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Exelon Corporation 2014 Annual Report

Table of contents

  • Page 1
    Exelon Corporation 2014 Annual Report

  • Page 2

  • Page 3
    ...and business customers. Exelon's utilities deliver electricity to more than 6.7 million customers in central Maryland (BGE), northern Illinois (ComEd) and southeastern Pennsylvania (PECO), and natural gas to 1.2 million customers through BGE and PECO. Exelon is headquartered in Chicago and trades on...

  • Page 4
    ... INFORMATION ...GENERAL DESCRIPTION OF OUR BUSINESS ...General ...Exelon Generation Company, LLC ...Commonwealth Edison Company ...PECO Energy Company ...Baltimore Gas and Electric Company ...Environmental Regulation ...Executive Officers of the Registrants ...MARKET FOR REGISTRANT'S COMMON EQUITY...

  • Page 5
    ...Trust IV BGE Trust II PETT Registrants Other Terms and Abbreviations Exelon Corporation Exelon Generation Company, LLC Commonwealth Edison Company PECO Energy Company Baltimore Gas and Electric Company Exelon Business Services Company, LLC Exelon's holding company Constellation Energy Nuclear Group...

  • Page 6
    ... Generation Supplier ExGen Texas Power, LLC Illinois Energy Infrastructure Modernization Act United States Environmental Protection Agency Electric Reliability Council of Texas Employee Retirement Income Security Act of 1974, as amended Expected Rate of Return on Assets Employee Stock Purchase Plan...

  • Page 7
    ...'s Investor Service Minimum Offer Price Rule Market-Related Value Megawatt Megawatt hour National Ambient Air Quality Standards not meaningful Net Asset Value Nuclear Decommissioning Trust Nuclear Electric Insurance Limited North American Electric Reliability Corporation Natural Gas Supplier New...

  • Page 8
    ... Standard & Poor's Ratings Services United States Securities and Exchange Commission Maryland Senate Bill 1 SERC Reliability Corporation (formerly Southeast Electric Reliability Council) Supplemental Employee Retirement Plan Smart Grid Investment Grant Smart Grid Initiative Program Sale-In, Lease...

  • Page 9
    ...information relating to any other Registrant. FORWARD-LOOKING STATEMENTS This Report contains certain forward-looking statements, within the meaning of the Private Securities... (a) Management's Discussion and Analysis of Financial Condition and Results of Operations and (b) Financial Statements and ...

  • Page 10
    ... its telephone number is 215-841-4000. BGE BGE's energy delivery business consists of the purchase and regulated retail sale of electricity and the provision of electricity transmission and distribution services to retail customers in central Maryland, including the City of Baltimore, as well as the...

  • Page 11
    ... foster development and delivery of other innovative energy-related products and services for its customers. Generation operates in well-developed energy markets and employs an integrated hedging strategy to manage commodity price volatility. Generation's fleet, including its nuclear plants which...

  • Page 12
    ...Energy Services, Inc. (Integrys) for a purchase price of $332 million, including net working capital. The generation and solar asset businesses of Integrys are excluded from the transaction. See Note 4-Mergers, Acquisitions, and Dispositions of the Combined Notes to Consolidated Financial Statements...

  • Page 13
    ... Financial Statements for additional information on revenues from external customers and revenues net of purchased power and fuel expense for each of Generation's reportable segments. Nuclear Facilities Generation has ownership interests in fourteen nuclear generating stations currently in service...

  • Page 14
    ..., operations, maintenance, emergency planning, security and environmental and radiological aspects of those stations. As part of its reactor oversight process, the NRC continuously assesses unit performance indicators and inspection results, and communicates its assessment on a semi-annual basis...

  • Page 15
    ... for use of the Exelon Nuclear Management Model. The terms for both agreements are 20 years. OPPD will continue to own the plant and remain the NRC licensee. Nuclear Uprate Program. Generation is engaged in individual projects as part of a planned power uprate program across its nuclear fleet. When...

  • Page 16
    ... Note 15-Asset Retirement Obligations of the Combined Notes to Consolidated Financial Statements for additional information regarding Zion Station Decommissioning). All currently operating Generation-owned nuclear sites have on-site dry cask storage, except for Clinton and Three Mile Island. Clinton...

  • Page 17
    ...and retail power marketing activities. For additional information regarding Generation's electric generating facilities, see MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS-Exelon Corporation, Executive Overview for additional information on Generation Renewable...

  • Page 18
    ...a material adverse effect on Exelon's and Generation's financial condition and their results of operations and cash flows. Long-Term Power Purchase Contracts In addition to energy produced by owned generation assets, Generation sources electricity and other related output from plants it does not own...

  • Page 19
    ... growth. Generation's purchases may be for more than the energy demanded by Generation's customers. Generation then sells this open position, along with capacity not used to meet customer demand, in the wholesale electricity markets. Where necessary, Generation also purchases transmission service...

  • Page 20
    ... to ComEd, PECO and BGE to serve their retail load. A portion of Generation's hedging strategy may be implemented through the use of fuel products based on assumed correlations between power and fuel prices, which routinely change in the market. The corporate risk management group and Exelon's RMC...

  • Page 21
    ... energy; however, that activity has no impact on electric revenue net of purchased power expense or ComEd's financial position. ComEd's cost of electric supply is passed without markup directly through to those customers not served by a competitive electric generation supplier and those rates...

  • Page 22
    ... of eligible retail customers. EIMA provides for additional energy efficiency in Illinois. Starting in the June 2013 through May 2014 period and occurring annually thereafter, as part of the IPA procurement plan, ComEd is to include cost-effective expansion of current energy efficiency programs, and...

  • Page 23
    ... revenue collected from customers related to supplied energy; however, that activity has no impact on PECO's electric revenue net of purchased power expense or financial position. PECO's cost of electric supply is passed directly through to default service customers without markup and those rates...

  • Page 24
    ... previously issued Retail Markets Intermediate Work Plan Order. PECO was also directed to allow its low-income Customer Assistance Program (CAP) customers to purchase their generation supply from competitive electric generation suppliers beginning April 1, 2014. On May 1, 2013, PECO filed a Petition...

  • Page 25
    ... Financial Statements for additional information. Natural Gas PECO's natural gas sales and distribution service revenues are derived through natural gas deliveries at rates regulated by the PAPUC. PECO's purchased natural gas cost rates, which represent a significant portion of total rates...

  • Page 26
    ...Capital Resources for further information. BGE BGE is engaged principally in the purchase and regulated retail sale of electricity and the provision of electricity transmission and distribution services to retail customers in central Maryland, including the City of Baltimore, as well as the purchase...

  • Page 27
    ... Financial Statements for additional information on revenues from external customers, net income and total assets. Procurement Related Proceedings. BGE is obligated to provide market-based SOS to all of its electric customers. The SOS rates charged recover BGE's wholesale power supply costs...

  • Page 28
    ... gas. Earnings from these activities are shared between shareholders and customers. BGE makes these sales as part of a program to balance its supply of, and cost of, natural gas. Natural Gas Distribution Rate Case. On July 2, 2014, and as amended on September 15, 2014, BGE filed for a gas base rate...

  • Page 29
    ... for updating the formula rate calculation on an annual basis. See Note 3-Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information regarding transmission services. Environmental Regulation General Exelon, Generation, ComEd, PECO and BGE are subject to...

  • Page 30
    ... from power plants. See MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS for additional information regarding clean air regulation in the forms of the CSAPR, the regulation of hazardous air pollutants from coaland oil-fired electric generating facilities under...

  • Page 31
    ... at former MGP sites. ComEd, pursuant to an ICC order, and PECO, pursuant to settlements of natural gas distribution rate cases with the PAPUC, have an on-going process to recover environmental remediation costs of the MGP sites through a provision within customer rates. While BGE does not have...

  • Page 32
    ... of fossil fuels represent the majority of Exelon's direct GHG emissions in 2014, although only a small portion of Exelon's electric supply is from fossil generating plants. Other GHG emission sources at Exelon include natural gas (methane) leakage on the natural gas systems, sulfur hexafluoride...

  • Page 33
    ...-carbon generating fleet is seen by management as a competitive advantage. Exelon remains one of the largest, lowest carbon electric generators in the United States: nuclear for base load, natural gas for marginal and peak demand, hydro and pumped storage, and supplemental wind and solar renewables...

  • Page 34
    ... in Maryland related to the use of alternative energy resources; however, the wholesale suppliers that supply power to BGE through SOS procurement auctions have the obligation, by contract with BGE, to meet the RPS requirements. Similar to ComEd, PECO and BGE, Generation's retail electric business...

  • Page 35
    ... Generation Executive Vice President and Chief Commercial Officer, Exelon President and Chief Executive Officer, Constellation Senior Vice President, Exelon; President, Power Team Senior Executive Vice President, Exelon; Chief Executive Officer, Exelon Utilities Vice Chairman, ComEd, PECO, BGE Chief...

  • Page 36
    ..., Exelon Chief Operating Officer, Exelon Transmission Company Senior Vice President, Mid-Atlantic Operations, Exelon Nuclear Senior Vice President and Chief Financial Officer, Generation Senior Vice President, Corporate Finance, Exelon Chief Accounting Officer, Constellation Energy Vice President...

  • Page 37
    ...BGE Senior Vice President, Strategy and Regulatory Affairs, BGE Vice President, Customer Operations and Chief Customer Officer, BGE Vice President, Gas Distribution, BGE Director, Gas and Electric Field Services, BGE 2014 - Present 2013 - 2014 2011 - 2013 2010 - 2011 2009 - 2010 2014 - Present 2012...

  • Page 38
    ... 31, 2015, there were 859,833,343 shares of common stock outstanding and approximately 123,997 record holders of common stock. The following table presents the New York Stock Exchange-Composite Common Stock Prices and dividends by quarter on a per share basis: 2014 Third Second Quarter Quarter 2013...

  • Page 39
    ...2009 2010 Value of Investment at December 31, 2011 2012 2013 2014 Exelon Corporation S&P 500 S&P Utilities $100 $100 $100 $74.88 $139.23 $107.71 $77.99 $139.23 $123.69 $53.48 $157.89 $120.09 $49.25 $204.63 $130.60 $66.68 $227.94 $162.33 Generation As of January 31, 2015, Exelon indirectly...

  • Page 40
    ... by Exelon. BGE As of January 31, 2015, there were 1,000 outstanding shares of common stock, without par value, of BGE, all of which were indirectly held by Exelon. Dividends Under applicable Federal law, Generation, ComEd, PECO and BGE can pay dividends only from retained, undistributed or current...

  • Page 41
    ... On April 1, 2014, Generation assumed operational control of CENG's nuclear fleet. As a result, the 2014 financial results include CENG's results of operations on a fully consolidated basis. (b) 2012 financial results include the activity of Constellation from the merger effective date of March 12...

  • Page 42
    (In millions) 2014 2013 December 31, 2012 2011 2010 Balance Sheet data: Current assets ...Property, plant and equipment, net ...Noncurrent regulatory assets ...Goodwill ...Other deferred debits and other assets ...Total assets ... $12,097 52,087 6,076 2,672 13,882 $86,814 $ 8,762 20,010 4,550 ...

  • Page 43
    ... and gas distribution services in central Maryland, including the City of Baltimore. • Exelon has nine reportable segments consisting of Generation's six power marketing reportable segments (Mid-Atlantic, Midwest, New England, New York, ERCOT and other regions in Generation), ComEd, PECO and BGE...

  • Page 44
    ... Ended December 31, 2014 ComEd PECO BGE Other Exelon Favorable (Unfavorable) Variance Generation (a) 2013 Exelon Operating revenues ...Purchased power and fuel expense ...Revenue net of purchased power and fuel expense (b) ...Other operating expenses Operating and maintenance ...Depreciation and...

  • Page 45
    ... primarily in operating and maintenance expense); and Increase of $104 million at BGE primarily due to increased distribution revenue as a result of the 2013 and 2014 electric and natural gas distribution rate case orders issued by the Maryland PSC, increased cost recovery for energy efficiency and...

  • Page 46
    ...Generation as a result of favorable settlements in 2014 of certain income tax positions on Constellation's pre-acquisition 2009-2012 tax returns and the change in realized and unrealized gains and losses on NDT funds. Exelon's effective income tax rates for the years ended December 31, 2014 and 2013...

  • Page 47
    ...the 2013 non-cash amortization of certain debt (net of taxes of ($5) million) recorded at fair value at the Constellation merger date which was retired in the second quarter of 2013. See Note 4-Mergers, Acquisitions, and Dispositions of the Combined Notes to the Consolidated Financial Statements for...

  • Page 48
    ... capitalized to property, plant and equipment excluding the direct investment Exelon and PHI have proposed to the PHI utilities respective customers. Pursuant to the conditions set forth by the MDPSC in its approval of the merger transaction, Exelon committed to provide a package of benefits to BGE...

  • Page 49
    ... foster development and delivery of other innovative energyrelated products and services for its customers. Generation operates in well-developed energy markets and employs an integrated hedging strategy to manage commodity price volatility. Its generation fleet, including its nuclear plants which...

  • Page 50
    ... or third quarter of 2015. Refer to Note 4-Mergers, Acquisitions, and Dispositions of the Combined Notes to Consolidated Financial Statements for additional information on the merger transaction. Power Markets Price of Fuels. The use of new technologies to recover natural gas from shale deposits...

  • Page 51
    ... resulting in positive growth for electricity for ComEd and PECO, and no projected growth for electricity for BGE. ComEd, PECO and BGE are projecting load volumes to increase by 0.4%, 0.8% and (0.2)%, respectively, in 2015 compared 2014. Retail Competition. Generation's retail operations compete for...

  • Page 52
    ...in using hedging strategies to mitigate commodity price risk in subsequent years as well. See Note 4-Mergers, Acquisition and Dispositions for more detail regarding the divestitures. Generation procures oil and natural gas through long-term and short-term contracts and spot-market purchases. Nuclear...

  • Page 53
    ... gas businesses, as well as entry into liquefied natural gas. Regulated Energy Businesses The proposed acquisition of PHI provides an opportunity to accelerate Exelon's regulated growth and provide stable cash flows, earnings accretion, and dividend stability. Additionally, ComEd, PECO and BGE...

  • Page 54
    ... operating and maintenance expense, and will likely result in the retirement of older, marginal facilities. Due to their low emission generation portfolios, Generation and CENG will not be significantly directly affected by these regulations, representing a competitive advantage relative to electric...

  • Page 55
    ... diesel backup generators to operate for up to 100 hours annually under certain emergency circumstances without meeting emissions limitations, but requires units that operate over 15 hours to burn low sulfur fuel and report key engine information. The final rule eliminates after May 2014 the 50...

  • Page 56
    ...achieve its required reductions, including heat rate improvements at coal-fired power plants, fuel switching from coal to gas, renewable generation and new nuclear facilities, demand side energy efficiency, and the use of market-based instruments. While the nature and impact of the final regulations...

  • Page 57
    ...future financial position, results of operations, and cash flows. Generation will continue to engage in nuclear industry assessments and actions and stakeholder input. See Item Management's Discussion and Analysis of Financial Condition and Results of Operations-Executive Overview of the Exelon 2014...

  • Page 58
    ... been reserved for the PJM Transmission Owners, potentially reducing ComEd's, PECO's and BGE's financial return on new investments in energy transmission facilities. Numerous parties sought rehearing of the FERC's March 22, 2013 order, including the PJM Transmission Owners who sought rehearing of...

  • Page 59
    ...Holdings, Inc. companies relating to their respective transmission formula rates. BGE's formula rate includes a 10.8% base rate of return on common equity (ROE) and a 50 basis point incentive for participating in PJM (the latter of which is conditioned upon crediting the first 50 basis points of any...

  • Page 60
    ... decommissioning period for each of the units. Cost escalation studies, updated on an annual basis, are used to determine escalation factors, and are based on inflation indices for labor, equipment and materials, energy, LLRW disposal and other costs. Probabilistic Cash Flow Models. Generation...

  • Page 61
    ... estimated future cash flows using these various scenarios are discounted using creditadjusted, risk-free rates (CARFR) applicable to the various businesses in which each of the nuclear units originally operated. The accounting guidance required Generation to establish an ARO at fair value at the...

  • Page 62
    ... and growth rates, utility sector market performance and transactions, projected operating and capital cash flows for ComEd's business and the fair value of debt. In applying the second step (if needed), management must estimate the fair value of specific assets and liabilities of the reporting unit...

  • Page 63
    ... purchased power and fuel expense or operating revenues. Refer to Note 4-Mergers, Acquisitions, and Dispositions and Note 10-Intangible Assets of the Combined Notes to Consolidated Financial Statements for further discussion. Impairment of Long-lived Assets Exelon, Generation, ComEd, PECO and BGE...

  • Page 64
    ... revenues to be generated and costs to be incurred to operate the plants over their remaining useful lives subsequent to the lease end dates. Significant assumptions used in estimating the fair value include fundamental energy and capacity prices, fixed and variable costs, capital expenditure...

  • Page 65
    ... securities, as well as certain alternative investment classes such as real estate, private equity and hedge funds. See Note 16-Retirement Benefits of the Combined Notes to Consolidated Financial Statements for information on fair value measurements of pension and other postretirement plan assets...

  • Page 66
    ... Cost Trend Rate. Assumed health care cost trend rates impact the costs reported for Exelon's other postretirement benefit plans for participant populations with plan designs that do not have a cap on cost growth. Accounting guidance requires that annual health care cost estimates be developed using...

  • Page 67
    ... period of postretirement benefit plan participants related to expected retirement was 10.1 years, 9.8 years and 10.1 years for the years ended December 31, 2014, 2013 and 2012, respectively. Regulatory Accounting Exelon, ComEd, PECO and BGE account for their regulated electric and gas operations in...

  • Page 68
    ...interest rates related to planned future debt issuances and changes in the fair value of outstanding debt. Generation uses a variety of derivative and non-derivative instruments to manage the commodity price risk of its electric generation facilities, including power sales, fuel and energy purchases...

  • Page 69
    ... designated for hedge accounting for ComEd, PECO and BGE, changes in the fair value each period are recorded as a regulatory asset or liability. Normal Purchases and Normal Sales Exception. As part of Generation's energy marketing business, Generation enters into contracts to buy and sell energy to...

  • Page 70
    ... energy purchases in currencies other than U.S. dollars, Generation utilizes foreign currency derivatives, which are typically designated as economic hedges. The fair value of the agreements is calculated by discounting the future net cash flows to the present value based on the terms and conditions...

  • Page 71
    ..., variances in costs incurred and investments made and actions by regulators or courts. Unbilled Revenues. The determination of Generation's, ComEd's, PECO's and BGE's retail energy sales to individual customers is based on systematic readings of customer meters generally on a monthly basis. At the...

  • Page 72
    ... 31, 2012. For Exelon and Generation, includes the operations of the Constellation and BGE from the date of the merger, March 12, 2012, through December 31, 2012. (b) On April 1, 2014, Generation assumed operational control of CENG's nuclear fleet. As a result, the 2014 financial results include...

  • Page 73
    ... more useful than the GAAP information provided elsewhere in this report. (b) Includes the operations of Constellation from the date of the merger, March 12, 2012. (c) On April 1, 2014, Generation assumed operational control of CENG's nuclear fleet. As a result, the 2014 financial results include...

  • Page 74
    ... its power marketing activities and allocates resources using the measure of revenue net of purchased power and fuel expense which is a non-GAAP measurement. Generation's operating revenues include all sales to third parties and affiliated sales to ComEd, PECO and BGE. Purchased power costs include...

  • Page 75
    ... 2014 2013 2012 (a) Mid-Atlantic (b)(c)(g) ...Midwest (d) ...New England ...New York (b)(g) ...ERCOT ...Other Regions (e) ...Total electric revenue net of purchased power and fuel expense ...Proprietary Trading ...Mark-to-market gains (losses) ...Other (f) ...Total revenue net of purchased power...

  • Page 76
    ... included in nuclear generation. (d) Excludes generation under the reliability-must-run rate schedule and generation of Brandon Shores, H.A. Wagner, and C.P. Crane, the generating facilities divested in the fourth quarter of 2012 as a result of the Exelon and Constellation merger. (e) Other Regions...

  • Page 77
    ... $119 million decrease in revenue net of purchased power and fuel expense in ERCOT was primarily due to higher procurement costs for replacement power in the second quarter of 2014 and the termination of an energy supply contract with a retail power supply company that was previously a consolidated...

  • Page 78
    ... intangibles and assets planned for divestiture as a result of the Constellation merger. Nuclear Fleet Capacity Factor and Production Costs The following table presents nuclear fleet operating data for 2014, as compared to 2013 and 2012, for the Generation-operated plants. The nuclear fleet capacity...

  • Page 79
    ... costs and higher plant operating and maintenance costs, partially offset by higher number of net MWhs generated resulted in a higher production cost per MWh during 2013 as compared to 2012. Operating and Maintenance Expense The changes in operating and maintenance expense for 2014 compared to 2013...

  • Page 80
    ... operating and maintenance expense for 2013 compared to 2012, consisted of the following: Increase (Decrease) Plant retirements and divestitures (a) ...FERC settlement (b) ...Constellation merger and integration costs ...Maryland commitments ...Asbestos bodily injury costs (c) ...Nuclear refueling...

  • Page 81
    ... on consolidation and acquisition of businesses is primarily related to a $261 million gain upon consolidation of CENG resulting from the difference in fair value of CENG's net assets as of April 1, 2014 and the equity method investment previously recorded on Generation's and Exelon's books and the...

  • Page 82
    ...information on ComEd's electricity procurement process. All ComEd customers have the choice to purchase electricity from a competitive electric generation supplier. Customer choice programs do not impact ComEd's volume of deliveries, but do affect ComEd's Operating revenue related to supplied energy...

  • Page 83
    ...% of total retail customers, respectively. Retail energy purchased from competitive electric generation suppliers represented 80%, 81% and 65% of ComEd's retail kWh sales for the years ended December 31, 2014, 2013 and 2012, respectively. The changes in ComEd's Revenue net of purchased power expense...

  • Page 84
    ... recovery, net represents recoveries under ComEd's uncollectible accounts tariff. See the Operating and maintenance expense discussion below for additional information on this tariff. Pricing and Customer Mix The increase in Revenue net of purchased power as a result of pricing and customer mix is...

  • Page 85
    ... formula rate proceeding under EIMA, which reestablished ComEd's position on the return on its pension asset, resulting in an increase to revenue in 2013. See Note 3- Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information. Transmission Revenue During...

  • Page 86
    ... collected in rates annually through a rider mechanism. In 2013, ComEd recorded a net reduction in Operating and maintenance expense related to uncollectible accounts due to the timing of regulatory cost recovery and customers purchasing electricity from competitive electric generation suppliers as...

  • Page 87
    ...Financial Statements for additional information regarding the components of the effective income tax rates. ComEd Electric Operating Statistics and Revenue Detail % Change 2014 vs 2013 WeatherNormal % Change % Change 2013 vs 2012 WeatherNormal % Change Retail Deliveries to customers (in GWhs) 2014...

  • Page 88
    ... from customers purchasing electricity directly from ComEd and customers purchasing electricity from a competitive electric generation supplier, as all customers are assessed delivery charges. For customers purchasing electricity from ComEd, revenue also reflects the cost of energy and transmission...

  • Page 89
    .... Operating Revenue Net of Purchased Power and Fuel Expense Electric and gas revenue and purchased power and fuel expense are affected by fluctuations in commodity procurement costs. PECO's electric supply and natural gas cost rates charged to customers are subject to adjustments at least quarterly...

  • Page 90
    ... information on included programs. The changes in PECO's operating revenue net of purchased power and fuel expense for the year ended December 31, 2013 compared to the same period in 2012 consisted of the following: Increase (Decrease) Electric Gas Total Weather ...Volume ...Pricing ...Regulatory...

  • Page 91
    Pricing The decrease in electric operating revenue net of purchased power expense as a result of pricing is primarily attributable to lower overall effective rates due to increased usage across all major customer classes. Regulatory Required Programs This represents the change in operating revenue ...

  • Page 92
    The changes in Operating and maintenance expense for 2014 compared to 2013 and 2013 compared to 2012 consisted of the following: Increase (Decrease) 2014 vs. 2013 Increase (Decrease) 2013 vs. 2012 Baseline Labor, other benefits, contracting and materials ...Storm-related costs ...Pension and non-...

  • Page 93
    ... revenue includes transmission revenue from PJM and wholesale electric revenue. PECO Gas Operating Statistics and Revenue Detail Weather% Change Normal % 2014 vs. 2013 Change Weather% Change Normal % 2013 vs. 2012 Change Deliveries to customers (in mmcf) (a) 2014 2013 2012 Retail Deliveries...

  • Page 94
    ... customers purchasing natural gas from PECO, revenue also reflect the cost of natural gas. Results of Operations-BGE Favorable (unfavorable) 2014 vs. 2013 variance Favorable (unfavorable) 2013 vs. 2012 variance 2014 2013 2012 Operating revenue ...Purchased power and fuel expense ...Revenue net...

  • Page 95
    ...BGE's Operating revenue net of purchased power and fuel expense for the year ended December 31, 2014 compared to the same period in 2013 consisted of the following: Increase (Decrease) Electric Gas Total Distribution rate increases ...Commodity margin ...Regulatory required programs ...Transmission...

  • Page 96
    ... December 15, 2014 approving increases to electric and natural gas distribution rates charged to customers. See Note 3-Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information. Commodity Margin. The increase in Revenue net of purchased power and fuel...

  • Page 97
    ... 13, 2013 approving increases to electric and natural gas distribution rates charged to customers. See Note 3-Regulatory Matters of the Combined Notes to the Consolidated Financial Statements for further information. Regulatory Required Programs. This represents the change in revenue collected under...

  • Page 98
    ...to Consolidated Financial Statements for additional information regarding the components of the effective income tax rates. BGE Electric Operating Statistics and Revenue Detail Weather% Change Normal % 2014 vs. 2013 Change Weather% Change Normal % 2013 vs. 2012 Change Retail Deliveries to customers...

  • Page 99
    ...purchasing electricity from BGE, revenue also reflects the cost of energy and transmission. BGE Gas Operating Statistics and Revenue Detail Weather% Change Normal % 2014 vs. 2013 Change Weather% Change Normal % 2013 vs. 2012 Change Deliveries to customers (in mmcf) 2014 2013 2012 Retail Retail...

  • Page 100
    ... and supply power at competitive costs as well as to obtain collections from customers. ComEd's, PECO's and BGE's cash flows from operating activities primarily result from the transmission and distribution of electricity and, in the case of PECO and BGE, gas distribution services. ComEd's, PECO...

  • Page 101
    ... 16-Retirement Benefits of the Combined Notes to Consolidated Financial Statements for the Registrants' 2014 and 2013 pension contributions. To the extent interest rates decline significantly or the pension plans do not earn the expected asset return rates, annual pension contribution requirements...

  • Page 102
    ... in working capital in the normal course of business, except as discussed below. In addition, significant operating cash flow impacts for the Registrants for 2014, 2013 and 2012 were as follows: Generation • Depending upon whether Generation is in a net mark-to-market liability or asset position...

  • Page 103
    .... See Note 5-Investment in Constellation Energy Nuclear Group, LLC of the Combined Notes to Consolidated Financial Statements for further information. Generation closed on the sale of its 67% equity interest in the 417 MW Safe Harbor Water Power Corporation hydroelectric facility on the Susquehanna...

  • Page 104
    ...4-Mergers, Acquisitions, and Dispositions of the Combined Notes to Consolidated Financial Statements for further information. During the fourth quarter of 2014, Generation acquired the competitive retail electric and natural gas business activities of Integrys Energy Group, Inc. through the purchase...

  • Page 105
    ... control of CENG's nuclear fleet. As a result, the 2014 activity includes CENG on a fully consolidated basis beginning April 1, 2014. (b) Exelon's and Generation's 2012 activity includes the activity of Constellation, and BGE in the case of Exelon, from the merger effective date of March 12...

  • Page 106
    ...and general corporate purposes Generation Nuclear Fuel Procurement Contract Generation ExGen Renewables I Nonrecourse Debt (b) 3.35% LIBOR + 4.25% June 30, 2018 February 6, 2021 September 18, 2021 December 31, 2015 Generation ExGen Texas Power Nonrecourse LIBOR + 4.75% Debt (b) Generation Energy...

  • Page 107
    ... corporate purposes Used to pay at maturity First Mortgage Bonds due October 1, 2012 and for general corporate purposes Used to repay total outstanding commercial paper obligations and for general corporate purposes Generation Senior Notes 5.60% June 15, 2042 788 Generation Constellation Solar...

  • Page 108
    ... Financial Statements for discussion of nonrecourse debt. During the year ended December 31, 2013, the following long term debt was retired and/or redeemed: Company Type Interest Rate Maturity Amount Generation Generation Generation Generation Generation (a) Generation ComEd ComEd PECO BGE BGE...

  • Page 109
    ... ended December 31, 2012, the following long term debt was retired and/or redeemed: Company Type Interest Rate Maturity Amount Exelon Exelon Generation Generation Generation Generation Generation Generation ComEd PECO PECO BGE BGE BGE Fixed rate Medium Term Notes Fixed rate Senior Notes Kennett...

  • Page 110
    ... Notes to Consolidated Financial Statements' for additional information. Credit Matters Market Conditions The Registrants fund liquidity needs for capital investment, working capital, energy hedging and other financial commitments through cash flows from continuing operations, public debt offerings...

  • Page 111
    ...default swap levels, capital raising and merger activity. The Registrants believe their cash flow from operating activities, access to credit markets and their credit facilities provide sufficient liquidity. If Generation lost its investment grade credit rating as of December 31, 2014, it would have...

  • Page 112
    ... market-based rate authority. See Note 3-Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information. Exelon's ability to pay dividends on its common stock depends on the receipt of dividends paid by its operating subsidiaries. The payments of dividends...

  • Page 113
    ... Financial Statements for electric and gas purchase commitments. (g) Primarily related to ComEd 20-year contracts for renewable energy and RECs beginning in June 2012. ComEd is permitted to recover its renewable energy and REC costs from retail customers with no mark-up. The commitments represent...

  • Page 114
    ... Operations and Hedging Activities. Electricity available from Generation's owned or contracted generation supply in excess of Generation's obligations to customers, including portions of ComEd's, PECO's and BGE's retail load, is sold into the wholesale markets. To reduce price risk caused by market...

  • Page 115
    ... sales to ComEd, PECO and BGE to serve their retail load. See Note 4-Mergers, Acquisitions, and Dispositions of the Combined Notes to Consolidated Financial Statements for more detail regarding divestitures. A portion of Generation's hedging strategy may be accomplished with fuel products based on...

  • Page 116
    ... hedge its price risk in the natural gas market. The hedging program for natural gas procurement has no direct impact on BGE's financial position. However, under BGE's market-based rates incentive mechanism, BGE's actual cost of gas is compared to a market index (a measure of the market price of gas...

  • Page 117
    ... Financial Statements for additional information on the balance sheet classification of the mark-to-market energy contract net assets (liabilities) recorded as of December 31, 2014 and December 31, 2013. Generation ComEd Intercompany Eliminations (b) Exelon Total mark-to-market energy contract net...

  • Page 118
    ... at December 31, 2014. (c) Includes ComEd's net assets (liabilities) associated with the floating-to-fixed energy swap contracts with unaffiliated suppliers. Generation Maturities Within 2015 2016 2017 2018 2019 2020 and Beyond Total Fair Value Normal Operations, Commodity derivative contracts...

  • Page 119
    ... rated-non-investment grade ...Total ... $1,196 35 388 60 $1,679 $379 11 90 - $480 $ 54 3 1 - $ 58 $1,629 49 479 60 $2,217 As of December 31, 2014 Net Credit Exposure by Type of Counterparty Financial institutions ...Investor-owned utilities, marketers, power producers ...Energy cooperatives...

  • Page 120
    ... cash collateral from suppliers under its natural gas supply and asset management agreements. As of December 31, 2014, PECO had credit exposure of $8 million under its natural gas supply and asset management agreements with investment grade suppliers. BGE Credit risk for BGE is managed by credit...

  • Page 121
    ... net mark-to-market assets and liabilities because it was not associated with energy-related derivatives or at the balance sheet date there were no positions to offset. See Note 22-Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for information regarding...

  • Page 122
    ...Consolidated Financial Statements for additional information. RTOs and ISOs Generation, ComEd, PECO and BGE participate in all, or some, of the established, real-time energy markets that are administered by PJM, ISO-NE, ISO-NY, CAISO, MISO, SPP, AESO, OIESO and ERCOT. In these areas, power is traded...

  • Page 123
    ... trust funds is designed to provide returns to be used to fund decommissioning and to compensate Generation for inflationary increases in decommissioning costs; however, the equity securities in the trust funds are exposed to price fluctuations in equity markets, and the value of fixed-rate, fixed...

  • Page 124
    ...from management's assessment of the effectiveness of Exelon's internal control over financial reporting as of December 31, 2014. This exclusion is in accordance with the SEC's general guidance that an assessment of a recently acquired business may be omitted from our scope in the year of acquisition...

  • Page 125
    ...December 31, 2014 because it was acquired by the Company in a purchase business combination on November 1, 2014. We have also excluded Integrys from our audit of internal control over financial reporting. Integrys is a wholly-owned subsidiary whose total assets and total revenues represent 0.74% and...

  • Page 126
    ... 31, 2014 2013 2012 (In millions, except per share data) Operating revenues Operating expenses Purchased power and fuel Purchased power and fuel from affiliates Operating and maintenance Depreciation and amortization Taxes other than income Total operating expenses Equity in (losses) earnings of...

  • Page 127
    ... and acquisition of businesses (Gain) loss on sales of assets Deferred income taxes and amortization of investment tax credits Net fair value changes related to derivatives Net realized and unrealized gains on nuclear decommissioning trust fund investments Other non-cash operating activities...

  • Page 128
    Exelon Corporation and Subsidiary Companies Consolidated Balance Sheets December 31, 2014 2013 (In millions) ASSETS Current assets Cash and cash equivalents Restricted cash and cash equivalents Accounts receivable, net Customer Other Mark-to-market derivative assets Unamortized energy contract ...

  • Page 129
    ...stock (No par value, 2,000 shares authorized, 860 and 857 shares outstanding at December 31, 2014 and 2013, respectively) Treasury stock, at cost (35 shares held at December 31, 2014 and 2013) Retained earnings Accumulated other comprehensive loss, net Total shareholders' equity BGE preference stock...

  • Page 130
    ... Stock Stock Earnings Loss Interest Stock Equity (In millions, shares in thousands) Balance, December 31, 2011 698,112 $ 9,107 $(2,327) $10,055 Net income (loss) - - - 1,160 Long-term incentive plan activity 2,432 126 - - Employee stock purchase plan issuances 857 26 - - Common stock dividends...

  • Page 131
    ..., Midwest, New England, New York, ERCOT and Other regions. The energy delivery businesses include: • • ComEd: Purchase and regulated retail sale of electricity and the provision of distribution and transmission services in northern Illinois, including the City of Chicago. PECO: Purchase and...

  • Page 132
    ... owned electric plants and transmission facilities, as well as its undivided ownership interests in Upstream natural gas exploration and production activities. Under proportionate consolidation, Exelon separately records its proportionate share of the assets, liabilities, revenues and expenses...

  • Page 133
    ...revenue. As of the Constellation merger date, Exelon and Generation have currently elected to de-designate all of their commodity cash flow hedge positions. As ComEd receives full cost recovery for energy procurement and related costs from retail customers, ComEd records the fair value of its energy...

  • Page 134
    ... taxes collected from customers along with an offsetting expense. See Note 23-Supplemental Financial Information for Generation's, ComEd's, PECO's and BGE's utility taxes that are presented on a gross basis. Cash and Cash Equivalents Exelon considers investments purchased with an original maturity...

  • Page 135
    ... cost or market and charged to fuel expense as they are used in operations. Marketable Securities All marketable securities are reported at fair value. Marketable securities held in the NDT funds, certain Generation Rabbi trust investments and BGE's Rabbi trust investments are classified as trading...

  • Page 136
    ... to fair value as a new cost basis and the amount of the write-down is included in earnings. See Note 15-Asset Retirement Obligations for information regarding marketable securities held by NDT funds and Note 23-Supplemental Financial Information for additional information regarding ComEd's and PECO...

  • Page 137
    ... capitalized to property, plant and equipment (based on the nature of the activities) in the period incurred. New Site Development Costs New site development costs represent the costs incurred in the assessment and design of new power generating facilities. Such costs are capitalized when management...

  • Page 138
    ... asset retirement activity even though the timing and/or method of settlement may be conditional on a future event. To estimate its decommissioning obligation related to its nuclear generating stations, Generation uses a probability-weighted, discounted cash flow model which, on a unit-by-unit basis...

  • Page 139
    ... by year: 2014 (a) 2013 2012 (b) Total incurred ...Capitalized interest ...Credits to AFUDC debt and equity ... interest (c) $1,144 63 37 1,423 54 35 1,003 67 25 (a) On April 1, 2014, Generation assumed operational control of CENG's nuclear fleet. As a result, the 2014 financial results include...

  • Page 140
    ... company. As part of Generation's energy marketing business, Generation enters into contracts to buy and sell energy to meet the requirements of its customers. These contracts include short-term and long-term commitments to purchase and sell energy and energy-related products in the energy markets...

  • Page 141
    ... Consolidated Financial Statements-(Continued) (Dollars in millions, except per share data unless otherwise noted) Equity Investment Earnings (Losses) of Unconsolidated Affiliates Exelon and Generation include equity in earnings from equity method investments in qualifying facilities, power projects...

  • Page 142
    ...340 (a) Includes certain purchase accounting adjustments not pushed down to the BGE standalone entity. (b) Includes total assets of $6.1 billion and total liabilities of $2.1 billion due to the consolidation of CENG. See Note 5- Investment in Constellation Energy Nuclear Group, LLC for additional...

  • Page 143
    ...-party gas supply creditors do not have any recourse to Exelon's or Generation's general credit other than the parental guarantee. Solar Project Entity Group. In 2011, Constellation formed a group of solar project limited liability companies to build, own, and operate solar power facilities, which...

  • Page 144
    ... available output generated by the CENG nuclear plants through the end of 2014 and will purchase 50.01% from 2015 through the end of the operating life of each respective plant, Generation provided a $400 million loan to CENG (see Note 5-Investment in Constellation Energy Nuclear Group, LLC for more...

  • Page 145
    ... any material contractual commitments or obligations to provide financial support to the VIEs; and the creditors of the VIEs did not have recourse to Exelon's, Generation's or BGE's general credit. As of December 31, 2014 and 2013, ComEd and PECO did not have any material consolidated VIEs. 141

  • Page 146
    ... 2014 2013 Cash and cash equivalents ...Restricted cash ...Accounts receivable, net ...Customer ...Other ...Mark-to-market derivatives assets ...Inventory ...Materials and supplies ...Other current assets ...Total current assets ...Property, plant and equipment, net ...Nuclear decommissioning trust...

  • Page 147
    ... represent amounts on Exelon's Consolidated Balance Sheets related to the asset sale agreement with ZionSolutions, LLC. The net assets pledged for Zion Station decommissioning includes gross pledged assets of $319 million and $458 million as of December 31, 2014 and December 31, 2013, respectively...

  • Page 148
    ... benefits from the VIE. In general, the most significant activity of the VIEs is the operation and maintenance of the facilities. Facilities represent power plants, sources of uranium and fossil fuels, or plants used in the uranium conversion, enrichment and fabrication process. Generation...

  • Page 149
    ...for the annual reconciliation for 2012. The final revenue requirement reflected the impacts of Senate Bill 9, which became effective in May 2013 and clarified the intent of EIMA on three issues: an allowed return on ComEd's pension asset; the use of year-end rather than average rate base and capital...

  • Page 150
    ... date, nearly 550,000 smart meters have been installed in the Chicago area. Appeal of 2007 Illinois Electric Distribution Rate Case. The ICC issued an order in ComEd's 2007 electric distribution rate case (2007 Rate Case) approving a $274 million increase in ComEd's annual delivery services revenue...

  • Page 151
    ... for electric supply service and then include those amounts on ComEd's bill to customers. Receivables are purchased at a discount to compensate ComEd for uncollectible accounts. ComEd produces consolidated bills for the aforementioned retail customers reflecting charges for electric delivery service...

  • Page 152
    ... receives from selling capacity and energy from the unit into the MISO or other markets, as well as any other revenue FutureGen receives from the operation of the facility. The order also directs ComEd and Ameren to recover these costs from their electric distribution customers through the use of...

  • Page 153
    ...of PECO's electric and natural gas distribution rate cases, which were filed in March 2010, providing increases in annual service revenue of $225 million and $20 million, respectively. The electric settlement provides for recovery of PJM transmission service costs on a full and current basis through...

  • Page 154
    ... per share data unless otherwise noted) The 2010 electric and natural gas distribution rate case settlements did not specify the rate of return upon which the settlement rates are based, but rather provided for an increase in annual revenue. PECO has not filed a transmission rate case since rates...

  • Page 155
    ... Audit, in which it was determined that PECO fully met its required cost share, and the audit was closed with no further action required. On August 15, 2012, PECO suspended installation of smart meters for new customers based on a limited number of incidents involving overheating meters. Following...

  • Page 156
    ... of the electric company's total annual revenue as of December 31, 2006. On March 15, 2013, PECO filed a Petition for Approval to amend its EE&C Phase II Plan to continue its DLC demand reduction program for mass market customers from June 1, 2013 to May 31, 2014. PECO proposed to fund the estimated...

  • Page 157
    ...retail market in Pennsylvania and directed its Office of Competitive Markets Oversight to evaluate potential intermediate and long-term structural changes to the default service model. Through various orders, the PAPUC issued default electric service pricing for customers in PECO's service territory...

  • Page 158
    ..., the MDPSC approved BGE's 2014 annual report, 2015 work plan and the 2015 surcharge. In January 2014, the residential consumer advocate in Maryland filed an appeal to the order issued by the MDPSC on December 13, 2013 in BGE's 2013 electric and gas distribution rate cases. The residential consumer...

  • Page 159
    ... per share data unless otherwise noted) New Electric Generation. On April 12, 2012, the MDPSC issued an order directing BGE and two other Maryland utilities to enter into a contract for differences (CfD) with CPV Maryland, LLC (CPV), under which CPV will construct an approximately 700MW natural gas...

  • Page 160
    ... for 2015. BGE will defer the difference between the surcharge revenues and program costs as a regulated asset or liability, which was immaterial to Exelon and BGE as of December 31, 2014. In February 2014, the residential consumer advocate in Maryland filed an appeal with the Baltimore City Circuit...

  • Page 161
    ... rate case in 2006, the rate of return on common equity for BGE's electric transmission business for new transmission projects placed in service on and after January 1, 2006 is 11.3%, inclusive of a 50 basis point incentive for participating in PJM. FERC Transmission Complaint. On February 27, 2013...

  • Page 162
    ... service programs in Maryland should be recoverable through retail rates and, thus, the rate design changes are not expected to have a material impact on BGE's results of operations, cash flows or financial position. ComEd, PECO and BGE are committed to the construction of transmission facilities...

  • Page 163
    ...ComEd, PECO and BGE file market power analyses using the prescribed market share screens to demonstrate that Generation, ComEd, PECO and BGE qualify for market-based rates in the regions where they are selling energy, capacity, and ancillary services under market-based rate tariffs. On June 29, 2012...

  • Page 164
    ...impact statement (GEIS) as well as the August 26, 2014 NRC order lifting the suspension of all final licensing decisions for affected applications in view of the rule and GEIS. On May 29, 2013, Generation submitted applications to the NRC to extend the current operating licenses of Byron Units 1 and...

  • Page 165
    ... ...Debt costs ...Fair value of BGE long-term debt ...Severance ...Asset retirement obligations ...MGP remediation costs ...Under-recovered uncollectible accounts ...Renewable energy ...Energy and transmission programs ...Deferred storm costs ...Electric generation-related regulatory asset ...Rate...

  • Page 166
    ... service costs ...Debt costs ...Fair value of BGE long-term debt ...Fair value of BGE supply contracts ...Severance ...Asset retirement obligations ...MGP remediation costs ...RTO start-up costs ...Under-recovered uncollectible accounts ...Renewable energy ...Energy and transmission programs...

  • Page 167
    ...and Note 16-Retirement Benefits for additional information. ComEd, PECO and BGE are not earning a return on the regulatory asset in base rates. AMI programs. For ComEd, this amount represents operating and maintenance expenses and meter costs associated with ComEd's AMI pilot program approved in the...

  • Page 168
    ...result of the Constellation merger. See Note 4-Mergers, Acquisitions, and Dispositions for additional information. Debt costs. Consistent with rate recovery for ratemaking purposes, ComEd's, PECO's and BGE's recoverable losses on reacquired long-term debt related to regulated operations are deferred...

  • Page 169
    ...of the Constellation merger date based on the MDPSC practice to allow BGE to recover its supply contracts through rates. Exelon amortized the regulatory asset and the associated fair value through December 31, 2014 and was not earning a return on the recovery of these contracts. Severance. For ComEd...

  • Page 170
    ... not earn (pay) a return on the regulatory asset (liability). The basis for the mark-to-market derivative asset or liability position is based on the difference between ComEd's cost to purchase energy on the spot market and the contracted price. Energy and transmission programs. ComEd's energy and...

  • Page 171
    ...asset included in base rates. Under (Over)-recovered electric and gas revenue decoupling. These amounts represent the electric and gas distribution costs recoverable from or (refundable) to customers under BGE's decoupling mechanism, which does not earn a rate of return. As of December 31, 2014, BGE...

  • Page 172
    ... of the 2007 Rate Case for further information. Purchase of Receivables Programs ComEd, PECO and BGE are required, under separate legislation and regulations in Illinois, Pennsylvania and Maryland, respectively, to purchase certain receivables from retail electric and natural gas suppliers. For...

  • Page 173
    ... non-current assets on Exelon's Consolidated Balance Sheet. PHI has the right to redeem the preferred securities at its option for the purchase price paid plus accrued dividends, if any. Exelon expects total cash required to fund the acquisition of common stock and preferred securities plus other...

  • Page 174
    ...Debt and Credit Agreements and Note 19-Common Stock for more information. Acquisitions Acquisition of Integrys Energy Services, Inc. On November 1, 2014, Generation acquired the competitive retail electric and natural gas business activities of Integrys Energy Group, Inc. through the purchase of all...

  • Page 175
    ... the fair value of the net assets acquired as of the acquisition date. The after-tax gain is included within Gain on consolidation and acquisition of businesses in Exelon's and Generation's Consolidated Statements of Operations and Comprehensive Income. IES's operating revenue and net loss included...

  • Page 176
    ... Exelon Statement of Operations Location BGE rate credit of $100 per residential customer (a) ...Q2 2012 $113 Revenues Customer investment fund to invest in energy efficiency and low-income energy assistance to BGE customers ...2012 to 2014 114 O&M Expense Contribution for renewable energy, energy...

  • Page 177
    ... laws or permits prior to the closing date of the sale. Pursuant to the MDPSC merger approval conditions, BGE was restricted from paying any dividend on its common shares through the end of 2014, was required to maintain specified minimum capital and O&M expenditure levels in 2012 and 2013...

  • Page 178
    ... Merger of Exelon with Constellation was as follows: Preliminary Purchase Price Allocation, excluding amortization Exelon Current assets ...Property, plant, and equipment ...Unamortized energy contracts ...Other intangibles, trade name and retail relationships ...Investment in affiliates ...Pension...

  • Page 179
    ... rate credit and the credit facility fees, which are included as a reduction to Operating revenues and Other, net, respectively, for years ended December 31, 2014, 2013, and 2012. See Note 22-Commitments and Contingencies for additional information. Pro-forma Impact of the Constellation Merger...

  • Page 180
    ...Asset retirement obligations ...Total liabilities held for sale (b) ... $143 4 $147 $ $ 1 4 5 (a) The total aggregate book value of property, plant and equipment is net of a $50 million pre-tax impairment loss recorded within Operating and maintenance expense on Exelon's and Generation's Statements...

  • Page 181
    ... in the Price Anderson Act) in connection with the CENG nuclear plants or their operations. Exelon guarantees Generation's obligations under this indemnity. In addition, on April 1, 2014, Generation, EDFI, CENG and Nine Mile Point Nuclear Station, LLC entered into an Employee Matters Agreement...

  • Page 182
    ...above: Fair Values Current assets ...Nuclear decommissioning trust fund ...Property, plant and equipment ...Nuclear fuel ...Other assets ...Total assets ...Current liabilities ...Asset retirement obligation ...Pension and other employee benefit obligations ...Unamortized energy contract liabilities...

  • Page 183
    ... and 2013: Average Service Life (years) 2014 2013 Asset Category Electric-transmission and distribution ...Electric-generation ...Gas-transportation and distribution ...Common-electric and gas ...Nuclear fuel (a) ...Construction work in progress ...Other property, plant and equipment (b) ...Total...

  • Page 184
    ...2014, updates to the long-term fundamental energy prices, which included a thorough evaluation of key assumptions including gas prices, load growth, plant retirements and renewable growth, suggested that the carrying value of certain wind assets with market price exposure may be impaired. Generation...

  • Page 185
    ... the Upstream assets. The fair value analysis used in the above impairments was primarily based on the income approach using significant unobservable inputs (Level 3) including revenue, generation and production forecasts, projected capital and maintenance expenditures and discount rates. Changes in...

  • Page 186
    ...$ 698 Exelon, Generation, PECO and BGE's undivided ownership interests in jointly owned electric plants and transmission facilities at December 31, 2014 and 2013 were as follows: Nuclear generation Peach Bottom Nine Mile Point Unit 2 (g) Fossil fuel generation Transmission Other Quad Cities Salem...

  • Page 187
    ..., 2013, Generation's ownership interest in CENG, including Nine Mile Point, was treated as an equity method investment, and thus did not represent an undivided Interest. See Note 5 - Investment in Constellation Energy Nuclear Group, LLC for additional information. Exelon's, Generation's, PECO's and...

  • Page 188
    ... operating and capital cash flows from ComEd's business and the fair value of debt. Management performs a reconciliation of the sum of the estimated fair value of all Exelon reporting units to Exelon's enterprise value based on its trading price to corroborate the results of the discounted cash...

  • Page 189
    ... Solar, Inc. (d) See Note 4-Mergers, Acquisitions, and Dispositions for further information on these acquisitions. (e) See Note 5-Investment in Constellation Energy Nuclear Group, LLC for additional information. (f) In March 1999, ComEd entered into a settlement agreement with the City of Chicago...

  • Page 190
    ...the present value of the underlying cash flows as of the acquisition dates through either Purchase power and fuel expense or Operating revenues within Exelon's and Generation's Consolidated Statement of Operations and Comprehensive Income. Customer Relationships. The customer relationship intangible...

  • Page 191
    ... then converted into discount rates of various tenors that are used for discounting the respective cash flows of the same tenor for each bond or note. The fair value of Exelon's equity units (Level 1) are valued based on publicly traded securities issued by Exelon. The fair value of Generation's non...

  • Page 192
    ...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...

  • Page 193
    ... a recurring basis and their level within the fair value hierarchy as of December 31, 2014 and 2013: As of December 31, 2014 Exelon Level 1 Level 2 Level 3 Total Assets Cash equivalents (a) ...$ 1,119 $ - $ Nuclear decommissioning trust fund investments ...Cash equivalents ...208 37 Equity Domestic...

  • Page 194
    ... Financial Statements-(Continued) (Dollars in millions, except per share data unless otherwise noted) Exelon Level 1 Level 2 Level 3 As of December 31, 2014 Total Liabilities Commodity derivative liabilities Economic hedges ...(2,241) (3,458) Proprietary trading ...(195) (295) Effect of netting...

  • Page 195
    ... Statements-(Continued) (Dollars in millions, except per share data unless otherwise noted) Exelon Level 1 Level 2 Level 3 As of December 31, 2013 Total Assets Cash equivalents (a) ...$1,230 $ - $ - $ 1,230 Nuclear decommissioning trust fund investments Cash equivalents ...459 - - 459 Equities...

  • Page 196
    ... cash surrender value of life insurance investment at December 31, 2014 and 2013, respectively, at Generation. (e) The mutual funds held by the Rabbi trusts at Exelon Consolidated include $45 million related to deferred compensation and $1 million related to a Supplemental Executive Retirement Plan...

  • Page 197
    ... basis during the year ended December 31, 2014 and 2013: Generation ComEd Exelon For The Year Ended December 31, 2014 Nuclear Decommissioning Pledged Assets Mark-toTrust Fund for Zion Station Market Other Total Other- Eliminated in Investments Decommissioning Derivatives Investments Generation...

  • Page 198
    ... Notes to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share data unless otherwise noted) Generation ComEd Exelon For The Year Ended December 31, 2013 Nuclear Decommissioning Pledged Assets Mark-toTrust Fund for Zion Station Market Other Total OtherEliminated in...

  • Page 199
    ...(losses) included in income for Exelon's Level 3 assets and liabilities measured at fair value on a recurring basis during the years ended December 31, 2014 and 2013: Purchased Power and Fuel Operating Revenues Other, net (a) Total gains (losses) included in net income for the year ended December...

  • Page 200
    ... models. Investments in middle market lending typically cannot be redeemed until maturity of the term loan. Private equity investments include investments in operating companies that are not publicly traded on a stock exchange. Private equity valuations are reported by the fund manager and are based...

  • Page 201
    ...strategy, vice president of audit services and officers representing Exelon's business units. The RMC reports to the Exelon Board of Directors on the scope of the risk management activities and is responsible for approving all valuation procedures at Exelon. Forward price curves for the power market...

  • Page 202
    ...-Derivative Financial Instruments for more information. The fair value of these swaps has been designated as a Level 3 valuation due to the long tenure of the positions and internal modeling assumptions. The modeling assumptions include using natural gas heat rates to project long term forward power...

  • Page 203
    ... gas pricing would potentially have a similar impact on forward power markets. Nuclear Decommissioning Trust Fund Investments and Pledged Assets for Zion Station Decommissioning (Exelon and Generation). For middle market lending, certain corporate debt securities, and private equity investments...

  • Page 204
    ... uses a variety of derivative and non-derivative instruments to manage the commodity price risk of its electric generation facilities, including power and gas sales, fuel and energy purchases, natural gas transportation and pipeline capacity agreements and other energy-related products marketed...

  • Page 205
    ...natural gas purchases in support of projected firm sales. The hedging program for natural gas procurement has no direct impact on PECO's financial position or results of operations as natural gas costs are fully recovered from customers under the PGC. BGE has contracts to procure SOS electric supply...

  • Page 206
    ... in millions, except per share data unless otherwise noted) for the years ended December 31, 2014, 2013 and 2012, are a complement to Generation's energy marketing portfolio but represent a small portion of Generation's revenue from energy marketing activities. ComEd, PECO and BGE do not enter into...

  • Page 207
    ... 31, 2014, Exelon and Generation had total outstanding fixed-to-floating fair value hedges related to interest rate swaps of $1,450 million and $550 million, with a derivative asset of $29 million and $7 million, respectively. At December 31, 2013, Exelon and Generation had outstanding fixed-to...

  • Page 208
    ...the proposed PHI acquisition. At December 31, 2014, Exelon had a $100 million derivative liability related to the swaps. During the fourth quarter, fixed-to-floating interest rate swaps, which were marked-to-market, acquired as part of the Constellation merger, expired for Exelon and Generation. The...

  • Page 209
    ... derivative fair value balances recorded by the Registrants as of December 31, 2014: Generation Collateral Proprietary and Trading Netting (a) ComEd Economic Hedges (c) Exelon Total Derivatives Derivatives Economic Hedges Subtotal (b) Mark-to-market derivative assets (current assets) ...Mark-to...

  • Page 210
    ... derivative fair value balances recorded by the Registrants as of December 31, 2013: Generation Collateral Proprietary and Trading Netting (a) ComEd Economic Hedges (c) Exelon Total Derivatives Derivatives Economic Hedges Subtotal (b) Mark-to-market derivative assets (current assets) ...Mark-to...

  • Page 211
    ... in market prices, were losses of $5 million for the year ended December 31, 2012. Neither Exelon nor Generation will incur changes in cash flow hedge ineffectiveness in future periods as all energy-related cash flow hedge positions were de-designated prior to the Constellation merger date. 207

  • Page 212
    ... during the period. Generation Purchased Power Interest and Fuel Expense Intercompany Eliminations Operating Revenues (a) Exelon Corporate Interest Expense Exelon Year Ended December 31, 2014 Operating Revenues Total Total Change in fair value of commodity positions ...Reclassification to...

  • Page 213
    ..., except per share data unless otherwise noted) Generation Purchased Power Interest and Fuel Expense Intercompany Eliminations Operating Revenues (a) Exelon Corporate Interest Expense Exelon Year Ended December 31, 2012 Operating Revenues Total Total Change in fair value of commodity positions...

  • Page 214
    ... Illinois Settlement Legislation. ComEd's counterparty credit risk is mitigated by its ability to recover realized energy costs through customer rates. See Note 3-Regulatory Matters for additional information. PECO's supplier master agreements that govern the terms of its electric supply procurement...

  • Page 215
    ... annually on a prospective basis by the PAPUC. PECO's counterparty credit risk under its natural gas supply and asset management agreements is mitigated by its ability to recover its natural gas costs through the PGC, which allows PECO to adjust rates quarterly to reflect realized natural gas prices...

  • Page 216
    ... forward market prices exceed contract prices. As of December 31, 2014, ComEd held approximately $19 million in the form of cash and letters of credit as margin for both the annual and long-term REC obligations. See Note 3-Regulatory Matters for additional information. PECO's natural gas procurement...

  • Page 217
    ...Size at December 31, 2014 (a)(b) 2013 (a)(b) Outstanding Commercial Paper at December 31, 2014 2013 Average Interest Rate on Commercial Paper Borrowings for the Year Ended December 31, 2014 2013 Commercial Paper Issuer Exelon Corporate ...Generation ...ComEd ...PECO ...BGE ...Total ... $ 500 5,600...

  • Page 218
    ...the Registrants' credit facilities. The following tables present the short-term borrowings activity for Exelon, during 2014, 2013 and 2012. 2014 2013 2012 Average borrowings ...Maximum borrowings outstanding ...Average interest rates, computed on a daily basis ...Average interest rates, at December...

  • Page 219
    ... bridge credit facility was subsequently reduced to $3.2 billion as a result of the June 2014 debt and equity security issuances discussed below, as well as, the net after-tax proceeds from generating asset divestitures during the second half of 2014. During the year ended December 31, 2014, Exelon...

  • Page 220
    ... The equity units carry a total annual distribution rate of 6.5%, which is comprised of a quarterly coupon rate of interest of 2.5% and a quarterly contract payment of 4.0% (contract payments). Each purchase contract obligates the holder to purchase, and Exelon to sell, for $50.00 a number of shares...

  • Page 221
    ... trusts within Exelon's Consolidated Balance Sheets. Long-term debt maturities at Exelon in the periods 2014 through 2019 and thereafter are as follows: Year Exelon 2015 ...2016 ...2017 ...2018 ...2019 ...Thereafter ...Total ...(a) Includes $648 million due to ComEd, PECO and BGE financing trusts...

  • Page 222
    ... Financial Instruments for additional information regarding the interest rate swaps associated with Antelope Valley. Constellation Solar Horizons. In September 2012, a subsidiary of Generation entered into an 18-year $38 million nonrecourse note to recover capital used to build a 16MW solar facility...

  • Page 223
    ...annually. Continental Wind owns and operates a portfolio of wind farms in Idaho, Kansas, Michigan, Oregon, New Mexico and Texas with a total net capacity of 667MW. The net proceeds were distributed to Generation for its general business purposes. As of December 31, 2014, $592 million was outstanding...

  • Page 224
    ... income tax benefit ...Qualified nuclear decommissioning trust fund income ...Tax exempt income ...Domestic production activities deduction ...Health care reform legislation ...Amortization of investment tax credit, net deferred taxes ...Plant basis differences ...Production tax credits and other...

  • Page 225
    ..., except per share data unless otherwise noted) The following table provides Exelon's carryforwards and any corresponding valuation allowances as of December 31, 2014. Exelon Federal Federal general business credits carryforward ...State State net operating losses and other credit carryforwards...

  • Page 226
    ... the reporting date Nuclear Decommissioning Liabilities AmerGen filed income tax refund claims taking the position that nuclear decommissioning liabilities assumed as part of its acquisition of nuclear power plants are taken into account in determining the tax basis in the assets it acquired. The...

  • Page 227
    ... corporate net income tax returns ...Various Constellation (Non-BGE) Maryland corporate net income tax returns ...Other Tax Matters Like-Kind Exchange 1999, 2001-2013 2011-March 2012 2007-2013 2008-2013 2010-2013 2011-2013 2012-2013 2011-2013 Exelon, through its ComEd subsidiary, took a position...

  • Page 228
    ... years such that the estimated cash and interest impacts will increase by a material amount. In the first quarter of 2014, Exelon entered into an agreement to terminate its investment in one of the three municipal-owned electric generation properties in exchange for a net early termination amount of...

  • Page 229
    ... of Federal tax benefits from Exelon under the Tax Sharing Agreement as a result of ComEd's and BGE's tax net operating loss generated primarily by the bonus depreciation deduction allowed under the Tax Relief Act of 2010. ComEd received a non-cash contribution to equity from Exelon in 2012 of $11...

  • Page 230
    ... in Other current liabilities on Exelon's Consolidated Balance Sheets. (b) Represents the fair value of the CENG ARO liability as of April 1, 2014, the date of consolidation. See Note 5-Investment in Constellation Energy Nuclear Group, LLC for additional information. During 2014, Generation's ARO...

  • Page 231
    ... limitations that allow sharing of excess funds with Generation related to the former PECO units. With respect to Generation's other nuclear units, Generation retains any funds remaining after decommissioning. However, in connection with CENG's acquisition of the Nine Mile Point and Ginna plants...

  • Page 232
    .... Interest and dividends earned on the NDT fund investments for the Regulatory Agreement Units are eliminated within Other, net in Exelon's Consolidated Statement of Operations and Comprehensive Income. Accounting Implications of the Regulatory Agreements with ComEd and PECO. Based on the regulatory...

  • Page 233
    ... with a Payable for Zion Station decommissioning in Generation's and Exelon's Consolidated Balance Sheets. Changes in the value of the Zion Station NDT assets, net of applicable taxes, will be recorded as a change in the Payable to ZionSolutions. At no point will the payable to ZionSolutions exceed...

  • Page 234
    ...after-tax returns on the NDT funds of 2% (3% for the former PECO units, as specified by the PAPUC). In contrast, the key criteria and assumptions used by Generation to determine the ARO and to forecast the target growth in the NDT funds at December 31, 2014 include: (1) the use of site specific cost...

  • Page 235
    ... PECO customers for decommissioning the former PECO units, the NRC minimum funding status of those plants could change at subsequent NRC filing dates. Non-Nuclear Asset Retirement Obligations Generation has AROs for plant closure costs associated with its fossil and renewable generating facilities...

  • Page 236
    ... generating stations. See Note 4-Mergers, Acquisitions, and Dispositions for further information. 16. Retirement Benefits As of December 31, 2014, Exelon sponsored defined benefit pension plans and other postretirement benefit plans for essentially all Generation, ComEd, PECO, BGE and BSC employees...

  • Page 237
    ... 83 34 (223) - - $2,238 (a) On April 1, 2014, Generation assumed operational control of CENG's nuclear fleet. As a result, Exelon became a sponsor of CENG's pension and OPEB plans effective July 14, 2014. See Note 5-Investment in Constellation Energy Nuclear Group, LLC for further information. 233

  • Page 238
    ... of CENG. Refer to Note 5-Investment in Constellation Energy Nuclear Group, LLC for further details on the consolidation of CENG. The 2014 pension benefit cost for these plans is calculated using an expected long-term rate of return on plan assets of 7.75% and discount rates ranging from 3.60%-4.30...

  • Page 239
    ... December 31, 2014, 2013 and 2012. Other Postretirement Benefits 2014 2013 2012 Pension Benefits 2014 2013 2012 Components of net periodic benefit cost: Service cost ...Interest cost ...Expected return on assets ...Amortization of: Transition obligation ...Prior service cost (credit) ...Actuarial...

  • Page 240
    .... Pension Benefits 2014 2013 2012 Other Postretirement Benefits 2014 2013 2012 Changes in plan assets and benefit obligations recognized in AOCI and regulatory assets (liabilities): Current year actuarial (gain) loss ...Amortization of actuarial loss ...Current year prior service (credit) cost...

  • Page 241
    ... the discount rate applied to benefit obligations, the longterm EROA, Exelon's expected level of contributions to the plans, the long-term expected investment rate credited to employees participating in cash balance plans and the anticipated rate of increase of health care costs. Additionally...

  • Page 242
    ... Note 5-Investment in Constellation Energy Nuclear Group, LLC for further information. (b) The discount rates above represent the initial discount rates used to establish Exelon's pension and other postretirement benefits costs for the year ended December 31, 2013. Certain of the benefit plans were...

  • Page 243
    ...populations with plan designs that do not have a cap on cost growth. A one percentage point change in assumed health care cost trend rates would have the following effects: Effect of a one percentage point increase in assumed health care cost trend: on 2014 total service and interest cost components...

  • Page 244
    .... Trust assets for Exelon's other postretirement plans are managed in a diversified investment strategy that prioritizes maximizing liquidity and returns while minimizing asset volatility. Exelon used an EROA of 7.00% and 6.46% to estimate its 2015 pension and other postretirement benefit costs...

  • Page 245
    ..., 2014 2013 Asset Category Target Allocation Equity securities ...Fixed income securities ...Alternative investments (a) ...Total ...(a) Alternative investments include private equity, hedge funds and real estate. 41% 34% 25% 42% 34 24 100% 45% 37 18 100% Concentrations of Credit Risk. Exelon...

  • Page 246
    ...benefit plan assets measured and recorded at fair value on Exelon's Consolidated Balance Sheets on a recurring basis and their level within the fair value hierarchy at December 31, 2014 and 2013: At December 31, 2014 (a) Level 1 Level 2 Level 3 Total Pension plan assets Cash equivalents ...Equities...

  • Page 247
    ... United States and by political subdivisions of the states ...Foreign debt securities ...Corporate debt securities ...Other ...Fixed income subtotal ...Private equity ...Hedge funds ...Real estate ...Other postretirement benefit plan assets subtotal ...Total pension and other postretirement benefit...

  • Page 248
    ... value for pension and other postretirement benefit plans for the years ended December 31, 2014 and 2013: Hedge funds Private equity Real estate Fixed income Equities Total Pension Assets Balance as of January 1, 2014 ...Actual return on plan assets: Relating to assets still held at the reporting...

  • Page 249
    ... between EDF and Exelon, Exelon assumed the pension plan assets of Nine Mile Point Nuclear Station, LLC and Constellation Energy Nuclear Group, LLC resulting in transfers into Level 3 of $56 million. (c) As of January 1, 2014 and January 1, 2013, hedge fund investments that contained redemption...

  • Page 250
    ... limited partnerships that invest in operating companies that are not publicly traded on a stock exchange such as leveraged buyouts, growth capital, venture capital, distressed investments and investments in natural resources. Private equity valuations are reported by the fund manager and are based...

  • Page 251
    ... first quarter of 2014 by CENG. See Note 5-Investment in Constellation Energy Nuclear Group, LLC for additional information. Cash payments under the severance plan began in 2014. Substantially all cash payments under the plan are expected to be made by the end of 2015. Constellation Merger-Related...

  • Page 252
    ... to common shareholders utilized in the calculation of the earnings per share for Exelon. At December 31, 2014 and 2013, BGE cumulative preference stock, $100 par value, consisted of 6,500,000 shares authorized and the outstanding amounts set forth below. Shares of BGE preference stock have no...

  • Page 253
    ... BGE, at the indicated dollar amounts per share, plus accrued and unpaid dividends. 19. Common Stock (Exelon, Generation, ComEd, PECO and BGE) The following table presents common stock authorized and outstanding as of December 31, 2014 and 2013: December 31, 2014 2013 Shares Outstanding Par Value...

  • Page 254
    ... of the direct cash proceeds from purchases of stock and the tax benefits associated with exercises of stock options. The 2004 share repurchase program had no specified limit on the number of shares that could be repurchased and no specified termination date. In 2008, Exelon management decided to...

  • Page 255
    ... date fair value (per share) ... 5.28% 23.20% 1.30% 6.25 4.18 The assumptions above relate to Exelon stock options granted in 2012 and therefore do not include stock options that were converted in connection with the merger with Constellation during the year ended 2012. The dividend yield is based...

  • Page 256
    ...a specific number of shares of common stock after the service condition has been met. The corresponding cost of services is measured based on the grant date fair value of the restricted stock unit issued. The value of the restricted stock units is expensed over the requisite service period using the...

  • Page 257
    ...-time 2013 performance share transition awards is considered an equity award and is valued based on Exelon's stock price on the grant date. The cash portion of the awards is considered a liability award which is remeasured each reporting period based on Exelon's current stock price. As the value of...

  • Page 258
    ... due to their antidilutive effect was approximately 17 million in 2014, 20 million in 2013, and 14 million in 2012. The number of equity units related to the PHI merger not included in the calculation of diluted common shares outstanding due to their antidilutive effect was less than 1 million for...

  • Page 259
    ... 31, 2014 and 2013: Gains and (Losses) on Cash Flow Hedges Unrealized Gains and (Losses) on Marketable Securities Pension and Non-Pension Postretirement Foreign Benefit Plan Currency items Items For the Year Ended December 31, 2014 AOCI of Equity Investments Total Exelon (a) Beginning balance...

  • Page 260
    ... available securities for sale ... $ $ (2) (2) Other Income and Deductions Net of tax Amortization of pension and other postretirement benefit plan items Prior service costs (b) ...Actuarial losses (b) ... $ 46 (239) (193) 75 $(118) Total before tax Tax benefit Net of tax Equity investments...

  • Page 261
    ...277 Operating revenues Interest expense Total before tax Tax expense Net of tax Amortization of pension and other postretirement benefit plan items Prior service costs (b) ...Actuarial losses (b) ...Deferred compensation unit plan (c) ...$ (2) (339) (1) (342) 134 $(208) Equity investments Capital...

  • Page 262
    ... plants or their operations. Exelon guarantees Generation's obligations under this indemnity. See Note 5-Investment in Constellation Energy Nuclear Group, LLC for additional information on Generation's operations relating to CENG. Generation is required each year to report to the NRC the current...

  • Page 263
    ...recommendations. This strategy included a consolidated interim storage facility that is planned to be operational in 2025. Generation uses the 2025 date as the assumed date for when the DOE will begin accepting SNF for purposes of determining nuclear decommissioning asset retirement obligations. The...

  • Page 264
    ...purchased firm transmission rights to ensure that it has reliable transmission capacity to physically move its power supplies to meet customer delivery needs. The primary intent and business objective for the use of its capital assets and contracts is to provide Generation with physical power supply...

  • Page 265
    ... efficiency programs. ComEd's, PECO's and BGE's electric supply procurement, curtailment services, REC and AEC purchase commitments as of December 31, 2014 are as follows: Expiration within Total 2015 2016 2017 2018 2019 2020 and beyond ComEd Electric supply procurement (a) ...Renewable energy and...

  • Page 266
    ...' other purchase obligations as of December 31, 2014, which primarily represent commitments for services, materials and information technology, are as follows: Expiration within Total 2015 2016 2017 2018 2019 2020 and beyond Exelon ...Generation (a)(b) ...ComEd (c) ...PECO (c) ...BGE (c) ... $894...

  • Page 267
    ... Exelon's 125 MW Tier I land-based renewables commitment made to Maryland. See Note 4-Mergers, Acquisitions, and Dispositions for additional information on commitments to develop or assist in development of new generation in Maryland resulting from the Constellation merger. During the fourth quarter...

  • Page 268
    ... by the agreements to fund the anticipated needs of the planned operations of the associated companies. The commitment includes approximately $20 million of in-kind services. As of December 31, 2014, Generation's estimated commitment relating to its equity purchase agreements, including the in...

  • Page 269
    ... of this investigation. • • ComEd, pursuant to an ICC order, and PECO, pursuant to settlements of natural gas distribution rate cases with the PAPUC, are currently recovering environmental remediation costs of former MGP facility sites through customer rates. BGE is authorized to recover, and...

  • Page 270
    ... 1, 2014 (Effective Date), NRG Energy purchased EME's portfolio of generation, including Midwest Generation and the Joint Chapter 11 Plan of Reorganization (Plan) became effective. As part of the Plan, the sale agreement, including the environmental indemnity, and the asbestos cost-sharing agreement...

  • Page 271
    ... to Consolidated Financial Statements-(Continued) (Dollars in millions, except per share data unless otherwise noted) (and Generation, through its agreement in Exelon's 2001 corporate restructuring to assume ComEd's rights and obligations associated with its former generation business) could face...

  • Page 272
    ...costs related to this settlement and clean-up of the site. Rossville Ash Site. The Rossville Ash Site is a 32-acre property located in Rosedale, Baltimore County, Maryland, which was used for the placement of fly ash from 1983-2007. The property is owned by Constellation Power Source Generation, LLC...

  • Page 273
    ... actions in certain facilities that are currently owned by Generation or were previously owned by ComEd and PECO. The reserve is recorded on an undiscounted basis and excludes the estimated legal costs associated with handling these matters, which could be material. At December 31, 2014 and 2013...

  • Page 274
    ... Balance Sheets. See Note 4-Mergers, Acquisitions, and Dispositions for additional information on the Constellation merger. Continuous Power Interruption Section 16-125 of the Illinois Public Utilities Act provides that in the event an electric utility, such as ComEd, experiences a continuous power...

  • Page 275
    ... may be material to ComEd's results of operations, cash flows, and financial position. Fund Transfer Restrictions Under applicable law, Exelon may borrow or receive an extension of credit from its subsidiaries. Under the terms of Exelon's intercompany money pool agreement, Exelon can lend to, but...

  • Page 276
    ... generating assets. 23. Supplemental Financial Information Supplemental Statement of Operations Information The following tables provide additional information about Exelon's Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2014, 2013 and 2012. For...

  • Page 277
    ... fund activity for those units. See Note 15-Asset Retirement Obligations for additional information regarding the accounting for nuclear decommissioning. Supplemental Cash Flow Information The following tables provide additional information regarding Exelon's Consolidated Statements of Cash Flows...

  • Page 278
    ... 31, 2014 and 2013 related to Antelope Valley. (f) See Note 5-Investment in Constellation Energy Nuclear Group, LLC for additional information. (g) Relates to the present value of the contract payments for the equity units issued by Exelon. See Note 19-Common Stock for additional information. 274

  • Page 279
    ...Exelon at December 31, 2014 and 2013. December 31, 2014 2014 2013 Investments Equity method investments: Financing trusts (a) ...Keystone Fuels, LLC ...Conemaugh Fuels, LLC ...CENG ...Safe Harbor ...Malacha ...Bloom Energy ...Net Power ...Sunnyside ...Other equity method investments ...Total equity...

  • Page 280
    ... resources for their respective companies based on net income and return on equity for ComEd, PECO, and BGE each as single integrated businesses. The foundation of Generation's six reportable segments is based on the geographic location of its assets, and is largely representative of the footprints...

  • Page 281
    ...' reportable segment information to the respective information in the consolidated financial statements for the years ended December 31, 2014, 2013, and 2012 is as follows: Other Generation (a) ComEd PECO BGE (b) (c) Intersegment Eliminations Exelon Operating revenues (d): 2014 ...2013 ...2012...

  • Page 282
    ... mark-to-market losses related to the ComEd swap, which eliminate upon consolidation. (b) Amounts represent activity recorded at BGE from March 12, 2012, the closing date of the merger, through December 31, 2014. (c) Other primarily includes Exelon's corporate operations, shared service entities and...

  • Page 283
    ... Financial Statements-(Continued) (Dollars in millions, except per share data unless otherwise noted) Generation total revenues net of purchased power and fuel expense: 2013 2012 2014 RNF from RNF from RNF from external Intersegment Total external Intersegment Total external Intersegment customers...

  • Page 284
    ... 2014 2013 2012 Operating revenues from affiliates: PECO (a) ...CENG (b) ...BGE (a) ...Total operating revenues from affiliates ...Purchase power and fuel from affiliates: CENG (c) ...Keystone Fuels, LLC (d) ...Conemaugh Fuels, LLC (d) ...Safe Harbor Water Power Corp (d) ...Total purchase power and...

  • Page 285
    ... in CENG, see Note 5-Investment in Constellation Energy Nuclear Group, LLC. (c) CENG owns 100% of four nuclear units in Maryland and New York and 82% of Nine Mile Point Unit 2 in New York. Beginning in 2012, Generation had a PPA under which it purchased 85% of the nuclear plant output owned by CENG...

  • Page 286
    ... presents the New York Stock Exchange-Composite Common Stock Prices and dividends by quarter on a per share basis: 2014 Third Second Quarter Quarter 2013 Third Second Quarter Quarter Fourth Quarter First Quarter Fourth Quarter First Quarter High price ...Low price ...Close ...Dividends ... $38...

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