Document
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2019
or
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission
File Number
 
Name of Registrant; State or Other Jurisdiction of Incorporation; Address of Principal Executive Offices; and Telephone Number
 
IRS Employer Identification Number
 
 
 
 
 
1-16169
 
EXELON CORPORATION
 
23-2990190
 
 
(a Pennsylvania corporation)
10 South Dearborn Street
P.O. Box 805379
Chicago, Illinois 60680-5379
(800) 483-3220
 
 
 
 
 
 
 
333-85496
 
EXELON GENERATION COMPANY, LLC
 
23-3064219
 
 
(a Pennsylvania limited liability company)
300 Exelon Way
Kennett Square, Pennsylvania 19348-2473
(610) 765-5959
 
 
 
 
 
 
 
1-1839
 
COMMONWEALTH EDISON COMPANY
 
36-0938600
 
 
(an Illinois corporation)
440 South LaSalle Street
Chicago, Illinois 60605-1028
(312) 394-4321
 
 
 
 
 
 
 
000-16844
 
PECO ENERGY COMPANY
 
23-0970240
 
 
(a Pennsylvania corporation)
P.O. Box 8699
2301 Market Street
Philadelphia, Pennsylvania 19101-8699
(215) 841-4000
 
 
 
 
 
 
 
1-1910
 
BALTIMORE GAS AND ELECTRIC COMPANY
 
52-0280210
 
 
(a Maryland corporation)
2 Center Plaza
110 West Fayette Street
Baltimore, Maryland 21201-3708
(410) 234-5000
 
 
 
 
 
 
 
001-31403
 
PEPCO HOLDINGS LLC
 
52-2297449
 
 
(a Delaware limited liability company)
701 Ninth Street, N.W.
Washington, District of Columbia 20068
(202) 872-2000
 
 
 
 
 
 
 
001-01072
 
POTOMAC ELECTRIC POWER COMPANY
 
53-0127880
 
 
(a District of Columbia and Virginia corporation)
701 Ninth Street, N.W.
Washington, District of Columbia 20068
(202) 872-2000
 
 
 
 
 
 
 
001-01405
 
DELMARVA POWER & LIGHT COMPANY
 
51-0084283
 
 
(a Delaware and Virginia corporation)
500 North Wakefield Drive
Newark, Delaware 19702
(202) 872-2000
 
 
 
 
 
 
 
001-03559
 
ATLANTIC CITY ELECTRIC COMPANY
 
21-0398280
 
 
(a New Jersey corporation)
500 North Wakefield Drive
Newark, Delaware 19702
(202) 872-2000
 
 


Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
EXELON CORPORATION;
 
 
 
 
Common Stock, without par value
 
EXC
 
New York and Chicago
Series A Junior Debt Subordinated Debentures
 
EXC22
 
New York
 
 
 
 
 
PECO ENERGY COMPANY:
 
 
 
 
Trust Receipts of PECO Energy Capital Trust III, each representing a 7.38% Cumulative Preferred Security, Series D, $25 stated value, issued by PECO Energy Capital, L.P. and unconditionally guaranteed by PECO Energy Company
 
EXC/28
 
New York

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x  No  o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  x  No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 
Large Accelerated Filer
 
Accelerated Filer
 
Non-accelerated Filer
 
Smaller Reporting Company
 
Emerging Growth Company
Exelon Corporation
x




 
 
 
 
Exelon Generation Company, LLC




x
 
 
 
 
Commonwealth Edison Company




x
 
 
 
 
PECO Energy Company




x
 
 
 
 
Baltimore Gas and Electric Company




x
 
 
 
 
Pepco Holdings LLC
 
 
 
 
x
 
 
 
 
Potomac Electric Power Company
 
 
 
 
x
 
 
 
 
Delmarva Power & Light Company
 
 
 
 
x
 
 
 
 
Atlantic City Electric Company
 
 
 
 
x
 
 
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes  o  No  x
The number of shares outstanding of each registrant’s common stock as of March 31, 2019 was:
Exelon Corporation Common Stock, without par value
970,954,879
Exelon Generation Company, LLC
not applicable
Commonwealth Edison Company Common Stock, $12.50 par value
127,021,331
PECO Energy Company Common Stock, without par value
170,478,507
Baltimore Gas and Electric Company Common Stock, without par value
1,000
Pepco Holdings LLC
not applicable
Potomac Electric Power Company Common Stock, $0.01 par value
100
Delmarva Power & Light Company Common Stock, $2.25 par value
1,000
Atlantic City Electric Company Common Stock, $3.00 par value
8,546,017


TABLE OF CONTENTS

 
Page No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

1

 
Page No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

2

 
Page No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

3
Table of Contents

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

4
Table of Contents

GLOSSARY OF TERMS AND ABBREVIATIONS
Other Terms and Abbreviations
 
 
Note "—" of the 2018 Form 10-K
 
Reference to specific Combined Note to Consolidated Financial Statements within Exelon’s 2018 Annual Report on Form 10-K
AESO
 
Alberta Electric Systems Operator
AFUDC
 
Allowance for Funds Used During Construction
AMI
 
Advanced Metering Infrastructure
AOCI
 
Accumulated Other Comprehensive Income
ARC
 
Asset Retirement Cost
ARO
 
Asset Retirement Obligation
BGS
 
Basic Generation Service
CAISO
 
California Independent System Operator
CES
 
Clean Energy Standard
Clean Air Act
 
Clean Air Act of 1963, as amended
Clean Water Act
 
Federal Water Pollution Control Amendments of 1972, as amended
CODM
 
Chief operating decision maker(s)
D.C. Circuit Court
 
United States Court of Appeals for the District of Columbia Circuit
DC PLUG
 
District of Columbia Power Line Undergrounding Initiative
DCPSC
 
District of Columbia Public Service Commission
DOE
 
United States Department of Energy
DOEE
 
Department of Energy & Environment
DOJ
 
United States Department of Justice
DPSC
 
Delaware Public Service Commission
DSP
 
Default Service Provider
EDF
 
Electricite de France SA and its subsidiaries
EIMA
 
Energy Infrastructure Modernization Act (Illinois Senate Bill 1652 and Illinois House Bill 3036)
EmPower
 
A Maryland demand-side management program for Pepco and DPL
EPA
 
United States Environmental Protection Agency
EPSA
 
Electric Power Supply Association
ERCOT
 
Electric Reliability Council of Texas
FASB
 
Financial Accounting Standards Board
FEJA
 
Illinois Public Act 99-0906 or Future Energy Jobs Act
FERC
 
Federal Energy Regulatory Commission
FRCC
 
Florida Reliability Coordinating Council
GAAP
 
Generally Accepted Accounting Principles in the United States
GCR
 
Gas Cost Rate
GHG
 
Greenhouse Gas
GSA
 
Generation Supply Adjustment
IBEW
 
International Brotherhood of Electrical Workers
ICC
 
Illinois Commerce Commission
ICE
 
Intercontinental Exchange

5
Table of Contents

GLOSSARY OF TERMS AND ABBREVIATIONS
Other Terms and Abbreviations
 
 
Illinois EPA
 
Illinois Environmental Protection Agency
Illinois Settlement Legislation
 
Legislation enacted in 2007 affecting electric utilities in Illinois
IPA
 
Illinois Power Agency
IRC
 
Internal Revenue Code
IRS
 
Internal Revenue Service
ISO
 
Independent System Operator
ISO-NE
 
Independent System Operator New England Inc.
ISO-NY
 
Independent System Operator New York
LIBOR
 
London Interbank Offered Rate
MATS
 
U.S. EPA Mercury and Air Toxics Rule
MBR
 
Market Based Rates Incentive
MDE
 
Maryland Department of the Environment
MDPSC
 
Maryland Public Service Commission
MGP
 
Manufactured Gas Plant
MISO
 
Midcontinent Independent System Operator, Inc.
mmcf
 
Million Cubic Feet
Moody’s
 
Moody’s Investor Service
MOPR
 
Minimum Offer Price Rule
MW
 
Megawatt
NAAQS
 
National Ambient Air Quality Standards
NAV
 
Net Asset Value
NDT
 
Nuclear Decommissioning Trust
NEIL
 
Nuclear Electric Insurance Limited
NERC
 
North American Electric Reliability Corporation
NJBPU
 
New Jersey Board of Public Utilities
NLRB
 
National Labor Relations Board
Non-Regulatory Agreements Units
 
Nuclear generating units or portions thereof whose decommissioning-related activities are not subject to contractual elimination under regulatory accounting
NOSA
 
Nuclear Operating Services Agreement
NPDES
 
National Pollutant Discharge Elimination System
NRC
 
Nuclear Regulatory Commission
NSPS
 
New Source Performance Standards
NYMEX
 
New York Mercantile Exchange
NYPSC
 
New York Public Service Commission
OCI
 
Other Comprehensive Income
OIESO
 
Ontario Independent Electricity System Operator
OPEB
 
Other Postretirement Employee Benefits
Oyster Creek
 
Oyster Creek Generating Station
PA DEP
 
Pennsylvania Department of Environmental Protection
PAPUC
 
Pennsylvania Public Utility Commission
PGC
 
Purchased Gas Cost Clause
PJM
 
PJM Interconnection, LLC

6
Table of Contents

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

7
Table of Contents

FILING FORMAT
This combined Form 10-Q is being filed separately by Exelon Corporation, Exelon Generation Company, LLC, Commonwealth Edison Company, PECO Energy Company, Baltimore Gas and Electric Company, Pepco Holdings LLC, Potomac Electric Power Company, Delmarva Power & Light Company and Atlantic City Electric Company (Registrants). Information contained herein relating to any individual Registrant is filed by such Registrant on its own behalf. No Registrant makes any representation as to information relating to any other Registrant.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION
This Report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. The factors that could cause actual results to differ materially from the forward-looking statements made by the Registrants include those factors discussed herein, as well as the items discussed in (1) the Registrants' combined 2018 Annual Report on Form 10-K in (a) ITEM 1A. Risk Factors, (b) ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) ITEM 8. Financial Statements and Supplementary Data: Note 22, Commitments and Contingencies; (2) this Quarterly Report on Form 10-Q in (a) Part II, Other Information, ITEM 1A. Risk Factors; (b) Part 1, Financial Information, ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) Part I, Financial Information, ITEM 1. Financial Statements: Note 16, Commitments and Contingencies; and (3) other factors discussed in filings with the SEC by the Registrants. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this Report. None of the Registrants undertakes any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this Report.
WHERE TO FIND MORE INFORMATION
The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information that the Registrants file electronically with the SEC. These documents are also available to the public from commercial document retrieval services and the Registrants' website at www.exeloncorp.com. Information contained on the Registrants' website shall not be deemed incorporated into, or to be a part of, this Report.

8
Table of Contents




PART I. FINANCIAL INFORMATION
Item 1. Financial Statements

9
Table of Contents


EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
 
Three Months Ended
March 31,
(In millions, except per share data)
2019
 
2018
Operating revenues
 
 
 
Competitive businesses revenues
$
4,979

 
$
5,113

Rate-regulated utility revenues
4,503

 
4,570

Revenues from alternative revenue programs
(5
)
 
10

Total operating revenues
9,477

 
9,693

Operating expenses
 
 
 
Competitive businesses purchased power and fuel
3,204

 
3,289

Rate-regulated utility purchased power and fuel
1,349

 
1,438

Operating and maintenance
2,189

 
2,384

Depreciation and amortization
1,075

 
1,091

Taxes other than income
445

 
446

Total operating expenses
8,262


8,648

Gain on sales of assets and businesses
3

 
56

Operating income
1,218


1,101

Other income and (deductions)

 

Interest expense, net
(397
)
 
(365
)
Interest expense to affiliates
(6
)
 
(6
)
Other, net
467

 
(28
)
Total other income and (deductions)
64


(399
)
Income before income taxes
1,282

 
702

Income taxes
310

 
59

Equity in losses of unconsolidated affiliates
(6
)
 
(7
)
Net income
966


636

Net income attributable to noncontrolling interests
59

 
51

Net income attributable to common shareholders
$
907


$
585

Comprehensive income, net of income taxes
 
 
 
Net income
$
966

 
$
636

Other comprehensive (loss) income, net of income taxes
 
 
 
Pension and non-pension postretirement benefit plans:
 
 
 
Prior service benefit reclassified to periodic benefit cost
(16
)
 
(17
)
Actuarial loss reclassified to periodic benefit cost
36

 
61

Pension and non-pension postretirement benefit plan valuation adjustment
(38
)
 
18

Unrealized gain on cash flow hedges
—

 
8

Unrealized (loss) gain on investments in unconsolidated affiliates
(2
)
 
1

Unrealized gain on foreign currency translation
2

 
1

Other comprehensive (loss) income
(18
)

72

Comprehensive income
948


708

Comprehensive income attributable to noncontrolling interests
58

 
52

Comprehensive income attributable to common shareholders
$
890

 
$
656

 
 
 
 
Average shares of common stock outstanding:
 
 
 
Basic
971

 
966

Assumed exercise and/or distributions of stock-based awards
1

 
2

Diluted(a)
972

 
968

 
 
 
 
Earnings per average common share:
 
 
 
Basic
$
0.93

 
$
0.61

Diluted
$
0.93

 
$
0.60

__________
(a)
The number of stock options not included in the calculation of diluted common shares outstanding due to their antidilutive effect was immaterial for the three months ended March 31, 2019 and approximately 5 million for the three months ended March 31, 2018.

See the Combined Notes to Consolidated Financial Statements
10
Table of Contents

EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
Three Months Ended
March 31,
(In millions)
2019
 
2018
Cash flows from operating activities
 
 
 
Net income
$
966

 
$
636

Adjustments to reconcile net income to net cash flows provided by operating activities:
 
 
 
Depreciation, amortization and accretion, including nuclear fuel and energy contract amortization
1,460

 
1,501

Impairment of long-lived assets
7

 
—

Gain on sales of assets and businesses
—

 
(56
)
Deferred income taxes and amortization of investment tax credits
187

 
(14
)
Net fair value changes related to derivatives
31

 
259

Net realized and unrealized (gains) losses on NDT funds
(308
)
 
68

Other non-cash operating activities
127

 
240

Changes in assets and liabilities:
 
 
 
Accounts receivable
79

 
133

Inventories
128

 
167

Accounts payable and accrued expenses
(764
)
 
(451
)
Option premiums received (paid), net
6

 
(27
)
Collateral posted, net
(101
)
 
(214
)
Income taxes
141

 
86

Pension and non-pension postretirement benefit contributions
(328
)
 
(331
)
Other assets and liabilities
(587
)
 
(495
)
Net cash flows provided by operating activities
1,044


1,502

Cash flows from investing activities
 
 
 
Capital expenditures
(1,873
)
 
(1,880
)
Proceeds from NDT fund sales
3,713

 
1,189

Investment in NDT funds
(3,666
)
 
(1,248
)
Proceeds from sales of assets and businesses
8

 
79

Other investing activities
32

 
3

Net cash flows used in investing activities
(1,786
)

(1,857
)
Cash flows from financing activities
 
 
 
Changes in short-term borrowings
540

 
726

Proceeds from short-term borrowings with maturities greater than 90 days
—

 
1

Repayments on short-term borrowings with maturities greater than 90 days
—

 
(1
)
Issuance of long-term debt
402

 
1,130

Retirement of long-term debt
(352
)
 
(1,241
)
Dividends paid on common stock
(352
)
 
(333
)
Proceeds from employee stock plans
51

 
12

Other financing activities
(14
)
 
(30
)
Net cash flows provided by financing activities
275


264

Decrease in cash, cash equivalents and restricted cash
(467
)
 
(91
)
Cash, cash equivalents and restricted cash at beginning of period
1,781

 
1,190

Cash, cash equivalents and restricted cash at end of period
$
1,314


$
1,099


See the Combined Notes to Consolidated Financial Statements
11
Table of Contents

EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)
March 31, 2019
 
December 31, 2018
ASSETS
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
880

 
$
1,349

Restricted cash and cash equivalents
223

 
247

Accounts receivable, net
 
 
 
Customer
4,564

 
4,607

Other
1,062

 
1,256

Mark-to-market derivative assets
652

 
804

Unamortized energy contract assets
49

 
48

Inventories, net
 
 
 
Fossil fuel and emission allowances
179

 
334

Materials and supplies
1,380

 
1,351

Regulatory assets
1,191

 
1,222

Assets held for sale
890

 
904

Other
1,406

 
1,238

Total current assets
12,476


13,360

Property, plant and equipment, net
77,460

 
76,707

Deferred debits and other assets
 
 
 
Regulatory assets
8,222

 
8,237

Nuclear decommissioning trust funds
12,302

 
11,661

Investments
620

 
625

Goodwill
6,677

 
6,677

Mark-to-market derivative assets
454

 
452

Unamortized energy contract assets
365

 
372

Other
3,017

 
1,575

Total deferred debits and other assets
31,657


29,599

Total assets(a)
$
121,593


$
119,666


See the Combined Notes to Consolidated Financial Statements
12
Table of Contents

EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)
March 31, 2019
 
December 31, 2018
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
Current liabilities
 
 
 
Short-term borrowings
$
1,254

 
$
714

Long-term debt due within one year
2,508

 
1,349

Accounts payable
3,327

 
3,800

Accrued expenses
1,725

 
2,112

Payables to affiliates
5

 
5

Regulatory liabilities
522

 
644

Mark-to-market derivative liabilities
345

 
475

Unamortized energy contract liabilities
151

 
149

Renewable energy credit obligation
348

 
344

Liabilities held for sale
799

 
777

Other
1,245

 
1,035

Total current liabilities
12,229

 
11,404

Long-term debt
32,960

 
34,075

Long-term debt to financing trusts
390

 
390

Deferred credits and other liabilities
 
 
 
Deferred income taxes and unamortized investment tax credits
11,642

 
11,330

Asset retirement obligations
9,967

 
9,679

Pension obligations
3,734

 
3,988

Non-pension postretirement benefit obligations
1,984

 
1,928

Spent nuclear fuel obligation
1,178

 
1,171

Regulatory liabilities
9,781

 
9,559

Mark-to-market derivative liabilities
434

 
479

Unamortized energy contract liabilities
432

 
463

Other
3,158

 
2,130

Total deferred credits and other liabilities
42,310

 
40,727

Total liabilities(a)
87,889


86,596

Commitments and contingencies

 

Shareholders’ equity
 
 
 
Common stock (No par value, 2,000 shares authorized, 971 shares and 968 shares outstanding at March 31, 2019 and December 31, 2018, respectively)
19,171

 
19,116

Treasury stock, at cost (2 shares at March 31, 2019 and December 31, 2018)
(123
)
 
(123
)
Retained earnings
15,321

 
14,766

Accumulated other comprehensive loss, net
(3,012
)
 
(2,995
)
Total shareholders’ equity
31,357


30,764

Noncontrolling interests
2,347

 
2,306

Total equity
33,704


33,070

Total liabilities and shareholders’ equity
$
121,593


$
119,666

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

See the Combined Notes to Consolidated Financial Statements
13
Table of Contents

EXELON CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
 
Three Months Ended March 31, 2019
(In millions, shares
in thousands)
Issued
Shares
 
Common
Stock
 
Treasury
Stock
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Loss, net
 
Noncontrolling
Interests
 
Total Shareholders'
Equity
Balance, December 31, 2018
970,020

 
$
19,116

 
$
(123
)
 
$
14,766

 
$
(2,995
)
 
$
2,306

 
$
33,070

Net income
—

 
—

 
—

 
907

 
—

 
59

 
966

Long-term incentive plan activity
2,446

 
(3
)
 
—

 
—

 
—

 
—

 
(3
)
Employee stock purchase plan issuances
320

 
51

 
—

 
—

 
—

 
—

 
51

Changes in equity of noncontrolling interests
—

 
—

 
—

 
—

 
—

 
(17
)
 
(17
)
Sale of noncontrolling interests
—

 
7

 
—

 
—

 
—

 
—

 
7

Common stock dividends
($0.36/common share)

—

 
—

 
—

 
(352
)
 
—

 
—

 
(352
)
Other comprehensive income, net of income taxes
—

 
—

 
—

 
—

 
(17
)
 
(1
)
 
(18
)
Balance, March 31, 2019
972,786

 
$
19,171

 
$
(123
)
 
$
15,321

 
$
(3,012
)
 
$
2,347

 
$
33,704

 
Three Months Ended March 31, 2018
(In millions, shares
in thousands)
Issued
Shares
 
Common
Stock
 
Treasury
Stock
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Loss, net
 
Noncontrolling
Interests
 
Total Shareholders'
Equity
Balance, December 31, 2017
965,168

 
$
18,964

 
$
(123
)
 
$
14,081

 
$
(3,026
)
 
$
2,291

 
$
32,187

Net income
—

 
—

 
—

 
585

 
—

 
51

 
636

Long-term incentive plan activity
1,685

 
(3
)
 
—

 
—

 
—

 
—

 
(3
)
Employee stock purchase plan issuances
361

 
12

 
—

 
—

 
—

 
—

 
12

Changes in equity of noncontrolling interests
—

 
—

 
—

 
—

 
—

 
(9
)
 
(9
)
Common stock dividends
($0.35/common share)

—

 
—

 
—

 
(334
)
 
—

 
—

 
(334
)
Other comprehensive income, net of income taxes
—

 
—

 
—

 
—

 
71

 
1

 
72

Impact of adoption of Recognition and Measurement of Financial Assets and Liabilities standard
—

 
—

 
—

 
14

 
(10
)
 
—

 
4

Balance, March 31, 2018
967,214

 
$
18,973

 
$
(123
)
 
$
14,346

 
$
(2,965
)
 
$
2,334

 
$
32,565


See the Combined Notes to Consolidated Financial Statements
14
Table of Contents


EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
 
Three Months Ended
March 31,
(In millions)
2019
 
2018
Operating revenues
 
 
 
Operating revenues
$
4,979

 
$
5,114

Operating revenues from affiliates
317

 
398

Total operating revenues
5,296


5,512

Operating expenses
 
 
 
Purchased power and fuel
3,204

 
3,289

Purchased power and fuel from affiliates
1

 
4

Operating and maintenance
1,068

 
1,178

Operating and maintenance from affiliates
150

 
161

Depreciation and amortization
405

 
448

Taxes other than income
135

 
138

Total operating expenses
4,963


5,218

Gain on sales of assets and businesses
—

 
53

Operating income
333


347

Other income and (deductions)
 
 
 
Interest expense, net
(102
)
 
(91
)
Interest expense to affiliates
(9
)
 
(10
)
Other, net
430

 
(44
)
Total other income and (deductions)
319


(145
)
Income before income taxes
652

 
202

Income taxes
224

 
9

Equity in losses of unconsolidated affiliates
(6
)
 
(7
)
Net income
422


186

Net income attributable to noncontrolling interests
59

 
50

Net income attributable to membership interest
$
363


$
136

Comprehensive income, net of income taxes
 
 
 
Net income
$
422

 
$
186

Other comprehensive income (loss), net of income taxes
 
 
 
Unrealized gain on cash flow hedges
1

 
7

Unrealized (loss) gain on investments in unconsolidated affiliates
(2
)
 
1

Unrealized gain (loss) on foreign currency translation
2

 
(1
)
Other comprehensive income
1


7

Comprehensive income
423


193

Comprehensive income attributable to noncontrolling interests
58

 
51

Comprehensive income attributable to membership interest
$
365

 
$
142


See the Combined Notes to Consolidated Financial Statements
15
Table of Contents

EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
Three Months Ended
March 31,
(In millions)
2019
 
2018
Cash flows from operating activities
 
 
 
Net income
$
422

 
$
186

Adjustments to reconcile net income to net cash flows provided by operating activities:
 
 
 
Depreciation, amortization and accretion, including nuclear fuel and energy contract amortization
789

 
858

Impairment of long-lived assets
7

 
—

Gain on sales of assets and businesses
—

 
(53
)
Deferred income taxes and amortization of investment tax credits
108

 
(68
)
Net fair value changes related to derivatives
33

 
264

Net realized and unrealized (gains) losses on NDT funds
(308
)
 
68

Other non-cash operating activities
(90
)
 
45

Changes in assets and liabilities:

 

Accounts receivable
197

 
194

Receivables from and payables to affiliates, net
(5
)
 
(15
)
Inventories
103

 
122

Accounts payable and accrued expenses
(411
)
 
(317
)
Option premiums received (paid), net
6

 
(27
)
Collateral posted, net
(87
)
 
(214
)
Income taxes
146

 
79

Pension and non-pension postretirement benefit contributions
(141
)
 
(125
)
Other assets and liabilities
(187
)
 
(142
)
Net cash flows provided by operating activities
582


855

Cash flows from investing activities
 
 
 
Capital expenditures
(511
)
 
(628
)
Proceeds from NDT fund sales
3,713

 
1,189

Investment in NDT funds
(3,666
)
 
(1,248
)
Proceeds from sales of assets and businesses
8

 
79

Other investing activities
23

 
(7
)
Net cash flows used in investing activities
(433
)

(615
)
Cash flows from financing activities
 
 
 
Changes in short-term borrowings
—

 
165

Proceeds from short-term borrowings with maturities greater than 90 days
—

 
1

Repayments of short-term borrowings with maturities greater than 90 days
—

 
(1
)
Issuance of long-term debt
2

 
4

Retirement of long-term debt
(47
)
 
(29
)
Changes in Exelon intercompany money pool
(100
)
 
—

Distributions to member
(225
)
 
(188
)
Other financing activities
(6
)
 
(9
)
Net cash flows used in financing activities
(376
)

(57
)
(Decrease) increase in cash, cash equivalents and restricted cash
(227
)
 
183

Cash, cash equivalents and restricted cash at beginning of period
903

 
554

Cash, cash equivalents and restricted cash at end of period
$
676


$
737


See the Combined Notes to Consolidated Financial Statements
16
Table of Contents

EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)
March 31, 2019
 
December 31, 2018
ASSETS
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
537

 
$
750

Restricted cash and cash equivalents
139

 
153

Accounts receivable, net
 
 
 
Customer
2,800

 
2,941

Other
367

 
562

Mark-to-market derivative assets
652

 
804

Receivables from affiliates
163

 
173

Unamortized energy contract assets
49

 
49

Inventories, net
 
 
 
Fossil fuel and emission allowances
146

 
251

Materials and supplies
965

 
963

Assets held for sale
890

 
904

Other
1,013

 
883

Total current assets
7,721


8,433

Property, plant and equipment, net
24,034

 
23,981

Deferred debits and other assets
 
 
 
Nuclear decommissioning trust funds
12,302

 
11,661

Investments
404

 
414

Goodwill
47

 
47

Mark-to-market derivative assets
454

 
452

Prepaid pension asset
1,525

 
1,421

Unamortized energy contract assets
364

 
371

Deferred income taxes
18

 
21

Other
1,813

 
755

Total deferred debits and other assets
16,927


15,142

Total assets(a)
$
48,682


$
47,556


See the Combined Notes to Consolidated Financial Statements
17
Table of Contents

EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)
March 31, 2019
 
December 31, 2018
LIABILITIES AND EQUITY
 
 
 
Current liabilities
 
 
 
Long-term debt due within one year
$
2,365

 
$
906

Accounts payable
1,566

 
1,847

Accrued expenses
675

 
898

Payables to affiliates
136

 
139

Borrowings from Exelon intercompany money pool
—

 
100

Mark-to-market derivative liabilities
318

 
449

Unamortized energy contract liabilities
28

 
31

Renewable energy credit obligation
348

 
343

Liabilities held for sale
799

 
777

Other
425

 
279

Total current liabilities
6,660

 
5,769

Long-term debt
5,487

 
6,989

Long-term debt to affiliates
895

 
898

Deferred credits and other liabilities
 
 
 
Deferred income taxes and unamortized investment tax credits
3,502

 
3,383

Asset retirement obligations
9,737

 
9,450

Non-pension postretirement benefit obligations
894

 
900

Spent nuclear fuel obligation
1,178

 
1,171

Payables to affiliates
2,870

 
2,606

Mark-to-market derivative liabilities
219

 
252

Unamortized energy contract liabilities
16

 
20

Other
1,528

 
610

Total deferred credits and other liabilities
19,944

 
18,392

Total liabilities(a)
32,986

 
32,048

Commitments and contingencies

 

Equity
 
 
 
Member’s equity
 
 
 
Membership interest
9,525

 
9,518

Undistributed earnings
3,862

 
3,724

Accumulated other comprehensive loss, net
(36
)
 
(38
)
Total member’s equity
13,351

 
13,204

Noncontrolling interests
2,345

 
2,304

Total equity
15,696

 
15,508

Total liabilities and equity
$
48,682

 
$
47,556

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

See the Combined Notes to Consolidated Financial Statements
18
Table of Contents

EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
 
Three Months Ended March 31, 2019
 
Member’s Equity
 
 
 
 
(In millions)
Membership
Interest
 
Undistributed
Earnings
 
Accumulated
Other
Comprehensive
Loss, net
 
Noncontrolling
Interests
 
Total Equity
Balance, December 31, 2018
$
9,518

 
$
3,724

 
$
(38
)
 
$
2,304

 
$
15,508

Net income
—

 
363

 
—

 
59

 
422

Changes in equity of noncontrolling interests
—

 
—

 
—

 
(17
)
 
(17
)
Sale of noncontrolling interests
7

 
—

 
—

 
—

 
7

Distributions to member
—

 
(225
)
 
—

 
—

 
(225
)
Other comprehensive income (loss), net of income taxes
—

 
—

 
2

 
(1
)
 
1

Balance, March 31, 2019
$
9,525


$
3,862


$
(36
)

$
2,345


$
15,696


 
Three Months Ended March 31, 2018
 
Member’s Equity
 
 
 
 
(In millions)
Membership
Interest
 
Undistributed
Earnings
 
Accumulated
Other
Comprehensive
Loss, net
 
Noncontrolling
Interests
 
Total Equity
Balance, December 31, 2017
$
9,357

 
$
4,349

 
$
(37
)
 
$
2,290

 
$
15,959

Net income
—

 
136

 
—

 
50

 
186

Changes in equity of noncontrolling interests
—

 
—

 
—

 
(9
)
 
(9
)
Distributions to member
—

 
(188
)
 
—

 
—

 
(188
)
Other comprehensive income, net of income taxes
—

 
—

 
6

 
1

 
7

Impact of adoption of Recognition and Measurement of Financial Assets and Liabilities standard
—

 
6

 
(3
)
 
—

 
3

Balance, March 31, 2018
$
9,357

 
$
4,303

 
$
(34
)
 
$
2,332

 
$
15,958



See the Combined Notes to Consolidated Financial Statements
19
Table of Contents


COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
 
Three Months Ended
March 31,
(In millions)
2019
 
2018
Operating revenues
 
 
 
Electric operating revenues
$
1,432

 
$
1,493

Revenues from alternative revenue programs
(28
)
 
5

Operating revenues from affiliates
4

 
14

Total operating revenues
1,408


1,512

Operating expenses
 
 
 
Purchased power
388

 
411

Purchased power from affiliate
97

 
194

Operating and maintenance
259

 
253

Operating and maintenance from affiliate
62

 
60

Depreciation and amortization
251

 
228

Taxes other than income
78

 
77

Total operating expenses
1,135


1,223

Gain on sales of assets
3

 
3

Operating income
276


292

Other income and (deductions)
 
 
 
Interest expense, net
(84
)
 
(86
)
Interest expense to affiliates
(3
)
 
(3
)
Other, net
8

 
8

Total other income and (deductions)
(79
)

(81
)
Income before income taxes
197

 
211

Income taxes
40

 
46

Net income
$
157


$
165

Comprehensive income
$
157

 
$
165


See the Combined Notes to Consolidated Financial Statements
20
Table of Contents

COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
Three Months Ended
March 31,
(In millions)
2019
 
2018
Cash flows from operating activities
 
 
 
Net income
$
157

 
$
165

Adjustments to reconcile net income to net cash flows provided by operating activities:
 
 
 
Depreciation and amortization
251

 
228

Deferred income taxes and amortization of investment tax credits
34

 
50

Other non-cash operating activities
56

 
46

Changes in assets and liabilities:
 
 
 
Accounts receivable
14

 
39

Receivables from and payables to affiliates, net
(34
)
 
(19
)
Inventories
(3
)
 
5

Accounts payable and accrued expenses
(188
)
 
(158
)
Collateral posted, net
(13
)
 
(3
)
Income taxes
5

 
(5
)
Pension and non-pension postretirement benefit contributions
(67
)
 
(38
)
Other assets and liabilities
(121
)
 
(176
)
Net cash flows provided by operating activities
91


134

Cash flows from investing activities
 
 
 
Capital expenditures
(503
)
 
(531
)
Other investing activities
11

 
8

Net cash flows used in investing activities
(492
)

(523
)
Cash flows from financing activities
 
 
 
Changes in short-term borrowings
322

 
317

Issuance of long-term debt
400

 
800

Retirement of long-term debt
(300
)
 
(700
)
Contributions from parent
63

 
113

Dividends paid on common stock
(127
)
 
(114
)
Other financing activities
(9
)
 
(9
)
Net cash flows provided by financing activities
349


407

(Decrease) increase in cash, cash equivalents and restricted cash
(52
)
 
18

Cash, cash equivalents and restricted cash at beginning of period
330

 
144

Cash, cash equivalents and restricted cash at end of period
$
278


$
162


See the Combined Notes to Consolidated Financial Statements
21
Table of Contents

COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)
March 31, 2019
 
December 31, 2018
ASSETS
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
68

 
$
135

Restricted cash
17

 
29

Accounts receivable, net
 
 
 
Customer
539

 
539

Other
336

 
320

Receivables from affiliates
21

 
20

Inventories, net
152

 
148

Regulatory assets
285

 
293

Other
89

 
86

Total current assets
1,507


1,570

Property, plant and equipment, net
22,274

 
22,058

Deferred debits and other assets
 
 
 
Regulatory assets
1,338

 
1,307

Investments
6

 
6

Goodwill
2,625

 
2,625

Receivables from affiliates
2,412

 
2,217

Prepaid pension asset
1,073

 
1,035

Other
347

 
395

Total deferred debits and other assets
7,801


7,585

Total assets
$
31,582


$
31,213


See the Combined Notes to Consolidated Financial Statements
22
Table of Contents

COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)
March 31, 2019
 
December 31, 2018
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
Current liabilities
 
 
 
Short-term borrowings
$
322

 
$
—

Long-term debt due within one year
—

 
300

Accounts payable
491

 
607

Accrued expenses
229

 
373

Payables to affiliates
74

 
119

Customer deposits
112

 
111

Regulatory liabilities
241

 
293

Mark-to-market derivative liability
27

 
26

Other
98

 
96

Total current liabilities
1,594

 
1,925

Long-term debt
8,194

 
7,801

Long-term debt to financing trust
205

 
205

Deferred credits and other liabilities
 
 
 
Deferred income taxes and unamortized investment tax credits
3,870

 
3,813

Asset retirement obligations
119

 
118

Non-pension postretirement benefits obligations
196

 
201

Regulatory liabilities
6,269

 
6,050

Mark-to-market derivative liability
213

 
223

Other
582

 
630

Total deferred credits and other liabilities
11,249

 
11,035

Total liabilities
21,242

 
20,966

Commitments and contingencies

 

Shareholders’ equity
 
 
 
Common stock
1,588

 
1,588

Other paid-in capital
7,385

 
7,322

Retained deficit unappropriated
(1,639
)
 
(1,639
)
Retained earnings appropriated
3,006

 
2,976

Total shareholders’ equity
10,340

 
10,247

Total liabilities and shareholders’ equity
$
31,582

 
$
31,213


See the Combined Notes to Consolidated Financial Statements
23
Table of Contents

COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
 
Three Months Ended March 31, 2019
(In millions)
Common
Stock
 
Other
Paid-In
Capital
 
Retained Deficit
Unappropriated
 
Retained
Earnings
Appropriated
 
Total
Shareholders’
Equity
Balance, December 31, 2018
$
1,588

 
$
7,322

 
$
(1,639
)
&