Item 1. FINANCIAL STATEMENTS

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Item 1. FINANCIAL STATEMENTS

EXELON CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,
(In millions, except per share data)		2023		2022
Operating revenues
Electric operating revenues		$	4,462	$	4,481
Natural gas operating revenues		822		817
Revenues from alternative revenue programs		279		29
Total operating revenues		5,563		5,327
Operating expenses
Purchased power		1,733		1,581
Purchased fuel		358		338
Purchased power and fuel from affiliates		—		159
Operating and maintenance		1,151		1,178
Depreciation and amortization		860		817
Taxes other than income taxes		355		354
Total operating expenses		4,457		4,427




Operating income		1,106		900
Other income and (deductions)
Interest expense, net		(406)		(332)
Interest expense to affiliates		(6)		(6)
Other, net		109		137
Total other income and (deductions)		(303)		(201)
Income from continuing operations before income taxes		803		699
Income taxes		134		218

Net income from continuing operations after income taxes		669		481
Net income from discontinued operations after income taxes (Note 2)		—		117
Net income		669		598
Net income attributable to noncontrolling interests		—		1
Net income attributable to common shareholders		$	669	$	597

Amounts attributable to common shareholders:
Net income from continuing operations		669		481
Net income from discontinued operations		—		116
Net income attributable to common shareholders		$	669	$	597

Comprehensive income, net of income taxes
Net income		$	669	$	598
Other comprehensive income (loss), net of income taxes
Pension and non-pension postretirement benefit plans:

Actuarial loss reclassified to periodic benefit cost		3		14
Pension and non-pension postretirement benefit plan valuation adjustment		(10)		—
Unrealized gain on cash flow hedges		6		—



Other comprehensive (loss) income		(1)		14
Comprehensive income		668		612
Comprehensive income attributable to noncontrolling interests		—		1
Comprehensive income attributable to common shareholders		$	668	$	611

Average shares of common stock outstanding:
Basic		995		981
Assumed exercise and/or distributions of stock-based awards		1		—
Diluted		996		981

Earnings per average common share from continuing operations
Basic		$	0.67	$	0.49
Diluted		$	0.67	$	0.49

Earnings per average common share from discontinued operations
Basic		$	—	$	0.12
Diluted		$	—	$	0.12

See the Combined Notes to Consolidated Financial Statements

EXELON CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended March 31,
(In millions)	2023		2022
Cash flows from operating activities
Net income	$	669	$	598
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation, amortization, and accretion, including nuclear fuel and energy contract amortization	860		1,024


Gain on sales of assets and businesses	—		(10)

Deferred income taxes and amortization of investment tax credits	113		110
Net fair value changes related to derivatives	—		(59)
Net realized and unrealized losses on NDT funds	—		205
Net unrealized losses on equity investments	—		16
Other non-cash operating activities	(138)		232
Changes in assets and liabilities:
Accounts receivable	106		(711)
Inventories	102		125
Accounts payable and accrued expenses	(482)		291
Option premiums paid, net	—		(39)
Collateral (paid) received, net	(214)		1,142
Income taxes	23		77
Regulatory assets and liabilities, net	(324)		(31)
Pension and non-pension postretirement benefit contributions	(44)		(574)
Other assets and liabilities	(187)		(614)
Net cash flows provided by operating activities	484		1,782
Cash flows from investing activities
Capital expenditures	(1,881)		(1,922)
Proceeds from NDT fund sales	—		488
Investment in NDT funds	—		(516)
Collection of DPP	—		169


Proceeds from sales of assets and businesses	—		16


Other investing activities	10		(54)
Net cash flows used in investing activities	(1,871)		(1,819)
Cash flows from financing activities
Changes in short-term borrowings	(1,130)		(700)
Proceeds from short-term borrowings with maturities greater than 90 days	—		1,150
Repayments on short-term borrowings with maturities greater than 90 days	(150)		(350)
Issuance of long-term debt	3,925		4,301
Retirement of long-term debt	(857)		(6)





Dividends paid on common stock	(358)		(332)
Proceeds from employee stock plans	10		9
Transfer of cash, restricted cash, and cash equivalents to Constellation	—		(2,594)
Other financing activities	(60)		(62)
Net cash flows provided by financing activities	1,380		1,416
(Decrease) increase in cash, restricted cash, and cash equivalents	(7)		1,379
Cash, restricted cash, and cash equivalents at beginning of period	1,090		1,619
Cash, restricted cash, and cash equivalents at end of period	$	1,083	$	2,998

Supplemental cash flow information
Decrease in capital expenditures not paid	$	(201)	$	(322)
Increase in DPP	—		348
Decrease in PP&E related to ARO update	—		(335)

See the Combined Notes to Consolidated Financial Statements

EXELON CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)


(In millions)	March 31, 2023		December 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	522	$	407
Restricted cash and cash equivalents	381		566

Accounts receivable
Customer accounts receivable	2,493		2,544
Customer allowance for credit losses	(389)		(327)
Customer accounts receivable, net	2,104		2,217
Other accounts receivable	1,346		1,426
Other allowance for credit losses	(91)		(82)
Other accounts receivable, net	1,255		1,344
Inventories, net
Fossil fuel	70		208
Materials and supplies	582		547
Regulatory assets	2,386		1,641
Other	477		406
Total current assets	7,777		7,336
Property, plant, and equipment (net of accumulated depreciation and amortization of $16,384 and $15,930 as of March 31, 2023 and December 31, 2022, respectively)	70,117		69,076
Deferred debits and other assets
Regulatory assets	7,878		8,037
Goodwill	6,630		6,630
Receivable related to Regulatory Agreement Units	3,069		2,897
Investments	234		232
Other	1,220		1,141
Total deferred debits and other assets	19,031		18,937
Total assets	$	96,925	$	95,349

See the Combined Notes to Consolidated Financial Statements

EXELON CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)


(In millions)	March 31, 2023		December 31, 2022
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Short-term borrowings	$	1,306	$	2,586
Long-term debt due within one year	1,356		1,802
Accounts payable	2,762		3,382
Accrued expenses	1,183		1,226
Payables to affiliates	5		5
Regulatory liabilities	472		437
Mark-to-market derivative liabilities	23		8
Unamortized energy contract liabilities	9		10
Other	976		1,155
Total current liabilities	8,092		10,611
Long-term debt	38,732		35,272
Long-term debt to financing trusts	390		390
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits	11,483		11,250
Regulatory liabilities	9,307		9,112
Pension obligations	1,101		1,109
Non-pension postretirement benefit obligations	506		507
Asset retirement obligations	270		269
Mark-to-market derivative liabilities	77		83
Unamortized energy contract liabilities	32		35
Other	1,869		1,967
Total deferred credits and other liabilities	24,645		24,332
Total liabilities	71,859		70,605
Commitments and contingencies

Shareholders’ equity
Common stock (No par value, 2,000 shares authorized, 994 shares outstanding as of March 31, 2023 and December 31, 2022)	20,921		20,908
Treasury stock, at cost (2 shares as of March 31, 2023 and December 31, 2022)	(123)		(123)
Retained earnings	4,907		4,597
Accumulated other comprehensive loss, net	(639)		(638)
Total shareholders’ equity	25,066		24,744


Total liabilities and shareholders’ equity	$	96,925	$	95,349

See the Combined Notes to Consolidated Financial Statements

EXELON CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)


	Three Months Ended March 31, 2023
(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, 2022	995,830	$	20,908	$	(123)	$	4,597	$	(638)	$	—	$	24,744
Net income	—	—		—		669		—		—		669
Long-term incentive plan activity	306	1		—		—		—		—		1
Employee stock purchase plan issuances	266	12		—		—		—		—		12




Common stock dividends ($0.36/common share)	—	—		—		(359)				—		(359)
Other comprehensive loss, net of income taxes	—	—		—		—		(1)		—		(1)

Balance, March 31, 2023	996,402	$	20,921	$	(123)	$	4,907	$	(639)	$	—	$	25,066


	Three Months Ended March 31, 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

See the Combined Notes to Consolidated Financial Statements

COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,
(In millions)		2023		2022
Operating revenues
Electric operating revenues		$	1,511	$	1,688
Revenues from alternative revenue programs		153		40
Operating revenues from affiliates		3		6
Total operating revenues		1,667		1,734
Operating expenses
Purchased power		488		579
Purchased power from affiliate		—		59
Operating and maintenance		254		266
Operating and maintenance from affiliates		83		85
Depreciation and amortization		338		321
Taxes other than income taxes		93		96
Total operating expenses		1,256		1,406

Operating income		411		328
Other income and (deductions)
Interest expense, net		(114)		(97)
Interest expense to affiliates		(3)		(3)
Other, net		18		12
Total other income and (deductions)		(99)		(88)
Income before income taxes		312		240
Income taxes		71		52
Net income		$	241	$	188
Comprehensive income		$	241	$	188

See the Combined Notes to Consolidated Financial Statements

COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended March 31,
(In millions)	2023		2022
Cash flows from operating activities
Net income	$	241	$	188
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization	338		321

Deferred income taxes and amortization of investment tax credits	55		54

Other non-cash operating activities	(153)		(9)
Changes in assets and liabilities:
Accounts receivable	96		(45)
Receivables from and payables to affiliates, net	10		(42)
Inventories	(21)		3
Accounts payable and accrued expenses	(306)		(154)
Collateral (paid) received, net	(4)		43
Income taxes	15		(2)
Regulatory assets and liabilities, net	(338)		(8)
Pension and non-pension postretirement benefit contributions	(23)		(176)
Other assets and liabilities	(22)		(29)
Net cash flows (used in) provided by operating activities	(112)		144
Cash flows from investing activities
Capital expenditures	(617)		(617)




Other investing activities	1		7
Net cash flows used in investing activities	(616)		(610)
Cash flows from financing activities
Changes in short-term borrowings	(18)		—
Repayments on short-term borrowings with maturities greater than 90 days	(150)		—
Issuance of long-term debt	975		750

Dividends paid on common stock	(187)		(144)
Contributions from parent	186		167

Other financing activities	(11)		(10)
Net cash flows provided by financing activities	795		763
Increase in cash, restricted cash, and cash equivalents	67		297
Cash, restricted cash, and cash equivalents at beginning of period	511		384
Cash, restricted cash, and cash equivalents at end of period	$	578	$	681

Supplemental cash flow information
Decrease in capital expenditures not paid	$	(35)	$	(50)

See the Combined Notes to Consolidated Financial Statements

COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)


(In millions)	March 31, 2023		December 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	75	$	67
Restricted cash and cash equivalents	323		327
Accounts receivable
Customer accounts receivable	674		558
Customer allowance for credit losses	(74)		(59)
Customer accounts receivable, net	600		499
Other accounts receivable	233		441
Other allowance for credit losses	(18)		(17)
Other accounts receivable, net	215		424

Receivables from affiliates	3		3

Inventories, net	216		196

Regulatory assets	1,472		775

Other	102		92
Total current assets	3,006		2,383
Property, plant, and equipment (net of accumulated depreciation and amortization of $6,838 and $6,673 as of March 31, 2023 and December 31, 2022, respectively)	27,858		27,513
Deferred debits and other assets
Regulatory assets	2,517		2,667

Goodwill	2,625		2,625

Receivable related to Regulatory Agreement Units	2,804		2,660
Investments	6		6
Prepaid pension asset	1,225		1,206

Other	679		601
Total deferred debits and other assets	9,856		9,765
Total assets	$	40,720	$	39,661

See the Combined Notes to Consolidated Financial Statements

COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)


(In millions)	March 31, 2023		December 31, 2022
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Short-term borrowings	$	409	$	577

Accounts payable	801		1,010
Accrued expenses	305		415
Payables to affiliates	84		74
Customer deposits	109		108
Regulatory liabilities	233		226
Mark-to-market derivative liabilities	22		5

Other	189		191
Total current liabilities	2,152		2,606
Long-term debt	11,480		10,518
Long-term debt to financing trust	205		205
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits	5,100		5,021
Regulatory liabilities	7,143		6,913
Asset retirement obligations	149		148

Non-pension postretirement benefits obligations	167		165

Mark-to-market derivative liabilities	76		79

Other	644		642
Total deferred credits and other liabilities	13,279		12,968
Total liabilities	27,116		26,297
Commitments and contingencies
Shareholders’ equity
Common stock	1,588		1,588


Other paid-in capital	9,932		9,746
Retained earnings	2,084		2,030

Total shareholders’ equity	13,604		13,364
Total liabilities and shareholders’ equity	$	40,720	$	39,661

See the Combined Notes to Consolidated Financial Statements

COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)


	Three Months Ended March 31, 2023
(In millions)	Common Stock		Other Paid-In Capital		Retained Earnings		Total Shareholders’ Equity
Balance, December 31, 2022	$	1,588	$	9,746	$	2,030	$	13,364
Net income	—		—		241		241
Common stock dividends	—		—		(187)		(187)
Contributions from parent	—		186		—		186
Balance, March 31, 2023	$	1,588	$	9,932	$	2,084	$	13,604









	Three Months Ended March 31, 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

See the Combined Notes to Consolidated Financial Statements

PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,
(In millions)		2023		2022
Operating revenues
Electric operating revenues		$	798	$	734
Natural gas operating revenues		316		306
Revenues from alternative revenue programs		(4)		6
Operating revenues from affiliates		2		1
Total operating revenues		1,112		1,047
Operating expenses
Purchased power		330		229
Purchased fuel		154		145
Purchased power from affiliate		—		33
Operating and maintenance		219		196
Operating and maintenance from affiliates		51		51
Depreciation and amortization		98		92
Taxes other than income taxes		50		47
Total operating expenses		902		793

Operating income		210		254
Other income and (deductions)
Interest expense, net		(45)		(38)
Interest expense to affiliates		(3)		(3)
Other, net		8		7
Total other income and (deductions)		(40)		(34)
Income before income taxes		170		220
Income taxes		4		14

Net income		$	166	$	206
Comprehensive income		$	166	$	206

See the Combined Notes to Consolidated Financial Statements

PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended March 31,
(In millions)	2023		2022
Cash flows from operating activities
Net income	$	166	$	206
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization	98		92


Deferred income taxes and amortization of investment tax credits	(16)		14
Other non-cash operating activities	32		15
Changes in assets and liabilities:
Accounts receivable	36		(40)
Receivables from and payables to affiliates, net	8		(31)
Inventories	60		27
Accounts payable and accrued expenses	(176)		(24)

Income taxes	20		—
Regulatory assets and liabilities, net	15		(4)
Pension and non-pension postretirement benefit contributions	—		(12)
Other assets and liabilities	(75)		(102)
Net cash flows provided by operating activities	168		141
Cash flows from investing activities
Capital expenditures	(335)		(344)


Other investing activities	—		2
Net cash flows used in investing activities	(335)		(342)
Cash flows from financing activities

Changes in short-term borrowings	(94)		—



Changes in Exelon intercompany money pool	—		65
Dividends paid on common stock	(101)		(100)
Contributions from parent	330		227


Other financing activities	—		(1)
Net cash flows provided by financing activities	135		191
Decrease in cash, restricted cash, and cash equivalents	(32)		(10)
Cash, restricted cash, and cash equivalents at beginning of period	68		44
Cash, restricted cash, and cash equivalents at end of period	$	36	$	34

Supplemental cash flow information
Decrease in capital expenditures not paid	$	(9)	$	(41)

See the Combined Notes to Consolidated Financial Statements

PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)


(In millions)	March 31, 2023		December 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	27	$	59
Restricted cash and cash equivalents	9		9
Accounts receivable
Customer accounts receivable	588		635
Customer allowance for credit losses	(130)		(105)
Customer accounts receivable, net	458		530
Other accounts receivable	147		153
Other allowance for credit losses	(11)		(9)
Other accounts receivable, net	136		144

Receivables from affiliates	2		4


Inventories, net
Fossil fuel	41		99
Materials and supplies	50		52
Prepaid utility taxes	100		—
Regulatory assets	83		80

Other	43		38
Total current assets	949		1,015
Property, plant, and equipment (net of accumulated depreciation and amortization of $4,135 and $4,078 as of March 31, 2023 and December 31, 2022, respectively)	12,359		12,125
Deferred debits and other assets
Regulatory assets	693		652




Receivable related to Regulatory Agreement Units	265		237
Investments	31		30
Prepaid pension asset	417		413

Other	24		30
Total deferred debits and other assets	1,430		1,362
Total assets	$	14,738	$	14,502

See the Combined Notes to Consolidated Financial Statements

PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)


(In millions)	March 31, 2023		December 31, 2022
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Short-term borrowings	$	145	$	239
Long-term debt due within one year	50		50
Accounts payable	543		668
Accrued expenses	95		142
Payables to affiliates	48		42

Customer deposits	66		63
Regulatory liabilities	95		75


Other	50		32
Total current liabilities	1,092		1,311
Long-term debt	4,563		4,562
Long-term debt to financing trusts	184		184
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits	2,245		2,213
Regulatory liabilities	295		270
Asset retirement obligations	28		28
Non-pension postretirement benefits obligations	286		286





Other	87		85
Total deferred credits and other liabilities	2,941		2,882
Total liabilities	8,780		8,939
Commitments and contingencies
Shareholder’s equity
Common stock	4,032		3,702


Retained earnings	1,926		1,861


Total shareholder’s equity	5,958		5,563
Total liabilities and shareholder's equity	$	14,738	$	14,502

See the Combined Notes to Consolidated Financial Statements

PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY

(Unaudited)


	Three Months Ended March 31, 2023
(In millions)	Common Stock		Retained Earnings		Total Shareholder's Equity
Balance, December 31, 2022	$	3,702	$	1,861	$	5,563
Net income	—		166		166
Common stock dividends	—		(101)		(101)
Contributions from parent	330		—		330
Balance, March 31, 2023	$	4,032	$	1,926	$	5,958









	Three Months Ended March 31, 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

See the Combined Notes to Consolidated Financial Statements

BALTIMORE GAS AND ELECTRIC COMPANY

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,
(In millions)		2023		2022
Operating revenues
Electric operating revenues		$	780	$	735
Natural gas operating revenues		409		424
Revenues from alternative revenue programs		65		(12)
Operating revenues from affiliates		3		7
Total operating revenues		1,257		1,154
Operating expenses
Purchased power		343		285
Purchased fuel		149		151
Purchased power from affiliate		—		18
Operating and maintenance		168		167
Operating and maintenance from affiliates		54		51
Depreciation and amortization		167		171
Taxes other than income taxes		83		76
Total operating expenses		964		919

Operating income		293		235
Other income and (deductions)
Interest expense, net		(44)		(35)
Other, net		3		7
Total other income and (deductions)		(41)		(28)
Income before income taxes		252		207
Income taxes		52		9
Net income		$	200	$	198
Comprehensive income		$	200	$	198

See the Combined Notes to Consolidated Financial Statements

BALTIMORE GAS AND ELECTRIC COMPANY

STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended March 31,
(In millions)	2023		2022
Cash flows from operating activities
Net income	$	200	$	198
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization	167		171

Deferred income taxes and amortization of investment tax credits	24		5

Other non-cash operating activities	(32)		44
Changes in assets and liabilities:
Accounts receivable	43		(80)
Receivables from and payables to affiliates, net	(3)		(2)
Inventories	62		32
Accounts payable and accrued expenses	(96)		(30)
Collateral (paid) received, net	(22)		30
Income taxes	29		4
Regulatory assets and liabilities, net	(31)		(8)
Pension and non-pension postretirement benefit contributions	(8)		(56)
Other assets and liabilities	(24)		(31)
Net cash flows provided by operating activities	309		277
Cash flows from investing activities
Capital expenditures	(350)		(303)

Other investing activities	3		3
Net cash flows used in investing activities	(347)		(300)
Cash flows from financing activities
Changes in short-term borrowings	(165)		120




Dividends paid on common stock	(80)		(76)
Contributions from parent	237		—
Other financing activities	—		(1)
Net cash flows (used in) provided by financing activities	(8)		43
(Decrease) increase in cash, restricted cash, and cash equivalents	(46)		20
Cash, restricted cash, and cash equivalents at beginning of period	67		55
Cash, restricted cash, and cash equivalents at end of period	$	21	$	75

Supplemental cash flow information
Decrease in capital expenditures not paid	$	(70)	$	(32)

See the Combined Notes to Consolidated Financial Statements

BALTIMORE GAS AND ELECTRIC COMPANY

BALANCE SHEETS

(Unaudited)


(In millions)	March 31, 2023		December 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	20	$	43
Restricted cash and cash equivalents	1		24
Accounts receivable
Customer accounts receivable	581		617
Customer allowance for credit losses	(73)		(54)
Customer accounts receivable, net	508		563
Other accounts receivable	128		132
Other allowance for credit losses	(12)		(10)
Other accounts receivable, net	116		122




Inventories, net
Fossil fuel	23		91
Materials and supplies	71		65
Prepaid utility taxes	49		52
Regulatory assets	237		177

Other	13		13
Total current assets	1,038		1,150
Property, plant, and equipment (net of accumulated depreciation and amortization of $4,658 and $4,583 as of March 31, 2023 and December 31, 2022, respectively)	11,493		11,338
Deferred debits and other assets
Regulatory assets	533		527
Investments	9		7


Prepaid pension asset	280		291

Other	58		37
Total deferred debits and other assets	880		862
Total assets	$	13,411	$	13,350

See the Combined Notes to Consolidated Financial Statements

BALTIMORE GAS AND ELECTRIC COMPANY

BALANCE SHEETS

(Unaudited)


(In millions)	March 31, 2023		December 31, 2022
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Short-term borrowings	$	243	$	408
Long-term debt due within one year	300		300
Accounts payable	310		462
Accrued expenses	174		159
Payables to affiliates	37		39
Customer deposits	107		105
Regulatory liabilities	61		47


Other	34		55
Total current liabilities	1,266		1,575
Long-term debt	3,908		3,907
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits	1,878		1,832
Regulatory liabilities	791		816
Asset retirement obligations	30		30
Non-pension postretirement benefits obligations	161		166



Other	84		88
Total deferred credits and other liabilities	2,944		2,932
Total liabilities	8,118		8,414
Commitments and contingencies
Shareholder's equity
Common stock	3,098		2,861

Retained earnings	2,195		2,075


Total shareholder's equity	5,293		4,936


Total liabilities and shareholder's equity	$	13,411	$	13,350

See the Combined Notes to Consolidated Financial Statements

BALTIMORE GAS AND ELECTRIC COMPANY

STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY

(Unaudited)


	Three Months Ended March 31, 2023
(In millions)	Common Stock		Retained Earnings		Total Shareholder's Equity
Balance, December 31, 2022	$	2,861	$	2,075	$	4,936
Net income	—		200		200
Common stock dividends	—		(80)		(80)
Contributions from parent	237		—		237
Balance, March 31, 2023	$	3,098	$	2,195	$	5,293









	Three Months Ended March 31, 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

See the Combined Notes to Consolidated Financial Statements

PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,
(In millions)	2023		2022
Operating revenues
Electric operating revenues	$	1,371	$	1,323
Natural gas operating revenues	97		83
Revenues from alternative revenue programs	65		(5)
Operating revenues from affiliates	3		3
Total operating revenues	1,536		1,404
Operating expenses
Purchased power	572		487
Purchased fuel	55		42
Purchased power from affiliate	—		50
Operating and maintenance	267		248
Operating and maintenance from affiliates	42		51
Depreciation and amortization	241		218
Taxes other than income taxes	120		119
Total operating expenses	1,297		1,215


Operating income	239		189
Other income and (deductions)
Interest expense, net	(76)		(69)

Other, net	26		17
Total other income and (deductions)	(50)		(52)
Income before income taxes	189		137
Income taxes	34		7

Net income	$	155	$	130








Comprehensive income	$	155	$	130

See the Combined Notes to Consolidated Financial Statements

PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended March 31,
(In millions)	2023		2022
Cash flows from operating activities
Net income	$	155	$	130
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	241		218


Deferred income taxes and amortization of investment tax credits	13		2

Other non-cash operating activities	(7)		35
Changes in assets and liabilities:
Accounts receivable	98		(21)
Receivables from and payables to affiliates, net	—		(51)
Inventories	4		7
Accounts payable and accrued expenses	(88)		(23)

Collateral (paid) received, net	(189)		37
Income taxes	20		5
Regulatory assets and liabilities, net	27		(18)
Pension and non-pension postretirement benefit contributions	(7)		(67)
Other assets and liabilities	(11)		(22)
Net cash flows provided by operating activities	256		232
Cash flows from investing activities
Capital expenditures	(561)		(409)




Other investing activities	8		2
Net cash flows used in investing activities	(553)		(407)
Cash flows from financing activities
Changes in short-term borrowings	(414)		(468)


Issuance of long-term debt	450		700

Changes in Exelon intercompany money pool	8		39



Distributions to member	(112)		(102)
Contributions from member	405		704


Other financing activities	(17)		(9)
Net cash flows provided by financing activities	320		864
Increase in cash, restricted cash, and cash equivalents	23		689
Cash, restricted cash, and cash equivalents at beginning of period	373		213
Cash, restricted cash, and cash equivalents at end of period	$	396	$	902

Supplemental cash flow information
Decrease in capital expenditures not paid	$	(76)	$	(55)

See the Combined Notes to Consolidated Financial Statements

PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)


(In millions)	March 31, 2023		December 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	367	$	198
Restricted cash and cash equivalents	29		175
Accounts receivable
Customer accounts receivable	650		734
Customer allowance for credit losses	(112)		(109)
Customer accounts receivable, net	538		625
Other accounts receivable	280		300
Other allowance for credit losses	(50)		(46)
Other accounts receivable, net	230		254

Receivables from affiliates	2		2


Inventories, net
Fossil fuel	5		18
Materials and supplies	245		236


Regulatory assets	439		455

Other	68		96
Total current assets	1,923		2,059
Property, plant, and equipment (net of accumulated depreciation and amortization of $2,757 and $2,618 as of March 31, 2023 and December 31, 2022, respectively)	18,003		17,686
Deferred debits and other assets
Regulatory assets	1,579		1,610
Goodwill	4,005		4,005
Investments	139		138


Prepaid pension asset	332		353


Other	227		231
Total deferred debits and other assets	6,282		6,337
Total assets	$	26,208	$	26,082

See the Combined Notes to Consolidated Financial Statements

PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)


(In millions)	March 31, 2023		December 31, 2022
LIABILITIES AND MEMBER'S EQUITY
Current liabilities
Short-term borrowings	$	—	$	414
Long-term debt due within one year	998		591
Accounts payable	634		771
Accrued expenses	252		260
Payables to affiliates	66		66
Borrowings from Exelon intercompany money pool	52		44

Customer deposits	92		88
Regulatory liabilities	69		76
Unamortized energy contract liabilities	9		10

PPA termination obligation	87		87
Other	149		330
Total current liabilities	2,408		2,737
Long-term debt	7,555		7,529
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits	2,934		2,895
Regulatory liabilities	976		1,011
Asset retirement obligations	59		59
Non-pension postretirement benefit obligations	46		50




Unamortized energy contract liabilities	32		35
Other	520		536
Total deferred credits and other liabilities	4,567		4,586
Total liabilities	14,530		14,852
Commitments and contingencies

Member's equity
Membership interest	11,987		11,582

Undistributed losses	(309)		(352)

Total member's equity	11,678		11,230
Total liabilities and member's equity	$	26,208	$	26,082

See the Combined Notes to Consolidated Financial Statements

PEPCO HOLDINGS LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CHANGES IN MEMBER'S EQUITY

(Unaudited)


	Three Months Ended March 31, 2023
(In millions)	Membership Interest		Undistributed (Losses)/Gains		Total Member's Equity
Balance, December 31, 2022	$	11,582	$	(352)	$	11,230
Net income	—		155		155
Distributions to member	—		(112)		(112)
Contributions from member	405		—		405
Balance, March 31, 2023	$	11,987	$	(309)	$	11,678


	Three Months Ended March 31, 2022
(In millions)	Membership Interest		Undistributed (Losses)/Gains		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

See the Combined Notes to Consolidated Financial Statements

POTOMAC ELECTRIC POWER COMPANY

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,
(In millions)	2023		2022
Operating revenues
Electric operating revenues	$	670	$	620
Revenues from alternative revenue programs	39		(7)
Operating revenues from affiliates	1		1
Total operating revenues	710		614
Operating expenses
Purchased power	258		174
Purchased power from affiliate	—		39
Operating and maintenance	93		73
Operating and maintenance from affiliates	57		58
Depreciation and amortization	108		108
Taxes other than income taxes	94		95
Total operating expenses	610		547



Operating income	100		67
Other income and (deductions)
Interest expense, net	(39)		(36)

Other, net	16		13
Total other income and (deductions)	(23)		(23)
Income before income taxes	77		44
Income taxes	12		(2)

Net income	$	65	$	46










Comprehensive income	$	65	$	46

See the Combined Notes to Consolidated Financial Statements

POTOMAC ELECTRIC POWER COMPANY

STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended March 31,
(In millions)	2023		2022
Cash flows from operating activities
Net income	$	65	$	46
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization	108		108

Deferred income taxes and amortization of investment tax credits	3		(2)

Other non-cash operating activities	(10)		12
Changes in assets and liabilities:
Accounts receivable	52		(2)
Receivables from and payables to affiliates, net	3		(25)
Inventories	(3)		—
Accounts payable and accrued expenses	(27)		5
Collateral (paid) received, net	(25)		1
Income taxes	8		1
Regulatory assets and liabilities, net	(3)		(7)
Pension and non-pension postretirement benefit contributions	(4)		(5)
Other assets and liabilities	11		(12)
Net cash flows provided by operating activities	178		120
Cash flows from investing activities
Capital expenditures	(264)		(218)




Other investing activities	8		1
Net cash flows used in investing activities	(256)		(217)
Cash flows from financing activities
Changes in short-term borrowings	(299)		(175)
Issuance of long-term debt	250		400


Dividends paid on common stock	(48)		(42)
Contributions from parent	243		387


Other financing activities	(14)		(5)
Net cash flows provided by financing activities	132		565
Increase in cash, restricted cash, and cash equivalents	54		468
Cash, restricted cash, and cash equivalents at beginning of period	99		68
Cash, restricted cash, and cash equivalents at end of period	$	153	$	536

Supplemental cash flow information
Decrease in capital expenditures not paid	$	(43)	$	(36)

See the Combined Notes to Consolidated Financial Statements

POTOMAC ELECTRIC POWER COMPANY

BALANCE SHEETS

(Unaudited)


(In millions)	March 31, 2023		December 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	126	$	45
Restricted cash and cash equivalents	27		54
Accounts receivable
Customer accounts receivable	312		351
Customer allowance for credit losses	(49)		(47)
Customer accounts receivable, net	263		304
Other accounts receivable	166		180
Other allowance for credit losses	(28)		(25)
Other accounts receivable, net	138		155

Receivables from affiliates	1		—


Inventories, net	138		135



Regulatory assets	248		235

Other	33		53
Total current assets	974		981
Property, plant, and equipment (net of accumulated depreciation and amortization of $4,118 and $4,067 as of March 31, 2023 and December 31, 2022, respectively)	8,955		8,794
Deferred debits and other assets
Regulatory assets	424		437
Investments	121		119



Prepaid pension asset	266		273

Other	55		53
Total deferred debits and other assets	866		882
Total assets	$	10,795	$	10,657

See the Combined Notes to Consolidated Financial Statements

POTOMAC ELECTRIC POWER COMPANY

BALANCE SHEETS

(Unaudited)


(In millions)	March 31, 2023		December 31, 2022
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Short-term borrowings	$	—	$	299
Long-term debt due within one year	405		4
Accounts payable	311		382
Accrued expenses	131		125
Payables to affiliates	38		34



Customer deposits	41		39
Regulatory liabilities	5		6
Merger related obligation	25		26

Other	75		93
Total current liabilities	1,031		1,008
Long-term debt	3,590		3,747

Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits	1,398		1,382
Regulatory liabilities	435		455
Asset retirement obligations	39		39






Other	260		244
Total deferred credits and other liabilities	2,132		2,120
Total liabilities	6,753		6,875
Commitments and contingencies
Shareholder's equity
Common stock	3,010		2,767


Retained earnings	1,032		1,015

Total shareholder's equity	4,042		3,782
Total liabilities and shareholder's equity	$	10,795	$	10,657

See the Combined Notes to Consolidated Financial Statements

POTOMAC ELECTRIC POWER COMPANY

STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY

(Unaudited)


	Three Months Ended March 31, 2023
(In millions)	Common Stock		Retained Earnings		Total Shareholder's Equity
Balance, December 31, 2022	$	2,767	$	1,015	$	3,782
Net income	—		65		65
Common stock dividends	—		(48)		(48)
Contributions from parent	243		—		243
Balance, March 31, 2023	$	3,010	$	1,032	$	4,042


	Three Months Ended March 31, 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

See the Combined Notes to Consolidated Financial Statements

DELMARVA POWER & LIGHT COMPANY

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,
(In millions)	2023		2022
Operating revenues
Electric operating revenues	$	366	$	348
Natural gas operating revenues	97		83
Revenues from alternative revenue programs	9		(1)
Operating revenues from affiliates	2		1
Total operating revenues	474		431
Operating expenses
Purchased power	166		137
Purchased fuel	55		42
Purchased power from affiliate	—		10
Operating and maintenance	46		51
Operating and maintenance from affiliates	41		42
Depreciation and amortization	60		57
Taxes other than income taxes	20		18
Total operating expenses	388		357



Operating income	86		74
Other income and (deductions)
Interest expense, net	(17)		(16)
Other, net	3		2
Total other income and (deductions)	(14)		(14)
Income before income taxes	72		60
Income taxes	12		4

Net income	$	60	$	56
Comprehensive income	$	60	$	56

See the Combined Notes to Consolidated Financial Statements

DELMARVA POWER & LIGHT COMPANY

STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended March 31,
(In millions)	2023		2022
Cash flows from operating activities
Net income	$	60	$	56
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization	60		57

Deferred income taxes and amortization of investment tax credits	3		5

Other non-cash operating activities	(1)		9
Changes in assets and liabilities:
Accounts receivable	23		(17)
Receivables from and payables to affiliates, net	4		(17)
Inventories	10		8
Accounts payable and accrued expenses	(16)		15
Collateral (paid) received, net	(120)		30
Income taxes	9		(1)
Regulatory assets and liabilities, net	27		—
Pension and non-pension postretirement benefit contributions	—		(1)
Other assets and liabilities	1		3
Net cash flows provided by operating activities	60		147
Cash flows from investing activities
Capital expenditures	(134)		(103)



Other investing activities	—		1
Net cash flows used in investing activities	(134)		(102)
Cash flows from financing activities
Changes in short-term borrowings	(115)		(149)
Issuance of long-term debt	125		125


Dividends paid on common stock	(42)		(41)
Contributions from parent	99		144
Other financing activities	(2)		(2)
Net cash flows provided by financing activities	65		77
(Decrease) increase in cash, restricted cash, and cash equivalents	(9)		122
Cash, restricted cash, and cash equivalents at beginning of period	152		71
Cash, restricted cash, and cash equivalents at end of period	$	143	$	193

Supplemental cash flow information
Decrease in capital expenditures not paid	$	(3)	$	(8)

See the Combined Notes to Consolidated Financial Statements

DELMARVA POWER & LIGHT COMPANY

BALANCE SHEETS

(Unaudited)


(In millions)	March 31, 2023		December 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	142	$	31
Restricted cash and cash equivalents	1		121
Accounts receivable
Customer accounts receivable	182		204
Customer allowance for credit losses	(26)		(21)
Customer accounts receivable, net	156		183
Other accounts receivable	48		52
Other allowance for credit losses	(8)		(7)
Other accounts receivable, net	40		45


Inventories, net
Fossil fuel	5		18
Materials and supplies	61		58


Regulatory assets	63		80

Other	30		37
Total current assets	498		573
Property, plant, and equipment (net of accumulated depreciation and amortization of $1,811 and $1,772 as of March 31, 2023 and December 31, 2022, respectively)	4,902		4,820
Deferred debits and other assets
Regulatory assets	202		202


Prepaid pension asset	148		153
Other	54		54
Total deferred debits and other assets	404		409
Total assets	$	5,804	$	5,802

See the Combined Notes to Consolidated Financial Statements

DELMARVA POWER & LIGHT COMPANY

BALANCE SHEETS

(Unaudited)


(In millions)	March 31, 2023		December 31, 2022
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Short-term borrowings	$	—	$	115
Long-term debt due within one year	584		584
Accounts payable	148		172
Accrued expenses	51		41
Payables to affiliates	26		22

Customer deposits	30		29
Regulatory liabilities	49		44
Other	17		136
Total current liabilities	905		1,143
Long-term debt	1,477		1,354
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits	882		869
Regulatory liabilities	374		380
Asset retirement obligations	13		13

Non-pension postretirement benefits obligations	9		9
Other	77		84
Total deferred credits and other liabilities	1,355		1,355
Total liabilities	3,737		3,852
Commitments and contingencies
Shareholder's equity
Common stock	1,455		1,356

Retained earnings	612		594
Total shareholder's equity	2,067		1,950
Total liabilities and shareholder's equity	$	5,804	$	5,802

See the Combined Notes to Consolidated Financial Statements

DELMARVA POWER & LIGHT COMPANY

STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY

(Unaudited)


	Three Months Ended March 31, 2023
(In millions)	Common Stock		Retained Earnings		Total Shareholder's Equity
Balance, December 31, 2022	$	1,356	$	594	$	1,950
Net income	—		60		60
Common stock dividends	—		(42)		(42)
Contributions from parent	99		—		99
Balance, March 31, 2023	$	1,455	$	612	$	2,067


	Three Months Ended March 31, 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

See the Combined Notes to Consolidated Financial Statements

ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,
(In millions)	2023		2022
Operating revenues
Electric operating revenues	$	335	$	345
Revenues from alternative revenue programs	17		3
Operating revenues from affiliates	1		1
Total operating revenues	353		349
Operating expenses
Purchased power	148		176
Purchased power from affiliate	—		2
Operating and maintenance	44		47
Operating and maintenance from affiliates	37		37
Depreciation and amortization	67		47
Taxes other than income taxes	2		2
Total operating expenses	298		311



Operating income	55		38
Other income and (deductions)
Interest expense, net	(16)		(14)

Other, net	5		3
Total other income and (deductions)	(11)		(11)
Income before income taxes	44		27
Income taxes	11		1

Net income	$	33	$	26
Comprehensive income	$	33	$	26

See the Combined Notes to Consolidated Financial Statements

ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended March 31,
(In millions)	2023		2022
Cash flows from operating activities
Net income	$	33	$	26
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation and amortization	67		47
Deferred income taxes and amortization of investment tax credits	6		1
Other non-cash operating activities	(9)		2
Changes in assets and liabilities:
Accounts receivable	24		(1)
Receivables from and payables to affiliates, net	(1)		(6)
Inventories	(3)		(1)
Accounts payable and accrued expenses	(15)		(17)
Collateral paid, net	(44)		(3)
Income taxes	5		—
Regulatory assets and liabilities, net	3		(3)
Pension and non-pension postretirement benefit contributions	(1)		(7)
Other assets and liabilities	(21)		6
Net cash flows provided by operating activities	44		44
Cash flows from investing activities
Capital expenditures	(161)		(87)



Net cash flows used in investing activities	(161)		(87)
Cash flows from financing activities
Changes in short-term borrowings	—		(144)


Issuance of long-term debt	75		175


Dividends paid on common stock	(21)		(19)
Contributions from parent	63		173
Other financing activities	(1)		(3)
Net cash flows provided by financing activities	116		182
(Decrease) increase in cash and cash equivalents	(1)		139
Cash and cash equivalents at beginning of period	72		29
Cash and cash equivalents at end of period	$	71	$	168

Supplemental cash flow information
Decrease in capital expenditures not paid	$	(30)	$	(10)

See the Combined Notes to Consolidated Financial Statements

ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY

CONSOLIDATED BALANCE SHEETS

(Unaudited)


(In millions)	March 31, 2023		December 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	71	$	72

Accounts receivable
Customer accounts receivable	156		179
Customer allowance for credit losses	(37)		(41)
Customer accounts receivable, net	119		138
Other accounts receivable	64		70
Other allowance for credit losses	(14)		(14)
Other accounts receivable, net	50		56

Receivables from affiliates	2		1

Inventories, net	46		43



Regulatory assets	114		130
Other	5		3
Total current assets	407		443
Property, plant, and equipment (net of accumulated depreciation and amortization of $1,583 and $1,551 as of March 31, 2023 and December 31, 2022, respectively)	4,067		3,990
Deferred debits and other assets
Regulatory assets	492		494



Prepaid pension asset	14		18

Other	33		34
Total deferred debits and other assets	539		546
Total assets	$	5,013	$	4,979

See the Combined Notes to Consolidated Financial Statements

ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY

CONSOLIDATED BALANCE SHEETS

(Unaudited)


(In millions)	March 31, 2023		December 31, 2022
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities

Long-term debt due within one year	$	3	$	3
Accounts payable	167		206
Accrued expenses	46		47
Payables to affiliates	26		26



Customer deposits	21		21
Regulatory liabilities	15		26
PPA termination obligation	87		87
Other	12		58
Total current liabilities	377		474
Long-term debt	1,828		1,754
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits	742		734
Regulatory liabilities	148		156


Non-pension postretirement benefit obligations	7		8



Other	83		100
Total deferred credits and other liabilities	980		998
Total liabilities	3,185		3,226
Commitments and contingencies
Shareholder's equity
Common stock	1,828		1,765
Retained earnings (deficit)	—		(12)

Total shareholder's equity	1,828		1,753
Total liabilities and shareholder's equity	$	5,013	$	4,979

See the Combined Notes to Consolidated Financial Statements

ATLANTIC CITY ELECTRIC COMPANY AND SUBSIDIARY COMPANY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY

(Unaudited)


	Three Months Ended March 31, 2023
(In millions)	Common Stock		Retained (Deficit) Earnings		Total Shareholder's Equity
Balance, December 31, 2022	$	1,765	$	(12)	$	1,753
Net income	—		33		33
Common stock dividends	—		(21)		(21)
Contributions from parent	63		—		63
Balance, March 31, 2023	$	1,828	$	—	$	1,828


	Three Months Ended March 31, 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

See the Combined Notes to Consolidated Financial Statements

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 transmission and distribution 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, finance, 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.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Note 1 — Significant Accounting Policies

The accompanying consolidated financial statements as of March 31, 2023 and for the three months ended March 31, 2023 and 2022 are unaudited but, in the opinion of the management of each Registrant include all adjustments that are considered necessary for a fair statement of the Registrants’ respective financial statements in accordance with GAAP. All adjustments are of a normal, recurring nature, except as otherwise disclosed. The December 31, 2022 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, 2023. 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, met 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 the three months ended March 31, 2022. 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. 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 contributed its equity ownership interest in Generation to Constellation. Exelon no longer retains any equity ownership interest in Generation or Constellation. See Note 2 — Discontinued Operations of the 2022 Form 10-K 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.
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 March 31, 2023, the amounts Exelon billed Constellation and Constellation billed Exelon for these services were $50 million recorded in Other income, net and $6 million recorded in Operating and maintenance expense, respectively. For the period from February 1, 2022 to March 31, 2022, the amounts Exelon billed Constellation and Constellation billed Exelon for these services were $56 million recorded in Other income, net and $9 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 7 — Income Taxes for additional information.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 2 — Discontinued Operations

In addition, the Utility Registrants will continue to incur expenses from transactions with Constellation 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 Constellation to provide a portion of ComEd’s electric supply requirements. ComEd also purchased RECs and ZECs from Constellation.
PECO received electric supply from Constellation under contracts executed through PECO’s competitive procurement process. In addition, PECO had a ten-year agreement with Constellation to sell solar AECs.
BGE received a portion of its energy requirements from Constellation under its MDPSC-approved market-based SOS and gas commodity programs.
Pepco received electric supply from Constellation under contracts executed through Pepco’s competitive procurement process approved by the MDPSC and DCPSC.
DPL received a portion of its energy requirements from Constellation under its MDPSC and DEPSC approved market-based SOS commodity programs.
ACE received electric supply from Constellation under contracts executed through ACE’s competitive procurement process approved by the NJBPU.

ComEd and PECO also have receivables with Constellation for estimated excess funds at the end of decommissioning the Regulatory Agreement Units, such amounts are due back to ComEd and PECO, as applicable, for payment to their respective customers. See Note 3 — Regulatory Matters and Note 23 — Related Party Transactions of the 2022 Form 10-K 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.

There were no results from discontinued operations for the three months ended March 31, 2023. 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 March 31, 2022.

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 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.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 2 — Discontinued Operations


	Three Months Ended March 31,
	2022
Operating revenues
Competitive business revenues	$	1,855
Competitive business revenues from affiliates	161
Total operating revenues	2,016
Operating expenses
Competitive businesses purchased power and fuel	1,138

Operating and maintenance(a)	371

Depreciation and amortization	94
Taxes other than income taxes	44
Total operating expenses	1,647
Gain on sales of assets and businesses	10
Operating income	379
Other income and (deductions)
Interest expense, net	(20)

Other, net	(281)
Total other (deductions) and income	(301)
Income before income taxes	78
Income taxes	(40)
Equity in losses of unconsolidated affiliates	(1)
Net income	117
Net income attributable to noncontrolling interests	1
Net income from discontinued operations	$	116

(a)Includes transaction and transition costs related to the separation of $52 million for the three months ended March 31, 2022.

There were no assets or liabilities of discontinued operations included in Exelon's Consolidated Balance Sheet as of March 31, 2023 and December 31, 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 year ended December 31, 2022. Refer to the Distribution of Constellation line in Exelon's Consolidated Statement of Changes in Shareholders' Equity for further information.

There were no discontinued operations included within Exelon’s Consolidated Statements of Cash Flows for the three months ended March 31, 2023. 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 three months ended March 31, 2022.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 2 — Discontinued Operations


	Three Months Ended March 31,
	2022
Non-cash items included in net income from discontinued operations:
Depreciation, amortization, and accretion, including nuclear fuel and energy contract amortization	$	207

Loss on sales of assets and businesses	9
Deferred income taxes and amortization of investment tax credits	(143)
Net fair value changes related to derivatives	(59)
Net realized and unrealized losses on NDT fund investments	205
Net unrealized losses on equity investments	16
Other decommissioning-related activity	36
Cash flows from investing activities:
Capital expenditures	(227)
Collection of DPP	169
Supplemental cash flow information:
Decrease in capital expenditures not paid	(128)
Increase in DPP	348
Increase in PP&E related to ARO update	335

3. Regulatory Matters (All Registrants)

As discussed in Note 3 — Regulatory Matters of the 2022 Form 10-K, the Registrants are involved in rate and regulatory proceedings at FERC and their state commissions. The following discusses developments in 2023 and updates to the 2022 Form 10-K.

Distribution Base Rate Case Proceedings

The following tables show the completed and pending distribution base rate case proceedings in 2023.

Completed Distribution Base Rate Case Proceedings

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 3 — Regulatory Matters


Registrant/Jurisdiction	Filing Date	Service	Requested Revenue Requirement Increase		Approved Revenue Requirement Increase			Approved ROE		Approval Date	Rate Effective Date
ComEd - Illinois(a)	April 15, 2022	Electric	$	199	$	199		7.85	%	November 17, 2022	January 1, 2023
PECO - Pennsylvania	March 31, 2022	Natural Gas	82		55			N/A(b)		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 - Maryland(d)	October 26, 2020 (amended March 31, 2021)	Electric	104		52			9.55	%	June 28, 2021	June 28, 2021
DPL - Maryland(e)	May 19, 2022	Electric	38		29			9.60	%	December 14, 2022	January 1, 2023

(a)ComEd's 2023 approved revenue requirement above 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 monthly average 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 monthly yields on 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. See discussion of CEJA below for details on the transition away from the electric distribution formula rate.

(b)The PECO natural gas base rate case proceeding was resolved through a settlement agreement, 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 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 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.

(e)Reflects a three-year cumulative multi-year plan for January 1, 2023 through December 31, 2025. The MDPSC awarded DPL electric incremental revenue requirement increases of $17 million, $6 million, and $6 million for 2023, 2024, and 2025, respectively.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 3 — Regulatory Matters

Pending Distribution Base Rate Case Proceedings


Registrant/Jurisdiction		Filing Date		Service	Requested Revenue Requirement Increase		Requested ROE	Expected Approval Timing
ComEd - Illinois(a)		January 17, 2023		Electric	$	1,472	10.50% to 10.65%	Fourth quarter of 2023
ComEd - Illinois(b)		April 21, 2023		Electric	247		8.91%	Fourth quarter of 2023
BGE - Maryland(c)		February 17, 2023		Electric	313		10.40%	Fourth quarter of 2023
Natural Gas	289		10.40%
Pepco - District of Columbia(d)		April 13, 2023		Electric	191		10.50%	First quarter of 2024
DPL - Delaware(e)		December 15, 2022 (amended February 28, 2023)		Electric	48		10.50%	Second quarter of 2024
ACE - New Jersey(f)		February 15, 2023		Electric	105		10.50%	First quarter of 2024

(a)Reflects a four-year cumulative MRP for January 1, 2024 to December 31, 2027 and total requested revenue requirement increases of $877 million effective January 1, 2024, $175 million effective January 1, 2025, $217 million effective January 1, 2026, and $203 million effective January 1, 2027, based on forecasted revenue requirements. The revenue requirement will provide for a weighted average debt and equity return on distribution rate base of 7.43% in 2024, 7.50% in 2025, 7.62% in 2026, and 7.70% in 2027, inclusive of an allowed ROE of 10.50% in 2024, 10.55% in 2025, 10.60% in 2026, and 10.65% in 2027. The requested revenue requirements are based on capital structures that reflect between 50.58% and 51.19% common equity. ComEd’s MRP also includes a proposed rate phase-in to defer approximately $307 million of the $877 million year-over-year increase for 2024 revenue from 2024 to 2026.

(b)On April 21, 2023, ComEd filed its proposed Delivery Reconciliation Amount of $247 million under Rider Delivery Service Pricing Reconciliation (Rider DSPR) which allows for the reconciliation of the revenue requirement in effect in the final years in which formula rates are determined and until such time as new rates are established under ComEd’s approved MRP. The 2023 filing reconciles the delivery service rates in effect in 2022 with the actual delivery service costs incurred in 2022. Final order is expected by December 2023, and the reconciliation amount will be in customer rates beginning January 1, 2024.

(c)Reflects a three-year cumulative multi-year plan for January 1, 2024 through December 31, 2026 submitted to the MDPSC. Inclusive of the proposed acceleration of remaining electric tax benefits in 2024 and 2025, and remaining gas tax benefits in 2024, BGE requested total electric revenue requirement increases of $85 million, $103 million, and $125 million in 2024, 2025, and 2026, respectively, and natural gas revenue requirement increases of $158 million, $77 million, and $54 million in 2024, 2025, and 2026, respectively. Requested revenue requirement increases will be used to recover capital investments designed to increase the resilience of the electric and gas distribution systems and support Maryland’s climate and regulatory initiatives. The 2021 and 2022 reconciliation amounts are not included in the requested revenue requirement increase, as BGE is proposing that these amounts be recovered through the separate electric and gas riders in 2024. The 2021 reconciliation amounts are $11 million and $7 million for electric and gas, respectively, and the 2022 reconciliation amounts are $44 million and $15 million for electric and gas, respectively.

(d)Reflects a three-year cumulative multi-year plan for January 1, 2024 through December 31, 2026 submitted to the DCPSC. Pepco requested total electric revenue requirement increases of $117 million, $37 million, and $37 million in 2024, 2025, and 2026, respectively. Requested revenue requirement increases will be used to recover capital investments designed to advance system-readiness and support the District of Columbia’s climate and clean energy goals.

(e)The rates will go into effect on July 15, 2023, subject to refund.

(f)Requested increases are before New Jersey sales and use tax. ACE intends to put rates into effect on November 17, 2023, subject to refund.

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 BGE is based on prior year actual costs and current year projected capital additions, accumulated depreciation, depreciation and amortization expense, and accumulated deferred income

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 3 — Regulatory Matters

taxes. The update for BGE also reconciles any differences between the actual costs and actual revenues for the calendar year (annual reconciliation).

For 2023, the following increases/(decreases) were included in BGE's annual electric transmission formula rate updates. ComEd, PECO, Pepco, DPL, and ACE intend to file by the required deadline for the annual update.


Registrant(a)	Initial Revenue Requirement Increase		Annual Reconciliation Decrease		Total Revenue Requirement Increase			Allowed Return on Rate Base(b)		Allowed ROE(c)


BGE	$	19	$	(12)	$	4	(d)	7.34	%	10.50	%

(a)All rates are effective June 1, 2023 - May 31, 2024, subject to review by interested parties pursuant to review protocols of tariffs.

(b)Represents the weighted average debt and equity return on transmission rate bases.

(c)The rate of return on common equity 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 $3 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 MRP 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, and received approval for, its last performance-based electric distribution formula rate update filing under EIMA in 2022; those rates are in effect throughout 2023.

On February 3, 2022, the ICC approved a tariff that establishes the process under which ComEd will reconcile its 2022 and 2023 rate year revenue requirements with actual costs. Those reconciliation amounts will be determined using the same process as were used for prior reconciliations under the performance-based electric distribution formula rate. Using that process, for the rate years 2022 and 2023 ComEd will ultimately collect revenues from customers reflecting each year’s actual recoverable costs, year-end rate base, and a weighted average debt and equity return on distribution rate base, with the ROE component based on the annual average of the monthly yields of the 30-year U.S. Treasury bonds plus 580 basis points. In April 2023, ComEd filed its first petition with the ICC to reconcile its 2022 actual costs with the approved revenue requirement that was in effect in 2022. The rate year 2023 reconciliation will be filed in 2024.

Beginning in 2024, 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 authorized by CEJA. On January 17, 2023, ComEd filed a petition with the ICC seeking approval of a MRP for 2024-2027. The MRP supports a multi-year grid plan (Grid Plan), also filed on January 17, covering planned investments on the electric distribution system within ComEd’s service area through 2027. Costs incurred during each year of the MRP 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. The reconciliation is subject to adjustment for certain costs, including a limitation on recovery of costs that are more than 105% of certain costs in the previously approved MRP revenue requirement, absent a modification of the

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 3 — Regulatory Matters

rate plan itself. 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. The ICC must issue its decision on both the MRP and Grid Plan by mid-December 2023, for rates to begin with the January 2024 billing cycle.

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 November 10, 2022, the ICC granted ComEd's application for rehearing, in part. On April 5, the ICC issued its final order on rehearing for the performance and tracking metrics proceeding, in which the ICC declined to adopt ComEd’s proposed modifications to the reliability and peak load reduction performance metrics. ComEd is determining how to implement the performance metrics, which take effect on January 1, 2024. 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. 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 $1,118 million as of March 31, 2023 for the difference between customer credits issued and the credit to be received from the participating nuclear-powered generating facilities.

Under CEJA, the costs of procuring CMCs, including carrying costs, will be recovered through a rider, the Rider Carbon-Free Resource Adjustment (Rider CFRA). The Rider CFRA provides for an annual reconciliation and true-up to actual costs incurred or credits received by ComEd to purchase CMCs, with any difference to be credited to or collected from ComEd’s retail customers in subsequent periods. The difference between the net payments to (or receivables from) ComEd ratepayers and the credits received by ComEd to purchase CMCs is recorded to Purchased Power expense with an offset to the regulatory asset (or regulatory liability). On December 21, 2022, ComEd filed a supplemental statement to the Rider CFRA proposing that the company recover costs or provide credits faster than the tariff allows, implement monthly reconciliations, and allow the Company to adjust Rider CFRA rates based not only on anticipated differences but also past payments or credits. The ICC approved the proposal on January 19, 2023.

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 (EV), 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. On November 10, 2022, in responses to a Staff motion, the ICC approved an interim order dismissing from ComEd’s Beneficial Electrification Plan certain rebates (rebates to support residential customers’ purchase of EVs; and rebates to ComEd’s commercial and industrial customers to support the installation of EV chargers). However, the ICC found that building electrification measures were properly within the scope of beneficial electrification, in line with ComEd’s proposal. The ICC also adopted ComEd’s position regarding the rate impact of spending associated with EV related infrastructure. On November 21, 2022, ComEd filed an application for rehearing of the interim order, which the ICC denied. On December 9, 2022, the Office of the Illinois Attorney General (AG) also

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 3 — Regulatory Matters

sought rehearing. On December 15, 2022, ComEd filed an appeal of the ICC’s interim order and the denial of rehearing with the Illinois Appellate Court. That appeal has been stayed pending the ICC's disposition of the case. Also on December 15, 2022, the ICC denied the AG’s application for rehearing and the AG subsequently filed an appeal.

On March 23, 2023, the ICC issued its final order in the beneficial electrification plan docket. The order adopts the beneficial electrification plan with modifications and directs ComEd to seek cost recovery through the multi-year rate plan filing for 2024 and 2025, and the final formula rate reconciliation docket for 2023, rather than through a new rider beneficial electrification as ComEd had proposed. The order also rejects ComEd’s request for a regulatory asset. The order approves an overall annual budget of $77 million per year for each of the three years in the plan (2023 through 2025), with flexibility to roll forward unused funds to future years within the same plan period. The final order also made specific reductions to the proposed $100 million per year budget, reducing the proposed customer education and awareness budget; the portfolio budget for cross-cutting administrative support; and the light, medium, and heavy-duty EV rebate programs. The order dedicates funds for rebates related to the installation of heat pumps and the promotion of home electrification for low-income customers and those in Environmental Justice and Restore, Reinvest, and Renew designated communities. The order also requires ComEd to propose methods to minimize or exempt low-income ratepayers from the impact of its beneficial electrification plan, possibly through ComEd’s next rate design investigation. On April 18, 2023, ComEd filed an application for rehearing concerning aspects of the ICC’s order, including the approved budgets. The ICC must act on that application by May 8, 2023. On April 21, 2023 the Chicago Transit Authority and city of Chicago jointly filed an application for rehearing requesting the ICC modify the final order so the transit agencies do not pay the cost of make-ready infrastructure and to exempt transit agencies from paying the required deposit or providing a letter of credit to ComEd for the cost of make-ready infrastructure. On April 24, 2023, the AG also filed an application for rehearing on several topics, including the budget, rebate levels, retail rate cap, types of programs included in the beneficial electrification plan, compliance with the EV Act, benefit-to-cost analysis, and rate-related issues. On April 27, 2023, ICC staff filed a motion for clarification of the order’s language regarding the annual budget. The ICC will likely rule on all of the applications for rehearing and staff’s motion at their regularly scheduled May 4, 2023 regular open meeting. If the ICC denies rehearing, parties have 35 days to appeal arguments raised in their rehearing applications.

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 March 31, 2023, the $118 million liability for the contract termination fee consists of $87 million and $31 million included in Other current liabilities and Other deferred credits and other liabilities, respectively, in Exelon's Consolidated Balance Sheet. The current and noncurrent liabilities are included in PPA termination obligation and Other deferred credits and other liabilities, respectively, in PHI's and ACE's Consolidated Balance Sheets. For the three months ended March 31, 2023, ACE has paid $19 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.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 3 — Regulatory Matters

Other Federal Regulatory Matters

FERC Audit (Exelon and ComEd). The Utility Registrants are subject to periodic audits by FERC. FERC’s Division of Audits and Accounting initiated a nonpublic audit of ComEd in May 2021 evaluating ComEd’s compliance with (1) approved terms, rates and conditions of its federally regulated service; (2) accounting requirements of the Uniform System of Accounts; (3) reporting requirements of the FERC Form 1; and (4) the requirements for record retention. The audit covered the period from January 1, 2017 through August 31, 2022. On January 17 and February 21, 2023, ComEd was provided with information on a series of potential findings, including concerning ComEd's methodology regarding the allocation of certain overhead costs to capital under FERC regulations. As of March 31, 2023, ComEd has continued discussions with FERC staff and determined that a loss is probable and has recorded a liability that reflects management's best estimate. The final outcome and resolution of the findings or of the audit itself cannot be predicted and the results could be material to the Exelon and ComEd financial statements.

Regulatory Assets and Liabilities

The Utility Registrants' regulatory assets and liabilities have not changed materially since December 31, 2022, unless noted below. See Note 3 — Regulatory Matters of the 2022 Form 10-K for additional information on the specific regulatory assets and liabilities.

ComEd. Regulatory assets increased $547 million primarily due to increases of $275 million in the CMC regulatory asset, as discussed in CEJA above, and $143 million in the Electric Distribution Formula Rate Annual Reconciliations regulatory asset.

PECO. Regulatory assets increased $44 million primarily due to an increase of $48 million in the Deferred Income Taxes regulatory asset. Regulatory liabilities increased $45 million primarily due to increases of $31 million in the Electric Energy and Natural Gas Costs regulatory liability and $28 million in the Decommissioning the Regulatory Agreement Units regulatory liability.

BGE. Regulatory assets increased $66 million primarily due to an increase of $54 million in the Under-Recovered Revenue Decoupling regulatory asset.

DPL. Regulatory assets decreased $17 million primarily due to a decrease of $18 million in the Electric Energy and Natural Gas Costs regulatory asset.

ACE. Regulatory assets decreased $18 million primarily due to a decrease of $35 million in the Electric Energy Costs regulatory asset as a result of the PPA termination. Regulatory liabilities decreased $19 million primarily due to a $9 million decrease 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. PECO had no related amounts as of March 31, 2023 and December 31, 2022.


	Exelon		ComEd(a)		BGE(b)		PHI		Pepco(c)		DPL(c)		ACE(b)
March 31, 2023	$	53	$	13	$	26	$	14	$	11	$	2	$	1

December 31, 2022	57		8		28		21		18		2		1

(a)Reflects ComEd's unrecognized equity returns earned for ratemaking purposes on its 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.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 4 — Revenue from Contracts with Customers

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 2022 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 deferred credits and other 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 months ended March 31, 2023 and 2022. As of March 31, 2023 and December 31, 2022, ComEd's, PECO's, and BGE's contract liabilities were immaterial.



	Exelon(a)		PHI(a)		Pepco(a)		DPL		ACE
Balance as of December 31, 2022	$	101	$	101	$	81	$	10	$	10
Revenues recognized	(1)		(1)		(1)		—		—
Balance as of March 31, 2023	$	100	$	100	$	80	$	10	$	10





	Exelon(a)		PHI(a)		Pepco(a)		DPL		ACE
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

(a)Revenues recognized in the three months ended March 31, 2023 and 2022, were included in the contract liabilities at December 31, 2022 and 2021, 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 March 31, 2023. 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.


Year	Exelon		PHI		Pepco		DPL		ACE
2023	$	7	$	7	$	5	$	1	$	1
2024	6		6		5		—		1
2025	5		5		5		—		—
2026	5		5		5		—		—
2027 and thereafter	77		77		60		9		8
Total	$	100	$	100	$	80	$	10	$	10

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 4 — Revenue from Contracts with Customers

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 Registrants' 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, ComEd, PECO, BGE, Pepco, DPL, and ACE's CODMs evaluate the performance of and allocate resources to the segments 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 months ended March 31, 2023 and 2022 is as follows:

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 5 — Segment Information


	ComEd		PECO		BGE		PHI		Other(a)		Intersegment Eliminations		Exelon
Operating revenues(b):
2023
Electric revenues	$	1,667	$	795	$	814	$	1,436	$	—	$	(5)	$	4,707
Natural gas revenues	—		317		443		97		—		(1)		856
Shared service and other revenues	—		—		—		3		437		(440)		—
Total operating revenues	$	1,667	$	1,112	$	1,257	$	1,536	$	437	$	(446)	$	5,563
2022
Electric revenues	$	1,734	$	741	$	736	$	1,318	$	—	$	(7)	$	4,522
Natural gas revenues	—		306		418		83		—		(2)		805
Shared service and other revenues	—		—		—		3		576		(579)		—
Total operating revenues	$	1,734	$	1,047	$	1,154	$	1,404	$	576	$	(588)	$	5,327

Intersegment revenues(c):
2023	$	3	$	2	$	3	$	3	$	434	$	(445)	$	—
2022	6		1		7		3		576		(587)		6
Depreciation and amortization:
2023	$	338	$	98	$	167	$	241	$	16	$	—	$	860
2022	321		92		171		218		15		—		817
Operating expenses:
2023	$	1,256	$	902	$	964	$	1,297	$	485	$	(447)	$	4,457
2022	1,406		793		919		1,215		625		(531)		4,427
Interest expense, net:
2023	$	117	$	48	$	44	$	76	$	127	$	—	$	412
2022	100		41		35		69		93		—		338
Income (loss) from continuing operations before income taxes:
2023	$	312	$	170	$	252	$	189	$	(120)	$	—	$	803
2022	240		220		207		137		(62)		(43)		699
Income taxes:
2023	$	71	$	4	$	52	$	34	$	(27)	$	—	$	134
2022	52		14		9		7		146		(10)		218
Net income (loss) from continuing operations:
2023	$	241	$	166	$	200	$	155	$	(93)	$	—	$	669
2022	188		206		198		130		(208)		(33)		481
Capital expenditures:
2023	$	617	$	335	$	350	$	561	$	18	$	—	$	1,881
2022	617		344		303		409		22		—		1,695
Total assets:
March 31, 2023	$	40,720	$	14,738	$	13,411	$	26,208	$	6,042	$	(4,194)	$	96,925
December 31, 2022	39,661		14,502		13,350		26,082		6,014		(4,260)		95,349

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

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 5 — Segment Information

(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 15 — Supplemental Financial Information for additional information on total utility taxes.

(c)See Note 16 — Related Party Transactions for additional information on intersegment revenues.

PHI:


	Pepco		DPL		ACE		Other(a)		Intersegment Eliminations		PHI
Operating revenues(b):
2023
Electric revenues	$	710	$	377	$	353	$	—	$	(4)	$	1,436
Natural gas revenues	—		97		—		—		—		97
Shared service and other revenues	—		—		—		102		(99)		3
Total operating revenues	$	710	$	474	$	353	$	102	$	(103)	$	1,536
2022
Electric revenues	$	614	$	348	$	349	$	—	$	7	$	1,318
Natural gas revenues	—		83		—		—		—		83
Shared service and other revenues	—		—		—		107		(104)		3
Total operating revenues	$	614	$	431	$	349	$	107	$	(97)	$	1,404
Intersegment revenues(c):
2023	$	1	$	2	$	1	$	102	$	(103)	$	3
2022	1		1		1		97		(97)		3
Depreciation and amortization:
2023	$	108	$	60	$	67	$	6	$	—	$	241
2022	108		57		47		6		—		218
Operating expenses:
2023	$	610	$	388	$	298	$	104	$	(103)	$	1,297
2022	547		357		311		97		(97)		1,215
Interest expense, net:
2023	$	39	$	17	$	16	$	4	$	—	$	76
2022	36		16		14		3		—		69
Income (loss) before income taxes:
2023	$	77	$	72	$	44	$	(4)	$	—	$	189
2022	44		60		27		6		—		137
Income taxes:
2023	$	12	$	12	$	11	$	(1)	$	—	$	34
2022	(2)		4		1		4		—		7
Net income (loss):
2023	$	65	$	60	$	33	$	(3)	$	—	$	155
2022	46		56		26		2		—		130
Capital expenditures:
2023	$	264	$	134	$	161	$	2	$	—	$	561
2022	218		103		87		1		—		409
Total assets:
March 31, 2023	$	10,795	$	5,804	$	5,013	$	4,638	$	(42)	$	26,208
December 31, 2022	10,657		5,802		4,979		4,677		(33)		26,082

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

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 5 — Segment Information

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

Electric and Gas Revenue by Customer Class (Utility Registrants):

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.



	Three Months Ended March 31, 2023
Revenues from contracts with customers	ComEd		PECO		BGE		PHI		Pepco		DPL		ACE
Electric revenues
Residential	$	836	$	519	$	434	$	639	$	283	$	210	$	146
Small commercial & industrial	361		135		92		160		39		62		59
Large commercial & industrial	84		65		149		378		282		33		63
Public authorities & electric railroads	10		8		7		17		8		4		5
Other(a)	217		68		96		176		56		58		63
Total electric revenues(b)	$	1,508	$	795	$	778	$	1,370	$	668	$	367	$	336
Natural gas revenues
Residential	$	—	$	223	$	278	$	60	$	—	$	60	$	—
Small commercial & industrial	—		75		41		26		—		26		—
Large commercial & industrial	—		1		70		1		—		1		—
Transportation	—		8		—		4		—		4		—
Other(c)	—		9		19		6		—		6		—
Total natural gas revenues(d)	$	—	$	316	$	408	$	97	$	—	$	97	$	—
Total revenues from contracts with customers	$	1,508	$	1,111	$	1,186	$	1,467	$	668	$	464	$	336
Other revenues
Revenues from alternative revenue programs	$	153	$	(4)	$	65	$	65	$	39	$	9	$	17
Other electric revenues(e)	6		4		4		4		3		1		—
Other natural gas revenues(e)	—		1		2		—		—		—		—

Total other revenues	$	159	$	1	$	71	$	69	$	42	$	10	$	17
Total revenues for reportable segments	$	1,667	$	1,112	$	1,257	$	1,536	$	710	$	474	$	353

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 5 — Segment Information



	Three Months Ended March 31, 2022
Revenues from contracts with customers	ComEd		PECO		BGE		PHI		Pepco		DPL		ACE
Electric revenues
Residential	$	857	$	487	$	417	$	652	$	275	$	207	$	170
Small commercial & industrial	423		111		81		141		38		56		47
Large commercial & industrial	153		64		131		323		253		26		44
Public authorities & electric railroads	14		8		7		16		8		4		4
Other(a)	239		62		97		193		46		56		81
Total electric revenues(b)	$	1,686	$	732	$	733	$	1,325	$	620	$	349	$	346
Natural gas revenues
Residential	$	—	$	218	$	282	$	51	$	—	$	51	$	—
Small commercial & industrial	—		76		45		21		—		21		—
Large commercial & industrial	—		—		65		3		—		3		—
Transportation	—		8		—		4		—		4		—
Other(c)	—		3		35		4		—		4		—
Total natural gas revenues(d)	$	—	$	305	$	427	$	83	$	—	$	83	$	—
Total revenues from contracts with customers	$	1,686	$	1,037	$	1,160	$	1,408	$	620	$	432	$	346
Other revenues
Revenues from alternative revenue programs	$	40	$	6	$	(12)	$	(5)	$	(7)	$	(1)	$	3
Other electric revenues(e)	8		3		4		1		1		—		—
Other natural gas revenues(e)	—		1		2		—		—		—		—

Total other revenues	$	48	$	10	$	(6)	$	(4)	$	(6)	$	(1)	$	3
Total revenues for reportable segments	$	1,734	$	1,047	$	1,154	$	1,404	$	614	$	431	$	349

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

(b)Includes operating revenues from affiliates in 2023 and 2022 respectively of:

$3 million, $6 million at ComEd
$1 million, $1 million at PECO
$2 million, $2 million at BGE
$3 million, $3 million at PHI
$1 million, $1 million at Pepco
$2 million, $2 million at DPL
$1 million, $1 million at ACE

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

(d)Includes operating revenues from affiliates in 2023 and 2022 respectively of:

$1 million, less than a $1 million at PECO
$1 million, $6 million at BGE

(e)Includes late payment charge revenues.

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 March 31, 2023
	Exelon		ComEd		PECO		BGE		PHI		Pepco		DPL		ACE
Balance as of December 31, 2022	$	327	$	59	$	105	$	54	$	109	$	47	$	21	$	41
Plus: Current period provision for expected credit losses(a)	108		22		39		30		17		9		7		1
Less: Write-offs, net of recoveries(b)	46		7		14		11		14		7		2		5
Balance as of March 31, 2023	$	389	$	74	$	130	$	73	$	112	$	49	$	26	$	37

	Three Months Ended March 31, 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	110		26		31		26		27		11		7		9
Less: Write-offs, net of recoveries	41		7		11		5		18		8		1		9
Balance as of March 31, 2022	$	389	$	92	$	125	$	59	$	113	$	40	$	24	$	49

(a)For PECO and BGE, the change in current period provision for expected credit losses is primarily a result of increased aging of receivables.

(b)Recoveries were not material to the Registrants.

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
















	Three Months Ended March 31, 2023
	Exelon		ComEd		PECO		BGE		PHI		Pepco		DPL		ACE
Balance as of December 31, 2022	$	82	$	17	$	9	$	10	$	46	$	25	$	7	$	14
Plus: Current period provision for expected credit losses	14		2		3		4		5		3		1		1
Less: Write-offs, net of recoveries(a)	5		1		1		2		1		—		—		1
Balance as of March 31, 2023	$	91	$	18	$	11	$	12	$	50	$	28	$	8	$	14

	Three Months Ended March 31, 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 for expected credit losses	14		4		3		3		4		2		1		1
Less: Write-offs, net of recoveries	5		1		1		1		2		—		—		2
Balance as of March 31, 2022	$	81	$	20	$	9	$	11	$	41	$	18	$	9	$	14

(a)Recoveries were not material to the Registrants.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 6 — Accounts Receivable

Unbilled Customer Revenue

The following table provides additional information about unbilled customer revenues recorded in the Registrants' Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022.


	Unbilled customer revenues(a)
	Exelon		ComEd		PECO		BGE		PHI		Pepco		DPL		ACE
March 31, 2023	$	709	$	237	$	149	$	149	$	174	$	74	$	49	$	51
December 31, 2022	912		223		219		247		223		103		74		46

(a)Unbilled customer revenues are classified in Customer accounts receivable, 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
Three months ended March 31, 2023	$	1,108	$	240	$	309	$	245	$	314	$	210	$	56	$	48
Three months ended March 31, 2022	1,044		248		292		222		282		174		57		51

(a)Includes $4 million of receivables purchased from Generation prior to the separation on February 1, 2022 for the three months ended March 31, 2022.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 7 — Income Taxes

7. Income Taxes (All Registrants)

Rate Reconciliation

The effective income tax rate from continuing operations varies from the U.S. federal statutory rate principally due to the following:


	Three Months Ended March 31, 2023(a)
	Exelon		ComEd		PECO(b)		BGE		PHI		Pepco		DPL		ACE
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	6.0		7.9		(1.4)		6.4		6.0		5.4		6.3		6.9
Plant basis differences	(4.0)		(0.3)		(15.2)		(0.7)		(1.8)		(2.5)		(1.0)		(0.9)
Excess deferred tax amortization	(6.3)		(5.7)		(2.4)		(5.4)		(7.0)		(8.4)		(8.8)		(2.0)
Amortization of investment tax credit, including deferred taxes on basis difference	(0.1)		(0.1)		—		(0.1)		(0.1)		—		(0.1)		(0.1)
Tax credits	(0.5)		(0.3)		—		(0.5)		(0.4)		(0.4)		(0.4)		(0.3)
Other	0.6		0.3		0.4		(0.1)		0.3		0.5		(0.3)		0.4
Effective income tax rate	16.7	%	22.8	%	2.4	%	20.6	%	18.0	%	15.6	%	16.7	%	25.0	%


	Three Months Ended March 31, 2022(a)
	Exelon		ComEd		PECO(c)		BGE(c)		PHI		Pepco(c)		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(d)	21.1		8.0		(0.1)		2.4		3.7		(4.5)		6.2		6.8
Plant basis differences	(3.6)		(0.6)		(11.3)		(0.9)		(1.6)		(2.6)		(0.7)		(1.3)
Excess deferred tax amortization	(11.5)		(6.3)		(3.2)		(17.6)		(17.7)		(17.4)		(19.4)		(22.2)
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(e)	1.7		(0.3)		—		(0.4)		(0.4)		(0.4)		(0.3)		(0.3)
Other(f)	2.6		—		—		(0.1)		0.2		(0.6)		0.1		(0.1)
Effective income tax rate	31.2	%	21.7	%	6.4	%	4.3	%	5.1	%	(4.5)	%	6.7	%	3.7	%

(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.

(c)For PECO, the lower effective tax rate is primarily related to plant basis differences attributable to tax repair deductions. For BGE, the lower effective tax rate is primarily due to the Maryland multi-year plan which resulted in the acceleration of certain income tax benefits. For Pepco, the income tax benefit is primarily due to the Maryland and Washington, D.C. multi-year plans which resulted in the acceleration of certain income tax benefits. For ACE, the lower effective tax rate is primarily related to the acceleration of certain income tax benefits due to distribution rate case settlements.

(d)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 approximately $67 million and the recognition of a valuation allowance of approximately $40 million against the net deferred tax asset position for certain standalone state filing jurisdiction as a result of the separation.

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

(f)For Exelon, primarily reflects the nondeductible transaction costs of approximately $19 million arising as part of the separation.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 7 — Income Taxes

Unrecognized Tax Benefits

Exelon, PHI and ACE have the following unrecognized tax benefits as of March 31, 2023 and December 31, 2022. ComEd's, PECO's, BGE's, Pepco's, and DPL's amounts are not material.


	Exelon(a)		PHI		ACE
March 31, 2023	$	148	$	59	$	17
December 31, 2022	148		59		17

(a)As of March 31, 2023 and December 31, 2022, Exelon recorded a receivable of $50 million in Other deferred debits and 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 March 31, 2023, 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

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 of March 31, 2023, Exelon recorded a payable of $18 million in Other current liabilities that is due to Constellation.

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, 2023, Exelon recorded a payable of $212 million and $319 million in Other current liabilities and Other deferred credits and other liabilities, respectively, in the Consolidated Balance Sheet for tax attribute carryforwards that are expected to be utilized and reimbursed to Constellation.

Corporate Alternative Minimum Tax (All Registrants)

On August 16, 2022, the IRA was signed into law and implements a new corporate alternative minimum tax (CAMT) that imposes a 15.0% tax on modified GAAP net income. Corporations are entitled to a tax credit (minimum tax credit) to the extent the CAMT liability exceeds the regular tax liability. This amount can be carried forward indefinitely and used in future years when regular tax exceeds the CAMT.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 7 — Income Taxes

Beginning in 2023, Exelon and each of the Utility Registrants will be subject to and will report the CAMT on a separate Registrant basis in the Consolidated Statements of Operations and Comprehensive Income and the Consolidated Balance Sheets. The deferred tax asset related to the minimum tax credit carryforward will be realized to the extent Exelon’s consolidated deferred tax liabilities exceed the minimum tax credit carryforward. Exelon’s deferred tax liabilities are expected to exceed the minimum tax credit carryforward for the foreseeable future and thus no valuation allowance is required. Exelon is continuing to assess the financial statement impacts of the IRA and will update estimates based on future guidance issued by the U.S. Treasury.

8. Retirement Benefits (All Registrants)

Defined Benefit Pension and OPEB

The majority of the 2023 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 5.53%. The majority of the 2023 OPEB cost is calculated using an expected long-term rate of return on plan assets of 6.50% for funded plans and a discount rate of 5.51%.

During the first quarter of 2023, Exelon received an updated valuation of its pension and OPEB to reflect actual census data as of January 1, 2023. This valuation resulted in an increase to the pension obligation of $27 million and an increase to the OPEB obligation of $2 million. Additionally, AOCI increased by $10 million (after-tax) and regulatory assets and liabilities increased by $18 million and $1 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 months ended March 31, 2023 and 2022.
















	Pension Benefits				OPEB
	Three Months Ended March 31,				Three Months Ended March 31,
	2023		2022		2023		2022
Components of net periodic benefit cost:
Service cost	$	39	$	61	$	6	$	10
Interest cost	145		110		25		19
Expected return on assets	(189)		(209)		(21)		(25)
Amortization of:
Prior service cost (credit)	1		1		(2)		(5)
Actuarial loss	41		76		—		4


Net periodic benefit cost	$	37	$	39	$	8	$	3

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, which apply multi-employer accounting, 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.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 8 — Retirement Benefits


	Three Months Ended March 31,
Pension and OPEB Costs (Benefit)		2023		2022
Exelon		$	45	$	42
ComEd		6		16
PECO		(3)		(2)
BGE		14		11
PHI		24		13
Pepco		8		2
DPL		4		1
ACE		4		3

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 months ended March 31, 2023 and 2022.


	Three Months Ended March 31,
Savings Plan Employer Contributions		2023		2022
Exelon		$	21	$	20
ComEd		9		8
PECO		3		3
BGE		2		2
PHI		3		3
Pepco		1		1
DPL		1		1
ACE		—		—

9. Derivative Financial Instruments (All Registrants)

The Registrants use derivative instruments to manage commodity price risk and interest rate risk related to ongoing business operations. The Registrants do not execute derivatives for speculative or proprietary trading purposes.

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. At Exelon, derivative economic hedges related to interest rates are recorded at fair value and offsets are recorded to Electric operating revenues or Interest expense based on the activity the transaction is economically hedging. 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. At Exelon, derivative hedges that qualify and are designated as cash flow hedges are recorded at fair value and offsets are recorded to AOCI.

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.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 9 — Derivative Financial Instruments

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 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.
Gas	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 2022 Form 10-K for additional information.

(b)The fair value of the DPL economic hedge is not material as of March 31, 2023 and December 31, 2022.

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.

Interest Rate and Other Risk (Exelon)

Exelon Corporate uses a combination of fixed-rate and variable-rate debt to manage interest rate exposure. Exelon Corporate may utilize interest rate derivatives to lock in rate levels in anticipation of future financings, which are typically designated as cash flow hedges. In addition, Exelon Corporate may also utilize interest rate swaps to manage interest rate exposure and manage potential fluctuations in Electric operating revenues at the corporate level in consolidation, which are directly correlated to yields on U.S. Treasury bonds under ComEd's distribution formula rate. These interest rate swaps are accounted for as economic hedges. A hypothetical 50

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 9 — Derivative Financial Instruments

basis point change in the interest rates associated with Exelon's interest rate swaps as of March 31, 2023 would result in an immaterial impact to Exelon's Consolidated Net Income.

Below is a summary of the interest rate hedge balances as of March 31, 2023 and December 31, 2022.


	March 31, 2023
	Derivatives Designated as Hedging Instruments		Economic Hedges		Total

Other deferred debits (noncurrent assets)	$	—	$	3	$	3
Total derivative assets	—		3		3
Mark-to-market derivative liabilities (current liabilities)	—		(1)		(1)
Mark-to-market derivative liabilities (noncurrent liabilities)	(1)		—		(1)
Total mark-to-market derivative liabilities	(1)		(1)		(2)
Total mark-to-market derivative net assets	$	(1)	$	2	$	1


	December 31, 2022
	Derivatives Designated as Hedging Instruments		Economic Hedges		Total

Other deferred debits (noncurrent assets)	$	6	$	5	$	11
Total derivative assets	6		5		11
Mark-to-market derivative liabilities (current liabilities)	—		(3)		(3)
Mark-to-market derivative liabilities (noncurrent liabilities)	(4)		—		(4)
Total mark-to-market derivative liabilities	(4)		(3)		(7)
Total mark-to-market derivative net assets	$	2	$	2	$	4

Cash Flow Hedges (Interest Rate Risk)

For derivative instruments that qualify and are designated as cash flow hedges, the changes in fair value each period are initially recorded in AOCI and reclassified into earnings when the underlying transaction affects earnings. The total notional of the swaps issued as of December 31, 2022 was $1.27 billion. In January 2023, Exelon Corporate entered into $115 million notional of 5-year maturity floating-to-fixed swaps and $115 million notional of 10-year maturity floating-to-fixed swaps, for a total of $230 million designated as cash flow hedges. In February 2023, Exelon terminated the previously issued floating-to-fixed swaps with a total notional of $1.5 billion upon issuance of $2.5 billion of debt. See Note 10 – Debt and Credit Agreements for additional information on the debt issuance. Prior to the termination, the AOCI derivative gain was $7 million (net of tax). The settlements resulted in a cash receipt of $10 million, which will be amortized into Interest expense in Exelon's Consolidated Statement of Operations and Comprehensive Income over the terms of the swaps. See Note 14 – Changes in Accumulated Other Comprehensive Income (Loss) for additional information.

In March 2023, Exelon Corporate entered into $65 million notional of 5-year maturity floating-to-fixed swaps and $65 million 10-year maturity floating-to-fixed swaps, for a total of $130 million designated as cash flow hedges. The related AOCI derivative gain for the three months ended as of March 31, 2023 was immaterial.

Economic Hedges (Interest Rate and Other Risk)

Exelon Corporate executes derivative instruments to mitigate exposure to fluctuations in interest rates but for which the fair value or cash flow hedge elections were not made. For derivatives intended to serve as economic hedges, fair value is recorded on the balance sheet and changes in fair value each period are recognized in earnings or as a regulatory asset or liability, if regulatory requirements are met, each period.

Exelon Corporate enters into floating-to-fixed interest rate cap swaps to manage a portion of interest rate exposure in connection with existing borrowings. In the fourth quarter of 2022, Exelon Corporate entered into $1

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 9 — Derivative Financial Instruments

billion notional of 18-month maturity floating-to-fixed interest rate cap swaps and $850 million notional of 6-month maturity floating-to-fixed interest rate cap swaps, for a total of $1.85 billion notional of floating-to-fixed interest rate cap swaps as of December 31, 2022. The 6-month maturity floating-to-fixed interest rate cap swaps of $850 million notional matured in March 2023. The total remaining notional of the swaps was $1 billion as of March 31, 2023.

Additionally, to manage potential fluctuations in Electric operating revenues related to ComEd's distribution formula rate, Exelon Corporate enters into 30-year constant maturity treasury interest rate (Corporate 30-year treasury) swaps. In the first quarter of 2023, Exelon Corporate entered into a total of $3.6 billion notional of calendar year 2023 Corporate 30-year treasury swaps. The total notional of the swaps issued was $4.1 billion and $500 million as of March 31, 2023 and December 31, 2022, respectively.

For the three months ended March 31, 2023, Exelon Corporate recognized the following net pre-tax mark-to-market gains (losses) which are also recognized in Net fair value changes related to derivatives in Exelon's Consolidated Statements of Cash Flows. Exelon had no swaps for the three months ended March 31, 2022.


	Gain (Loss)
Income Statement Location	2023
Electric operating revenues	$	1
Interest expense	(1)
Total	$	—

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. The amount of cash collateral received from external counterparties decreased as of March 31, 2023 due to decreasing energy prices. The amount of cash collateral for PECO was immaterial as of March 31, 2023 and December 31, 2022. The following table reflects the Registrants' cash collateral held with external counterparties, which is recorded in Other current liabilities on their respective Consolidated Balance Sheets, as of March 31, 2023 and December 31, 2022:


	March 31, 2023		December 31, 2022
Exelon	$	81	$	297
ComEd	73		77
BGE	1		23
PHI	8		197
Pepco	1		26
DPL	1		121
ACE	6		50

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 March 31, 2023, 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 March 31, 2023, they could have been required to post collateral to their counterparties of $39 million, $73 million, and $14 million, respectively.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 10 — Debt and Credit Agreements

10. 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 supported by the revolving credit agreements and bilateral credit agreements as of March 31, 2023 and December 31, 2022. As of March 31, 2023 and December 31, 2022, ACE had no commercial paper borrowings:


	Outstanding Commercial Paper as of				Average Interest Rate on Commercial Paper Borrowings as of
Commercial Paper Issuer	March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
Exelon(a)	$	807	$	1,938	5.12	%	4.77	%
ComEd	409		427		5.09	%	4.71	%
PECO	145		239		5.04	%	4.71	%
BGE	243		409		5.24	%	4.81	%
PHI(b)	—		414		—	%	4.78	%

Pepco	—		299		—	%	4.79	%
DPL	—		115		—	%	4.76	%

(a)Exelon Corporate had $10 million and $449 million in outstanding commercial paper borrowings as of March 31, 2023 and December 31, 2022, respectively.

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

Revolving Credit Agreements

Exelon Corporate and the Utility Registrants each have a 5-year 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 March 31, 2023.

The Utility Registrants have 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.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 10 — Debt and Credit Agreements

See Note 16 — Debt and Credit Agreements of the 2022 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 in the first quarter of 2023 and was bifurcated into two tranches of $300 million on March 14, 2023 and $200 million on March 24, 2023. The agreements will expire on March 14, 2024 and March 22, 2024, respectively. Pursuant to the loan agreements, loans made thereunder bear interest at a variable rate equal to SOFR plus 0.90% and all indebtedness thereunder is unsecured. The loan agreement is reflected in Exelon's Consolidated Balance Sheets within Short-term borrowings.

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 balance of the loan was repaid on January 13, 2023 in conjunction with the $400 million and $575 million First Mortgage Bond agreements that were entered into on January 3, 2023. Refer to the Issuance of Long-Term Debt table below for further information.

Long-Term Debt

Issuance of Long-Term Debt

During the three months ended March 31, 2023, the following long-term debt was issued:


Company	Type	Interest Rate	Maturity	Amount	Use of Proceeds
Exelon	Notes	5.15%	March 15, 2028	$1,000	Repay existing indebtedness and for general corporate purposes.
Exelon	Notes	5.30%	March 15, 2033	850	Repay existing indebtedness and for general corporate purposes.
Exelon	Notes	5.60%	March 15, 2053	650	Repay existing indebtedness and for general corporate purposes.
ComEd	First Mortgage Bonds, Series 134	4.90%	February 1, 2033	400	Repay outstanding commercial paper obligations and to fund other general corporate purposes.
ComEd	First Mortgage Bonds Series 135	5.30%	February 1, 2053	575	Repay outstanding commercial paper obligations and to fund other general corporate purposes.
Pepco(a)	First Mortgage Bonds	5.30%	March 15, 2033	85	Repay existing indebtedness and for general corporate purposes.
Pepco	First Mortgage Bonds	5.40%	March 15, 2038	40	Repay existing indebtedness and for general corporate purposes.
Pepco	First Mortgage Bonds	5.57%	March 15, 2053	125	Repay existing indebtedness and for general corporate purposes.
DPL(b)	First Mortgage Bonds	5.30%	March 15, 2033	60	Repay existing indebtedness and for general corporate purposes.
DPL	First Mortgage Bonds	5.57%	March 15, 2053	65	Repay existing indebtedness and for general corporate purposes.
ACE	First Mortgage Bonds	5.57%	March 15, 2053	75	Repay existing indebtedness and for general corporate purposes.

(a)On March 15, 2023, Pepco entered into a purchase agreement of First Mortgage Bonds of $100 million at 5.35% due on September 13, 2033. The closing date of the issuance is expected to occur in September 2023.

(b)On March 15, 2023, DPL entered into a purchase agreement of First Mortgage Bonds of $340 million, $75 million, and $110 million at 5.45%, 5.55% and 5.72% due on November 8, 2033, November 8, 2038, and November 8, 2053, respectively. The closing date of the issuance is expected to occur in November 2023.

Debt Covenants

As of March 31, 2023, the Registrants are in compliance with debt covenants.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 11 — Fair Value of Financial Assets and Liabilities

11. 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 March 31, 2023 and December 31, 2022. The Registrants have no financial liabilities classified as Level 1 or measured using the NAV practical expedient.

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.


	March 31, 2023											December 31, 2022
	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	$	40,088		$	33,224		$	2,870		$	36,094	$	37,074	$	29,902	$	2,327	$	32,229
ComEd	11,480			10,236			—			10,236		10,518		9,006		—		9,006
PECO	4,613			3,946			50			3,996		4,612		3,864		50		3,914
BGE	4,208			3,685			—			3,685		4,207		3,613		—		3,613
PHI	8,553			4,632			2,820			7,452		8,120		4,507		2,277		6,784
Pepco	3,995			2,295			1,507			3,802		3,751		2,229		1,205		3,434
DPL	2,061			1,183			604			1,787		1,938		1,164		458		1,622
ACE	1,831			935			709			1,644		1,757		909		614		1,523
Long-Term Debt to Financing Trusts
Exelon	$	390		$	—		$	392		$	392	$	390	$	—	$	384	$	384
ComEd	205			—			207			207		205		—		204		204
PECO	184			—			185			185		184		—		180		180

(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 16 — Debt and Credit Agreements of the 2022 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 2022 Form 10-K for finance lease liabilities.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 11 — Fair Value of Financial Assets and Liabilities

Recurring Fair Value Measurements

The following tables present assets and liabilities measured and recorded at fair value in the Registrants' Consolidated Balance Sheets on a recurring basis and their level within the fair value hierarchy as of March 31, 2023 and December 31, 2022. The Registrants have no financial assets or liabilities measured using the NAV practical expedient:

Exelon


	As of March 31, 2023						As of December 31, 2022
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Cash equivalents(a)	$	523	$	—	$	—	$	523	$	664	$	—	$	—	$	664
Rabbi trust investments
Cash equivalents	65		—		—		65		62		—		—		62
Mutual funds	49		—		—		49		49		—		—		49
Fixed income	—		7		—		7		—		7		—		7
Life insurance contracts	—		56		41		97		—		58		40		98
Rabbi trust investments subtotal	114		63		41		218		111		65		40		216

Interest rate derivative assets
Derivatives designated as hedging instruments	—		—		—		—		—		6		—		6
Economic hedges	—		3		—		3		—		5		—		5
Interest rate derivative assets subtotal	—		3		—		3		—		11		—		11
Total assets	637		66		41		744		775		76		40		891
Liabilities
Mark-to-market derivative liabilities	—		—		(98)		(98)		—		—		(84)		(84)
Interest rate derivative liabilities
Derivatives designated as hedging instruments	—		(1)		—		(1)		—		(4)		—		(4)
Economic hedges	—		(1)		—		(1)		—		(3)		—		(3)
Interest rate derivative liabilities subtotal	—		(2)		—		(2)		—		(7)		—		(7)
Deferred compensation obligation	—		(75)		—		(75)		—		(75)		—		(75)
Total liabilities	—		(77)		(98)		(175)		—		(82)		(84)		(166)
Total net assets (liabilities)	$	637	$	(11)	$	(57)	$	569	$	775	$	(6)	$	(44)	$	725

(a)Exelon excludes cash of $482 million and $345 million as of March 31, 2023 and December 31, 2022, respectively, and restricted cash of $78 million and $81 million as of March 31, 2023 and December 31, 2022, respectively, and includes long-term restricted cash of $180 million and $117 million as of March 31, 2023 and December 31, 2022, respectively, which is reported in Other deferred debits and other assets in the Consolidated Balance Sheets.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 11 — Fair Value of Financial Assets and Liabilities

ComEd, PECO, and BGE


	ComEd								PECO								BGE
As of March 31, 2023	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)	$	454	$	—	$	—	$	454	$	11	$	—	$	—	$	11	$	1	$	—	$	—	$	1
Rabbi trust investments

Mutual funds	—		—		—		—		8		—		—		8		9		—		—		9
Life insurance contracts	—		—		—		—		—		15		—		15		—		—		—		—
Rabbi trust investments subtotal	—		—		—		—		8		15		—		23		9		—		—		9

Total assets	454		—		—		454		19		15		—		34		10		—		—		10
Liabilities
Mark-to-market derivative liabilities(b)	—		—		(98)		(98)		—		—		—		—		—		—		—		—
Deferred compensation obligation	—		(8)		—		(8)		—		(8)		—		(8)		—		(4)		—		(4)
Total liabilities	—		(8)		(98)		(106)		—		(8)		—		(8)		—		(4)		—		(4)
Total net assets (liabilities)	$	454	$	(8)	$	(98)	$	348	$	19	$	7	$	—	$	26	$	10	$	(4)	$	—	$	6


	ComEd								PECO								BGE
As of December 31, 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)	$	392	$	—	$	—	$	392	$	10	$	—	$	—	$	10	$	23	$	—	$	—	$	23
Rabbi trust investments
Mutual funds	—		—		—		—		7		—		—		7		7		—		—		7
Life insurance contracts	—		—		—		—		—		15		—		15		—		—		—		—
Rabbi trust investments subtotal	—		—		—		—		7		15		—		22		7		—		—		7
Total assets	392		—		—		392		17		15		—		32		30		—		—		30
Liabilities
Mark-to-market derivative liabilities(b)	—		—		(84)		(84)		—		—		—		—		—		—		—		—
Deferred compensation obligation	—		(8)		—		(8)		—		(7)		—		(7)		—		(4)		—		(4)
Total liabilities	—		(8)		(84)		(92)		—		(7)		—		(7)		—		(4)		—		(4)
Total net assets (liabilities)	$	392	$	(8)	$	(84)	$	300	$	17	$	8	$	—	$	25	$	30	$	(4)	$	—	$	26

(a)ComEd excludes cash of $51 million and $42 million as of March 31, 2023 and December 31, 2022, respectively, and restricted cash of $73 million and $77 million as of March 31, 2023 and December 31, 2022, respectively, and includes long-term restricted cash of $180 million and $117 million as of March 31, 2023 and December 31, 2022, respectively, which is reported in Other deferred debits and other assets in the Consolidated Balance Sheets. PECO excludes cash of $25 million and $58 million as of March 31, 2023 and December 31, 2022, respectively. BGE excludes cash of $19 million and $43 million as of March 31, 2023 and December 31, 2022, respectively, and restricted cash of $1 million and $1 million as of March 31, 2023 and December 31, 2022, respectively.

(b)The Level 3 balance consists of the current and noncurrent liability of $22 million and $76 million, respectively, as of March 31, 2023 and $5 million and $79 million, respectively, as of December 31, 2022 related to floating-to-fixed energy swap contracts with unaffiliated suppliers.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 11 — Fair Value of Financial Assets and Liabilities

PHI, Pepco, DPL, and ACE


	As of March 31, 2023								As of December 31, 2022
PHI	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Cash equivalents(a)	$	35	$	—	$	—	$	35	$	205	$	—	$	—	$	205
Rabbi trust investments
Cash equivalents	62		—		—		62		59		—		—		59
Mutual funds	10		—		—		10		11		—		—		11
Fixed income	—		7		—		7		—		7		—		7
Life insurance contracts	—		20		39		59		—		22		39		61
Rabbi trust investments subtotal	72		27		39		138		70		29		39		138
Total assets	107		27		39		173		275		29		39		343
Liabilities
Deferred compensation obligation	—		(13)		—		(13)		—		(14)		—		(14)



Total liabilities	—		(13)		—		(13)		—		(14)		—		(14)
Total net assets	$	107	$	14	$	39	$	160	$	275	$	15	$	39	$	329


	Pepco								DPL								ACE
As of March 31, 2023	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)	$	26	$	—	$	—	$	26	$	1	$	—	$	—	$	1	$	1	$	—	$	—	$	1




Rabbi trust investments
Cash equivalents	61		—		—		61		—		—		—		—		—		—		—		—

Life insurance contracts	—		20		39		59		—		—		—		—		—		—		—		—
Rabbi trust investments subtotal	61		20		39		120		—		—		—		—		—		—		—		—
Total assets	87		20		39		146		1		—		—		1		1		—		—		1
Liabilities
Deferred compensation obligation	—		(1)		—		(1)		—		—		—		—		—		—		—		—



Total liabilities	—		(1)		—		(1)		—		—		—		—		—		—		—		—
Total net assets	$	87	$	19	$	39	$	145	$	1	$	—	$	—	$	1	$	1	$	—	$	—	$	1

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 11 — Fair Value of Financial Assets and Liabilities


	Pepco								DPL								ACE
As of December 31, 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)	$	51	$	—	$	—	$	51	$	121	$	—	$	—	$	121	$	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	110		22		38		170		121		—		—		121		1		—		—		1
Liabilities
Deferred compensation obligation	—		(1)		—		(1)		—		—		—		—		—		—		—		—



Total liabilities	—		(1)		—		(1)		—		—		—		—		—		—		—		—
Total net assets	$	110	$	21	$	38	$	169	$	121	$	—	$	—	$	121	$	1	$	—	$	—	$	1

(a)PHI excludes cash of $358 million and $165 million as of March 31, 2023 and December 31, 2022, respectively, and restricted cash of $3 million and $3 million as of March 31, 2023 and December 31, 2022, respectively. Pepco excludes cash of $124 million and $45 million as of March 31, 2023 and December 31, 2022, respectively, and restricted cash of $3 million and $3 million as of March 31, 2023 and December 31, 2022, respectively. DPL excludes cash of $142 million and $31 million as of March 31, 2023 and December 31, 2022, respectively. ACE excludes cash of $70 million and $71 million as of March 31, 2023 and December 31, 2022, respectively.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 11 — Fair Value of Financial Assets and Liabilities

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 months ended March 31, 2023 and 2022:


	Exelon		ComEd			PHI and Pepco
Three Months Ended March 31, 2023	Total		Mark-to-Market Derivatives			Life Insurance Contracts
Balance as of December 31, 2022	$	(44)	$	(84)		$	40
Total realized / unrealized gains
Included in net income(a)	1		—			1


Included in regulatory assets/liabilities	(14)		(14)		(b)	—








Balance as of March 31, 2023	$	(57)	$	(98)	(c)	$	41
The amount of total gains included in income attributed to the change in unrealized gains related to assets and liabilities as of March 31, 2023	$	1	$	—		$	1


	Exelon		ComEd			PHI and Pepco
Three Months Ended March 31, 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)	1		—			1


Included in regulatory assets	75		75		(b)	—







Transfers out of Level 3	(1)		—			—
Balance as of March 31, 2022	$	(107)	$	(144)		$	36
The amount of total gains included in income attributed to the change in unrealized gain related to assets and liabilities as of March 31, 2022	$	1	$	—		$	1

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

(b)Includes $25 million of decreases in fair value and an increase for realized gains due to settlements of $11 million recorded in Purchased power expense associated with floating-to-fixed energy swap contracts with unaffiliated suppliers for the three months ended March 31, 2023. Includes $69 million of increases in fair value and an increase for realized losses 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 March 31, 2022.

(c)The balance consists of a current and noncurrent liability of $22 million and $76 million, respectively, as of March 31, 2023.

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 17 — Fair Value of Financial Assets and Liabilities of the 2022 Form 10-K.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 11 — 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 March 31, 2023						Fair Value as of December 31, 2022						Valuation Technique						Unobservable Input						2023 Range & Arithmetic Average															2022 Range & Arithmetic Average
Mark-to-market derivatives						$	(98)					$	(84)					Discounted Cash Flow						Forward power price(a)						$22.49			-			$83.26			$47.69						$34.78			-			$75.71			$48.44

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

12. Commitments and Contingencies (All Registrants)

The following is an update to the current status of commitments and contingencies set forth in Note 18 — Commitments and Contingencies of the 2022 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 March 31, 2023:


Description	Exelon		PHI		Pepco		DPL		ACE
Total commitments	$	513	$	320	$	120	$	89	$	111
Remaining commitments(a)	48		42		37		3		2

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

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 12 — Commitments and Contingencies

Commercial Commitments (All Registrants). The Registrants’ commercial commitments as of March 31, 2023, representing commitments potentially triggered by future events were as follows:


			Expiration within
	Total		2023		2024		2025		2026		2027		2028 and beyond
Exelon
Letters of credit	$	19	$	17	$	2	$	—	$	—	$	—	$	—
Surety bonds(a)	205		190		15		—		—		—		—
Financing trust guarantees	378		—		—		—		—		—		378
Guaranteed lease residual values(b)	29		—		5		6		5		4		9
Total commercial commitments	$	631	$	207	$	22	$	6	$	5	$	4	$	387

ComEd
Letters of credit	$	12	$	10	$	2	$	—	$	—	$	—	$	—
Surety bonds(a)	47		42		5		—		—		—		—
Financing trust guarantees	200		—		—		—		—		—		200
Total commercial commitments	$	259	$	52	$	7	$	—	$	—	$	—	$	200

PECO
Letters of credit	$	1	$	1	$	—	$	—	$	—	$	—	$	—
Surety bonds(a)	2		1		1		—		—		—		—
Financing trust guarantees	178		—		—		—		—		—		178
Total commercial commitments	$	181	$	2	$	1	$	—	$	—	$	—	$	178

BGE
Letters of credit	$	2	$	2	$	—	$	—	$	—	$	—	$	—
Surety bonds(a)	3		2		1		—		—		—		—
Total commercial commitments	$	5	$	4	$	1	$	—	$	—	$	—	$	—

PHI

Surety bonds(a)	$	95	$	90	$	5	$	—	$	—	$	—	$	—
Guaranteed lease residual values(b)	29		—		5		6		5		4		9
Total commercial commitments	$	124	$	90	$	10	$	6	$	5	$	4	$	9

Pepco

Surety bonds(a)	$	84	$	84	$	—	$	—	$	—	$	—	$	—
Guaranteed lease residual values(b)	10		—		2		2		2		1		3
Total commercial commitments	$	94	$	84	$	2	$	2	$	2	$	1	$	3

DPL

Surety bonds(a)	$	6	$	2	$	4	$	—	$	—	$	—	$	—
Guaranteed lease residual values(b)	12		—		2		2		2		2		4
Total commercial commitments	$	18	$	2	$	6	$	2	$	2	$	2	$	4

ACE
Surety bonds(a)	$	5	$	4	$	1	$	—	$	—	$	—	$	—
Guaranteed lease residual values(b)	7		—		1		2		1		1		2
Total commercial commitments	$	12	$	4	$	2	$	2	$	1	$	1	$	2

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

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 12 — Commitments and Contingencies

(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 9 years. The maximum potential obligation at the end of the minimum lease term would be $65 million guaranteed by Exelon and PHI, of which $21 million, $27 million, and $17 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 2025.
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.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 12 — Commitments and Contingencies

As of March 31, 2023 and December 31, 2022, 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:


	March 31, 2023				December 31, 2022
	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	$	421	$	343	$	409	$	355
ComEd	313		312		325		324
PECO	25		23		25		23
BGE	9		8		9		8
PHI	70		—		46		—
Pepco	68		—		44		—
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 completing a FS to evaluate possible remedial alternatives for submission to DOEE. In October 2022, DOEE approved dividing the work to complete the landside portion of the FS from the waterside portion to expedite the overall schedule for completion of the project. After completion and approval of the landside FS, now scheduled for September 2023, 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 to address any landside issues. The DOEE will issue a separate ROD for the waterside FS when that work is completed which is now anticipated to be by March 31, 2024.

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 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.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 12 — Commitments and Contingencies

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 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 (D.C. OAG) on behalf of DOEE conveying a settlement offer to resolve all PRPs' liability to the District of Columbia (District) for their past costs and their anticipated future costs to complete the work for the Interim ROD. Pepco responded on July 27, 2022 to enter into settlement discussions. Since that time Exelon and the other PRPs at the site have exchanged letters with the D.C. OAG exploring potential settlement options. Those discussions are ongoing. 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 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.

Buzzard Point Site (Exelon, PHI, and Pepco). On December 8, 2022, Pepco received a letter from the D.C. OAG, alleging wholly past violations of the District's stormwater discharge and waste disposal requirements related to operations at the Buzzard Point facility, a 9-acre parcel of waterfront property in Washington, D.C. occupied by an active substation and former steam plant building. The letter also alleged wholly past violations by Pepco of stormwater discharge requirements related to its district-wide system of underground vaults. The D.C. OAG invited Pepco to resolve the threatened enforcement action through a court-approved consent decree, and Pepco is engaged in discussions with the D.C. OAG regarding a potential resolution. Exelon, PHI, and Pepco have determined that a loss associated with this matter is probable and have accrued an estimated liability. Pepco concluded that incremental exposure is reasonably possible, but the range of loss cannot be reasonably estimated beyond the amounts included in the table above.

Litigation and Regulatory Matters

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

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 12 — Commitments and Contingencies

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 a 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 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. The time to further appeal has passed and the Seventh Circuit’s decision is final.
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. The appellate briefing is complete and the parties are awaiting oral argument and/or a decision.
On November 3, 2022, a plaintiff filed a putative class action complaint in Lake County, Illinois Circuit Court against ComEd and Exelon for unjust enrichment and deceptive business practices in connection with the conduct giving rise to the DPA. Plaintiff seeks an accounting and disgorgement of any benefits ComEd allegedly obtained from said conduct. Plaintiff served initial discovery requests on ComEd in December 2022, to which ComEd has responded. ComEd and Exelon filed a motion to dismiss the Complaint on February 3, 2023. The parties fully briefed the motion, and on April 21, 2023, the court heard oral argument on the motion. The court expects to issue its ruling on the motion to dismiss on or before June 9, 2023.
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

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 12 — Commitments and Contingencies

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 June 27, 2023. Based on recent developments, management has determined that a probable loss exists for this matter in the amount of $173 million. Management anticipates that such loss would be fully covered by insurance. The probable loss and the expected insurance recovery are reflected in Exelon's Consolidated Balance Sheets within Accrued expenses and Other accounts receivable, respectively.

Several shareholders have sent letters to the Exelon Board of Directors since 2020 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 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. The stay has been extended several times. On March 27, 2023, the court issued an order further extending the stay until June 9, 2023, with a status report due by May 31, 2023. The parties participated in a mediation in February 2023 and efforts to resolve the matter remain ongoing. On April 26 and May 1, 2023, two additional demand letter shareholders each filed a separate derivative lawsuit against current and former Exelon and ComEd officers and directors, and certain third parties, and against Exelon as nominal defendant, asserting claims similar to those made in their respective demand letters.
Several shareholders have sent requests seeking review of certain Exelon books and records since August 2021. Exelon has responded to each request.

Except as noted 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. The window to file an appeal on the ICC final order has expired and the ICC’s DPA investigation is now closed. An accrual for the amount of the customer refund has been recorded in Regulatory liabilities and Regulatory assets in Exelon’s and ComEd’s Consolidated Balance Sheets as of March 31, 2023. The ICC jurisdictional refund is being made to customers during the April 2023 billing cycle, as required by the ICC. The FERC jurisdictional refund will be made as part of the next transmission formula rate

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 12 — Commitments and Contingencies

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. 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, which was later extended to November 30, 2022. Plaintiffs filed their amended complaint on November 30, 2022. Defendants filed their motion to dismiss the amended complaint on January 20, 2023. Briefing on the motion to dismiss is now complete and the parties await a ruling. 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 Registrants are also from time to time subject to audits and investigations by the FERC and other regulators. The assessment of whether a loss is probable or 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.

13. Shareholders' Equity (Exelon)

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 March 31, 2023, Exelon has not issued any shares of Common Stock under the ATM program and has not entered into any forward sale agreements.

14. Changes in Accumulated Other Comprehensive Income (Loss) (Exelon)

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


Three Months Ended March 31, 2023	Cash Flow Hedges		Pension and Non-Pension Postretirement Benefit Plan Items(a)		Foreign Currency Items		Total
Balance as of December 31, 2022	$	2	$	(640)	$	—	$	(638)
OCI before reclassifications	6		(10)		—		(4)
Amounts reclassified from AOCI	—		3		—		3
Net current-period OCI	6		(7)		—		(1)
Balance as of March 31, 2023	$	8	$	(647)	$	—	$	(639)

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 14 — Changes in Accumulated Other Comprehensive Income


Three Months Ended March 31, 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

Amounts reclassified from AOCI	—		14		—		14
Net current-period OCI	—		14		—		14
Balance as of March 31, 2022	$	—	$	(713)	$	—	$	(713)

(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 14 — Retirement Benefits of the 2022 Form 10-K and Note 8 — Retirement Benefits for additional information. See Exelon's Statements of Operations and Comprehensive Income for individual components of AOCI.

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


	Three Months Ended March 31,
		2023		2022
Pension and non-pension postretirement benefit plans:

Actuarial loss reclassified to periodic benefit cost		$	(1)	$	(5)
Pension and non-pension postretirement benefit plans valuation adjustment		3		—
Unrealized gain on cash flow hedges		(1)		—

15. 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 March 31, 2023
Utility taxes(a)	$	220	$	74	$	40	$	29	$	77	$	68	$	8	$	1
Property	99		10		4		50		35		24		11		—
Payroll	32		7		5		5		7		2		1		1

Three Months Ended March 31, 2022
Utility taxes(a)	$	221	$	78	$	38	$	27	$	78	$	70	$	7	$	1
Property	94		10		4		46		34		23		10		1
Payroll	37		7		4		4		7		2		1		1

(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.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 15 — Supplemental Financial Information


	Other, Net
	Exelon		ComEd		PECO		BGE		PHI		Pepco		DPL		ACE
Three Months Ended March 31, 2023
AFUDC — Equity	$	38	$	10	$	6	$	3	$	19	$	14	$	2	$	3
Non-service net periodic benefit cost	(1)		—		—		—		—		—		—		—


Three Months Ended March 31, 2022
AFUDC — Equity	$	36	$	8	$	7	$	6	$	15	$	11	$	2	$	2
Non-service net periodic benefit cost	17		—		—		—		—		—		—		—

Supplemental Cash Flow Information

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


	Depreciation, amortization, and accretion
	Exelon(a)		ComEd		PECO		BGE		PHI		Pepco		DPL		ACE
Three Months Ended March 31, 2023
Property, plant, and equipment(b)	$	680	$	267	$	95	$	124	$	180	$	76	$	51	$	47
Amortization of regulatory assets(b)	178		71		3		43		61		32		9		20
Amortization of intangible assets, net(b)	2		—		—		—		—		—		—		—



Total depreciation and amortization	$	860	$	338	$	98	$	167	$	241	$	108	$	60	$	67

Three Months Ended March 31, 2022
Property, plant, and equipment(b)	$	726	$	254	$	88	$	117	$	164	$	72	$	45	$	41
Amortization of regulatory assets(b)	179		67		4		54		54		36		12		6
Amortization of intangible assets, net(b)	6		—		—		—		—		—		—		—
Amortization of energy contract assets and liabilities(c)	3		—		—		—		—		—		—		—
Nuclear fuel(d)	66		—		—		—		—		—		—		—
ARO accretion(e)	44		—		—		—		—		—		—		—
Total depreciation, amortization, and accretion	$	1,024	$	321	$	92	$	171	$	218	$	108	$	57	$	47

(a)Exelon's 2022 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 Electric operating revenues or Purchased power 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.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 15 — Supplemental Financial Information


	Other non-cash operating activities
	Exelon(a)		ComEd		PECO		BGE		PHI		Pepco		DPL		ACE
Three Months Ended March 31, 2023
Pension and OPEB costs (benefit)	$	45	$	6	$	(3)	$	14	$	24	$	8	$	4	$	4
Allowance for credit losses	70		—		37		18		15		7		5		3


True-up adjustments to decoupling mechanisms and formula rates(b)	(282)		(153)		4		(65)		(68)		(39)		(11)		(18)


Long-term incentive plan	2		—		—		—		—		—		—		—


Amortization of operating ROU asset	10		1		—		1		7		1		2		1
Change in environmental liabilities	25		—		—		—		25		25		—		—

AFUDC — Equity	(38)		(10)		(6)		(3)		(19)		(14)		(2)		(3)

Three Months Ended March 31, 2022
Pension and OPEB costs (benefit)	$	44	$	16	$	(2)	$	12	$	13	$	2	$	1	$	3
Allowance for credit losses	78		17		27		18		18		9		6		3
Other decommissioning-related activity	36		—		—		—		—		—		—		—
Energy-related options	60		—		—		—		—		—		—		—
True-up adjustments to decoupling mechanisms and formula rates(b)	(29)		(40)		(6)		12		5		7		1		(3)


Long-term incentive plan	25		—		—		—		—		—		—		—


Amortization of operating ROU asset	23		1		—		7		7		2		2		1


AFUDC — Equity	(36)		(8)		(7)		(6)		(15)		(11)		(2)		(2)

(a)Exelon's 2022 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 2022 Form 10-K for additional information.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 15 — 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
March 31, 2023
Cash and cash equivalents	$	522	$	75	$	27	$	20	$	367	$	126	$	142	$	71
Restricted cash and cash equivalents	381		323		9		1		29		27		1		—
Restricted cash included in other deferred debits and other assets	180		180		—		—		—		—		—		—
Total cash, restricted cash, and cash equivalents	$	1,083	$	578	$	36	$	21	$	396	$	153	$	143	$	71

December 31, 2022
Cash and cash equivalents	$	407	$	67	$	59	$	43	$	198	$	45	$	31	$	72
Restricted cash and cash equivalents	566		327		9		24		175		54		121		—
Restricted cash included in other deferred debits and other assets	117		117		—		—		—		—		—		—
Total cash, restricted cash, and cash equivalents	$	1,090	$	511	$	68	$	67	$	373	$	99	$	152	$	72

March 31, 2022
Cash and cash equivalents	$	2,476	$	343	$	26	$	41	$	796	$	502	$	120	$	168
Restricted cash and cash equivalents	430		246		8		34		106		34		73		—
Restricted cash included in other deferred debits and other assets	92		92		—		—		—		—		—		—
Total cash, restricted cash, and cash equivalents	$	2,998	$	681	$	34	$	75	$	902	$	536	$	193	$	168

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 deferred debits and other 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

For additional information on restricted cash see Note 1 — Significant Accounting Policies of the 2022 Form 10-K.

Supplemental Balance Sheet Information

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

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 15 — Supplemental Financial Information


	Accrued expenses
	Exelon		ComEd		PECO		BGE		PHI		Pepco		DPL		ACE
March 31, 2023
Compensation-related accruals(a)	$	359	$	107	$	43	$	42	$	59	$	18	$	11	$	10
Taxes accrued	214		102		3		83		94		67		14		16
Interest accrued	373		78		44		45		75		35		22		16


December 31, 2022
Compensation-related accruals(a)	$	613	$	179	$	81	$	79	$	104	$	29	$	20	$	16
Taxes accrued	211		92		10		34		70		52		8		12
Interest accrued	338		124		47		42		61		32		9		14

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

16. 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 affiliate and an immaterial amount recorded as Operating and maintenance expense from affiliates at the Utility Registrants. Effective February 1, 2022, Generation is no longer considered a related party.


	Three Months Ended March 31,
	2022
ComEd(a)	$	59
PECO(b)	33
BGE(c)	18
PHI	51
Pepco(d)	39
DPL(e)	10
ACE(f)	2

(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.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 16 — 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 March 31,					Three Months Ended March 31,
	2023		2022				2023		2022
Exelon
BSC							$	175	$	205
PHISCO							24		19
ComEd
BSC	$	83	$	85			81		85
PECO
BSC	51		49				30		36
BGE
BSC	54		51				24		38
PHI
BSC	42		50				40		46
PHISCO	—		—				24		19
Pepco
BSC	27		29				14		17
PHISCO	30		29				11		8

DPL
BSC	17		18				10		14
PHISCO	24		24				7		6

ACE
BSC	14		15				14		15
PHISCO	22		21				6		5

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Note 16 — Related Party Transactions

Current Receivables from/Payables to affiliates

The following tables present current Receivables from affiliates and current Payables to affiliates:

March 31, 2023


				Receivables from affiliates:
	Payables to affiliates:			ComEd			PECO			BGE			Pepco			DPL			ACE			BSC			PHISCO			Other			Total
ComEd					$	—		$	—		$	—		$	—		$	—		$	78		$	—		$	6		$	84
PECO		$	—					—			—			—			1			39			—			8			48
BGE		—			—						—			—			—			35			—			2			37
PHI		—			—			—			—			—			—			7			—			10			17
Pepco		—			—			—						—			—			22			15			1			38
DPL		—			1			—			—						—			13			12			—			26
ACE		—			1			—			1			—						13			11			—			26
Other		3			—			—			—			—			1			—			1						5
Total		$	3		$	2		$	—		$	1		$	—		$	2		$	207		$	39		$	27		$	281

December 31, 2022


				Receivables from affiliates:
	Payables to affiliates:			ComEd			PECO			BGE			Pepco			DPL			ACE			BSC			PHISCO			Other			Total
ComEd					$	—		$	—		$	—		$	—		$	—		$	66		$	—		$	8		$	74
PECO		$	—					—			—			—			—			39			—			3			42
BGE		—			—						—			—			—			38			—			1			39
PHI		—			—			—			—			—			—			4			—			10			14
Pepco		—			—			—						—			—			20			13			1			34
DPL		—			2			—			—						—			12			8			—			22
ACE		—			2			—			—			—						14			9			1			26
Other		3			—			—			—			—			1			—			—						4
Total		$	3		$	4		$	—		$	—		$	—		$	1		$	193		$	30		$	24		$	255

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 intercompany money pool. Pepco, DPL, and ACE participate in the PHI intercompany money pool.

Long-term debt to financing trusts

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


	March 31, 2023						December 31, 2022
	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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