retiree Medical Plan

X

X

X

X

X

X

BGE Retiree Dental Plan

X

Exelon Retiree Medical Plan of Constellation Energy Nuclear Group, LLC

X

X

X

Exelon Retiree Dental Plan of Constellation Energy Nuclear Group, LLC

X

X

X

Pepco Holdings LLC Welfare Plan for Retirees

X

X

X

X

X

X

X

__________

(a)Employees generally remain in their legacy benefit plans when transferring between operating companies.

As of February 1, 2022, in connection with the separation, Exelon's pension and OPEB plans were remeasured. The remeasurement and separation resulted in a decrease to the pension obligation, net of plan assets, of $921 million and a decrease to the OPEB obligation of $893 million. Additionally, accumulated other comprehensive loss, decreased by $1,994 million (after-tax) and regulatory assets and liabilities increased by $14 million and $5 million respectively. Key assumptions were held consistent with the year end December 31, 2021 assumptions with the exception of the discount rate.

The majority of the 2022 pension benefit cost for the Exelon-sponsored plans is calculated using an expected long-term rate of return on plan assets of 7.00% and a discount rate of 3.24%. The majority of the 2022 OPEB cost is calculated using an expected long-term rate of return on plan assets of 6.44% for funded plans and a discount rate of 3.20%.

During the first quarter of 2022, Exelon received an updated valuation of its pension and OPEB to reflect actual census data as of February 1, 2022. This valuation resulted in a decrease to the pension obligation of $24 million and an increase to the OPEB obligation of $5 million. Additionally, accumulated other comprehensive loss increased by $5 million (after-tax) and regulatory assets and liabilities decreased by $30 million and $3 million, respectively.

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 and nine months ended September 30, 2022 and 2021.

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(Dollars in millions, except per share data, unless otherwise noted)

Note 9 — Retirement Benefits

			Pension Benefits												OPEB
			Three Months Ended September 30,												Three Months Ended September 30,
			2022						2021						2022						2021
Components of net periodic benefit cost:
Service cost			$	58					$	74					$	10					$	13
Interest cost			110						102						19						18
Expected return on assets			(205)						(212)						(25)						(26)
Amortization of:
Prior service cost (credit)			1						1						(5)						(6)
Actuarial loss			73						100						4						7
Settlement charges			—						2						—						—
Net periodic benefit cost			$	37					$	67					$	3					$	6
			Pension Benefits												OPEB
			Nine Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
Components of net periodic benefit cost:
Service cost			$	177					$	222					$	30					$	38
Interest cost			330						304						57						52
Expected return on assets			(619)						(633)						(75)						(75)
Amortization of:
Prior service cost (credit)			3						3						(15)						(18)
Actuarial loss			222						299						12						19
Curtailment benefits			—						—						—						(1)
Settlement charges			—						2						—						—
Net periodic benefit cost			$	113					$	197					$	9					$	15

The amounts below represent the Registrants' allocated pension and OPEB 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 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.

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(Dollars in millions, except per share data, unless otherwise noted)

Note 9 — Retirement Benefits

						Three Months Ended September 30,												Nine Months Ended September 30,
Pension and OPEB Costs (Benefit)						2022						2021						2022						2021
Exelon						$	40					$	73					$	122					$	212
ComEd						15						32						45						97
PECO						(2)						2						(6)						5
BGE						11						16						33						47
PHI						13						12						39						36
Pepco						2						2						6						5
DPL						1						1						3						2
ACE						3						3						9						8

Defined Contribution Savings Plan

The Registrants participate in a 401(k) defined contribution savings plan that is sponsored by Exelon. The plan is qualified under applicable sections of the IRC and allows 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 employer contributions and employer matching contributions to the savings plan for the three and nine months ended September 30, 2022 and 2021.

						Three Months Ended September 30,												Nine Months Ended September 30,
Savings Plan Employer Contributions						2022						2021						2022						2021
Exelon						$	23					$	24					$	66					$	67
ComEd						11						9						29						27
PECO						3						2						9						8
BGE						2						4						7						8
PHI						4						5						11						12
Pepco						1						1						3						3
DPL						1						1						3						3
ACE						1						1						2						2

10. Derivative Financial Instruments (All Registrants)

The Registrants use derivative instruments to manage commodity price risk and interest rate 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. At ComEd, derivative economic hedges related to commodities are recorded at fair value and offset by a corresponding regulatory asset or liability. For all NPNS derivative instruments, accounts receivable or accounts payable are recorded when derivatives settle and revenue or expense is recognized in earnings as the underlying physical commodity is sold or consumed.

ComEd’s use of cash collateral is generally unrestricted unless ComEd is 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 meets certain qualifications.

Commodity Price Risk

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, which are either determined to be non-derivative or classified as economic hedges. 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

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(Dollars in millions, except per share data, unless otherwise noted)

Note 10 — Derivative Financial Instruments

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.

Registrant			Commodity			Accounting Treatment			Hedging Instrument
ComEd			Electricity			NPNS			Fixed 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			Electricity			NPNS			Fixed price contracts for default supply requirements through full requirements contracts.
			Gas			NPNS			Fixed price contracts to cover about 10% of planned natural gas purchases in support of projected firm sales.
BGE			Electricity			NPNS			Fixed price contracts for all SOS requirements through full requirements contracts.
			Gas			NPNS			Fixed price contracts for between 10-20% of forecasted system supply requirements for flowing (i.e., non-storage) gas for the November through March period.
Pepco			Electricity			NPNS			Fixed price contracts for all SOS requirements through full requirements contracts.
DPL			Electricity			NPNS			Fixed price contracts for all SOS requirements through full requirements contracts.
			Gas			NPNS			Fixed and index priced contracts through full requirements contracts.
						Changes in fair value of economic hedge recorded to an offsetting regulatory asset or liability(b)			Exchange traded future contracts for up to 50% of estimated monthly purchase requirements each month, including purchases for storage injections.
ACE			Electricity			NPNS			Fixed price contracts for all BGS requirements through full requirements contracts.

__________

(a)See Note 3 — Regulatory Matters of the 2021 Recast Form 10-K for additional information.

(b)The fair value of the DPL economic hedge is not material as of September 30, 2022 and December 31, 2021.

The fair value of derivative economic hedges is presented in Other current assets and current and noncurrent Mark-to-market derivative liabilities in Exelon's and ComEd's Consolidated Balance Sheets. The Mark-to-market derivative assets included in Other current assets in Exelon’s and ComEd’s Consolidated Balance Sheets were $24 million and none as of September 30, 2022 and December 31, 2021, respectively.

Cash Flow Hedges (Interest Rate Risk) (Exelon)

Exelon uses a combination of fixed-rate and variable-rate debt to manage interest rate exposure. In addition, Exelon may utilize interest rate derivatives to lock in rate levels in anticipation of future financings. In October 2022, Exelon entered into $840 million of notional amount floating-to-fixed forward starting interest rate swaps to manage a portion of interest rate exposure associated with anticipated debt issuances. The swaps are designated as cash flow hedges. Changes in fair value each period will initially be recorded in AOCI starting in the fourth quarter of 2022 and recognized in earnings as interest expense is accrued on the anticipated debt issuance.

Economic Hedges (Interest Rate Risk) (Exelon)

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(Dollars in millions, except per share data, unless otherwise noted)

Note 10 — Derivative Financial Instruments

Exelon may use derivative instruments to mitigate exposure to fluctuations in interest rates but for which the fair value or cash flow hedge elections are not made. In October 2022, Exelon entered into $1,850 million of notional amount floating-to-fixed interest rate cap swaps to manage a portion of interest rate exposure in connection with borrowings. The swaps are not designated as cash flow hedges. As economic hedges, changes in fair value each period will be recognized in earnings starting in the fourth quarter of 2022.

Credit Risk

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. 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 September 30, 2022, the amount of cash collateral held with external counterparties by Exelon, ComEd, BGE, PHI, Pepco, DPL, and ACE was $505 million, $95 million, $129 million, $279 million, $48 million, $157 million, and $74 million, respectively, which is recorded in Other current liabilities in Exelon's, ComEd's, BGE's, PHI's, Pepco's, DPL's, and ACE's Consolidated Balance Sheets. The amount of cash collateral received from external counterparties increased as of September 30, 2022 due to rising energy prices. The amount for PECO was not material as of September 30, 2022. As of December 31, 2021, the amounts for ComEd and DPL were $41 million and $43 million, respectively. The amounts for Exelon, PECO, BGE, PHI, Pepco, and ACE were not material as of December 31, 2021.

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's, and DPL’s credit rating. As of September 30, 2022, PECO, BGE, and DPL were not required to post collateral for any of these agreements. If PECO, BGE, or DPL lost their investment grade credit rating as of September 30, 2022, they could have been required to post collateral to their counterparties of $43 million, $79 million, and $16 million, respectively.

11. 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. PECO meets 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 borrowings from 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 September 30, 2022 and December 31, 2021. PECO had no commercial paper borrowings as of September 30, 2022 and December 31, 2021.

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(Dollars in millions, except per share data, unless otherwise noted)

Note 11 — Debt and Credit Agreements

			Outstanding Commercial Paper as of												Average Interest Rate on Commercial Paper Borrowings as of
Commercial Paper Issuer			September 30, 2022						December 31, 2021						September 30, 2022						December 31, 2021
Exelon(a)			$	615					$	599					3.37		%				0.35		%
ComEd			233						—						3.35		%				—		%
BGE			156						130						3.40		%				0.37		%
PHI(b)			—						469						—		%				0.35		%
Pepco			—						175						—		%				0.33		%
DPL			—						149						—		%				0.36		%
ACE			—						145						—		%				0.35		%

__________

(a)Exelon Corporate had $226 million of outstanding commercial paper borrowings at September 30, 2022 and no outstanding commercial paper borrowings as of December 31, 2021.

(b)Represents the consolidated amounts of Pepco, DPL, and ACE.

Revolving Credit Agreements

On February 1, 2022, Exelon Corporate and the Utility Registrants each entered into a new 5-year revolving credit facility that replaced its existing syndicated revolving credit facility. The following table reflects the credit agreements:

Borrower						Aggregate Bank Commitment						Interest Rate
Exelon Corporate						900						SOFR plus 1.275		%
ComEd						1,000						SOFR plus 1.000		%
PECO						600						SOFR plus 0.900		%
BGE						600						SOFR plus 0.900		%
Pepco						300						SOFR plus 1.075		%
DPL						300						SOFR plus 1.000		%
ACE						300						SOFR plus 1.075		%

Exelon Corporate and the Utility Registrants had no outstanding amounts on the revolving credit facilities as of September 30, 2022.

On October 7, 2022, Exelon entered into new credit facility agreements, arranged at minority and community banks, which are solely utilized to issue letters of credit. The new facility agreements have aggregate commitments of $40 million, $40 million, $15 million, $15 million, $15 million, and $15 million, at ComEd, PECO, BGE, Pepco, DPL, and ACE, respectively. These facilities expire on October 6, 2023.

See Note 15 — Debt and Credit Agreements of the 2021 Recast 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 14, 2022 and will expire on March 16, 2023. Pursuant to the loan agreement, loans made thereunder bear interest at a variable rate equal to SOFR plus 0.65% and all indebtedness thereunder is unsecured. The loan agreement is reflected in Exelon's Consolidated Balance Sheets within Short-term borrowings.

On March 31, 2021, Exelon Corporate entered into a 364-day term loan agreement for $150 million with a variable interest rate of LIBOR plus 0.65% and an expiration date of March 30, 2022. Exelon Corporate repaid the term loan on March 30, 2022.

In connection with the separation, on January 24, 2022, Exelon Corporate entered into a 364-day term loan agreement for $1.15 billion. The loan agreement will expire on January 23, 2023. Pursuant to the loan agreement, loans made thereunder bore interest at a variable rate equal to SOFR plus 0.75% until July 23, 2022

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(Dollars in millions, except per share data, unless otherwise noted)

Note 11 — Debt and Credit Agreements

and a rate of SOFR plus 0.975% thereafter. All indebtedness pursuant to the loan agreement is unsecured. On August 11, 2022, Exelon Corporate made a partial repayment of $575 million on the term loan. The remaining $575 million outstanding balance was repaid on October 11, 2022 in conjunction with the $500 million 18-month term loan that was entered into on October 7, 2022. Refer to the Issuance of Long-Term Debt below for further information.

On October 4, 2022, ComEd entered into a 364-day term loan agreement for $150 million with a variable rate equal to SOFR plus 0.75% and an expiration date of October 3, 2023. The proceeds from this loan were used to repay outstanding commercial paper obligations. The loan agreement will be reflected in Exelon's and ComEd's Consolidated Balance Sheets within Short-term borrowings in the fourth quarter of 2022.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 11 — Debt and Credit Agreements

Long-Term Debt

Issuance of Long-Term Debt

During the nine months ended September 30, 2022, the following long-term debt was issued:

Company(a)

Type

Interest Rate

Maturity

Amount

Use of Proceeds

Exelon

SMBC Term Loan Agreement

SOFR plus 0.65%

July 21, 2023(b)

$300

Fund a cash payment to Constellation and for general corporate purposes.

Exelon

U.S. Bank Term Loan Agreement

SOFR plus 0.65%

July 21, 2023(b)

300

Fund a cash payment to Constellation and for general corporate purposes.

Exelon

PNC Term Loan Agreement

SOFR plus 0.65%

July 24, 2023(b)

250

Fund a cash payment to Constellation and for general corporate purposes.

Exelon

Notes(c)

2.75%

March 15, 2027

650

Repay existing indebtedness and for general corporate purposes.

Exelon

Notes(c)

3.35%

March 15, 2032

650

Repay existing indebtedness and for general corporate purposes.

Exelon

Notes(c)

4.10%

March 15, 2052

700

Repay existing indebtedness and for general corporate purposes.

Exelon

Long-Term Software License Agreements

2.30%

December 1, 2025

17

Procurement of software licenses

ComEd

First Mortgage Bonds, Series 132

3.15%

March 15, 2032

300

Repay outstanding commercial paper obligations and to fund other general corporate purposes.

ComEd

First Mortgage Bonds, Series 133

3.85%

March 15, 2052

450

Repay outstanding commercial paper obligations and to fund other general corporate purposes.

PECO

First and Refunding Mortgage Bonds

4.60%

May 15, 2052

350

Refinance existing indebtedness and for general corporate purposes.

PECO

First and Refunding Mortgage Bonds

4.375%

August 15, 2052

425

Refinance outstanding commercial paper and for general corporate purposes.

BGE

Notes

4.55%

June 1, 2052

500

Repay outstanding commercial paper obligations, repay existing indebtedness, and for general corporate purposes.

Pepco

First Mortgage Bonds

3.97%

March 24, 2052

400

Repay existing indebtedness and for general corporate purposes.

Pepco

First Mortgage Bonds

3.35%

September 15, 2032

225

Repay existing indebtedness and for general corporate purposes.

DPL

First Mortgage Bonds

3.06%

February 15, 2052

125

Repay existing indebtedness and for general corporate purposes.

ACE

First Mortgage Bonds

2.27%

February 15, 2032

25

Repay existing indebtedness and for general corporate purposes.

ACE

First Mortgage Bonds

3.06%

February 15, 2052

150

Repay existing indebtedness and for general corporate purposes.

__________

(a)On October 7, 2022, Exelon Corporate entered into an 18-month term loan agreement for $500 million with a variable rate equal to SOFR plus 0.85% and an expiration date of April 7, 2024.

(b)During the third quarter of 2022, the SMBC Term Loan, U.S. Bank Term Loan, and PNC Term Loan were all reclassified to Long-term debt due within one year on the Exelon Consolidated Balance Sheet, given that the Term Loans have maturity dates of July 21, 2023, and July 24, 2023, respectively.

(c)In connection with the issuance and sale of the Notes, Exelon entered into a Registration Rights Agreement with the representatives of the initial purchasers of the Notes and other parties. Pursuant to the Registration Rights Agreement, Exelon filed a registration statement on August 3, 2022, with respect to an offer to exchange the Notes for substantially similar notes of Exelon that are registered under the Securities Act. The registration statement became effective on August 19, 2022. The registered notes, when issued later in the fourth quarter, will have terms identical in all material respects to the Notes, except that their issuance will have been registered under the Securities Act.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 11 — Debt and Credit Agreements

Long-Term Debt to Affiliates

As of December 31, 2021, Exelon Corporate had $319 million recorded to intercompany notes receivable from Generation. See Note 15 — Debt and Credit Agreements of the 2021 Recast Form 10-K for additional information. In connection with the separation, on January 31, 2022, Exelon Corporate received cash from Generation of $258 million to settle the intercompany loan.

Debt Covenants

As of September 30, 2022, the Registrants are in compliance with debt covenants.

12. 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.

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, and trust preferred securities (long-term debt to financing trusts or junior subordinated debentures) as of September 30, 2022 and December 31, 2021. The Registrants have no financial liabilities classified as Level 1.

The carrying amounts of the Registrants’ short-term liabilities as presented in their Consolidated Balance Sheets are representative of their fair value (Level 2) because of the short-term nature of these instruments.

						September 30, 2022																								December 31, 2021
						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						$	36,583					$	28,654					$	2,270					$	30,924					$	32,902					$	34,897					$	2,217					$	37,114
ComEd						10,517						8,783						—						8,783						9,773						11,305						—						11,305
PECO						4,612						3,747						50						3,797						4,197						4,740						50						4,790
BGE						4,207						3,539						—						3,539						3,961						4,406						—						4,406
PHI						8,130						4,434						2,220						6,654						7,547						5,970						2,167						8,137
Pepco						3,752						2,179						1,174						3,353						3,445						3,201						975						4,176
DPL						1,938						1,143						446						1,589						1,810						1,426						552						1,978
ACE						1,758						903						600						1,503						1,582						1,091						641						1,732
Long-Term Debt to Financing Trusts
Exelon						$	390					$	—					$	385					$	385					$	390					$	—					$	470					$	470
ComEd						205						—						204						204						205						—						248						248
PECO						184						—						181						181						184						—						222						222

__________

(a)Includes unamortized debt issuance costs, unamortized debt discount and premium, net, purchase accounting fair value adjustments, and finance lease liabilities which are not fair valued. Refer to Note 15 - Debt and Credit Agreements of the 2021 Recast Form 10-K for unamortized debt issuance costs, unamortized debt discount and premium, net, and purchase accounting fair value adjustments and Note 10 - Leases of the 2021 Recast Form 10-K for finance lease liabilities.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 12 — 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 September 30, 2022 and December 31, 2021:

Exelon

			As of September 30, 2022																								As of December 31, 2021
			Level 1						Level 2						Level 3												Total						Level 1						Level 2						Level 3												Total
Assets
Cash equivalents(a)			$	664					$	—					$	—											$	664					$	524					$	—					$	—											$	524
Rabbi trust investments
Cash equivalents			62						—						—												62						60						—						—												60
Mutual funds			49						—						—												49						60						—						—												60
Fixed income			—						8						—												8						—						10						—												10
Life insurance contracts			—						57						39												96						—						61						37												98
Rabbi trust investments subtotal			111						65						39												215						120						71						37												228
Mark-to-market derivative assets			—						—						24												24						—						—						—												—
Total assets			775						65						63												903						644						71						37												752
Liabilities
Mark-to-market derivative liabilities			—						—						(67)												(67)						—						—						(219)												(219)
Deferred compensation obligation			—						(68)						—												(68)						—						(131)						—												(131)
Total liabilities			—						(68)						(67)												(135)						—						(131)						(219)												(350)
Total net assets (liabilities)			$	775					$	(3)					$	(4)											$	768					$	644					$	(60)					$	(182)											$	402

__________    

(a)Exelon excludes cash of $384 million and $464 million as of September 30, 2022 and December 31, 2021, respectively, and restricted cash of $225 million and $49 million as of September 30, 2022 and December 31, 2021, respectively, and includes long-term restricted cash of $83 million and $44 million as of September 30, 2022 and December 31, 2021, respectively, which is reported in Other deferred debits in the Consolidated Balance Sheets.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 12 — Fair Value of Financial Assets and Liabilities

ComEd, PECO, and BGE

			ComEd																								PECO																								BGE
As of September 30, 2022			Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total
Assets
Cash equivalents(a)			$	354					$	—					$	—					$	354					$	10					$	—					$	—					$	10					$	1					$	—					$	—					$	1
Rabbi trust investments
Mutual funds			—						—						—						—						8						—						—						8						7						—						—						7
Life insurance contracts			—						—						—						—						—						15						—						15						—						—						—						—
Rabbi trust investments subtotal			—						—						—						—						8						15						—						23						7						—						—						7
Mark-to-market derivative assets(b)			—						—						24						24						—						—						—						—						—						—						—						—
Total assets			354						—						24						378						18						15						—						33						8						—						—						8
Liabilities
Mark-to-market derivative liabilities(b)			—						—						(67)						(67)						—						—						—						—						—						—						—						—
Deferred compensation obligation			—						(7)						—						(7)						—						(7)						—						(7)						—						(4)						—						(4)
Total liabilities			—						(7)						(67)						(74)						—						(7)						—						(7)						—						(4)						—						(4)
Total net assets (liabilities)			$	354					$	(7)					$	(43)					$	304					$	18					$	8					$	—					$	26					$	8					$	(4)					$	—					$	4

			ComEd																								PECO																								BGE
As of December 31, 2021			Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total
Assets
Cash equivalents(a)			$	237					$	—					$	—					$	237					$	9					$	—					$	—					$	9					$	—					$	—					$	—					$	—
Rabbi trust investments
Mutual funds			—						—						—						—						11						—						—						11						14						—						—						14
Life insurance contracts			—						—						—						—						—						16						—						16						—						—						—						—
Rabbi trust investments subtotal			—						—						—						—						11						16						—						27						14						—						—						14
Total assets			237						—						—						237						20						16						—						36						14						—						—						14
Liabilities
Mark-to-market derivative liabilities(b)			—						—						(219)						(219)						—						—						—						—						—						—						—						—
Deferred compensation obligation			—						(10)						—						(10)						—						(9)						—						(9)						—						(7)						—						(7)
Total liabilities			—						(10)						(219)						(229)						—						(9)						—						(9)						—						(7)						—						(7)
Total net assets (liabilities)			$	237					$	(10)					$	(219)					$	8					$	20					$	7					$	—					$	27					$	14					$	(7)					$	—					$	7

__________

(a)ComEd excludes cash of $39 million and $105 million as of September 30, 2022 and December 31, 2021, respectively, and restricted cash of $95 million and $42 million as of September 30, 2022 and December 31, 2021, respectively, and includes long-term restricted cash of $83 million and $43 million as of September 30, 2022 and December 31, 2021, respectively, which is reported in Other deferred debits in the Consolidated Balance Sheets. PECO excludes cash of $93 million and $35 million as of September 30, 2022 and December 31, 2021, respectively. BGE excludes cash of $20 million and $51 million as of September 30, 2022 and December 31, 2021, respectively, and restricted cash of $129 million and $4 million as of September 30, 2022 and December 31, 2021, respectively.

(b)The Level 3 balance consists of the current asset of $24 million and current and noncurrent liability of none and $67 million, respectively, as of September 30, 2022 and none, $18 million and $201 million, respectively, as of December 31, 2021 related to floating-to-fixed energy swap contracts with unaffiliated suppliers.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 12 — Fair Value of Financial Assets and Liabilities

PHI, Pepco, DPL, and ACE

			As of September 30, 2022																								As of December 31, 2021
PHI			Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total
Assets
Cash equivalents(a)			$	266					$	—					$	—					$	266					$	110					$	—					$	—					$	110
Rabbi trust investments
Cash equivalents			59						—						—						59						59						—						—						59
Mutual funds			10						—						—						10						14						—						—						14
Fixed income			—						8						—						8						—						10						—						10
Life insurance contracts			—						22						38						60						—						27						35						62
Rabbi trust investments subtotal			69						30						38						137						73						37						35						145
Total assets			335						30						38						403						183						37						35						255
Liabilities
Deferred compensation obligation			—						(14)						—						(14)						—						(18)						—						(18)
Total liabilities			—						(14)						—						(14)						—						(18)						—						(18)
Total net assets			$	335					$	16					$	38					$	389					$	183					$	19					$	35					$	237

			Pepco																								DPL																								ACE
As of September 30, 2022			Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total
Assets
Cash equivalents(a)			$	76					$	—					$	—					$	76					$	157					$	—					$	—					$	157					$	1					$	—					$	—					$	1
Rabbi trust investments
Cash equivalents			59						—						—						59						—						—						—						—						—						—						—						—
Life insurance contracts			—						22						38						60						—						—						—						—						—						—						—						—
Rabbi trust investments subtotal			59						22						38						119						—						—						—						—						—						—						—						—
Total assets			135						22						38						195						157						—						—						157						1						—						—						1
Liabilities
Deferred compensation obligation			—						(1)						—						(1)						—						—						—						—						—						—						—						—
Total liabilities			—						(1)						—						(1)						—						—						—						—						—						—						—						—
Total net assets			$	135					$	21					$	38					$	194					$	157					$	—					$	—					$	157					$	1					$	—					$	—					$	1

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 12 — Fair Value of Financial Assets and Liabilities

			Pepco																								DPL																								ACE
As of December 31, 2021			Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total
Assets
Cash equivalents(a)			$	31					$	—					$	—					$	31					$	43					$	—					$	—					$	43					$	—					$	—					$	—					$	—
Rabbi trust investments
Cash equivalents			58						—						—						58						—						—						—						—						—						—						—						—
Life insurance contracts			—						27						35						62						—						—						—						—						—						—						—						—
Rabbi trust investments subtotal			58						27						35						120						—						—						—						—						—						—						—						—
Total assets			89						27						35						151						43						—						—						43						—						—						—						—
Liabilities
Deferred compensation obligation			—						(2)						—						(2)						—						—						—						—						—						—						—						—
Total liabilities			—						(2)						—						(2)						—						—						—						—						—						—						—						—
Total net assets			$	89					$	25					$	35					$	149					$	43					$	—					$	—					$	43					$	—					$	—					$	—					$	—

__________

(a)PHI excludes cash of $186 million and $100 million as of September 30, 2022 and December 31, 2021, respectively, and restricted cash of $1 million and $3 million as of September 30, 2022 and December 31, 2021, respectively. Pepco excludes cash of $21 million and $34 million as of September 30, 2022 and December 31, 2021, respectively, and restricted cash of $1 million and $3 million as of September 30, 2022 and December 31, 2021, respectively. DPL excludes cash of $49 million and $28 million as of September 30, 2022 and December 31, 2021, respectively. ACE excludes cash of $111 million and $29 million as of September 30, 2022 and December 31, 2021, respectively.

Reconciliation of Level 3 Assets and Liabilities

The following tables present the fair value reconciliation of Level 3 assets and liabilities measured at fair value on a recurring basis during the three and nine months ended September 30, 2022 and 2021:

			Exelon						ComEd						PHI and Pepco
Three Months Ended September 30, 2022			Total						Mark-to-Market Derivatives						Life Insurance Contracts
Balance as of June 30, 2022			$	(50)					$	(88)					$	37
Total realized / unrealized gains
Included in net income(a)			1						—						1
Included in regulatory assets/liabilities			45						45			(b)			—
Balance as of September 30, 2022			$	(4)					$	(43)		(c)			$	38
The amount of total gains included in income attributed to the change in unrealized gains related to assets and liabilities as of September 30, 2022			$	1					$	—					$	1

			Exelon						ComEd						PHI and Pepco
Three Months Ended September 30, 2021			Total						Mark-to-Market Derivatives						Life Insurance Contracts
Balance as of June 30, 2021			$	(231)					$	(265)					$	34
Total realized / unrealized gains
Included in regulatory assets			51						51			(b)			—
Balance as of September 30, 2021			$	(180)					$	(214)					$	34
The amount of total gains included in income attributed to the change in unrealized gains related to assets and liabilities as of September 30, 2021			$	—					$	—					$	—

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 12 — Fair Value of Financial Assets and Liabilities

			Exelon						ComEd						PHI and Pepco
Nine months ended September 30, 2022			Total						Mark-to-Market Derivatives						Life Insurance Contracts
Balance as of December 31, 2021			$	(182)					$	(219)					$	35
Total realized / unrealized gains
Included in net income(a)			3						—						3
Included in regulatory assets/liabilities			176						176			(b)			—
Transfers out of Level 3			(1)						—						—
Balance as of September 30, 2022			$	(4)					$	(43)		(c)			$	38
The amount of total gains included in income attributed to the change in unrealized gains related to assets and liabilities as of September 30, 2022			$	3					$	—					$	3

			Exelon						ComEd						PHI and Pepco
Nine Months Ended September 30, 2021			Total						Mark-to-Market Derivatives						Life Insurance Contracts
Balance as of December 31, 2020			$	(267)					$	(301)					$	34
Total realized / unrealized gains
Included in net income(a)			2						—						2
Included in regulatory assets			87						87			(b)			—
Purchases, sales, and settlements
Settlements			(2)						—						(2)
Balance as of September 30, 2021			$	(180)					$	(214)					$	34
The amount of total gains included in income attributed to the change in unrealized gain related to assets and liabilities as of September 30, 2021			$	2					$	—					$	2

__________

(a)Classified in Operating and maintenance expense in the Consolidated Statements of Operations and Comprehensive Income.

(b)Includes $51 million of increases in fair value and a decrease for realized gains due to settlements of $6 million recorded in purchased power expense associated with floating-to-fixed energy swap contracts with unaffiliated suppliers for the three months ended September 30, 2022. Includes $49 million of increases in fair value and an increase for realized losses due to settlements of $2 million recorded in purchased power expense associated with floating-to-fixed energy swap contracts with unaffiliated suppliers for the three months ended September 30, 2021. Includes $179 million of increases in fair value and an decrease for realized losses due to settlements of $3 million recorded in purchase power expense associated with floating-to-fixed energy swap contracts with unaffiliated suppliers for the nine months ended September 30, 2022. Includes $72 million of increases in fair value and an increase for realized losses due to settlements of $15 million recorded in purchased power expense associated with floating-to-fixed energy swap contracts with unaffiliated suppliers for the nine months ended September 30, 2021.

(c)The balance consists of $24 million of current assets and current and noncurrent liability of none and $67 million, respectively, as of September 30, 2022.

Valuation Techniques Used to Determine Fair Value

Exelon’s valuation techniques used to measure the fair value of the assets and liabilities shown in the tables below are in accordance with the policies discussed in Note 16 — Fair Value of Financial Assets and Liabilities of the 2021 Recast Form 10-K.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 12 — Fair Value of Financial Assets and Liabilities

Mark-to-Market Derivatives (Exelon and ComEd)

The table below discloses the significant unobservable inputs to the forward curve used to value mark-to-market derivatives.

Type of trade						Fair Value as of September 30, 2022						Fair Value as of December 31, 2021						Valuation Technique						Unobservable Input						2022 Range & Arithmetic Average															2021 Range & Arithmetic Average
Mark-to-market derivatives						$	(43)					$	(219)					Discounted Cash Flow						Forward power price(a)						$36.02			-			$111.10			$50.61						$28.65			-			$47.10			$33.96

________

(a)An increase to the forward power price would increase the fair value.

13. Commitments and Contingencies (All Registrants)

The following is an update to the current status of commitments and contingencies set forth in Note 17 — Commitments and Contingencies of the 2021 Recast Form 10-K.

Commitments

PHI Merger Commitments (Exelon, PHI, Pepco, DPL, and ACE). Approval of the PHI Merger in Delaware, New Jersey, Maryland, and the District of Columbia was conditioned upon Exelon and PHI agreeing to certain commitments. The following amounts represent total commitment costs that have been recorded since the acquisition date and the total remaining obligations for Exelon, PHI, Pepco, DPL, and ACE as of September 30, 2022:

Description			Exelon						PHI						Pepco						DPL						ACE
Total commitments			$	513					$	320					$	120					$	89					$	111
Remaining commitments(a)			57						50						41						6						3

__________

(a)Remaining commitments extend through 2026 and include rate credits, energy efficiency programs and delivery system modernization.

In addition, DPL has committed to conducting three RFPs to procure up to a total of 120 MWs of wind RECs for the purpose of meeting Delaware's renewable portfolio standards. DPL has conducted two of the three wind REC RFPs. The first 40 MW wind REC tranche was conducted in 2017 and did not result in a purchase agreement. The second 40 MW wind REC tranche was conducted in 2018 and resulted in a proposed REC purchase agreement that was approved by the DEPSC in 2019. The RFP for the third and final 40 MW wind REC tranche was conducted in the second quarter of 2022, an evaluation of the proposals was completed in the third quarter and DPL has made a draft recommendation to the DEPSC. The DEPSC is reviewing DPL's recommendation. DPL expects to make a decision on a potential award in the fourth quarter of 2022.

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Commercial Commitments (All Registrants). The Registrants’ commercial commitments as of September 30, 2022, representing commitments potentially triggered by future events were as follows:

									Expiration within
			Total						2022						2023						2024						2025						2026						2027 and beyond
Exelon
Letters of credit			$	17					$	5					$	12					$	—					$	—					$	—					$	—
Surety bonds(a)			205						85						118						2						—						—						—
Financing trust guarantees			378						—						—						—						—						—						378
Guaranteed lease residual values(b)			30						—						1						6						6						5						12
Total commercial commitments			$	630					$	90					$	131					$	8					$	6					$	5					$	390
ComEd
Letters of credit			$	10					$	2					$	8					$	—					$	—					$	—					$	—
Surety bonds(a)			46						5						39						2						—						—						—
Financing trust guarantees			200						—						—						—						—						—						200
Total commercial commitments			$	256					$	7					$	47					$	2					$	—					$	—					$	200
PECO
Letters of credit			$	1					$	—					$	1					$	—					$	—					$	—					$	—
Surety bonds(a)			2						—						2						—						—						—						—
Financing trust guarantees			178						—						—						—						—						—						178
Total commercial commitments			$	181					$	—					$	3					$	—					$	—					$	—					$	178
BGE
Letters of credit			$	3					$	2					$	1					$	—					$	—					$	—					$	—
Surety bonds(a)			2						1						1						—						—						—						—
Total commercial commitments			$	5					$	3					$	2					$	—					$	—					$	—					$	—
PHI
Surety bonds(a)			$	96					$	75					$	21					$	—					$	—					$	—					$	—
Guaranteed lease residual values(b)			30						—						1						6						6						5						12
Total commercial commitments			$	126					$	75					$	22					$	6					$	6					$	5					$	12
Pepco
Surety bonds(a)			$	85					$	71					$	14					$	—					$	—					$	—					$	—
Guaranteed lease residual values(b)			10						—						—						2						2						2						4
Total commercial commitments			$	95					$	71					$	14					$	2					$	2					$	2					$	4
DPL
Surety bonds(a)			$	7					$	3					$	4					$	—					$	—					$	—					$	—
Guaranteed lease residual values(b)			13						—						—						3						3						2						5
Total commercial commitments			$	20					$	3					$	4					$	3					$	3					$	2					$	5
ACE
Surety bonds(a)			$	4					$	1					$	3					$	—					$	—					$	—					$	—
Guaranteed lease residual values(b)			7						—						1						1						1						1						3
Total commercial commitments			$	11					$	1					$	4					$	1					$	1					$	1					$	3

__________

(a)Surety bonds — Guarantees issued related to contract and commercial agreements, excluding bid bonds.

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(b)Represents the maximum potential obligation in the event that the fair value of certain leased equipment and fleet vehicles is zero at the end of the maximum lease term. The lease term associated with these assets ranges from 1 to 8 years. The maximum potential obligation at the end of the minimum lease term would be $73 million guaranteed by Exelon and PHI, of which $24 million, $30 million, and $19 million is guaranteed by Pepco, DPL, and ACE, respectively. Historically, payments under the guarantees have not been made and PHI believes the likelihood of payments being required under the guarantees is remote.

Environmental Remediation Matters

General (All Registrants). The Registrants’ operations have in the past, and may in the future, require substantial expenditures to comply with environmental laws. Additionally, under federal and state environmental laws, the Registrants are generally liable for the costs of remediating environmental contamination of property now or formerly owned by them and of property contaminated by hazardous substances generated by them. The Registrants own or lease a number of real estate parcels, including parcels on which their operations or the operations of others may have resulted in contamination by substances that are considered hazardous under environmental laws. In addition, the Registrants are currently involved in a number of proceedings relating to sites where hazardous substances have been deposited and may be subject to additional proceedings in the future. Unless otherwise disclosed, the Registrants cannot reasonably estimate whether they will incur significant liabilities for additional investigation and remediation costs at these or additional sites identified by the Registrants, environmental agencies or others, or whether such costs will be recoverable from third parties, including customers. Additional costs could have a material, unfavorable impact on the Registrants' financial statements.

MGP Sites (All Registrants). ComEd, PECO, BGE, and DPL have identified sites where former MGP or gas purification activities have or may have resulted in actual site contamination. For some sites, there are additional PRPs that may share responsibility for the ultimate remediation of each location.

•ComEd has 20 sites that are currently under some degree of active study and/or remediation. ComEd expects the majority of the remediation at these sites to continue through at least 2031.

•PECO has 6 sites that are currently under some degree of active study and/or remediation. PECO expects the majority of the remediation at these sites to continue through at least 2024.

•BGE has 4 sites that currently require some level of remediation and/or ongoing activity. BGE expects the majority of the remediation at these sites to continue through at least 2023.

•DPL has 1 site that is currently under study and the required cost at the site is not expected to be material.

The historical nature of the MGP and gas purification sites and the fact that many of the sites have been buried and built over, impacts the ability to determine a precise estimate of the ultimate costs prior to initial sampling and determination of the exact scope and method of remedial activity. Management determines its best estimate of remediation costs using all available information at the time of each study, including probabilistic and deterministic modeling for ComEd and PECO, and the remediation standards currently required by the applicable state environmental agency. Prior to completion of any significant clean up, each site remediation plan is approved by the appropriate state environmental agency.

ComEd, pursuant to an ICC order, and PECO, pursuant to a PAPUC order, are currently recovering environmental remediation costs of former MGP facility sites through customer rates. While BGE and DPL do not have riders for MGP clean-up costs, they have historically received recovery of actual clean-up costs in distribution rates.

During the third quarter of 2022, ComEd and PECO completed an annual study of their future estimated MGP remediation requirements. The study resulted in a $60 million increase to the environmental liability and related regulatory asset for ComEd. The increase was primarily due to increased costs due to inflation and changes in remediation plans. The study did not result in a material change to the environmental liability for PECO.

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As of September 30, 2022 and December 31, 2021, the Registrants had accrued the following undiscounted amounts for environmental liabilities in Accrued expenses, Other current liabilities, and Other deferred credits and other liabilities in their respective Consolidated Balance Sheets:

			September 30, 2022												December 31, 2021
			Total environmental investigation and remediation liabilities						Portion of total related to MGP investigation and remediation						Total environmental investigation and remediation liabilities						Portion of total related to MGP investigation and remediation
Exelon			$	405					$	358					$	352					$	303
ComEd			328						328						279						279
PECO			25						24						22						20
BGE			7						6						6						4
PHI			41						—						42						—
Pepco			39						—						40						—
DPL			1						—						1						—
ACE			1						—						1						—

Benning Road Site (Exelon, PHI, and Pepco). In September 2010, PHI received a letter from EPA identifying the Benning Road site as one of six land-based sites potentially contributing to contamination of the lower Anacostia River. A portion of the site, which is owned by Pepco, was formerly the location of an electric generating facility owned by Pepco subsidiary, Pepco Energy Services (PES), which became a part of Generation, following the 2016 merger between PHI and Exelon. This generating facility was deactivated in June 2012. The remaining portion of the site consists of a Pepco transmission and distribution service center that remains in operation. In December 2011, the U.S. District Court for the District of Columbia approved a Consent Decree entered into by Pepco and Pepco Energy Services (hereinafter "Pepco Entities") with the DOEE, which requires the Pepco Entities to conduct a Remedial Investigation and Feasibility Study (RI/FS) for the Benning Road site and an approximately 10 to 15-acre portion of the adjacent Anacostia River. The purpose of this RI/FS is to define the nature and extent of contamination from the Benning Road site and to evaluate remedial alternatives.

Pursuant to an internal agreement between the Pepco Entities, since 2013, Pepco has performed the work required by the Consent Decree and has been reimbursed for that work by an agreed upon allocation of costs between the Pepco Entities. In September 2019, the Pepco Entities issued a draft “final” RI report which DOEE approved on February 3, 2020. The Pepco Entities are developing a FS to evaluate possible remedial alternatives for submission to DOEE. The Court has established a schedule for completion of the FS, and approval by the DOEE, by March 16, 2023. After completion and approval of the FS, DOEE will prepare a Proposed Plan for public comment and then issue a Record of Decision (ROD) identifying any further response actions determined to be necessary. As part of the separation between Exelon and Constellation in February 2022, the internal agreement between the Pepco Entities for completion and payment for the remaining Consent Decree work was memorialized in a formal agreement for post-separation activities. A second post-separation assumption agreement between Exelon and Constellation transferred any of the potential remaining remediation liability, if any, of PES/Generation to a non-utility subsidiary of Exelon which going forward will be responsible for those liabilities. Exelon, PHI, and Pepco have determined that a loss associated with this matter is probable and have accrued an estimated liability, which is included in the table above.

Anacostia River Tidal Reach (Exelon, PHI, and Pepco). Contemporaneous with the Benning Road site RI/FS, being performed by the Pepco Entities, DOEE and National Park Service (NPS) have been conducting a separate RI/FS focused on the entire tidal reach of the Anacostia River extending from just north of the Maryland-District of Columbia boundary line to the confluence of the Anacostia and Potomac Rivers. The river-wide RI incorporated the results of the river sampling performed by the Pepco Entities as part of the Benning RI/FS, as well as similar sampling efforts conducted by owners of other sites adjacent to this segment of the river and supplemental river sampling conducted by DOEE’s contractor.

On September 30, 2020, DOEE released its Interim ROD. The Interim ROD reflects an adaptive management approach which will require several identified “hot spots” in the river to be addressed first while continuing to conduct studies and to monitor the river to evaluate improvements and determine potential future remediation plans. The adaptive management process chosen by DOEE is less intrusive, provides more long-term

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environmental certainty, is less costly, and allows for site specific remediation plans already underway, including the plan for the Benning Road site to proceed to conclusion.

On July 15, 2022, Pepco received a letter from the District of Columbia's Office of the Attorney General (District) on behalf of DOEE conveying a settlement offer to resolve all PRPs' liability to the District. Pepco responded on July 27, 2022 to enter into settlement discussions. Exelon, PHI, and Pepco have determined that it is probable that costs for remediation will be incurred and have accrued a liability for management's best estimate of its share of the costs. Pepco concluded that incremental exposure remains reasonably possible, but management cannot reasonably estimate a range of loss beyond the amounts recorded, which are included in the table above.

In addition to the activities associated with the remedial process outlined above, CERCLA separately requires federal and state (here including Washington, D.C.) Natural Resource Trustees (federal or state agencies designated by the President or the relevant state, respectively, or Indian tribes) to conduct an assessment of any damages to natural resources within their jurisdiction as a result of the contamination that is being remediated. The Trustees can seek compensation from responsible parties for such damages, including restoration costs. During the second quarter of 2018, Pepco became aware that the Trustees are in the beginning stages of a Natural Resources Damages (NRD) assessment, a process that often takes many years beyond the remedial decision to complete. Pepco has entered into negotiations with the Trustees to evaluate possible incorporation of NRD assessment and restoration as part of its remedial activities associated with the Benning site to accelerate the NRD benefits for that portion of the Anacostia River Sediment Project ("ARSP") assessment. Pepco has concluded that a loss associated with the eventual NRD assessment is reasonably possible. Due to the very early stage of the assessment process, Pepco cannot reasonably estimate the final range of loss potentially resulting from this process.

As noted in the Benning Road Site disclosure above, as part of the separation of Exelon and Constellation in February 2022, an assumption agreement was executed transferring any potential future remediation liabilities associated with the Benning Site remediation to a non-utility subsidiary of Exelon. Similarly, any potential future liability associated with the ARSP was also assumed by this entity.

Litigation and Regulatory Matters

Deferred Prosecution Agreement (DPA) and Related Matters (Exelon and ComEd). Exelon and ComEd received a grand jury subpoena in the second quarter of 2019 from the U.S. Attorney’s Office for the Northern District of Illinois (USAO) requiring production of information concerning their lobbying activities in the State of Illinois. On October 4, 2019, Exelon and ComEd received a second grand jury subpoena from the USAO requiring production of records of any communications with certain individuals and entities. On October 22, 2019, the SEC notified Exelon and ComEd that it had also opened an investigation into their lobbying activities. On July 17, 2020, ComEd entered into a DPA with the USAO to resolve the USAO investigation. Under the DPA, the USAO filed a single charge alleging that ComEd improperly gave and offered to give jobs, vendor subcontracts, and payments associated with those jobs and subcontracts for the benefit of the former Speaker of the Illinois House of Representatives and the Speaker’s associates, with the intent to influence the Speaker’s action regarding legislation affecting ComEd’s interests. The DPA provides that the USAO will defer any prosecution of such charge and any other criminal or civil case against ComEd in connection with the matters identified therein for a three-year period subject to certain obligations of ComEd, including payment to the U.S. Treasury of $200 million, which was paid in November 2020. Exelon was not made party to the DPA, and therefore the investigation by the USAO into Exelon’s activities ended with no charges being brought against Exelon. The SEC’s investigation remains ongoing and Exelon and ComEd have cooperated fully and intend to continue to cooperate fully with the SEC. Exelon and ComEd cannot predict the outcome of the SEC investigation. No loss contingency has been reflected in Exelon's and ComEd's consolidated financial statements with respect to the SEC investigation, as this contingency is neither probable nor reasonably estimable at this time.

Subsequent to Exelon announcing the receipt of the subpoenas, various lawsuits were filed, and various demand letters were received related to the subject of the subpoenas, the conduct described in the DPA and the SEC's investigation, including:

•Four putative class action lawsuits against ComEd and Exelon were filed in federal court on behalf of ComEd customers in the third quarter of 2020 alleging, among other things, civil violations of federal racketeering laws. In addition, the Citizens Utility Board (CUB) filed a motion to intervene in these cases on October 22, 2020 which was granted on December 23, 2020. On December 2, 2020, the court

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appointed interim lead plaintiffs in the federal cases which consisted of counsel for three of the four federal cases. These plaintiffs filed a consolidated complaint on January 5, 2021. CUB also filed its own complaint against ComEd only on the same day. The remaining federal case, Potter, et al. v. Exelon et al, differed from the other lawsuits as it named additional individual defendants not named in the consolidated complaint. However, the Potter plaintiffs voluntarily dismissed their complaint without prejudice on April 5, 2021. ComEd and Exelon moved to dismiss the consolidated class action complaint and CUB’s complaint on February 4, 2021 and briefing was completed on March 22, 2021. On March 25, 2021, the parties agreed, along with state court plaintiffs, discussed below, to jointly engage in mediation. The parties participated in a one-day mediation on June 7, 2021 but no settlement was reached. On September 9, 2021, the federal court granted Exelon’s and ComEd’s motion to dismiss and dismissed the plaintiffs’ and CUB’s federal law claim with prejudice. The federal court also dismissed the related state law claims made by the federal plaintiffs and CUB on jurisdictional grounds. Plaintiffs appealed dismissal of the federal law claim to the Seventh Circuit Court of Appeals. Plaintiffs and CUB also refiled their state law claims in state court and moved to consolidate them with the already pending consumer state court class action, discussed below. On August 22, 2022, the Seventh Circuit affirmed the dismissal of the consolidated federal cases in their entirety.

•Three putative class action lawsuits against ComEd and Exelon were filed in Illinois state court in the third quarter of 2020 seeking restitution and compensatory damages on behalf of ComEd customers. The cases were consolidated into a single action in October of 2020. In November 2020, CUB filed a motion to intervene in the cases pursuant to an Illinois statute allowing CUB to intervene as a party or otherwise participate on behalf of utility consumers in any proceeding which affects the interest of utility consumers. On November 23, 2020, the court allowed CUB’s intervention, but denied CUB's request to stay these cases. Plaintiffs subsequently filed a consolidated complaint, and ComEd and Exelon filed a motion to dismiss on jurisdictional and substantive grounds on January 11, 2021. Briefing on that motion was completed on March 2, 2021. The parties agreed, on March 25, 2021, along with the federal court plaintiffs discussed above, to jointly engage in mediation. The parties participated in a one-day mediation on June 7, 2021 but no settlement was reached. On December 23, 2021, the state court granted ComEd and Exelon's motion to dismiss with prejudice. On December 30, 2021, plaintiffs filed a motion to reconsider that dismissal and for permission to amend their complaint. The court denied the plaintiffs' motion on January 21, 2022. Plaintiffs have appealed the court's ruling dismissing their complaint to the First District Court of Appeals. On February 15, 2022, Exelon and ComEd moved to dismiss the federal plaintiffs' refiled state law claims, seeking dismissal on the same legal grounds asserted in their motion to dismiss the original state court plaintiffs' complaint. The court granted dismissal of the refiled state claims on February 16, 2022. The original federal plaintiffs appealed that dismissal on February 18, 2022. The two state appeals were consolidated on March 21, 2022. Plaintiffs' opening appellate brief was filed on August 5, 2022. Exelon and ComEd's response is currently due November 18, 2022.

•A putative class action lawsuit against Exelon and certain officers of Exelon and ComEd was filed in federal court in December 2019 alleging misrepresentations and omissions in Exelon’s SEC filings related to ComEd’s lobbying activities and the related investigations. The complaint was amended on September 16, 2020, to dismiss two of the original defendants and add other defendants, including ComEd. Defendants filed a motion to dismiss in November 2020. The court denied the motion in April 2021. On May 26, 2021, defendants moved the court to certify its order denying the motion to dismiss for interlocutory appeal. Briefing on the motion was completed in June 2021. That motion was denied on January 28, 2022. In May 2021, the parties each filed respective initial discovery disclosures. On June 9, 2021, defendants filed their answer and affirmative defenses to the complaint and the parties engaged thereafter in discovery. On September 9, 2021, the U.S. government moved to intervene in the lawsuit and stay discovery until the parties entered into an amendment to their protective order that would prohibit the parties from requesting discovery into certain matters, including communications with the U.S. government. The court ordered said amendment to the protective order on November 15, 2021 and discovery resumed. The court further amended the protective order on October 17, 2022 and extended it until May 15, 2023. The next court status is set for May 8, 2023. Discovery remains ongoing.

•Several shareholders have sent letters to the Exelon Board of Directors from 2020 through May 2022 demanding, among other things, that the Exelon Board of Directors investigate and address alleged breaches of fiduciary duties and other alleged violations by Exelon and ComEd officers and directors related to the conduct described in the DPA. In the first quarter of 2021, the Exelon Board of Directors

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appointed a Special Litigation Committee (SLC) consisting of disinterested and independent parties to investigate and address these shareholders’ allegations and make recommendations to the Exelon Board of Directors based on the outcome of the SLC’s investigation. In July 2021, one of the demand letter shareholders filed a derivative action against current and former Exelon and ComEd officers and directors, and against Exelon, as nominal defendant, asserting the same claims made in its demand letter. On October 12, 2021, the parties to the derivative action filed an agreed motion to stay that litigation for 120 days in order to allow the SLC to continue its investigation, which the court granted. On February 3, 2022, the court granted an extension of the stay for another 120 days and directed the parties to file a status report on June 1, 2022. On June 1, 2022, the parties requested a further extension of the stay until September 14, 2022, which the court granted. On September 13, 2022, the court further extended the stay until December 16, 2022 and directed the parties to file a status report on December 9, 2022.

•Two separate shareholder requests seeking review of certain Exelon books and records were received in August 2021 and January 2022. Exelon responded to both requests and both shareholders have since sent formal shareholder demands to the Exelon Board, as discussed above.

No loss contingencies have been reflected in Exelon’s and ComEd’s consolidated financial statements with respect to these matters, as such contingencies are neither probable nor reasonably estimable at this time.

In August 2022, the ICC concluded its investigation initiated on August 12, 2021 into rate impacts of conduct admitted in the DPA, including the costs recovered from customers related to the DPA and Exelon's funding of the fine paid by ComEd. On August 17, 2022, the ICC issued its final order accepting ComEd's voluntary customer refund offer of approximately $38 million (of which about $31 million is ICC jurisdictional; the remaining balance is FERC jurisdictional) that resolves the question of whether customer funds were used for DPA related activities. The customer refund includes the cost of every individual or entity that was either (i) identified in the DPA or (ii) identified by ComEd as an associate of the former Speaker of the Illinois House of Representatives in the ICC proceeding. The ICC rejected an argument by the Illinois Attorney General, City of Chicago, and CUB that a costly permanent adjustment also needed to be made to ComEd's ratemaking capital structure on account of Exelon having funded ComEd's payment of the DPA fine with an equity infusion. On October 6, the ICC denied the application for rehearing filed by the Illinois Attorney General, City of Chicago, and CUB that specifically focused on their capital structure argument. An accrual for the amount of the voluntary customer refund has been recorded in Regulatory liabilities and Other deferred credits and other liabilities in Exelon’s and ComEd’s Consolidated Balance Sheets as of September 30, 2022. The ICC jurisdictional refund must be made in April 2023; the FERC jurisdictional refund will be made as part of the next transmission formula rate update proceeding in 2023. The customer refund will not be recovered in rates or charged to customers and ComEd will not seek or accept reimbursement or indemnification from any source other than Exelon.

Savings Plan Claim (Exelon). On December 6, 2021, seven current and former employees filed a putative ERISA class action suit in U.S. District Court for the Northern District of Illinois against Exelon, its Board of Directors, the former Board Investment Oversight Committee, the Corporate Investment Committee, individual defendants, and other unnamed fiduciaries of the Exelon Corporation Employee Savings Plan (Plan). The complaint alleges that the defendants violated their fiduciary duties under the Plan by including certain investment options that allegedly were more expensive than and underperformed similar passively-managed or other funds available in the marketplace and permitting a third-party administrative service provider/recordkeeper and an investment adviser to charge excessive fees for the services provided. The plaintiffs seek declaratory, equitable and monetary relief on behalf of the Plan and participants. On February 16, 2022, the court granted the parties' stipulated dismissal of the individual named defendants without prejudice. The remaining defendants filed a motion to dismiss the complaint on February 25, 2022. The plaintiffs filed their response brief on March 28, 2022 and the defendants filed their reply on April 11, 2022. On March 4, 2022, the Chamber of Commerce filed a brief of amicus curiae in support of the defendants' motion to dismiss. On September 22, 2022, the court granted Exelon’s motion to dismiss without prejudice. The court granted plaintiffs leave until October 31, 2022 to file an amended complaint. On October 21, 2022, the court granted plaintiffs additional time, until November 30, 2022, to file an amendment complaint. Defendants’ response to any amended complaint would be due January 20, 2023. No loss contingencies have been reflected in Exelon’s consolidated financial statements with respect to this matter, as such contingencies are neither probable nor reasonably estimable at this time.

General (All Registrants). The Registrants are involved in various other litigation matters that are being defended and handled in the ordinary course of business. The assessment of whether a loss is probable or

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reasonably possible, and whether the loss or a range of loss is estimable, often involves a series of complex judgments about future events. The Registrants maintain accruals for such losses that are probable of being incurred and subject to reasonable estimation. Management is sometimes unable to estimate an amount or range of reasonably possible loss, particularly where (1) the damages sought are indeterminate, (2) the proceedings are in the early stages, or (3) the matters involve novel or unsettled legal theories. In such cases, there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including a possible eventual loss.

14. Shareholders' Equity (Exelon)

Equity Securities Offering

On August 4, 2022, Exelon entered into an agreement with certain underwriters in connection with an underwritten public offering (the “Offering”) of 11.3 million shares (the “Shares”) of its common stock, no par value (“Common Stock”). The Shares were sold to the underwriters at a price per share of $43.32. Exelon also granted the underwriters an option to purchase an additional 1.695 million shares of Common Stock also at the price per share of $43.32. On August 5, 2022, the underwriters exercised the option in full. The net proceeds from the Offering and the exercise of the underwriters’ option were $563 million before expenses paid by Exelon. Exelon used the proceeds together with available cash balances, to repay $575 million in borrowings under a $1.15 billion term loan credit facility. See Note 11 — Debt and Credit Agreements for additional information on Exelon’s term loan.

At-the-Market (ATM) Program

On August 4, 2022, Exelon executed an equity distribution agreement (“Equity Distribution Agreement”) with certain sales agents and forward sellers and certain forward purchasers establishing an ATM equity distribution program under which it may offer and sell shares of its Common Stock, having an aggregate gross sales price of up to $1.0 billion. Exelon has no obligation to offer or sell any shares of Common Stock under the Equity Distribution Agreement and may at any time suspend or terminate offers and sales under the Equity Distribution Agreement. As of September 30, 2022, Exelon has not issued any shares of Common Stock under the ATM program and has not entered into any forward sale agreements.

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Note 15 — Changes in Accumulated Other Comprehensive Income

15. Changes in Accumulated Other Comprehensive Income (Exelon)

The following tables present changes in Exelon's AOCI, net of tax, by component:

Three Months Ended September 30, 2022			Cash Flow Hedges						Pension and Non-Pension Postretirement Benefit Plan Items(a)						Foreign Currency Items												Total
Balance as of June 30, 2022			$	—					$	(701)					$	—											$	(701)
Amounts reclassified from AOCI			—						9						—												9
Net current-period OCI			—						9						—												9
Balance as of September 30, 2022			$	—					$	(692)					$	—											$	(692)

Three Months Ended September 30, 2021			Cash Flow Hedges						Pension and Non-Pension Postretirement Benefit Plan Items(a)						Foreign Currency Items												Total
Balance as of June 30, 2021			$	(5)					$	(3,264)					$	(20)											$	(3,289)
OCI before reclassifications			—						14						(3)												11
Amounts reclassified from AOCI			—						55						—												55
Net current-period OCI			—						69						(3)												66
Balance as of September 30, 2021			$	(5)					$	(3,195)					$	(23)											$	(3,223)

Nine Months Ended September 30, 2022			Cash Flow Hedges						Pension and Non-Pension Postretirement Benefit Plan Items(a)						Foreign Currency Items												Total
Balance as of December 31, 2021			$	(6)					$	(2,721)					$	(23)											$	(2,750)
Separation of Constellation			6						1,994						23												2,023
OCI before reclassifications			—						2						—												2
Amounts reclassified from AOCI			—						33						—												33
Net current-period OCI			—						35						—												35
Balance as of September 30, 2022			$	—					$	(692)					$	—											$	(692)

Nine Months Ended September 30, 2021			Cash Flow Hedges						Pension and Non-Pension Postretirement Benefit Plan Items(a)						Foreign Currency Items												Total
Balance as of December 31, 2020			$	(5)					$	(3,372)					$	(23)											$	(3,400)
OCI before reclassifications			(1)						15						—												14
Amounts reclassified from AOCI			—						163						—												163
Net current-period OCI			(1)						178						—												177
Balance as of September 30, 2021			$	(6)					$	(3,194)					$	(23)											$	(3,223)

__________

(a)This AOCI component is included in the computation of net periodic pension and OPEB cost. Additionally, as of February 1, 2022, in connection with the separation, Exelon's pension and OPEB plans were remeasured. See Note 9 — Retirement Benefits for additional information. See Exelon's Statements of Operations and Comprehensive Income for individual components of AOCI.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 15 — Changes in Accumulated Other Comprehensive Income

The following table presents income tax benefit (expense) allocated to each component of Exelon's other comprehensive income (loss):

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
Pension and non-pension postretirement benefit plans:
Prior service benefit reclassified to periodic benefit cost			$	—					$	1					$	—					$	3
Actuarial loss reclassified to periodic benefit cost			(3)						(19)						(11)						(57)
Pension and non-pension postretirement benefit plans valuation adjustment			—						(7)						—						(8)

16. Supplemental Financial Information (All Registrants)

Supplemental Statement of Operations Information

The following tables provide additional information about material items recorded in the Registrants' Consolidated Statements of Operations and Comprehensive Income:

			Taxes other than income taxes
			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Three Months Ended September 30, 2022
Utility taxes(a)			$	244					$	84					$	51					$	22					$	87					$	79					$	7					$	1
Property			99						10						4						50						35						23						11						1
Payroll			28						7						5						4						7						2						1						—
Three Months Ended September 30, 2021
Utility taxes(a)			$	215					$	67					$	41					$	21					$	86					$	80					$	6					$	—
Property			98						13						5						46						34						23						10						1
Payroll			33						7						4						5						7						2						1						1
Nine Months Ended September 30, 2022
Utility taxes(a)			$	667					$	233					$	126					$	70					$	238					$	216					$	19					$	3
Property			287						30						12						142						103						70						31						2
Payroll			92						21						14						13						21						5						4						2
Nine Months Ended September 30, 2021
Utility taxes(a)			$	592					$	188					$	107					$	66					$	231					$	212					$	17					$	2
Property			271						30						13						131						97						65						30						2
Payroll			97						20						12						14						21						5						4						2

_________

(a)The Registrants' utility taxes represent municipal and state utility taxes and gross receipts taxes related to their operating revenues. The offsetting collection of utility taxes from customers is recorded in revenues in the Registrants’ Consolidated Statements of Operations and Comprehensive Income.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 16 — Supplemental Financial Information

			Other, Net
			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Three Months Ended September 30, 2022
AFUDC — Equity			$	38					$	10					$	7					$	5					$	16					$	12					$	2					$	2
Non-service net periodic benefit cost			16						—						—						—						—						—						—						—
Three Months Ended September 30, 2021
AFUDC — Equity			$	36					$	10					$	7					$	7					$	12					$	9					$	2					$	1
Non-service net periodic benefit cost			19						—						—						—						—						—						—						—

Nine Months Ended September 30, 2022
AFUDC — Equity			$	112					$	28					$	22					$	17					$	45					$	35					$	5					$	5
Non-service net periodic benefit cost			48						—						—						—						—						—						—						—
Nine Months Ended September 30, 2021
AFUDC — Equity			$	99					$	23					$	19					$	21					$	36					$	30					$	4					$	2
Non-service net periodic benefit cost			64						—						—						—						—						—						—						—

Supplemental Cash Flow Information

The following tables provide additional information about material items recorded in the Registrants' Consolidated Statements of Cash Flows.

			Depreciation and amortization
			Exelon(a)						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Nine Months Ended September 30, 2022
Property, plant, and equipment(b)			$	2,024					$	770					$	267					$	355					$	502					$	214					$	141					$	126
Amortization of regulatory assets(b)			532						212						10						115						195						98						31						66
Amortization of intangible assets, net(b)			10						—						—						—						—						—						—						—
Amortization of energy contract assets and liabilities(c)			3						—						—						—						—						—						—						—
Nuclear fuel(d)			66						—						—						—						—						—						—						—
ARO accretion(e)			44						—						—						—						—						—						—						—
Total depreciation, amortization, and accretion			$	2,679					$	982					$	277					$	470					$	697					$	312					$	172					$	192
Nine Months Ended September 30, 2021
Property, plant, and equipment(b)			$	4,505					$	721					$	249					$	324					$	467					$	204					$	126					$	115
Amortization of regulatory assets(b)			439						172						10						110						147						98						31						18
Amortization of intangible assets, net(b)			44						—						—						—						—						—						—						—
Amortization of energy contract assets and liabilities(c)			23						—						—						—						—						—						—						—
Nuclear fuel(d)			810						—						—						—						—						—						—						—
ARO accretion(e)			383						—						—						—						—						—						—						—
Total depreciation, amortization, and accretion			$	6,204					$	893					$	259					$	434					$	614					$	302					$	157					$	133

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 16 — Supplemental Financial Information

__________

(a)Exelon's amounts include amounts related to Generation prior to the separation. See Note 2 — Discontinued Operations for additional information.

(b)Included in Depreciation and amortization in the Registrants' Consolidated Statements of Operations and Comprehensive Income.

(c)Included in Operating revenues or Purchased power and fuel expense in Exelon’s Consolidated Statements of Operations and Comprehensive Income.

(d)Included in Purchased fuel expense in Exelon's Consolidated Statement of Operations and Comprehensive Income.

(e)Included in Operating and maintenance expense in Exelon's Consolidated Statement of Operations and Comprehensive Income.

			Other non-cash operating activities
			Exelon(a)						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Nine Months Ended September 30, 2022
Pension and non-pension postretirement benefit costs			$	124					$	45					$	(6)					$	34					$	39					$	6					$	3					$	9
Allowance for credit losses			130						40						32						18						42						21						9						12
Other decommissioning-related activity			36						—						—						—						—						—						—						—
Energy-related options			60						—						—						—						—						—						—						—
True-up adjustments to decoupling mechanisms and formula rates(b)			(92)						(163)						(1)						40						33						15						3						14
Long-term incentive plan			35						—						—						—						—						—						—						—
Amortization of operating ROU asset			47						1						—						14						21						5						6						3
AFUDC — Equity			(112)						(28)						(22)						(17)						(45)						(35)						(5)						(5)
Nine Months Ended September 30, 2021
Pension and non-pension postretirement benefit costs			$	304					$	97					$	5					$	45					$	36					$	5					$	2					$	8
Allowance for credit losses			155						34						36						7						18						9						3						6
Other decommissioning-related activity			(810)						—						—						—						—						—						—						—
Energy-related options			45						—						—						—						—						—						—						—
True-up adjustments to decoupling mechanisms and formula rates(b)			(129)						(32)						(20)						17						(94)						(54)						(17)						(23)
Severance costs			(67)						1						—						—						1						—						—						—
Long-term incentive plan			94						—						—						—						—						—						—						—
Amortization of operating ROU asset			146						2						—						22						21						5						7						3
AFUDC — Equity			(99)						(23)						(19)						(21)						(36)						(30)						(4)						(2)

__________

(a)Exelon's amounts include amounts related to Generation prior to the separation. See Note 2 — Discontinued Operations for additional information.

(b)For ComEd, reflects the true-up adjustments in regulatory assets and liabilities associated with its distribution, energy efficiency, distributed generation, and transmission formula rates. For PECO, reflects the change in regulatory assets and liabilities associated with its transmission formula rates. For BGE, Pepco, DPL, and ACE, reflects the change in regulatory assets and liabilities associated with their decoupling mechanisms and transmission formula rates. See Note 3 — Regulatory Matters of the 2021 Recast Form 10-K for additional information.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 16 — Supplemental Financial Information

The following tables provide a reconciliation of cash, cash equivalents, and restricted cash reported within the Registrants’ Consolidated Balance Sheets that sum to the total of the same amounts in their Consolidated Statements of Cash Flows.

			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
September 30, 2022
Cash and cash equivalents			$	446					$	63					$	94					$	20					$	219					$	21					$	49					$	112
Restricted cash and cash equivalents			744						342						9						130						234						77						157						—
Restricted cash included in other long-term assets			83						83						—						—						—						—						—						—
Total cash, restricted cash, and cash equivalents			$	1,273					$	488					$	103					$	150					$	453					$	98					$	206					$	112
December 31, 2021
Cash and cash equivalents			$	672					$	131					$	36					$	51					$	136					$	34					$	28					$	29
Restricted cash and cash equivalents			321						210						8						4						77						34						43						—
Restricted cash included in other long-term assets			44						43						—						—						—						—						—						—
Cash, restricted cash, and cash equivalents from discontinued operations			582						—						—						—						—						—						—						—
Total cash, restricted cash, and cash equivalents			$	1,619					$	384					$	44					$	55					$	213					$	68					$	71					$	29
September 30, 2021
Cash and cash equivalents			$	2,957					$	241					$	344					$	225					$	82					$	19					$	13					$	16
Restricted cash and cash equivalents			473						276						8						27						71						41						26						5
Restricted cash included in other long-term assets			54						44						—						—						9						—						—						9
Total cash, restricted cash, and cash equivalents(a)			$	3,484					$	561					$	352					$	252					$	162					$	60					$	39					$	30
December 31, 2020
Cash and cash equivalents			$	432					$	83					$	19					$	144					$	111					$	30					$	15					$	17
Restricted cash and cash equivalents			349						279						7						1						39						35						—						3
Restricted cash included in other long-term assets			53						43						—						—						10						—						—						10
Cash, restricted cash, and cash equivalents from discontinued operations			332						—						—						—						—						—						—						—
Total cash, restricted cash, and cash equivalents			$	1,166					$	405					$	26					$	145					$	160					$	65					$	15					$	30

__________

(a)Exelon's amounts include amounts related to Generation prior to the separation. See Note 2 — Discontinued Operations for additional information.

For additional information on restricted cash see Note 1 — Significant Accounting Policies of the 2021 Recast Form 10-K.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 16 — Supplemental Financial Information

Supplemental Balance Sheet Information

The following table provides additional information about material items recorded in the Registrants' Consolidated Balance Sheets.

			Accrued expenses
			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
September 30, 2022
Compensation-related accruals(a)			$	501					$	152					$	63					$	56					$	89					$	26					$	16					$	13
Taxes accrued			317						115						41						85						90						67						12						4
Interest accrued			341						66						43						44						73						34						21						16
December 31, 2021
Compensation-related accruals(a)			$	596					$	155					$	77					$	78					$	113					$	35					$	20					$	17
Taxes accrued			253						94						14						53						96						88						9						11
Interest accrued			297						116						41						44						52						28						8						11

__________

(a)Primarily includes accrued payroll, bonuses and other incentives, vacation, and benefits.

Book Overdrafts (Exelon, PHI, DPL)

Book overdrafts representing outstanding checks in excess of funds on deposit are included in Other current liabilities on the Registrants' Consolidated Balance Sheets. The balance of DPL's book overdrafts was $28 million and $4 million as of September 30, 2022 and December 31, 2021, respectively.

17. Related Party Transactions (All Registrants)

Utility Registrants' expense with Generation

The Utility Registrants incurred expenses from transactions with the Generation affiliate as described in the footnotes to the table below prior to separation on February 1, 2022. Such expenses were primarily recorded as Purchased power from affiliates and an immaterial amount recorded as Operating and maintenance expense from affiliates at the Utility Registrants:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2022						2021						2022						2021
ComEd(a)			$	—					$	94					$	59					$	256
PECO(b)			—						59						33						142
BGE(c)			—						65						18						195
PHI			—						99						51						276
Pepco(d)			—						69						39						199
DPL(e)			—						25						10						63
ACE(f)			—						5						2						14

__________

(a)ComEd had an ICC-approved RFP contract with Generation to provide a portion of ComEd’s electric supply requirements. ComEd also purchased RECs and ZECs from Generation.

(b)PECO received electric supply from Generation under contracts executed through PECO’s competitive procurement process. In addition, PECO had a ten-year agreement with Generation to sell solar AECs.

(c)BGE received a portion of its energy requirements from Generation under its MDPSC-approved market-based SOS and gas commodity programs.

(d)Pepco received electric supply from Generation under contracts executed through Pepco's competitive procurement process approved by the MDPSC and DCPSC.

(e)DPL received a portion of its energy requirements from Generation under its MDPSC and DEPSC approved market-based SOS commodity programs.

(f)ACE received electric supply from Generation under contracts executed through ACE's competitive procurement process approved by the NJBPU.

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 17 — Related Party Transactions

Service Company Costs for Corporate Support

The Registrants receive a variety of corporate support services from BSC. Pepco, DPL, and ACE also receive corporate support services from PHISCO. See Note 1 — Significant Accounting Policies for additional information regarding BSC and PHISCO.

The following table presents the service company costs allocated to the Registrants:

						Operating and maintenance from affiliates																								Capitalized costs
						Three Months Ended September 30,												Nine Months Ended September 30,												Three Months Ended September 30,												Nine Months Ended September 30,
						2022						2021						2022						2021						2022						2021						2022						2021
Exelon
BSC																														$	156					$	106					$	500					$	355
PHISCO																														20						18						60						54
ComEd
BSC						$	69					$	71					$	234					$	214					70						47						222						148
PECO
BSC						44						41						140						120						24						12						80						57
BGE
BSC						46						45						148						133						26						20						86						62
PHI
BSC						39						40						135						116						36						27						112						88
PHISCO						—						—						—						—						20						18						60						54
Pepco
BSC						24						23						80						68						13						11						41						36
PHISCO						28						26						86						84						8						7						24						22
DPL
BSC						16						14						51						43						11						10						34						29
PHISCO						24						24						73						73						7						6						20						17
ACE
BSC						13						14						42						37						12						7						37						22
PHISCO						20						21						63						64						5						5						16						15

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 17 — Related Party Transactions

Current Receivables from/Payables to affiliates

The following tables present current receivables from affiliates and current payables to affiliates:

September 30, 2022

									Receivables from affiliates:
			Payables to affiliates:						ComEd						PECO						BGE												Pepco						DPL						ACE						BSC						PHISCO						Other						Total
ComEd												$	—					$	—											$	—					$	—					$	—					$	50					$	—					$	4					$	54
PECO						$	—											—												—						—						—						30						—						6						36
BGE						—						—																		—						—						—						31						—						1						32
PHI						—						—						—												—						—						—						4						—						10						14
Pepco						—						—						—																		—						—						14						13						1						28
DPL						—						—						—												—												—						13						10						1						24
ACE						—						—						—												—						—												10						9						1						20
Other						3						1						—												—						—						1						9						—												14
Total						$	3					$	1					$	—											$	—					$	—					$	1					$	161					$	32					$	24					$	222

December 31, 2021

									Receivables from affiliates:
			Payables to affiliates:						ComEd						PECO						BGE												Pepco						DPL						ACE						Generation						BSC						PHISCO						Other						Total
ComEd												$	—					$	—											$	—					$	—					$	—					$	41					$	71					$	—					$	9					$	121
PECO						$	—											—												—						—						—						30						36						—						4						70
BGE						—						—																		—						—						—						4						41						—						3						48
PHI						—						1						—												—						—						1						—						5						—						9						16
Pepco						—						—						1																		1						1						20						21						12						3						59
DPL						—						—						—												—												—						4						17						11						1						33
ACE						—						—						—												—						—												7						13						9						2						31
Generation						13						—						—												—						—						—												102						—						16						131
Other						3						—						—												—						—						—						11						—						—												14
Total						$	16					$	1					$	1											$	—					$	1					$	2					$	117					$	306					$	32					$	47					$	523

Borrowings from Exelon/PHI intercompany money pool

To provide an additional short-term borrowing option that will generally be more favorable to the borrowing participants than the cost of external financing both Exelon and PHI operate an intercompany money pool. PECO and PHI Corporate participate in the Exelon money pool. Pepco, DPL, and ACE participate in the PHI intercompany money pool.

Noncurrent Receivables from affiliates

ComEd and PECO have noncurrent receivables with Generation as a result of the nuclear decommissioning contractual construct whereby, to the extent NDT funds are greater than the underlying ARO at the end of decommissioning, such amounts are due back to ComEd and PECO, as applicable, for payment to their respective customers. The receivables are recorded in Receivable related to Regulatory Agreement Units as of September 30, 2022 and in noncurrent Receivables from affiliates as of December 31, 2021. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements of the 2021 Recast Form 10-K for additional information.

Long-term debt to financing trusts

The following table presents Long-term debt to financing trusts:

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COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollars in millions, except per share data, unless otherwise noted)

Note 17 — Related Party Transactions

			September 30, 2022																		December 31, 2021
			Exelon						ComEd						PECO						Exelon						ComEd						PECO
ComEd Financing III			$	206					$	205					$	—					$	206					$	205					$	—
PECO Trust III			81						—						81						81						—						81
PECO Trust IV			103						—						103						103						—						103
Total			$	390					$	205					$	184					$	390					$	205					$	184

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ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Dollars in millions except per share data, unless otherwise noted)

Exelon

Executive Overview

Exelon is a utility services holding company engaged in the energy distribution and transmission businesses through ComEd, PECO, BGE, Pepco, DPL, and ACE.

Exelon has six reportable segments consisting of ComEd, PECO, BGE, Pepco, DPL, and ACE. See Note 1 — Significant Accounting Policies and Note 5 — Segment Information of the Combined Notes to Consolidated Financial Statements for additional information regarding Exelon's principal subsidiaries and reportable segments.

Exelon’s consolidated financial information includes the results of its seven separate operating subsidiary registrants, ComEd, PECO, BGE, PHI, Pepco, DPL, and ACE, which, along with Exelon, are collectively referred to as the Registrants. The following combined Management’s Discussion and Analysis of Financial Condition and Results of Operations is separately filed by Exelon, ComEd, PECO, BGE, PHI, Pepco, DPL, and ACE. However, none of the Registrants makes any representation as to information related solely to any of the other Registrants.

Financial Results of Operations

GAAP Results of Operations. The following table sets forth Exelon's GAAP consolidated Net income attributable to common shareholders from continuing operations and the Utility Registrants' Net income for the three and nine months ended September 30, 2022 compared to the same period in 2021. For additional information regarding the financial results for the three and nine months ended September 30, 2022 and 2021 see the discussions of Results of Operations by Registrant.

			Three Months Ended September 30,												Favorable (Unfavorable) Variance						Nine Months Ended September 30,												Favorable (Unfavorable) Variance
			2022						2021												2022						2021
Exelon			$	676					$	457					$	219					$	1,622					$	1,307					$	315
ComEd			291						220						71						706						609						97
PECO			135						111						24						474						383						91
BGE			33						36						(3)						267						290						(23)
PHI			289						266						23						518						535						(17)
Pepco			145						130						15						261						264						(3)
DPL			52						50						2						130						135						(5)
ACE			94						90						4						131						141						(10)
Other(a)			(72)						(176)						104						(343)						(510)						167

__________

(a)Primarily includes eliminating and consolidating adjustments, Exelon’s corporate operations, shared service entities and other financing and investing activities.

The separation of Constellation, including Generation and its subsidiaries, meets the criteria for discontinued operations and as such, Generation's results of operations are presented as discontinued operations and have been excluded from Exelon's continuing operations for all periods presented.

Accounting rules require that certain BSC costs previously allocated to Generation be presented as part of Exelon’s continuing operations as these costs do not qualify as expenses of the discontinued operations. Such costs are included in Other in the table above. See further discussion below.

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021. Net income attributable to common shareholders from continuing operations increased by $219 million and

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diluted earnings per average common share from continuing operations increased to $0.68 in 2022 from $0.47 in 2021 primarily due to:

•Higher electric distribution earnings from higher allowed electric distribution ROE due to an increase in treasury rates and higher rate base at ComEd;

•The favorable impacts of rate increases at PECO, BGE, and PHI;

•Favorable impacts of decreased storm costs at PECO and BGE; and

•Lower BSC costs, which were previously allocated to Generation but do not qualify as expenses of the discontinued operations per the accounting rules. Such costs, on a pre-tax basis, were $104 million for the three months ended September 30, 2021.

The increases were partially offset by:

•An adjustment at PECO to exclude one-time non-cash impacts associated with the remeasurement of deferred income taxes as a result of the reduction in Pennsylvania corporate income tax rate;

•Higher depreciation expense at PECO and PHI; and

•Higher interest expense at Exelon Corporate.

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021. Net income attributable to common shareholders from continuing operations increased by $315 million and diluted earnings per average common share from continuing operations increased to $1.65 in 2022 from $1.33 in 2021 primarily due to:

•Higher electric distribution earnings from higher allowed electric distribution ROE due to an increase in treasury rates and higher rate base at ComEd;

•The favorable impacts of rate increases at PECO, BGE, and PHI;

•Favorable impacts of decreased storm costs at PECO and BGE; and

•Lower BSC costs presented in Exelon’s continuing operations, which were previously allocated to Generation but do not qualify as expenses of the discontinued operation per the accounting rules. Such costs, on a pre-tax basis, were $28 million for the period in 2022 prior to the separation on February 1, 2022 (January 1, 2022 to January 31, 2022) and $309 million for the nine months ended September 30, 2021.

The increases were partially offset by:

•An income tax expense recorded in connection with the separation primarily due to the long-term marginal state income tax rate change, the recognition of valuation allowances against the net deferred tax assets positions for certain standalone state filing jurisdictions, and nondeductible transaction costs partially offset by a one-time impact associated with a state tax benefit;

•An adjustment at PECO to exclude one-time non-cash impacts associated with the remeasurement of deferred income taxes as a result of the reduction in Pennsylvania corporate income tax rate;

•The absence of favorable weather and volume as a result of the CIP at ACE;

•Higher depreciation expense at PECO, BGE, and PHI;

•Higher credit loss expense at BGE and PHI;

•Higher storm costs at PHI; and

•Higher interest expense at PHI and Exelon Corporate.

Adjusted (non-GAAP) Operating Earnings. In addition to net income, Exelon evaluates its operating performance using the measure of Adjusted (non-GAAP) operating earnings because management believes it represents earnings directly related to the ongoing operations of the business. Adjusted (non-GAAP) operating

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earnings exclude certain costs, expenses, gains and losses, and other specified items. This information is intended to enhance an investor’s overall understanding of year-to-year operating results and provide an indication of Exelon’s baseline operating performance excluding items that are considered by management to be not directly related to the ongoing operations of the business. In addition, this information is among the primary indicators management uses as a basis for evaluating performance, allocating resources, setting incentive compensation targets, and planning and forecasting of future periods. Adjusted (non-GAAP) operating earnings 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.

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The following tables provide a reconciliation between net income attributable to common shareholders from continuing operations as determined in accordance with GAAP and adjusted (non-GAAP) operating earnings for the three and nine months ended September 30, 2022 compared to the same period in 2021.

			Three Months Ended September 30,
			2022												2021
(In millions, except per share data)									Earnings per Diluted Share												Earnings per Diluted Share
Net Income Attributable to Common Shareholders from Continuing Operations			$	676					$	0.68					$	457					$	0.47
Mark-to-Market Impact of Economic Hedging Activities (net of taxes of $1)			—						—						3						—
Cost Management Program (net of taxes of $0)			—						—						4						—
COVID-19 Direct Costs (net of taxes of $0)(a)			—						—						3						—
Asset Retirement Obligation (net of taxes of $2 and $1)			(4)						—						2						—
Acquisition Related Costs (net of taxes of $2)(b)			—						—						7						0.01
ERP System Implementation Costs (net of taxes $1)(c)			—						—						4						—
Asset Impairments (net of taxes of $10)			37						0.04						—						—
Separation Costs (net of taxes of $1 and $8, respectively)(d)			(3)						—						16						0.02
Income Tax-Related Adjustments (entire amount represents tax expense)(e)			38						0.04						26						0.03
Adjusted (non-GAAP) Operating Earnings			$	745					$	0.75					$	522					$	0.53

			Nine Months Ended September 30,
			2022												2021
(In millions, except per share data)									Earnings per Diluted Share												Earnings per Diluted Share
Net Income Attributable to Common Shareholders from Continuing Operations			$	1,622					$	1.65					$	1,307					$	1.33
Mark-to-Market Impact of Economic Hedging Activities (net of taxes of $2)			—						—						6						0.01
Cost Program Management (net of taxes of $0)			—						—						5						0.01
COVID-19 Direct Costs (net of taxes of $3)(a)			—						—						7						0.01
Asset Retirement Obligation (net of taxes of $2 and $1)			(4)						—						2						—
Acquisition Related Costs (net of taxes of $5)(b)			—						—						15						0.02
ERP System Implementation Costs (net of taxes of $0 and $2, respectively)(c)			1						—						10						0.01
Asset Impairments (net of taxes of $10)			37						0.04						—						—
Separation Costs (net of taxes of $10 and $13, respectively)(d)			25						0.03						29						0.03
Income Tax-Related Adjustments (entire amount represents tax expense)(f)			130						0.13						24						0.02
Adjusted (non-GAAP) Operating Earnings			$	1,811					$	1.84					$	1,405					$	1.43

__________

Note:

Amounts may not sum due to rounding.

Unless otherwise noted, the income tax impact of each reconciling item between GAAP Net Income from Continuing Operations and Adjusted (non-GAAP) Operating Earnings is based on the marginal statutory federal and state income tax rates for each Registrant, taking into account whether the income or expense item is taxable or deductible, respectively, in whole or in part. The marginal statutory income tax rates for 2022 and 2021 ranged from 24.0% to 29.0%.

(a)Represents direct costs related to COVID-19 consisting primarily of costs to acquire personal protective equipment, costs for cleaning supplies and services, and costs to hire healthcare professionals to monitor the health of employees, which are recorded in Operating and maintenance expense.

(b)Reflects certain BSC costs related to the acquisition of Electricite de France SA's (EDF's) interest in CENG, which was completed in the third quarter of 2021, that were historically allocated to Constellation Energy Generation, LLC

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(Generation) but are presented as part of continuing operations in Exelon’s results as these costs do not qualify as expenses of the discontinued operations per the accounting rules.

(c)Reflects costs related to a multi-year Enterprise Resource Program (ERP) system implementation, which are recorded in Operating and maintenance expense.

(d)Represents costs related to the separation primarily comprised of system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the separation, and employee-related severance costs, which are recorded in Operating and maintenance expense.

(e)In 2022, for PECO, reflects an adjustment to exclude one-time non-cash impacts associated with the remeasurement of deferred income taxes as a result of the reduction in Pennsylvania corporate income tax rate. In 2021, for Corporate, primarily reflects the adjustment to deferred income taxes due to changes in forecasted apportionment.

(f)In 2022, for PECO, reflects an adjustment to exclude one-time non-cash impacts associated with the remeasurement of deferred income taxes as a result of the reduction in Pennsylvania corporate income tax rate. In 2022, for Corporate, in connection with the separation, Exelon recorded an income tax expense primarily due to the long-term marginal state income tax rate change, the recognition of valuation allowances against the net deferred tax assets positions for certain standalone state filing jurisdictions, and nondeductible transaction costs partially offset by a one-time impact associated with a state tax benefit. In 2021, for Corporate, primarily reflects the adjustment to deferred income taxes due to changes in forecasted apportionment.

Significant 2022 Transactions and Developments

Separation

On February 21, 2021, Exelon’s Board of Directors approved a plan to separate the Utility Registrants and Generation, creating two publicly traded companies (“the separation”). Exelon completed the separation on February 1, 2022. Constellation was newly formed and incorporated in Pennsylvania on June 15, 2021 for the purpose of separation and holds Generation. The separation represented a strategic shift that would have a major effect on Exelon’s operations and financial results. Accordingly, the separation meets the criteria for discontinued operations. See Note 2 — Discontinued Operations of the Combined Notes to Consolidated Financial Statements for additional information on the separation and discontinued operations.

In connection with the separation, Exelon incurred separation (benefit)/costs impacting continuing operations of $(2) million and $24 million on a pre-tax basis for the three months ended September 30, 2022 and 2021, respectively, and $35 million and $42 million on a pre-tax basis for the nine months ended September 30, 2022 and 2021, respectively, which are recorded in Operating and maintenance expense. Total separation costs impacting continuing operations for the remainder of 2022 are not expected to be material. These costs are excluded from Adjusted (non-GAAP) Operating Earnings. The separation costs are primarily comprised of system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the separation, and employee-related severance costs.

Equity Securities Offering

On August 4, 2022, Exelon entered into an agreement with certain underwriters in connection with an underwritten public offering of 12.995 million shares of its common stock, no par value. The net proceeds were $563 million before expenses paid by Exelon. See Note 14 – Shareholders' Equity of the Combined Notes to Consolidated Financial Statements for additional information.

ComEd Electric Distribution Rates

On November 3, 2022, ComEd announced it plans on filing a four-year MRP in January 2023. The MRP will set rates for 2024 – 2027, based on forecasted revenue requirements and an ICC determined rate of return on rate base, including the cost of common equity. See Note 3 – Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information.

Distribution Base Rate Case Proceedings

The Utility Registrants file base rate cases with their regulatory commissions seeking increases or decreases to their electric transmission and distribution, and gas distribution rates to recover their costs and earn a fair return on their investments. The outcomes of these regulatory proceedings impact the Utility Registrants’ current and future financial statements.

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The following tables show the Utility Registrants’ completed and pending distribution base rate case proceedings in 2022. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information.

Completed Distribution Base Rate Case Proceedings

Registrant/Jurisdiction						Filing Date						Service						Requested Revenue Requirement Increase						Approved Revenue Requirement Increase						Approved ROE						Approval Date						Rate Effective Date
ComEd - Illinois						April 16, 2021						Electric						$	51					$	46					7.36		%				December 1, 2021						January 1, 2022
PECO - Pennsylvania						March 30, 2021						Electric						246						132						N/A						November 18, 2021						January 1, 2022
						March 31, 2022						Natural Gas						82						55												October 27, 2022						January 1, 2023
BGE - Maryland						May 15, 2020 (amended September 11, 2020)						Electric						203						140						9.50		%				December 16, 2020						January 1, 2021
												Natural Gas						108						74						9.65		%
Pepco - District of Columbia						May 30, 2019 (amended June 1, 2020)						Electric						136						109						9.275		%				June 8, 2021						July 1, 2021
Pepco - Maryland						October 26, 2020 (amended March 31, 2021)						Electric						104						52						9.55		%				June 28, 2021						June 28, 2021
DPL - Maryland						September 1, 2021 (amended December 23, 2021)						Electric						27						13						9.60		%				March 2, 2022						March 2, 2022
DPL - Delaware						January 14, 2022 (amended August 15, 2022)						Natural Gas						13						8						9.60		%				October 12, 2022						November 1, 2022
ACE - New Jersey						December 9, 2020 (amended February 26, 2021)						Electric						67						41						9.60		%				July 14, 2021						January 1, 2022

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Pending Distribution Base Rate Case Proceedings

Registrant/Jurisdiction

Filing Date

Service

Requested Revenue Requirement Increase

Requested ROE

Expected Approval Timing

ComEd - Illinois

April 15, 2022

Electric

$

199

7.85

%

Fourth quarter of 2022

DPL - Maryland

May 19, 2022

Electric

38

10.25

%

Fourth quarter of 2022

Transmission Formula Rates

For 2022, the following total increases/(decreases) were included in the Utility Registrants' electric transmission formula rate updates. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information.

Registrant						Initial Revenue Requirement Increase						Annual Reconciliation (Decrease) Increase						Total Revenue Requirement Increase						Allowed Return on Rate Base						Allowed ROE
ComEd						$	24					$	(24)					$	—					8.11		%				11.50		%
PECO						23						16						39						7.30		%				10.35		%
BGE						25						(4)						16						7.30		%				10.50		%
Pepco						16						15						31						7.60		%				10.50		%
DPL						9						2						11						7.09		%				10.50		%
ACE						21						13						34						7.18		%				10.50		%

Pennsylvania Corporate Income Tax Rate Change

On July 8, 2022, Pennsylvania enacted House Bill 1342, which will permanently reduce the corporate income tax rate from 9.99% to 4.99%. The tax rate will be reduced to 8.99% for the 2023 tax year. Starting with the 2024 tax year, the rate is reduced by 0.50% annually until it reaches 4.99% in 2031. As a result of the rate change, in the third quarter of 2022, Exelon and PECO recorded a one-time decrease to deferred income taxes of $390 million with a corresponding decrease to the deferred income taxes regulatory asset of $428 million for the amounts that are expected to be settled through future customer rates and an increase to income tax expense of $38 million (net of federal taxes), which was excluded from Exelon's Adjusted (non-GAAP) Operating Earnings. The tax rate decrease is not expected to have a material ongoing impact to Exelon’s and PECO’s financial statements. See Note 8 — Income Taxes of the Combined Notes to Consolidated Financial Statements for additional information.

Inflation Reduction Act

On August 16, 2022, the Inflation Reduction Act (IRA) was signed into law. The bill extends tax benefits for renewable technologies like solar and wind, creates new tax benefits for alternative clean energy sources like nuclear and hydrogen and it focuses on energy efficiency, electrification, and equity. However, the bill also implements a new 15.0% corporate alternative minimum tax based on adjusted GAAP income. Exelon estimates the IRA could result in an increase in cash taxes for Exelon of approximately $200 million per year starting in 2023. Exelon is continuing to assess the impacts of the IRA on the financial statements and will update estimates based on guidance to be issued by the U.S. Treasury and IRS in the future.

Asset Impairment

In the third quarter of 2022, a review of the impacts of COVID-19 on office use resulted in plans to cease the renovation and dispose of an office building at BGE before the asset was placed into service. As a result, Exelon and BGE recorded a pre-tax impairment charge of $46 million in the third quarter of 2022, which was excluded from Exelon's Adjusted (non-GAAP) Operating Earnings. See Note 7 – Asset Impairments of the Combined Notes to Consolidated Financial Statements for additional information.

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Other Key Business Drivers and Management Strategies

The following discussion of other key business drivers and management strategies includes current developments of previously disclosed matters and new issues arising during the period that may impact future financial statements. This section should be read in conjunction with ITEM 1. Business  in the 2021 Form 10-K, ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Other Key Business Drivers and Management Strategies in the 2021 Recast Form 10-K, and Note 13 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements in this report for additional information on various environmental matters.

Legislative and Regulatory Developments

Infrastructure Investment and Jobs Act

On November 15, 2021, President Biden signed the $1.2 trillion Infrastructure Investment and Jobs Act (IIJA) into law. IIJA provides for approximately $550 billion in new federal spending. Categories of funding include funding for a variety of infrastructure needs, including but not limited to: (1) power and grid reliability and resilience, (2) resilience for cybersecurity to address critical infrastructure needs, and (3) electric vehicle charging infrastructure for alternative fuel corridors. Federal agencies are developing guidelines to implement spending programs under IIJA. The time needed to develop these guidelines will vary with some limited program applications opened as early as the first quarter of 2022. The Registrants are continuing to analyze the legislation and considering possible opportunities to apply for funding, either directly or in potential collaborations with state and/or local agencies and key stakeholders. The Registrants cannot predict the ultimate timing and success of securing funding from programs under IIJA.

ComEd and BGE applied for the Middle Mile Grant (MMG), which establishes and funds construction, improvement, or acquisition of middle mile broadband infrastructure which creates high-speed internet services. The MMG addresses inequitable broadband access by expansion and extension of the middle mile infrastructure in underserved communities. ComEd and BGE cannot predict if their applications will be approved as filed or the timing of receiving any funds if they are awarded a grant.

Critical Accounting Policies and Estimates

Management of each of the Registrants makes a number of significant estimates, assumptions, and judgments in the preparation of its financial statements. At September 30, 2022, the Registrants’ critical accounting policies and estimates had not changed significantly from December 31, 2021. See ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — Critical Accounting Policies and Estimates in the 2021 Recast Form 10-K for further information.

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Results of Operations by Registrant

Results of Operations — ComEd

			Three Months Ended September 30,												(Unfavorable) Favorable Variance						Nine Months Ended September 30,												(Unfavorable) Favorable Variance
			2022						2021												2022						2021
Operating revenues			$	1,378					$	1,789					$	(411)					$	4,536					$	4,840					$	(304)
Operating expenses
Purchased power			121						703						582						1,041						1,728						687
Operating and maintenance			355						330						(25)						1,045						969						(76)
Depreciation and amortization			333						304						(29)						982						893						(89)
Taxes other than income taxes			104						91						(13)						289						243						(46)
Total operating expenses			913						1,428						515						3,357						3,833						476
Loss on sales of assets			—						—						—						(2)						—						(2)
Operating income			465						361						104						1,177						1,007						170
Other income and (deductions)
Interest expense, net			(104)						(98)						(6)						(308)						(292)						(16)
Other, net			14						13						1						40						35						5
Total other income and (deductions)			(90)						(85)						(5)						(268)						(257)						(11)
Income before income taxes			375						276						99						909						750						159
Income taxes			84						56						(28)						203						141						(62)
Net income			$	291					$	220					$	71					$	706					$	609					$	97

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021. Net income increased by $71 million as compared to the same period in 2021, primarily due to increases in electric distribution formula rate earnings (reflecting higher allowed electric distribution ROE due to an increase in treasury rates and the impacts of higher rate base).

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021. Net income increased by $97 million as compared to the same period in 2021, primarily due to increases in electric distribution formula rate earnings (reflecting higher allowed electric distribution ROE due to an increase in treasury rates and the impacts of higher rate base) partially offset by the voluntary customer refund related to the ICC investigation of matters identified in the Deferred Prosecution Agreement. See Note 13 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information.

The changes in Operating revenues consisted of the following:

			Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
			Increase (Decrease)						Increase (Decrease)
Distribution			$	112					$	223
Transmission			9						47
Energy efficiency			19						39
Other			6						9
			146						318
Regulatory required programs			(557)						(622)
Total increase			$	(411)					$	(304)

Revenue Decoupling. The demand for electricity is affected by weather and customer usage. Operating revenues are not impacted by abnormal weather, usage per customer, or number of customers as a result of revenue decoupling mechanisms implemented pursuant to FEJA.

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ComEd

Distribution Revenue. EIMA and FEJA provide for a performance-based formula rate, which requires an annual reconciliation of the revenue requirement in effect to the actual costs that the ICC determines are prudently and reasonably incurred in a given year. Electric distribution revenue varies from year to year based upon fluctuations in the underlying costs, (e.g., severe weather and storm restoration), investments being recovered, and allowed ROE. Electric distribution revenue increased for the three and nine months ended September 30, 2022 as compared to the same period in 2021, due to higher allowed ROE due to an increase in treasury rates, the impact of a higher rate base, and higher fully recoverable costs.

Transmission Revenue. Under a FERC-approved formula, transmission revenue varies from year to year based upon fluctuations in the underlying costs, capital investments being recovered, and the highest daily peak load, which is updated annually in January based on the prior calendar year. Generally, increases/decreases in the highest daily peak load will result in higher/lower transmission revenue. Transmission revenue increased for the three and nine months ended September 30, 2022 as compared to the same period in 2021 primarily due to the impact of higher rate base and higher fully recoverable costs.

Energy Efficiency Revenue. FEJA provides for a performance-based formula rate, which requires an annual reconciliation of the revenue requirement in effect to the actual costs that the ICC determines are prudently and reasonably incurred in a given year. Under FEJA, energy efficiency revenue varies from year to year based upon fluctuations in the underlying costs, investments being recovered, and allowed ROE. Energy efficiency revenue increased for the three and nine months ended September 30, 2022 as compared to the same period in 2021, primarily due to increased regulatory asset amortization, which is fully recoverable.

Other Revenue primarily includes assistance provided to other utilities through mutual assistance programs. Other revenue increased for the three and nine months ended September 30, 2022 as compared to the same period in 2021, which primarily reflects mutual assistance revenues associated with storm restoration efforts.

Regulatory Required Programs represents revenues collected under approved riders to recover costs incurred for regulatory programs such as recoveries under the credit loss expense tariff, environmental costs associated with MGP sites, ETAC, and costs related to electricity, ZEC, CMC, and REC procurement. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information regarding CMCs. ETAC is a retail customer surcharge collected by electric utilities operating in Illinois established by CEJA and remitted to an Illinois state agency for programs to support clean energy jobs and training. The riders are designed to provide full and current cost recovery. The costs of these programs are included in Purchased power expense, Operating and maintenance expense, Depreciation and amortization expense and Taxes other than income. Customers have the choice to purchase electricity from competitive electric generation suppliers. Customer choice programs do not impact the volume of deliveries as ComEd remains the distribution service provider for all customers and charges a regulated rate for distribution service, which is recorded in Operating revenues. For customers that choose to purchase electric generation from competitive suppliers, ComEd either acts as the billing agent or the competitive supplier separately bills its own customers, and therefore does not record Operating revenues or Purchased power expense related to the electricity. For customers that choose to purchase electric generation from ComEd, ComEd is permitted to recover the electricity, ZEC, CMC, and REC procurement costs without mark-up and therefore records equal and offsetting amounts in Operating revenues and Purchased power expense related to the electricity, ZECs, CMCs, and RECs.

See Note 5 — Segment Information of the Combined Notes to Consolidated Financial Statements for the presentation of ComEd's revenue disaggregation.

The decrease of $582 million and $687 million for the three and nine months ended September 30, 2022 compared to the same period in 2021, in Purchased power expense is primarily due to the CMCs from the participating nuclear-powered generating facilities. This favorability is offset by a decrease in Operating revenues as part of regulatory required programs. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information regarding CMCs.

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ComEd

The changes in Operating and maintenance expense consisted of the following:

			Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
			Increase (Decrease)						Increase (Decrease)
Storm-related costs			$	10					$	10
Pension and non-pension postretirement benefits expense			(8)						(22)
Labor, other benefits, contracting and materials			21						32
BSC costs			(2)						20
Other(a)			3						30
			24						70
Regulatory required programs(b)			1						6
Total increase			$	25					$	76

__________

(a)For the nine months ended September 30, 2022, the increase is primarily due to the voluntary customer refund related to the ICC investigation of matters identified in the Deferred Prosecution Agreement. See Note 13 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information related to the Deferred Prosecution Agreement.

(b)ComEd is allowed to recover from or refund to customers the difference between its annual credit loss expense and the amounts collected in rates annually through a rider mechanism.

The changes in Depreciation and amortization expense consisted of the following:

			Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
			Increase						Increase
Depreciation and amortization(a)			$	17					$	50
Regulatory asset amortization(b)			12						39
Total increase			$	29					$	89

__________

(a)Reflects ongoing capital expenditures.

(b)Includes amortization of ComEd's energy efficiency formula rate regulatory asset.

Taxes other than income taxes increased by $13 million and by $46 million for the three and nine months ended September 30, 2022, respectively, compared to the same period in 2021, primarily due to taxes related to ETAC, which is recovered through Operating revenues.

Effective income tax rates were 22.4% and 20.3% for the three months ended September 30, 2022 and 2021, respectively, and 22.3% and 18.8% for the nine months ended September 30, 2022 and 2021, respectively. See Note 8 — Income Taxes of the Combined Notes to Consolidated Financial Statements for additional information regarding the components of the effective income tax rates.

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PECO

Results of Operations — PECO

			Three Months Ended September 30,												Favorable (Unfavorable) Variance						Nine Months Ended September 30,												Favorable (Unfavorable) Variance
			2022						2021												2022						2021
Operating revenues			$	1,014					$	818					$	196					$	2,877					$	2,399					$	478
Operating expenses
Purchased power and fuel			403						277						(126)						1,093						800						(293)
Operating and maintenance			243						263						20						705						706						1
Depreciation and amortization			92						86						(6)						277						259						(18)
Taxes other than income taxes			60						51						(9)						155						143						(12)
Total operating expenses			798						677						(121)						2,230						1,908						(322)
Operating income			216						141						75						647						491						156
Other income and (deductions)
Interest expense, net			(45)						(40)						(5)						(129)						(119)						(10)
Other, net			8						7						1						23						20						3
Total other income and (deductions)			(37)						(33)						(4)						(106)						(99)						(7)
Income before income taxes			179						108						71						541						392						149
Income taxes			44						(3)						(47)						67						9						(58)
Net income			$	135					$	111					$	24					$	474					$	383					$	91

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021. Net income increased by $24 million, primarily due to increases in electric distribution rates and lower storm costs, partially offset by a decrease in electrical volume and the one-time non-cash impacts associated with the Pennsylvania corporate income tax legislation passed in July 2022.

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021. Net income increased by $91 million, primarily due to increases in electric and gas distribution rates, partially offset by the one-time non-cash impacts associated with the Pennsylvania corporate income tax legislation passed in July 2022.

The changes in Operating revenues consisted of the following:

			Three Months Ended September 30, 2022																		Nine Months Ended September 30, 2022
			Increase (Decrease)																		Increase (Decrease)
			Electric						Gas						Total						Electric						Gas						Total
Weather			$	28					$	—					$	28					$	23					$	(5)					$	18
Volume			(23)						1						(22)						(19)						11						(8)
Pricing			45						1						46						110						24						134
Transmission			2						—						2						10						—						10
Other			3						1						4						14						5						19
			55						3						58						138						35						173
Regulatory required programs			123						15						138						218						87						305
Total increase			$	178					$	18					$	196					$	356					$	122					$	478

Weather. The demand for electricity and natural gas is affected by weather conditions. With respect to the electric business, very warm weather in summer months and, with respect to the electric and natural gas businesses, very cold weather in winter months are referred to as “favorable weather conditions” because these weather conditions result in increased deliveries of electricity and natural gas. Conversely, mild weather reduces demand. During the three months ended September 30, 2022 compared to the same period in 2021, Operating revenues related to weather increased by the impact of favorable weather conditions. During the nine months ended September 30, 2022 compared to the same period in 2021, Operating revenues related to weather increased by the impact of favorable weather conditions in PECO's service territory.

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Heating and cooling degree-days are quantitative indices that reflect the demand for energy needed to heat or cool a home or business. Normal weather is determined based on historical average heating and cooling degree-days for a 30-year period in PECO's service territory. The changes in heating and cooling degree-days in PECO’s service territory for the three and nine months ended September 30, 2022 compared to the same period in 2021 and normal weather consisted of the following:

			Three Months Ended September 30,																		% Change
PECO Service Territory			2022						2021						Normal						2022 vs. 2021						2022 vs. Normal
Heating Degree-Days			19						4						24						375.0		%				(20.8)		%
Cooling Degree-Days			1,290						1,094						1,021						17.9		%				26.3		%
			Nine Months Ended September 30,																		% Change
			2022						2021						Normal						2022 vs. 2021						2022 vs. Normal
Heating Degree-Days			2,632						2,710						2,864						(2.9)		%				(8.1)		%
Cooling Degree-Days			1,725						1,517						1,413						13.7		%				22.1		%

Volume. Electric volume, exclusive of the effects of weather, for the three and nine months ended September 30, 2022, compared to the same period in 2021, decreased due to customer mix and load growth. Natural gas volume for the three months ended September 30, 2022 compared to the same period in 2021, remained relatively consistent. Natural gas volume for the nine months ended September 30, 2022 compared to the same period in 2021 increased due to retail load growth.

Electric Retail Deliveries to Customers (in GWhs)			Three Months Ended September 30,												% Change						Weather - Normal % Change(b)						Nine Months Ended September 30,												% Change						Weather - Normal % Change(b)
			2022						2021																		2022						2021
Residential			4,386						4,318						1.6		%				(5.6)		%				11,204						11,201						—		%				(2.0)		%
Small commercial & industrial			2,139						2,157						(0.8)		%				(3.3)		%				5,889						5,796						1.6		%				0.8		%
Large commercial & industrial			3,943						3,880						1.6		%				0.1		%				10,691						10,627						0.6		%				—		%
Public authorities & electric railroads			172						155						11.0		%				10.5		%				489						425						15.1		%				15.1		%
Total electric retail deliveries(a)			10,640						10,510						1.2		%				(2.8)		%				28,273						28,049						0.8		%				(0.4)		%

			As of September 30,
Number of Electric Customers			2022						2021
Residential			1,523,269						1,514,836
Small commercial & industrial			155,516						155,006
Large commercial & industrial			3,120						3,108
Public authorities & electric railroads			10,393						10,271
Total			1,692,298						1,683,221

__________

(a)Reflects delivery volumes from customers purchasing electricity directly from PECO and customers purchasing electricity from a competitive electric generation supplier as all customers are assessed distribution charges.

(b)Reflects the change in delivery volumes assuming normalized weather based on the historical 30-year average.

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Natural Gas Deliveries to Customers (in mmcf)			Three Months Ended September 30,												% Change						Weather - Normal % Change(b)						Nine Months Ended September 30,												% Change						Weather - Normal % Change(b)
			2022						2021																		2022						2021
Residential			2,197						2,244						(2.1)		%				0.3		%				28,240						27,945						1.1		%				4.1		%
Small commercial & industrial			2,054						1,926						6.6		%				9.5		%				16,238						15,217						6.7		%				8.5		%
Large commercial & industrial			6						4						50.0		%				19.6		%				20						13						53.8		%				14.0		%
Transportation			5,162						5,356						(3.6)		%				(9.3)		%				18,508						18,474						0.2		%				(0.7)		%
Total natural gas retail deliveries(a)			9,419						9,530						(1.2)		%				(3.1)		%				63,006						61,649						2.2		%				3.8		%

			As of September 30,
Number of Natural Gas Customers			2022						2021
Residential			500,934						495,752
Small commercial & industrial			46,074						44,435
Large commercial & industrial			9						6
Transportation			656						670
Total			547,673						540,863

__________

(a)Reflects delivery volumes from customers purchasing natural gas directly from PECO and customers purchasing natural gas from a competitive natural gas supplier as all customers are assessed distribution charges.

(b)Reflects the change in delivery volumes assuming normalized weather based on the historical 30-year average.

Pricing for the three months ended September 30, 2022 compared to the same period in 2021 increased primarily due to increases in electric distribution rates charged to customers. Pricing for the nine months ended September 30, 2022 compared to the same period in 2021 increased primarily due to increases in electric and gas distribution rates charged to customers.

Transmission Revenue. Under a FERC-approved formula, transmission revenue varies from year to year based upon fluctuations in the underlying costs and capital investments being recovered.

Other revenue primarily includes revenue related to late payment charges. Other revenue for the three months ended September 30, 2022 compared to the same period in 2021 remained relatively consistent. Other revenue for the nine months ended September 30, 2022 compared to the same period in 2021 increased primarily due to revenue related to late payment charges.

Regulatory Required Programs represents revenues collected under approved riders to recover costs incurred for regulatory programs such as energy efficiency, PGC, and the GSA. The riders are designed to provide full and current cost recovery as well as a return. The costs of these programs are included in Purchased power and fuel expense, Operating and maintenance expense, Depreciation and amortization expense, and Income taxes. Customers have the choice to purchase electricity and natural gas from competitive electric generation and natural gas suppliers. Customer choice programs do not impact the volume of deliveries as PECO remains the distribution service provider for all customers and charges a regulated rate for distribution service, which is recorded in Operating revenues. For customers that choose to purchase electric generation or natural gas from competitive suppliers, PECO either acts as the billing agent or the competitive supplier separately bills its own customers and therefore PECO does not record Operating revenues or Purchased power and fuel expense related to the electricity and/or natural gas. For customers that choose to purchase electric generation or natural gas from PECO, PECO is permitted to recover the electricity, natural gas, and REC procurement costs without mark-up and therefore records equal and offsetting amounts in Operating revenues and Purchased power and fuel expense related to the electricity, natural gas, and RECs.     

See Note 5 — Segment Information of the Combined Notes to Consolidated Financial Statements for the presentation of PECO's revenue disaggregation.

The increase of $126 million and $293 million for the three and nine months ended September 30, 2022 compared to the same period in 2021, respectively, in Purchased power and fuel expense is offset in Operating revenues as part of regulatory required programs.

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The changes in Operating and maintenance expense consisted of the following:

			Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
			(Decrease) Increase						(Decrease) Increase
Storm-related costs			$	(40)					$	(39)
Credit loss expense			(7)						(3)
Pension and non-pension post retirement benefit expense			(3)						(6)
Labor, other benefits, contracting and materials			17						8
BSC costs			5						21
Other			3						8
			(25)						(11)
Regulatory required programs			5						10
Total decrease			$	(20)					$	(1)

The changes in Depreciation and amortization expense consisted of the following:

			Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
			Increase						Increase
Depreciation and amortization(a)			$	6					$	18
Regulatory asset amortization			—						—
Total increase			$	6					$	18

__________

(a)Depreciation and amortization increased primarily due to ongoing capital expenditures.

Taxes other than income taxes increased by $9 million for the three months ended September 30, 2022 compared to the same period in 2021, primarily due to higher PA gross receipts tax, which is offset in operating revenues. Increased by $12 million for the nine months ended September 30, 2022 compared to the same period in 2021, primarily due to higher PA gross receipts tax, which is offset in operating revenues, and offset by lower PA Use Tax.

Interest expense, net increased $5 million and $10 million for the three and nine months ended September 30, 2022 compared to the same period in 2021, respectively, primarily due to the issuance of debt in 2021 and 2022.

Effective income tax rates were 24.6% and (2.8)% for the three months ended September 30, 2022 and 2021 respectively, and 12.4% and 2.3% for the nine months ended September 30, 2022 and 2021, respectively. See Note 8 — Income Taxes of the Combined Notes to Consolidated Financial Statements for additional information regarding the components of the effective income tax rates.

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BGE

Results of Operations — BGE

			Three Months Ended September 30,												Favorable (Unfavorable) Variance						Nine Months Ended September 30,												Favorable (Unfavorable) Variance
			2022						2021												2022						2021
Operating revenues			$	870					$	770					$	100					$	2,810					$	2,426					$	384
Operating expenses
Purchased power and fuel			350						290						(60)						1,093						840						(253)
Operating and maintenance			235						205						(30)						658						595						(63)
Depreciation and amortization			148						142						(6)						470						434						(36)
Taxes other than income taxes			77						72						(5)						225						211						(14)
Total operating expenses			810						709						(101)						2,446						2,080						(366)
Operating income			60						61						(1)						364						346						18
Other income and (deductions)
Interest expense, net			(39)						(36)						(3)						(110)						(103)						(7)
Other, net			5						7						(2)						16						23						(7)
Total other income and (deductions)			(34)						(29)						(5)						(94)						(80)						(14)
Income before income taxes			26						32						(6)						270						266						4
Income taxes			(7)						(4)						3						3						(24)						(27)
Net income			$	33					$	36					$	(3)					$	267					$	290					$	(23)

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021. Net income decreased $3 million primarily due to an asset impairment in 2022, and an increase in depreciation expense and credit loss expense, partially offset by favorable impacts of the multi-year plans. See Note 7 — Asset Impairments for additional information on the asset impairment. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information on the three-year electric and natural gas distribution multi-year plans.

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021. Net income decreased $23 million primarily due to an asset impairment in 2022, and an increase in depreciation expense and credit loss expense, partially offset by favorable impacts of the multi-year plans. See Note 7 — Asset Impairments for additional information on the asset impairment. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information on the three-year electric and natural gas distribution multi-year plans.

The changes in Operating revenues consisted of the following:

			Three Months Ended September 30, 2022																		Nine Months Ended September 30, 2022
			Increase																		Increase
			Electric						Gas						Total						Electric						Gas						Total
Distribution			$	20					$	3					$	23					$	51					$	18					$	69
Transmission			13						—						13						20						—						20
Other			1						1						2						10						6						16
			34						4						38						81						24						105
Regulatory required programs			47						15						62						175						104						279
Total increase			$	81					$	19					$	100					$	256					$	128					$	384

Revenue Decoupling. The demand for electricity and natural gas is affected by weather and customer usage. However, Operating revenues are not impacted by abnormal weather or usage per customer as a result of a monthly rate adjustment that provides for fixed distribution revenue per customer by customer class. While Operating revenues are not impacted by abnormal weather or usage per customer, they are impacted by changes in the number of customers.

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BGE

			As of September 30,
Number of Electric Customers			2022						2021
Residential			1,200,786						1,194,254
Small commercial & industrial			115,778						114,814
Large commercial & industrial			12,774						12,584
Public authorities & electric railroads			266						268
Total			1,329,604						1,321,920

			As of September 30,
Number of Natural Gas Customers			2022						2021
Residential			653,413						649,745
Small commercial & industrial			38,128						38,216
Large commercial & industrial			6,222						6,167
Total			697,763						694,128

Distribution Revenue increased for the three and nine months ended September 30, 2022, compared to the same period in 2021, due to favorable impacts of the multi-year plans.

Transmission Revenue. Under a FERC-approved formula, transmission revenue varies from year to year based upon fluctuations in the underlying costs and capital investments being recovered. Transmission revenue increased for the three months ended September 30, 2022, compared to the same period in 2021, primarily due to increases in capital investments and underlying costs and increased for the nine months ended September 30, 2022, compared to the same period in 2021, primarily due to increases in capital investments.

Other Revenue includes revenue related to late payment charges, mutual assistance, off-system sales, and service application fees. Other revenue increased for the three and nine months ended September 30, 2022, compared to the same period in 2021, primarily due to an increase in late fees charged to customers.

Regulatory Required Programs represent revenues collected under approved riders to recover costs incurred for regulatory programs such as conservation, demand response, STRIDE, and the POLR mechanism. The riders are designed to provide full and current cost recovery, as well as a return in certain instances. The costs of these programs are included in Purchased power and fuel expense, Operating and maintenance expense, Depreciation and amortization expense, and Taxes other than income taxes. Customers have the choice to purchase electricity and natural gas from competitive electric generation and natural gas suppliers. Customer choice programs do not impact the volume of deliveries as BGE remains the distribution service provider for all customers and charges a regulated rate for distribution service, which is recorded in Operating revenues. For customers that choose to purchase electric generation or natural gas from competitive suppliers, BGE acts as the billing agent and therefore does not record Operating revenues or Purchased power and fuel expense related to the electricity and/or natural gas. For customers that choose to purchase electric generation or natural gas from BGE, BGE is permitted to recover the electricity and natural gas procurement costs from customers and therefore records the amounts related to the electricity and/or natural gas in Operating revenues and Purchased power and fuel expense. BGE recovers electricity and natural gas procurement costs from customers with a slight mark-up.

See Note 5 — Segment Information of the Combined Notes to Consolidated Financial Statements for the presentation of BGE's revenue disaggregation.

The increase of $60 million and $253 million for the three and nine months ended September 30, 2022 compared to the same period in 2021, in Purchased power and fuel expense is fully offset in Operating revenues as part of regulatory required programs.

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BGE

The changes in Operating and maintenance expense consisted of the following:

			Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
			(Decrease) Increase						Increase (Decrease)
Labor, other benefits, contracting, and materials			$	(2)					$	4
Storm-related costs			(9)						(10)
Pension and non-pension postretirement benefits expense			(3)						(9)
BSC costs			—						14
Credit loss expense			(4)						10
Asset impairment (a)			46						46
Other			2						5
			30						60
Regulatory required programs			—						3
Total increase			$	30					$	63

__________

(a)See Note 7 — Asset Impairments for additional information on the asset impairment.

The changes in Depreciation and amortization expense consisted of the following:

			Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
			Increase (Decrease)						Increase
Depreciation and amortization(a)			$	10					$	30
Regulatory required programs			(4)						2
Regulatory asset amortization			—						4
Total increase			$	6					$	36

__________

(a)Depreciation and amortization increased primarily due to ongoing capital expenditures.

Taxes other than income taxes increased by $5 million and $14 million for the three and nine months ended September 30, 2022, respectively, compared to the same period in 2021, primarily due to increased property taxes.

Effective income tax rates were (26.9)% and (12.5)% for the three months ended September 30, 2022 and 2021, respectively, and 1.1% and (9.0)% for the nine months ended September 30, 2022 and 2021, respectively. The change is primarily due to decreases in the multi-year plans' accelerated income tax benefits in 2022 as compared to 2021. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information on the three-year electric and natural gas distribution multi-year plans and Note 8 — Income Taxes of the Combined Notes to Consolidated Financial Statements for additional information regarding the components of the effective income tax rates.

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PHI

Results of Operations — PHI

PHI’s Results of Operations include the results of its three reportable segments, Pepco, DPL, and ACE. PHI also has a business services subsidiary, PHISCO, which provides a variety of support services and the costs are directly charged or allocated to the applicable subsidiaries. Additionally, the results of PHI’s corporate operations include interest costs from various financing activities. All material intercompany accounts and transactions have been eliminated in consolidation. The following table sets forth PHI's GAAP consolidated Net income, by Registrant, for the three and nine months ended September 30, 2022 compared to the same period in 2021. See the Results of Operations for Pepco, DPL, and ACE for additional information.

			Three Months Ended September 30,												Favorable Variance						Nine Months Ended September 30,												(Unfavorable) Favorable Variance
			2022						2021												2022						2021
PHI			$	289					$	266					$	23					$	518					$	535					$	(17)
Pepco			145						130						15						261						264						(3)
DPL			52						50						2						130						135						(5)
ACE			94						90						4						131						141						(10)
Other(a)			(2)						(4)						2						(4)						(5)						1

__________

(a)Primarily includes eliminating and consolidating adjustments, PHI's corporate operations, shared service entities, and other financing and investing activities.

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021. Net Income increased by $23 million primarily due to favorable impacts as a result of Pepco's Maryland and District of Columbia multi-year plans and higher electric distribution rates at DPL and ACE, partially offset by an increase in depreciation expense.

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021. Net Income decreased by $17 million primarily due to an increase in depreciation expense, interest expense at Pepco and ACE, credit loss expense at Pepco and DPL, storm costs at Pepco and DPL, higher contracting costs partially due to timing of maintenance projects at Pepco, the absence of favorable weather and volume as a result of the CIP at ACE, and timing of excess deferred tax amortization at Pepco, partially offset by favorable impacts as a result of Pepco's Maryland and District of Columbia multi-year plans and higher electric distribution rates at DPL and ACE.

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Pepco

Results of Operations — Pepco

			Three Months Ended September 30,												Favorable (Unfavorable) Variance						Nine Months Ended September 30,												Favorable (Unfavorable) Variance
			2022						2021												2022						2021
Operating revenues			$	724					$	660					$	64					$	1,919					$	1,736					$	183
Operating expenses
Purchased power			230						172						(58)						605						471						(134)
Operating and maintenance			121						120						(1)						380						341						(39)
Depreciation and amortization			99						104						5						312						302						(10)
Taxes other than income taxes			105						105						—						291						282						(9)
Total operating expenses			555						501						(54)						1,588						1,396						(192)
Operating income			169						159						10						331						340						(9)
Other income and (deductions)
Interest expense, net			(37)						(35)						(2)						(111)						(104)						(7)
Other, net			14						12						2						39						37						2
Total other income and (deductions)			(23)						(23)						—						(72)						(67)						(5)
Income before income taxes			146						136						10						259						273						(14)
Income taxes			1						6						5						(2)						9						11
Net income			$	145					$	130					$	15					$	261					$	264					$	(3)

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021. Net Income increased by $15 million primarily due to favorable impacts of the Maryland and District of Columbia multi-year plans, partially offset by an increase in depreciation expense.

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021. Net income decreased by $3 million primarily due to higher contracting costs partially due to timing of maintenance projects, an increase in depreciation expense, credit loss expense, storm costs, interest expense, and timing of excess deferred tax amortization, partially offset by the favorable impacts of the Maryland and District of Columbia multi-year plans.

The changes in Operating revenues consisted of the following:

			Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
			Increase (Decrease)						Increase (Decrease)
Distribution			$	20					$	47
Transmission			(8)						—
Other			(3)						(3)
			9						44
Regulatory required programs			55						139
Total increase			$	64					$	183

Revenue Decoupling. The demand for electricity is affected by weather and customer usage. However, Operating revenues from electric distribution in both Maryland and the District of Columbia are not impacted by abnormal weather or usage per customer as a result of a bill stabilization adjustment (BSA) that provides for a fixed distribution charge per customer by customer class. While Operating revenues are not impacted by abnormal weather or usage per customer, they are impacted by changes in the number of customers.

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Pepco

			As of September 30,
Number of Electric Customers			2022						2021
Residential			853,873						839,574
Small commercial & industrial			54,423						53,849
Large commercial & industrial			22,789						22,586
Public authorities & electric railroads			196						179
Total			931,281						916,188

Distribution Revenue increased for the three and nine months ended September 30, 2022 compared to the same period in 2021 primarily due to favorable impacts of the Maryland and District of Columbia multi-year plans.

Transmission Revenue Under a FERC-approved formula, transmission revenue varies from year to year based upon fluctuations in the underlying costs and capital investments being recovered. Transmission revenue decreased for the three months ended September 30, 2022, compared to the same period in 2021, primarily due to decreases in underlying costs. Transmission revenue remained consistent for the nine months ended September 30, 2022.

Other Revenue includes rental revenue, revenue related to late payment charges, mutual assistance revenues, and recoveries of other taxes.

Regulatory Required Programs represent revenues collected under approved riders to recover costs incurred for regulatory programs such as energy efficiency programs, DC PLUG, and SOS procurement and administrative costs. The riders are designed to provide full and current cost recovery as well as a return in certain instances. The costs of these programs are included in Purchased power expense, Operating and maintenance expense, Depreciation and amortization expense, and Taxes other than income taxes. Customers have the choice to purchase electricity from competitive electric generation suppliers. Customer choice programs do not impact the volume of deliveries, as Pepco remains the distribution service provider for all customers and charges a regulated rate for distribution service, which is recorded in Operating revenues. For customers that choose to purchase electric generation from competitive suppliers, Pepco acts as the billing agent and therefore, Pepco does not record Operating revenues or Purchased power expense related to the electricity. For customers that choose to purchase electric generation from Pepco, Pepco is permitted to recover the electricity and REC procurement costs from customers and therefore records the amounts related to the electricity and RECs in Operating revenues and Purchased power expense. Pepco recovers electricity and REC procurement costs from customers with a slight mark-up.

See Note 5 — Segment Information of the Combined Notes to Consolidated Financial Statements for the presentation of Pepco's revenue disaggregation.

The increase of $58 million and $134 million for the three and nine months ended September 30, 2022 compared to the same period in 2021, respectively, in Purchased power expense is fully offset in Operating revenues as part of regulatory required programs.

The changes in Operating and maintenance expense consisted of the following:

			Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
			Increase (Decrease)						Increase (Decrease)
BSC and PHISCO Costs			$	1					$	14
Storm-related costs			1						7
Credit loss expense			—						9
Labor, other benefits, contracting and materials(a)			(1)						7
Pension and non-pension postretirement benefits expense			—						1
Other			(2)						(3)
			(1)						35
Regulatory required programs			2						4
Total increase			$	1					$	39

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__________

(a) Primarily reflects higher contracting costs partially due to timing of maintenance projects.

The changes in Depreciation and amortization expense consisted of the following:

			Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
			(Decrease)						Increase (Decrease)
Depreciation and amortization(a)			$	(1)					$	10
Regulatory asset amortization			(1)						(3)
Regulatory required programs			(3)						3
Total (decrease) increase			$	(5)					$	10

__________

(a)Depreciation and amortization decreased for the three months ended September 30, 2022 primarily due to a reduction in transmission depreciation rates approved on August 16, 2022, which is fully offset in Operating revenues as part of the FERC-approved formula. Depreciation and amortization increased for the nine months ended September 30, 2022 primarily due to ongoing capital expenditures.

Taxes other than income taxes remained consistent for the for three months ended September 30, 2022 and 2021 and increased by $9 million for the nine months ended September 30, 2022 compared to the same period in 2021, primarily due to an increase in property taxes.

Interest expense, net increased by $2 million and $7 million for the three and nine months ended September 30, 2022 compared to the same period in 2021, respectively, primarily due to the issuance of debt in 2021 and 2022.

Effective income tax rates were 0.7% and 4.4% for three months ended September 30, 2022 and 2021, respectively, and (0.8)% and 3.3% for the nine months ended September 30, 2022 and 2021, respectively. The three and nine months ended September 30, 2022 change is primarily due to the acceleration of certain income tax benefits as a result of the Maryland and District of Columbia multi-year plans, partially offset by the timing of excess deferred tax amortization. See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statement for additional information on the three-year electric distribution multi-year plans and Note 8 — Income Taxes of the Combined Notes to Consolidated Financial Statements for additional information regarding the components of the effective income tax rates.

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Results of Operations — DPL

			Three Months Ended September 30,												Favorable (Unfavorable) Variance						Nine Months Ended September 30,												Favorable (Unfavorable) Variance
			2022						2021												2022						2021
Operating revenues			$	412					$	360					$	52					$	1,176					$	1,040					$	136
Operating expenses
Purchased power and fuel			183						138						(45)						507						402						(105)
Operating and maintenance			84						87						3						266						249						(17)
Depreciation and amortization			59						53						(6)						172						157						(15)
Taxes other than income taxes			19						17						(2)						54						50						(4)
Total operating expenses			345						295						(50)						999						858						(141)
Operating income			67						65						2						177						182						(5)
Other income and (deductions)
Interest expense, net			(16)						(15)						(1)						(48)						(47)						(1)
Other, net			3						3						—						9						9						—
Total other income and (deductions)			(13)						(12)						(1)						(39)						(38)						(1)
Income before income taxes			54						53						1						138						144						(6)
Income taxes			2						3						1						8						9						1
Net income			$	52					$	50					$	2					$	130					$	135					$	(5)

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021. Net income remained relatively consistent.

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021. Net income decreased $5 million primarily due to an increase in credit loss expense, storm costs, and depreciation expense, partially offset by higher electric distribution rates.

The changes in Operating revenues consisted of the following:

			Three Months Ended September 30, 2022																		Nine Months Ended September 30, 2022
			Increase (Decrease)																		Increase (Decrease)
			Electric						Gas						Total						Electric						Gas						Total
Weather			$	1					$	—					$	1					$	—					$	—					$	—
Volume			—						(1)						(1)						4						2						6
Distribution			3						1						4						13						4						17
Transmission			4						—						4						6						—						6
Other			(1)						—						(1)						(2)						—						(2)
			7						—						7						21						6						27
Regulatory required programs			30						15						45						74						35						109
Total increase			$	37					$	15					$	52					$	95					$	41					$	136

Revenue Decoupling. The demand for electricity is affected by weather and customer usage. However, Operating revenues from electric distribution in Maryland are not impacted by abnormal weather or usage per customer as a result of a bill stabilization adjustment (BSA) that provides for a fixed distribution charge per customer by customer class. While Operating revenues from electric distribution customers in Maryland are not impacted by abnormal weather or usage per customer, they are impacted by changes in the number of customers.

Weather. The demand for electricity and natural gas in Delaware is affected by weather conditions. With respect to the electric business, very warm weather in summer months and, with respect to the electric and natural gas businesses, very cold weather in winter months are referred to as "favorable weather conditions” because these weather conditions result in increased deliveries of electricity and natural gas. Conversely, mild weather reduces

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demand. During the three and nine months ended September 30, 2022 compared to the same period in 2021, Operating revenues related to weather remained relatively consistent.

Heating and cooling degree days are quantitative indices that reflect the demand for energy needed to heat or cool a home or business. Normal weather is determined based on historical average heating and cooling degree days for a 20-year period in DPL's Delaware electric service territory and a 30-year period in DPL's Delaware natural gas service territory. The changes in heating and cooling degree days in DPL’s Delaware service territory for the three and nine months ended September 30, 2022 compared to same period in 2021 and normal weather consisted of the following:

			Three Months Ended September 30,																		% Change
Delaware Electric Service Territory			2022						2021						Normal						2022 vs. 2021						2022 vs. Normal
Heating Degree-Days			32						11						26						190.9		%				23.1		%
Cooling Degree-Days			1,043						969						906						7.6		%				15.1		%
			Nine Months Ended September 30,																		% Change
			2022						2021						Normal						2022 vs. 2021						2022 vs. Normal
Heating Degree-Days			2,828						2,848						2,977						(0.7)		%				(5.0)		%
Cooling Degree-Days			1,374						1,333						1,243						3.1		%				10.5		%

			Three Months Ended September 30,																		% Change
Delaware Natural Gas Service Territory			2022						2021						Normal						2022 vs. 2021						2022 vs. Normal
Heating Degree-Days			32						11						36						190.9		%				(11.1)		%
			Nine Months Ended September 30,																		% Change
			2022						2021						Normal						2022 vs. 2021						2022 vs. Normal
Heating Degree-Days			2,828						2,848						3,029						(0.7)		%				(6.6)		%

Volume, exclusive of the effects of weather, remained relatively consistent for the three months ended September 30, 2022 compared to the same period in 2021 and increased for the nine months ended September 30, 2022 compared to the same period in 2021 primarily due to customer growth and usage.

Electric Retail Deliveries to Delaware Customers (in GWhs)			Three Months Ended September 30,												% Change						Weather - Normal % Change(b)						Nine Months Ended September 30,												% Change						Weather - Normal % Change(b)
			2022						2021																		2022						2021
Residential			978						973						0.5		%				(2.1)		%				2,548						2,530						0.7		%				0.2		%
Small commercial & industrial			400						412						(2.9)		%				(4.0)		%				1,107						1,111						(0.4)		%				(0.6)		%
Large commercial & industrial			856						860						(0.5)		%				(1.2)		%				2,394						2,359						1.5		%				1.4		%
Public authorities & electric railroads			7						7						—		%				(1.7)		%				24						26						(7.7)		%				(6.1)		%
Total electric retail deliveries(a)			2,241						2,252						(0.5)		%				(2.1)		%				6,073						6,026						0.8		%				0.5		%

			As of September 30,
Number of Total Electric Customers (Maryland and Delaware)			2022						2021
Residential			480,779						476,008
Small commercial & industrial			63,685						62,990
Large commercial & industrial			1,230						1,215
Public authorities & electric railroads			597						605
Total			546,291						540,818

__________

(a)Reflects delivery volumes from customers purchasing electricity directly from DPL and customers purchasing electricity from a competitive electric generation supplier as all customers are assessed distribution charges.

(b)Reflects the change in delivery volumes assuming normalized weather based on the historical 20-year average.

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Natural Gas Retail Deliveries to Delaware Customers (in mmcf)			Three Months Ended September 30,												% Change						Weather - Normal % Change(b)						Nine Months Ended September 30,												% Change						Weather - Normal % Change(b)
			2022						2021																		2022						2021
Residential			374						399						(6.3)		%				(15.2)		%				5,810						5,507						5.5		%				4.7		%
Small commercial & industrial			331						352						(6.0)		%				(10.2)		%				2,882						2,647						8.9		%				9.1		%
Large commercial & industrial			397						395						0.5		%				0.6		%				1,259						1,247						1.0		%				0.9		%
Transportation			1,284						1,303						(1.5)		%				(2.1)		%				4,934						4,997						(1.3)		%				(1.1)		%
Total natural gas deliveries(a)			2,386						2,449						(2.6)		%				(5.2)		%				14,885						14,398						3.4		%				3.2		%

			As of September 30,
Number of Delaware Natural Gas Customers			2022						2021
Residential			129,005						127,740
Small commercial & industrial			10,044						9,935
Large commercial & industrial			16						21
Transportation			156						158
Total			139,221						137,854

__________

(a)Reflects delivery volumes from customers purchasing natural gas directly from DPL and customers purchasing natural gas from a competitive natural gas supplier as all customers are assessed distribution charges.

(b)Reflects the change in delivery volumes assuming normalized weather based on the historical 30-year average.

Distribution Revenue increased for the three and nine months ended September 30, 2022 compared to the same period in 2021 primarily due to higher electric distribution rates in Maryland that became effective in March 2022 and higher DSIC rates in Delaware that became effective in January and July 2022.

Transmission Revenue Under a FERC-approved formula, transmission revenue varies from year to year based upon fluctuations in the underlying costs and capital investments being recovered. During the three and nine months ended September 30, 2022 compared to the same period in 2021, transmission revenue increased, primarily due to increases in underlying costs.

Other Revenue includes rental revenue, revenue related to late payment charges, mutual assistance revenues, and recoveries of other taxes.

Regulatory Required Programs represent revenues collected under approved riders to recover costs incurred for regulatory programs such as energy efficiency programs, DE Renewable Portfolio Standards, SOS procurement and administrative costs, and GCR costs. The riders are designed to provide full and current cost recovery as well as a return in certain instances. The costs of these programs are included in Purchased power and fuel expense, Operating and maintenance expense, Depreciation and amortization expense, and Taxes other than income taxes. All customers have the choice to purchase electricity from competitive electric generation suppliers; however, only certain commercial and industrial customers have the choice to purchase natural gas from competitive natural gas suppliers. Customer choice programs do not impact the volume of deliveries as DPL remains the distribution service provider for all customers and charges a regulated rate for distribution service, which is recorded in Operating revenues. For customers that choose to purchase electric generation or natural gas from competitive suppliers, DPL either acts as the billing agent or the competitive supplier separately bills its own customers, and therefore does not record Operating revenues or Purchased power and fuel expense related to the electricity and/or natural gas. For customers that choose to purchase electric generation or natural gas from DPL, DPL is permitted to recover the electricity, natural gas, and REC procurement costs from customers and therefore records the amounts related to the electricity, natural gas, and RECs in Operating revenues and Purchased power and fuel expense. DPL recovers electricity and REC procurement costs from customers with a slight mark-up, and natural gas costs without mark-up.

See Note 5 — Segment Information of the Combined Notes to Consolidated Financial Statements for the presentation of DPL's revenue disaggregation.

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The increase of $45 million and $105 million for the three and nine months ended September 30, 2022, compared to the same period in 2021, respectively, in Purchased power and fuel expense is fully offset in Operating revenues as part of regulatory required programs.

The changes in Operating and maintenance expense consisted of the following:

			Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
			Increase (Decrease)						Increase (Decrease)
Storm-related costs			$	1					$	4
BSC and PHISCO costs			1						7
Credit loss expense			—						4
Labor, other benefits, contracting and materials			(5)						(3)
Other			(2)						1
			(5)						13
Regulatory required programs			2						4
Total (decrease) increase			$	(3)					$	17

The changes in Depreciation and amortization expense consisted of the following:

			Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
			Increase (Decrease)						Increase (Decrease)
Depreciation and amortization(a)			$	7					$	15
Regulatory asset amortization			(1)						(2)
Regulatory required programs			—						2
Total increase			$	6					$	15

__________

(a)Depreciation and amortization increased primarily due to ongoing capital expenditures.

Taxes other than income taxes increased by $2 million and $4 million for the three and nine months ended September 30, 2022 compared to the same period in 2021, respectively, primarily due to an increase in property taxes and gross receipts taxes.

Effective income tax rates were 3.7% and 5.7% for the three months ended September 30, 2022 and 2021, respectively, and 5.8% and 6.3% for the nine months ended September 30, 2022 and 2021, respectively. See Note 8 — Income Taxes of the Combined Notes to Consolidated Financial Statements for additional information regarding the components of the effective income tax rates.

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Results of Operations — ACE

			Three Months Ended September 30,												Favorable (Unfavorable) Variance						Nine Months Ended September 30,												Favorable (Unfavorable) Variance
			2022						2021												2022						2021
Operating revenues			$	462					$	451					$	11					$	1,120					$	1,080					$	40
Operating expenses
Purchased power			197						230						33						497						541						44
Operating and maintenance			80						81						1						251						231						(20)
Depreciation and amortization			74						46						(28)						192						133						(59)
Taxes other than income taxes			2						2						—						7						6						(1)
Total operating expenses			353						359						6						947						911						(36)
Operating income			109						92						17						173						169						4
Other income and (deductions)
Interest expense, net			(17)						(14)						(3)						(49)						(43)						(6)
Other, net			3						1						2						9						3						6
Total other income and (deductions)			(14)						(13)						(1)						(40)						(40)						—
Income before income taxes			95						79						16						133						129						4
Income taxes			1						(11)						(12)						2						(12)						(14)
Net income			$	94					$	90					$	4					$	131					$	141					$	(10)

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021. Net income increased by $4 million primarily due to increases in distribution rates, partially offset by an increase in depreciation expense.

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021. Net income decreased by $10 million primarily due to the absence of favorable weather and volume as a result of the CIP, an increase in depreciation expense, and interest expense, partially offset by increases in distribution rates.

The changes in Operating revenues consisted of the following:

			Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
			Increase (Decrease)						(Decrease) Increase
Weather			$	—					$	(3)
Volume			—						(11)
Distribution			15						35
Transmission			5						8
			20						29
Regulatory required programs			(9)						11
Total increase			$	11					$	40

Revenue Decoupling. The demand for electricity is affected by weather and customer usage. However, Operating revenues from electric distribution in New Jersey are not impacted by abnormal weather or usage per customer as a result of the CIP which became effective, prospectively, in the third quarter of 2021. The CIP compares current distribution revenues by customer class to approved target revenues established in ACE’s most recent distribution base rate case. The CIP is calculated annually, and recovery is subject to certain conditions, including an earnings test and ceilings on customer rate increases. While Operating revenues are not impacted by abnormal weather or usage per customer, they are impacted by changes in the number of customers.

Weather. Prior to the third quarter of 2021, the demand for electricity was affected by weather conditions. With respect to the electric business, very warm weather in summer months and very cold weather in winter months

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are referred to as “favorable weather conditions” because these weather conditions result in increased deliveries of electricity. Conversely, mild weather reduces demand. During the nine months ended September 30, 2022 compared to the same period in 2021, Operating revenues related to weather decreased due to the absence of favorable impacts in the first and second quarter of 2022 as a result of the CIP.

Heating and cooling degree days are quantitative indices that reflect the demand for energy needed to heat or cool a home or business. Normal weather is determined based on historical average heating and cooling degree days for a 20-year period in ACE’s service territory. The changes in heating and cooling degree days in ACE’s service territory for the nine months ended September 30, 2022 compared to same period in 2021 and normal weather consisted of the following:

			Nine Months Ended September 30,												Normal						% Change
Heating and Cooling Degree-Days			2022						2021												2022 vs. 2021						2022 vs. Normal
Heating Degree-Days			3,007						2,884						3,024						4.3		%				(0.6)		%
Cooling Degree-Days			1,231						1,246						1,178						(1.2)		%				4.5		%

Volume, exclusive of the effects of weather, decreased for the nine months ended September 30, 2022 compared to the same period in 2021, due to the absence of favorable impacts in the first and second quarter of 2022 as a result of the CIP.

																					Nine Months Ended September 30,												% Change						Weather - Normal % Change(b)
Electric Retail Deliveries to Customers (in GWhs)																					2022						2021
Residential																											3,293						3,443						(4.4)		%				(4.6)		%
Small commercial & industrial																											1,179						1,073						9.9		%				9.8		%
Large commercial & industrial																											2,396						2,351						1.9		%				1.8		%
Public authorities & electric railroads																											34						33						3.0		%				—		%
Total electric retail deliveries(a)																											6,902						6,900						—		%				(0.2)		%

			As of September 30,
Number of Electric Customers			2022						2021
Residential			501,869						499,775
Small commercial & industrial			62,204						61,838
Large commercial & industrial			3,075						3,209
Public authorities & electric railroads			731						707
Total			567,879						565,529

__________

(a)Reflects delivery volumes from customers purchasing electricity directly from ACE and customers purchasing electricity from a competitive electric generation supplier as all customers are assessed distribution charges.

(b)Reflects the change in delivery volumes assuming normalized weather based on the historical 20-year average.

Distribution Revenue increased for the three and nine months ended September 30, 2022 compared to the same period in 2021 due to higher distribution rates that became effective in January 2022.

Transmission Revenues. Under a FERC-approved formula, transmission revenue varies from year to year based upon fluctuations in the underlying costs and capital investments being recovered. Transmission revenue increased for the three months ended September 30, 2022 compared to the same period in 2021, primarily due to increases in underlying costs. Transmission revenue increased for the nine months ended September 30, 2022 compared to the same period in 2021, primarily due to increases in underlying costs and capital investment.

Regulatory Required Programs represent revenues collected under approved riders to recover costs incurred for regulatory programs such as energy efficiency programs, Societal Benefits Charge, Transition Bonds, and BGS procurement and administrative costs. The riders are designed to provide full and current cost recovery as well as a return in certain instances. The costs of these programs are included in Purchased power expense, Operating and maintenance expense, Depreciation and amortization expense, and Taxes other than income

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taxes. Customers have the choice to purchase electricity from competitive electric generation suppliers. Customer choice programs do not impact the volume of deliveries, as ACE remains the distribution service provider for all customers and charges a regulated rate for distribution service, which is recorded in Operating revenues. For customers that choose to purchase electric generation from competitive suppliers, ACE acts as the billing agent and therefore, ACE does not record Operating revenues or Purchased power expense related to the electricity. For customers that choose to purchase electric generation from ACE, ACE is permitted to recover the electricity, ZEC, and REC procurement costs without mark-up and therefore records equal and offsetting amounts in Operating revenues and Purchased power expense related to the electricity, ZECs, and RECs.

See Note 5 — Segment Information of the Combined Notes to Consolidated Financial Statements for the presentation of ACE's revenue disaggregation.

The decrease of $33 million and $44 million for the three and nine months ended September 30, 2022 compared to the same period in 2021, respectively, in Purchased power expense is fully offset in Operating revenues as part of regulatory required programs.

The changes in Operating and maintenance expense consisted of the following:

			Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
			(Decrease) Increase						Increase (Decrease)
Labor, other benefits, contracting and materials			$	(2)					$	2
BSC and PHISCO costs			(1)						3
Storm-related costs			(1)						1
Other			4						7
			—						13
Regulatory required programs(a)			(1)						7
Total (decrease) increase			$	(1)					$	20

__________

(a)ACE is allowed to recover from or refund to customers the difference between its annual credit loss expense and the amounts collected in rates annually through the Societal Benefits Charge.

The changes in Depreciation and amortization expense consisted of the following:

			Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
			Increase						Increase
Depreciation and amortization(a)			$	4					$	11
Regulatory asset amortization			—						1
Regulatory required programs(b)			24						47
Total increase			$	28					$	59

__________

(a)Depreciation and amortization increased primarily due to ongoing capital expenditures.

(b)Regulatory required programs increased primarily due to the regulatory asset amortization of the PPA termination obligation which is fully offset in Operating revenues.

Interest expense, net increased $3 million and $6 million for the three and nine months ended September 30, 2022 compared to the same period in 2021, respectively, primarily due to the issuance of debt in 2021 and 2022.

Other, net increased by $2 million and $6 million for the three and nine months ended September 30, 2022 compared to the same period in 2021, respectively, primarily due to higher AFUDC equity.

Effective income tax rates were 1.1% and (13.9)% for the three months ended September 30, 2022 and 2021, respectively, and 1.5% and (9.3)% for the nine months ended September 30, 2022 and 2021, respectively. The three and nine months ended September 30, 2022 changes primarily reflect the absence of impacts of the July 14, 2021 settlement, which allowed ACE to retain certain tax benefits in 2021, partially offset by the timing of excess deferred tax amortization. See Note 3 — Regulatory Matters of the 2021 Recast Form 10-K for additional information on the July 14, 2021 settlement agreement. See Note 8 — Income Taxes of the Combined Notes to

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Consolidated Financial Statements for additional information regarding the components of the effective income tax rates.

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Liquidity and Capital Resources (All Registrants)

All results included throughout the liquidity and capital resources section are presented on a GAAP basis.

The Registrants’ operating and capital expenditures requirements are provided by internally generated cash flows from operations, as well as funds from external sources in the capital markets and through bank borrowings. The Registrants’ businesses are capital intensive and require considerable capital resources. Each of the Registrants annually evaluates its financing plan, dividend practices, and credit line sizing, focusing on maintaining its investment grade ratings while meeting its cash needs to fund capital requirements, including construction expenditures, retire debt, pay dividends, and fund pension and OPEB obligations. The Registrants spend a significant amount of cash on capital improvements and construction projects that have a long-term return on investment. Additionally, the Utility Registrants operate in rate-regulated environments in which the amount of new investment recovery may be delayed or limited and where such recovery takes place over an extended period of time. Each Registrant’s access to external financing on reasonable terms depends on its credit ratings and current overall capital market business conditions, including that of the utility industry in general. If these conditions deteriorate to the extent that the Registrants no longer have access to the capital markets at reasonable terms, the Registrants have access to credit facilities with aggregate bank commitments of $4.0 billion. The Registrants utilize their credit facilities to support their commercial paper programs, provide for other short-term borrowings and to issue letters of credit. See the “Credit Matters and Cash Requirements” section below for additional information. The Registrants expect cash flows to be sufficient to meet operating expenses, financing costs, and capital expenditure requirements. See Note 11 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on the Registrants’ debt and credit agreements.

Cash flows related to Constellation have not been presented as discontinued operations and are included in the Consolidated Statements of Cash Flows for all periods presented. The Exelon Consolidated Statement of Cash Flows for the nine months ended September 30, 2022 includes one month of cash flows from Generation. The Exelon Consolidated Statement of Cash Flows for the nine months ended September 30, 2021 includes nine months of cash flows from Generation. This is the primary reason for the changes in cash flows as shown in the tables unless otherwise noted below.

Cash Flows from Operating Activities

The Utility Registrants' cash flows from operating activities primarily result from the transmission and distribution of electricity and, in the case of PECO, BGE, and DPL, gas distribution services. The Utility Registrants' distribution services are provided to an established and diverse base of retail customers. The Utility Registrants' future cash flows may be affected by the economy, weather conditions, future legislative initiatives, future regulatory proceedings with respect to their rates or operations, and their ability to achieve operating cost reductions.

See Note 3 — Regulatory Matters of the 2021 Recast Form 10-K and Notes 3 — Regulatory Matters and 13 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information on regulatory and legal proceedings and proposed legislation.

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The following table provides a summary of the change in cash flows from operating activities for the nine months ended September 30, 2022 and 2021 by Registrant:

Increase (decrease) in cash flows from operating activities			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Net income (loss)			$	298					$	97					$	91					$	(23)					$	(17)					$	(3)					$	(5)					$	(10)
Adjustments to reconcile net income to cash:
Non-cash operating activities			(1,316)						(114)						58						100						228						67						43						125
Option premiums (paid), net			147						—						—						—						—						—						—						—
Collateral received, net			(655)						1						—						105						205						46						89						70
Income taxes			(247)						9						(25)						(23)						(20)						(15)						(15)						(3)
Pension and non-pension postretirement benefit contributions			6						(3)						2						12						(32)						—						—						(4)
Changes in regulatory assets and liabilities, net			(322)						(249)						(11)						(7)						(37)						11						(3)						(35)
Changes in working capital and other assets and liabilities			2,089						(84)						(96)						(56)						(88)						(45)						(13)						(34)
(Decrease) increase in cash flows from operating activities			$	—					$	(343)					$	19					$	108					$	239					$	61					$	96					$	109

Changes in the Registrants' cash flows from operations were generally consistent with changes in each Registrant’s respective results of operations, as adjusted by changes in working capital in the normal course of business, except as discussed below. See above for additional information related to cash flows from Generation. Significant operating cash flow impacts for the Registrants and Generation for the nine months ended September 30, 2022 and 2021 were as follows:

•See Note 16 — Supplemental Financial Information of the Combined Notes to Consolidated Financial Statements and the Registrants’ Consolidated Statements of Cash Flows for additional information on non-cash operating activities.

•Changes in collateral depended upon whether Generation was in a net mark-to-market liability or asset position, and collateral may have been required to be posted with or collected from its counterparties. In addition, the collateral posting and collection requirements differed depending on whether the transactions were on an exchange or in the over-the-counter markets. Changes in collateral for the Registrants are dependent upon the credit exposure of procurement contracts that may require suppliers to post collateral. The amount of cash collateral received from external counterparties increased due to rising energy prices. See Note 10 – Derivative Financial Instruments for additional information.

•See Note 8 — Income Taxes of the Combined Notes to Consolidated Financial Statements and the Registrants' Consolidated Statements of Cash Flows for additional information on income taxes.

•See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information on regulatory assets and liabilities.

•Changes in working capital and other assets and liabilities for the Utility Registrants and Exelon Corporate total $(316) million and for Generation total $2,405 million. The change for Generation primarily relates to the revolving accounts receivable financing arrangement. See Note 6 — Accounts Receivable of the 2021 Form 10-K and the Collection of DPP discussion below for additional information.

Cash Flows from Investing Activities

The following table provides a summary of the change in cash flows from investing activities for the nine months ended September 30, 2022 and 2021 by Registrant:

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Increase (decrease) in cash flows from investing activities			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Capital expenditures			$	791					$	(78)					$	(113)					$	(11)					$	125					$	46					$	26					$	52
Investment in NDT fund sales, net			106						—						—						—						—						—						—						—
Collection of DPP			(2,883)						—						—						—						—						—						—						—
Proceeds from sales of assets and businesses			(785)						—						—						—						—						—						—						—
Changes in intercompany money pool			—						—						—						—						—						—						(25)						—
Other investing activities			(4)						1						3						(6)						6						4						1						—
(Decrease) increase in cash flows from investing activities			$	(2,775)					$	(77)					$	(110)					$	(17)					$	131					$	50					$	2					$	52

Significant investing cash flow impacts for the Registrants for nine months ended September 30, 2022 and 2021 were as follows:

•Variances in capital expenditures are primarily due to the timing of cash expenditures for capital projects. See the "Credit Matters and Cash Requirements" section below for additional information on projected capital expenditure spending. See Note 2 — Discontinued Operations of the Combined Notes to Consolidated Financial Statements for capital expenditures related to Generation prior to the separation.

•Collection of DPP relates to the revolving accounts receivable financing agreement which Generation entered into in April of 2020. See Note 6 — Accounts Receivable of the 2021 Form 10-K for additional information on the transaction and the DPP, including the $400 million of additional funding received in February and March of 2021.

•Proceeds from sales of assets and businesses decreased primarily due to the sale of a significant portion of Generation's solar business and a biomass facility in 2021. See Note 2 — Mergers, Acquisitions, and Dispositions of the 2021 Form 10-K for additional information.

•Changes in intercompany money pool are driven by short-term borrowing needs. Refer below for more information regarding the intercompany money pool.

Cash Flows from Financing Activities

The following table provides a summary of the change in cash flows from financing activities for the nine months ended September 30, 2022 and 2021 by Registrant:

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(Decrease) increase in cash flows from financing activities			Exelon						ComEd						PECO						BGE						PHI						Pepco						DPL						ACE
Changes in short-term borrowings, net			$	(746)					$	556					$	—					$	26					$	(387)					$	(180)					$	(25)					$	(182)
Long-term debt, net			1,946						(50)						(25)						(50)						120						41						—						79
Changes in intercompany money pool			—						—						40						—						41						25						—						—
Issuance of common stock			563						—						—						—						—						—						—						—
Dividends paid on common stock			122						(54)						(45)						(6)						—						(179)						11						152
Acquisition of noncontrolling interest			885						—						—						—						—						—						—						—
Distributions to member			—						—						—						—						(20)						—						—						—
Contributions from parent/member			—						(90)						(140)						(71)						120						221						27						(128)
Transfer of cash, restricted cash, and cash equivalents to Constellation			(2,594)						—						—						—						—						—						—						—
Other financing activities			(65)						6						(6)						(2)						(6)						(4)						—						1
Increase (decrease) in cash flows from financing activities			$	111					$	368					$	(176)					$	(103)					$	(132)					$	(76)					$	13					$	(78)

Significant financing cash flow impacts for the Registrants for the nine months ended September 30, 2022 and 2021 were as follows:

•Changes in short-term borrowings, net, is driven by repayments on and issuances of notes due in less than 365 days. See Note 11 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on short-term borrowings for the Registrants. These changes also included repayments of $552 million in commercial paper and term loans by Generation prior to the separation.

•Long-term debt, net, varies due to debt issuances and redemptions each year. See Note 11 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on debt issuances. Refer to the debt redemptions table below for additional information.

•Changes in intercompany money pool are driven by short-term borrowing needs. Refer below for more information regarding the intercompany money pool.

•Issuance of common stock relates to the August 2022 underwritten public offering of Exelon common stock. See Note 14 — Shareholders' Equity of the Combined Notes to Consolidated Financial Statements for additional information.

•Exelon’s ability to pay dividends on its common stock depends on the receipt of dividends paid by its operating subsidiaries. The payments of dividends to Exelon by its subsidiaries in turn depend on their results of operations and cash flows and other items affecting retained earnings. See Note 17 — Commitments and Contingencies of the 2021 Recast Form 10-K for additional information on dividend restrictions. See below for quarterly dividends declared.

•Acquisition of noncontrolling interest relates to Generation's acquisition of CENG noncontrolling interest in 2021. See Note 2 — Mergers, Acquisitions, and Dispositions of the 2021 Form 10-K for additional information.

•Refer to Note 2 - Discontinued Operations for the transfer of cash, restricted cash, and cash equivalents to Constellation related to the separation.

•For the nine months ended September 30, 2022, other financing activities primarily consists of debt issuance costs. See Note 11 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information of the Registrants’ debt issuances.

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Debt

See Note 11 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on the Registrants’ debt issuances.

During the nine months ended September 30, 2022, the following long-term debt was retired and/or redeemed:

Company						Type						Interest Rate									Maturity						Amount
Exelon						Junior Subordinated Notes						3.50		%							May 2, 2022						$	1,150
Exelon						Long-Term Software License Agreement						3.96		%							May 1, 2024						2
PECO						First Mortgage Bonds						2.375		%							September 15, 2022						350
BGE						Notes						2.80		%							August 15, 2022						250
Pepco						First Mortgage Bonds						3.05		%							April 1, 2022						200
Pepco						Tax-Exempt Bonds						1.70		%							September 1, 2022						110

Dividends

Quarterly dividends declared by the Exelon Board of Directors during the nine months ended September 30, 2022 and for the fourth quarter of 2022 were as follows:

Period

Declaration Date

Shareholder of Record Date

Dividend Payable Date

Cash per Share(a)

First Quarter 2022

February 8, 2022

February 25, 2022

March 10, 2022

$

0.3375

Second Quarter 2022

April 26, 2022

May 13, 2022

June 10, 2022

$

0.3375

Third Quarter 2022

July 26, 2022

August 15, 2022

September 9, 2022

$

0.3375

Fourth Quarter 2022

October 28, 2022

November 15, 2022

December 9, 2022

$

0.3375

__________

(a)Exelon's Board of Directors approved an updated dividend policy for 2022. The 2022 quarterly dividend will be $0.3375 per share.

Credit Matters and Cash Requirements

The Registrants fund liquidity needs for capital investment, working capital, energy hedging, and other financial commitments through cash flows from continuing operations, public debt offerings, commercial paper markets, and large, diversified credit facilities. The credit facilities include $4.0 billion in aggregate total commitments of which $3.4 billion was available to support additional commercial paper as of September 30, 2022, and of which no financial institution has more than 6% of the aggregate commitments for the Registrants. The Registrants had access to the commercial paper markets and had availability under their revolving credit facilities during the nine months ended September 30, 2022 to fund their short-term liquidity needs, when necessary. On February 1, 2022, Exelon Corporate and the Utility Registrants each entered into a new 5-year revolving credit facility that replaced its existing syndicated revolving credit facility. See Note 11 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information. The Registrants routinely review the sufficiency of their liquidity position, including appropriate sizing of credit facility commitments, by performing various stress test scenarios, such as commodity price movements, increases in margin-related transactions, changes in hedging levels, and the impacts of hypothetical credit downgrades. The Registrants have continued to closely monitor events in the financial markets and the financial institutions associated with the credit facilities, including monitoring credit ratings and outlooks, credit default swap levels, capital raising, and merger activity. See PART I. ITEM 1A. RISK FACTORS of the 2021 Form 10-K for additional information regarding the effects of uncertainty in the capital and credit markets.

The Registrants believe their cash flows from operating activities, access to credit markets, and their credit facilities provide sufficient liquidity to support the estimated future cash requirements.

On August 4, 2022, Exelon entered into an agreement with certain underwriters in connection with an underwritten public offering of 12.995 million shares of its common stock, no par value. The net proceeds were $563 million before expenses paid. Exelon used the proceeds, together with available cash balances, to repay $575 million in borrowings under a $1.15 billion term loan credit facility. See Note 14 — Shareholders' Equity and

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Note 11 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information.

On August 4, 2022, Exelon executed an equity distribution agreement (“Equity Distribution Agreement”) with certain sales agents and forward sellers and certain forward purchasers establishing an ATM equity distribution program under which it may offer and sell shares of its common stock, having an aggregate gross sales price of up to $1.0 billion. Exelon has no obligation to offer or sell any shares of common stock under the Equity Distribution Agreement and may at any time suspend or terminate offers and sales under the Equity Distribution Agreement. As of September 30, 2022, Exelon has not issued any shares of common stock under the ATM program and has not entered into any forward sale agreements.

Pursuant to the Separation Agreement between Exelon and Constellation, Exelon made a cash payment of $1.75 billion to Generation on January 31, 2022. See Note 2 — Discontinued Operations of the Combined Notes to Consolidated Financial Statements for additional information on the separation.

The following table presents the incremental collateral that each Utility Registrant would have been required to provide in the event each Utility Registrant lost its investment grade credit rating at September 30, 2022 and available credit facility capacity prior to any incremental collateral at September 30, 2022:

			PJM Credit Policy Collateral						Other Incremental Collateral Required(a)						Available Credit Facility Capacity Prior to Any Incremental Collateral
ComEd			$	34					$	—					$	762
PECO			2						43						600
BGE			3						79						444
Pepco			3						—						300
DPL			3						16						300
ACE			1						—						300

__________

(a)Represents incremental collateral related to natural gas procurement contracts.

Capital Expenditure Spending

As of September 30, 2022, the most recent estimates of capital expenditures for plant additions and improvements for 2022 are as follows:        

(In millions)			Transmission						Distribution						Gas						Total
Exelon			N/A						N/A						N/A						$	6,950
ComEd			425						2,075						N/A						2,500
PECO			200						850						325						1,375
BGE			250						525						475						1,250
PHI			600						1,150						75						1,825
Pepco			275						625						N/A						900
DPL			150						225						75						450
ACE			175						300						N/A						475

Projected capital expenditures and other investments are subject to periodic review and revision to reflect changes in economic conditions and other factors.

Pension and Other Postretirement Benefits

Management considers various factors when making pension funding decisions, including actuarially determined minimum contribution requirements under ERISA, contributions required to avoid benefit restrictions and at-risk status as defined by the Pension Protection Act of 2006 (the Act), management of the pension obligation, and regulatory implications. The Act requires the attainment of certain funding levels to avoid benefit restrictions (such as an inability to pay lump sums or to accrue benefits prospectively), and at-risk status (which triggers higher minimum contribution requirements and participant notification). The projected contributions reflect a

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funding strategy to make levelized annual contributions with the objective of achieving 100% funded status on an ABO basis over time. This level funding strategy helps minimize volatility of future period required pension contributions. Post-separation, Exelon's estimated annual qualified pension contributions will be approximately $313 million in 2022. In connection with the separation, additional qualified pension contributions of $207 million and $33 million were completed on February 1, 2022 and March 2, 2022, respectively. Unlike the qualified pension plans, Exelon’s non-qualified pension plans are not funded, given that they are not subject to statutory minimum contribution requirements.

While OPEB plans are also not subject to statutory minimum contribution requirements, Exelon does fund certain of its plans. For Exelon's funded OPEB plans, contributions generally equal accounting costs, however, Exelon’s management has historically considered several factors in determining the level of contributions to its OPEB plans, including liabilities management, levels of benefit claims paid, and regulatory implications (amounts deemed prudent to meet regulatory expectations and best assure continued rate recovery).

Credit Facilities

Exelon Corporate, ComEd, and BGE meet their short-term liquidity requirements primarily through the issuance of commercial paper. PECO meets its 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.

See Note 11 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on the Registrants’ credit facilities and short term borrowing activity.

Security Ratings

The Registrants’ access to the capital markets, including the commercial paper market, and their respective financing costs in those markets, may depend on the securities ratings of the entity that is accessing the capital markets.

The Registrants’ borrowings are not subject to default or prepayment as a result of a downgrading of securities, although such a downgrading of a Registrant’s securities could increase fees and interest charges under that Registrant’s credit agreements.

As part of the normal course of business, the Registrants enter into contracts that contain express provisions or otherwise permit the Registrants and their counterparties to demand adequate assurance of future performance when there are reasonable grounds for doing so. In accordance with the contracts and applicable contracts law, if the Registrants are downgraded by a credit rating agency, it is possible that a counterparty would attempt to rely on such a downgrade as a basis for making a demand for adequate assurance of future performance, which could include the posting of collateral. See Note 10 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information on collateral provisions.

The credit ratings for ComEd, PECO, BGE, and DPL did not change for the nine months ended September 30, 2022. On January 14, 2022, Fitch lowered Exelon Corporate's long-term and senior unsecured ratings from BBB+ to BBB and affirmed the short-term rating of F2. In addition, Fitch upgraded Pepco, ACE, and PHI's long-term rating from BBB to BBB+ and upgraded Pepco and ACE's senior secured rating from A- to A.

Intercompany Money Pool

To provide an additional short-term borrowing option that will generally be more favorable to the borrowing participants than the cost of external financing, both Exelon and PHI operate an intercompany money pool. Maximum amounts contributed to and borrowed from the money pool by participant and the net contribution or borrowing as of September 30, 2022, are presented in the following table. ACE had no activity within the PHI intercompany money pool during the nine months ended September 30, 2022.

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						During the Nine Months Ended September 30, 2022												As of September 30, 2022
Exelon Intercompany Money Pool						Maximum Contributed						Maximum Borrowed						Contributed (Borrowed)
Exelon Corporate						$	396					$	—					$	299
PECO						138						(105)						—
BSC						—						(377)						(301)
PHI Corporate						—						(54)						(43)
PCI						50						—						45

						During the Nine Months Ended September 30, 2022												As of September 30, 2022
PHI Intercompany Money Pool						Maximum Contributed						Maximum Borrowed						Contributed (Borrowed)
Pepco						$	—					$	(108)					$	(25)
DPL						108						—						25

Shelf Registration Statements

Exelon and the Utility Registrants have a currently effective combined shelf registration statement unlimited in amount, filed with the SEC on August 3, 2022, that will expire in August 2025. The ability of each Registrant to sell securities off the shelf registration statement or to access the private placement markets will depend on a number of factors at the time of the proposed sale, including other required regulatory approvals, as applicable, the current financial condition of the Registrant, its securities ratings and market conditions.

Regulatory Authorizations

The Utility Registrants are required to obtain short-term and long-term financing authority from Federal and State Commissions as follows:

As of September 30, 2022

Short-term Financing Authority

Remaining Long-term Financing Authority

Commission

Expiration Date

Amount

Commission

Expiration Date

Amount

ComEd(a)

FERC

December 31, 2023

$

2,500

ICC

January 1, 2025

$

1,343

PECO(b)

FERC

December 31, 2023

1,500

PAPUC

December 31, 2024

1,125

BGE(c)

FERC

December 31, 2023

700

MDPSC

N/A

—

Pepco(d)

FERC

December 31, 2023

500

MDPSC / DCPSC

2022 & 2025

1,400

DPL(e)

FERC

December 31, 2023

500

MDPSC / DEPSC

December 31, 2022

47

ACE(f)

NJBPU

December 31, 2023

350

NJBPU

December 31, 2022

700

__________

(a)On November 18, 2021, ComEd received approval from the ICC for $2 billion in new money long-term debt financing authority with an effective date of January 1, 2022.

(b)On December 2, 2021, PECO received approval from the PAPUC for $2.5 billion in new long-term debt financing authority with an effective date of January 1, 2022.

(c)On October 28, 2022, BGE filed with the MDPSC for approval of $1.8 billion in new long-term financing authority. The long-term financing authority will become effective on the date of approval. This financing authority does not have an expiration date.

(d)On June 9, 2022 and June 30, 2022, Pepco received approval from the MDPSC and DCPSC, respectively, for $1.4 billion in new long-term financing authority. The long-term financing authority became effective on the date of respective approvals and has an expiration date of December 31, 2025.

(e)On November 2, 2022, DPL filed with the MDPSC and DEPSC for approval of $1.2 billion in new long-term financing authority. The long-term financing authority will become effective on the date of respective approvals. The financing authority filed with MDPSC does not have an expiration date, while the financing authority filed with DEPSC has an expiration date of December 31, 2025.

(f)On July 13, 2022, ACE received approval from the NJBPU for $700 million in new long-term debt financing authority with an effective date of July 20, 2022.

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ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The Registrants hold commodity and financial instruments that are exposed to the following market risks:

•Commodity price risk, which is discussed further below.

•Counterparty credit risk associated with non-performance by counterparties on executed derivative instruments and participation in all, or some of the established, wholesale spot energy markets that are administered by PJM. The credit policies of PJM may, under certain circumstances, require that losses arising from the default of one member on spot energy market transactions be shared by the remaining participants. See Note 10 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for a detailed discussion of counterparty credit risk related to derivative instruments.

•Equity price and interest rate risk associated with Exelon’s pension and OPEB plan trusts. See Note 13 — Retirement Benefits of the 2021 Recast Form 10-K for additional information.

•Interest rate risk associated with changes in interest rates for the Registrants’ outstanding long-term debt. This risk is significantly reduced as substantially all of the Registrants’ outstanding debt has fixed interest rates. There is inherent interest rate risk related to refinancing maturing debt by issuing new long-term debt. The Registrants use a combination of fixed-rate and variable-rate debt to manage interest rate exposure. See Note 11 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information. In addition, Exelon may utilize interest rate derivatives to lock in rate levels in anticipation of future financings, which are typically designated as cash flow hedges, or to lock in rate levels on borrowings, which are typically designated as economic hedges. See Note 10 – Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information.

The Registrants operate primarily under cost-based rate regulation limiting exposure to the effects of market risk. Hedging programs are utilized to reduce exposure to energy and natural gas price volatility and have no direct earnings impacts as the costs are fully recovered through regulatory-approved recovery mechanisms.

Exelon manages these risks through risk management policies and objectives for risk assessment, control and valuation, counterparty credit approval, and the monitoring and reporting of risk exposures. Risk management issues are reported to Exelon’s Executive Committee, the Risk Management Committees of each Utility Registrant, and the Audit and Risk Committee of Exelon’s Board of Directors.

Commodity Price Risk

Commodity price risk is associated with price movements resulting from changes in supply and demand, fuel costs, market liquidity, weather conditions, governmental regulatory and environmental policies, and other factors. To the extent the total amount of energy Exelon purchases differs from the amount of energy it has contracted to sell, Exelon is exposed to market fluctuations in commodity prices. Exelon seeks to mitigate its commodity price risk through the sale and purchase of electricity and natural gas.

ComEd entered into 20-year floating-to-fixed renewable energy swap contracts beginning in June 2012, which are considered an economic hedge and have changes in fair value recorded to an offsetting regulatory asset or liability. ComEd has block energy contracts to procure electric supply that are executed through a competitive procurement process, which are considered derivatives and qualify for NPNS, and as a result are accounted for on an accrual basis of accounting. PECO, BGE, Pepco, DPL, and ACE have contracts to procure electric supply that are executed through a competitive procurement process. PECO, BGE, Pepco, DPL, and ACE have certain full requirements contracts, which are considered derivatives and qualify for NPNS, and as a result are accounted for on an accrual basis of accounting. Other full requirements contracts are not derivatives.

PECO, BGE, and DPL also have executed derivative natural gas contracts, which either qualify for NPNS or have no mark-to-market balances because the derivatives are index priced, to hedge their long-term price risk in the natural gas market. The hedging programs for natural gas procurement have no direct impact on their financial statements.

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For additional information on these contracts, see Note 10 — Derivative Financial Instruments and Note 12 — Fair Value of Financial Assets and Liabilities of the Combined Notes to Consolidated Financial Statements.

The following table presents the maturity and source of fair value for Exelon’s and ComEd’s mark-to-market commodity contract net liabilities. These net liabilities are associated with ComEd’s floating-to-fixed energy swap contracts with unaffiliated suppliers. The table provides two fundamental pieces of information. First, the table provides the source of fair value used in determining the carrying amount of Exelon's and ComEd's total mark-to-market net liabilities. Second, the table shows the maturity, by year, of Exelon's and ComEd's commodity contract net liabilities giving an indication of when these mark-to-market amounts will settle and either generate or require cash. See Note 12 — Fair Value of Financial Assets and Liabilities of the Combined Notes to Consolidated Financial Statements for additional information regarding fair value measurements and the fair value hierarchy.

			Maturities Within																																				Total Fair Value
			2022						2023						2024						2025						2026						2027 and Beyond
Prices based on model or other valuation methods (Level 3)			$	7					$	16					$	(5)					$	(10)					$	(11)					$	(40)					$	(43)

ITEM 4.    CONTROLS AND PROCEDURES

During the third quarter of 2022, each of the Registrants' management, including its principal executive officer and principal financial officer, evaluated its disclosure controls and procedures related to the recording, processing, summarizing, and reporting of information in its periodic reports that it files with the SEC. These disclosure controls and procedures have been designed by the Registrants to ensure that (a) material information relating to that Registrant, including its consolidated subsidiaries, is accumulated and made known to that Registrant's management, including its principal executive officer and principal financial officer, by other employees of that Registrant and its subsidiaries as appropriate to allow timely decisions regarding required disclosure, and (b) this information is recorded, processed, summarized, evaluated, and reported, as applicable, within the time periods specified in the SEC’s rules and forms. Due to the inherent limitations of control systems, not all misstatements may be detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls could be circumvented by the individual acts of some persons or by collusion of two or more people.

Accordingly, as of September 30, 2022, the principal executive officer and principal financial officer of each of the Registrants concluded that such Registrant’s disclosure controls and procedures were effective to accomplish its objectives. The Registrants continually strive to improve their disclosure controls and procedures to enhance the quality of its financial reporting and to maintain dynamic systems that change as conditions warrant. There were no changes in internal control over financial reporting during the third quarter of 2022 that materially affected, or are reasonably likely to materially affect, any of the Registrants' internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

The Registrants are parties to various lawsuits and regulatory proceedings in the ordinary course of their respective businesses. For information regarding material lawsuits and proceedings, see (a) ITEM 3. LEGAL PROCEEDINGS of the 2021 Form 10-K, (b) Notes 3 — Regulatory Matters and 17 — Commitments and Contingencies of the 2021 Recast Form 10-K, and (c) Notes 3 — Regulatory Matters and 13 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements in PART I, ITEM 1. FINANCIAL STATEMENTS of this Report. Such descriptions are incorporated herein by these references.

ITEM 1A.    RISK FACTORS

Risks Related to All Registrants

At September 30, 2022, the Registrants' risk factors were consistent with the risk factors described in the 2021 Form 10-K in ITEM 1A. RISK FACTORS, except for the updates below.

The Registrants are subject to physical security and cybersecurity risks (All Registrants).

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The Registrants face physical security and cybersecurity risks. Threat sources, including sophisticated nation-state actors, continue to seek to exploit potential vulnerabilities in the electric and natural gas utility industry, grid infrastructure, and other energy infrastructures, and these attacks and disruptions, both physical and cyber, are becoming increasingly sophisticated and dynamic. Continued implementation of advanced digital technologies increases the potentially unfavorable impacts of such attacks. Additionally, the U.S. government has warned that the Ukraine conflict may increase the risks of attacks targeting critical infrastructure in the United States.

A security breach of the Registrants' physical assets or information systems or those of the Registrants competitors, vendors, business partners and interconnected entities in RTOs and ISOs, or regulators could materially impact Registrants by, among other things, impairing the availability of electricity and gas distributed by Registrants and/or the reliability of transmission and distribution systems, or by leading to the theft or inappropriate release of certain types of information, including critical infrastructure information, sensitive customer, vendor, or employee data, or other confidential data. The risk of these system-related events and security breaches occurring continues to intensify, and while the Registrants have been, and will likely continue to be, subjected to physical and cyber-attacks, to date none have directly experienced a material breach or material disruption to its network or information systems or our operations. However, as such attacks continue to increase in sophistication and frequency, the Registrants may be unable to prevent all such attacks in the future.

If a significant breach were to occur, the Registrants' reputation could be negatively affected, customer confidence in the Registrants or others in the industry could be diminished, or the Registrants could be subject to legal claims, loss of revenues, increased costs, or operations shutdown. Moreover, the amount and scope of insurance maintained against losses resulting from any such events or security breaches may not be sufficient to cover losses or otherwise adequately compensate for any disruptions to business that could result.

The Utility Registrants' deployment of smart meters throughout their service territories could increase the risk of damage from an intentional disruption of the system by third parties.

In addition, new or updated security regulations or unforeseen threat sources could require changes in current measures taken by the Registrants or their business operations and could adversely affect their consolidated financial statements.

ITEM 5.    OTHER INFORMATION

All Registrants

None.

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ITEM 6.    EXHIBITS

Certain of the following exhibits are incorporated herein by reference under Rule 12b-32 of the Securities and Exchange Act of 1934, as amended. Certain other instruments which would otherwise be required to be listed below have not been so listed because such instruments do not authorize securities in an amount which exceeds 10% of the total assets of the applicable Registrant and its subsidiaries on a consolidated basis and the relevant Registrant agrees to furnish a copy of any such instrument to the Commission upon request.

Exhibit No.			Description
4.1			One Hundred and Twenty-Second Supplemental Indenture dated as of August 1, 2022, among PECO Energy Company and U.S. Bank , N.A., as trustee (File 001-16844, Form 8-K dated August 23, 2022, Exhibit 4.1)
101.INS			Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH			Inline XBRL Taxonomy Extension Schema Document.
101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB			Inline XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Certifications Pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities and Exchange Act of 1934 as to the Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022 filed by the following officers for the following companies:

Exhibit No.			Description
31-1			Filed by Christopher M. Crane for Exelon Corporation
31-2			Filed by Jeanne M. Jones for Exelon Corporation
31-3			Filed by Gil C. Quiniones for Commonwealth Edison Company
31-4			Filed by Elisabeth J. Graham for Commonwealth Edison Company
31-5			Filed by Michael A. Innocenzo for PECO Energy Company
31-6			Filed by Robert J. Stefani for PECO Energy Company
31-7			Filed by Carim V. Khouzami for Baltimore Gas and Electric Company
31-8			Filed by David M. Vahos for Baltimore Gas and Electric Company
31-9			Filed by J. Tyler Anthony for Pepco Holdings LLC
31-10			Filed by Phillip S. Barnett for Pepco Holdings LLC
31-11			Filed by J. Tyler Anthony for Potomac Electric Power Company
31-12			Filed by Phillip S. Barnett for Potomac Electric Power Company
31-13			Filed by J. Tyler Anthony for Delmarva Power & Light Company
31-14			Filed by Phillip S. Barnett for Delmarva Power & Light Company
31-15			Filed by J. Tyler Anthony for Atlantic City Electric Company
31-16			Filed by Phillip S. Barnett for Atlantic City Electric Company

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Certifications Pursuant to Section 1350 of Chapter 63 of Title 18 United States Code (Sarbanes — Oxley Act of 2002) as to the Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022 filed by the following officers for the following companies:

Exhibit No.			Description
32-1			Filed by Christopher M. Crane for Exelon Corporation
32-2			Filed by Jeanne M. Jones for Exelon Corporation
32-3			Filed by Gil C. Quiniones for Commonwealth Edison Company
32-4			Filed by Elisabeth J. Graham for Commonwealth Edison Company
32-5			Filed by Michael A. Innocenzo for PECO Energy Company
32-6			Filed by Robert J. Stefani for PECO Energy Company
32-7			Filed by Carim V. Khouzami for Baltimore Gas and Electric Company
32-8			Filed by David M. Vahos for Baltimore Gas and Electric Company
32-9			Filed by J. Tyler Anthony for Pepco Holdings LLC
32-10			Filed by Phillip S. Barnett for Pepco Holdings LLC
32-11			Filed by J. Tyler Anthony for Potomac Electric Power Company
32-12			Filed by Phillip S. Barnett for Potomac Electric Power Company
32-13			Filed by J. Tyler Anthony for Delmarva Power & Light Company
32-14			Filed by Phillip S. Barnett for Delmarva Power & Light Company
32-15			Filed by J. Tyler Anthony for Atlantic City Electric Company
32-16			Filed by Phillip S. Barnett for Atlantic City Electric Company

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SIGNATURES

Pursuant to requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

EXELON CORPORATION

 

/s/    CHRISTOPHER M. CRANE						/s/    JEANNE M. JONES
Christopher M. Crane						Jeanne M. Jones
Chief Executive Officer (Principal Executive Officer) and Director						Executive Vice President and Chief Financial Officer (Principal Financial Officer)
/s/ JOSEPH R. TRPIK
Joseph R. Trpik
Senior Vice President and Corporate Controller (Principal Accounting Officer)

November 3, 2022

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Pursuant to requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

COMMONWEALTH EDISON COMPANY

 

/s/ GIL C. QUINIONES						/s/ ELISABETH J. GRAHAM
Gil C. Quiniones						Elisabeth J. Graham
Chief Executive Officer (Principal Executive Officer)						Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)
/s/    STEVEN J. CICHOCKI
Steven J. Cichocki
Director, Accounting (Principal Accounting Officer)

November 3, 2022

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Pursuant to requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

PECO ENERGY COMPANY

 

/s/    MICHAEL A. INNOCENZO						/s/    ROBERT J. STEFANI
Michael A. Innocenzo						Robert J. Stefani
President and Chief Executive Officer (Principal Executive Officer)						Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)
/s/    CAROLINE FULGINITI
Caroline Fulginiti
Director, Accounting (Principal Accounting Officer)

November 3, 2022

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Pursuant to requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

BALTIMORE GAS AND ELECTRIC COMPANY

 

/s/    CARIM V. KHOUZAMI						/s/ DAVID M. VAHOS
Carim V. Khouzami						David M. Vahos
Chief Executive Officer (Principal Executive Officer)						Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)
/s/ JASON T. JONES
Jason T. Jones
Director, Accounting (Principal Accounting Officer)

November 3, 2022

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Pursuant to requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

PEPCO HOLDINGS LLC

/s/ J. TYLER ANTHONY						/s/    PHILLIP S. BARNETT
J. Tyler Anthony						Phillip S. Barnett
President and Chief Executive Officer (Principal Executive Officer)						Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)
/s/ JULIE E. GIESE
Julie E. Giese
Director, Accounting (Principal Accounting Officer)

November 3, 2022

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Pursuant to requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

POTOMAC ELECTRIC POWER COMPANY

/s/ J. TYLER ANTHONY						/s/    PHILLIP S. BARNETT
J. Tyler Anthony						Phillip S. Barnett
President and Chief Executive Officer (Principal Executive Officer)						Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)
/s/ JULIE E. GIESE
Julie E. Giese
Director, Accounting (Principal Accounting Officer)

November 3, 2022

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Pursuant to requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

DELMARVA POWER & LIGHT COMPANY

/s/ J. TYLER ANTHONY						/s/    PHILLIP S. BARNETT
J. Tyler Anthony						Phillip S. Barnett
President and Chief Executive Officer (Principal Executive Officer)						Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)
/s/ JULIE E. GIESE
Julie E. Giese
Director, Accounting (Principal Accounting Officer)

November 3, 2022

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Pursuant to requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ATLANTIC CITY ELECTRIC COMPANY

/s/ J. TYLER ANTHONY						/s/    PHILLIP S. BARNETT
J. Tyler Anthony						Phillip S. Barnett
President and Chief Executive Officer (Principal Executive Officer)						Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)
/s/ JULIE E. GIESE
Julie E. Giese
Director, Accounting (Principal Accounting Officer)

November 3, 2022

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