Schedule I - Condensed Financial Information of Parent (Exelon Corporate) |
Exelon Corporation and Subsidiary Companies Schedule I – Condensed Financial Information of Parent (Exelon Corporate) Condensed Statements of Operations and Other Comprehensive Income | | | | | | | | | | | | | | For the Years Ended December 31, | (In millions) | 2016 | | 2015 | | 2014 | Operating expenses | | | | | | Operating and maintenance | $ | 221 |
| | $ | — |
| | $ | 9 |
| Operating and maintenance from affiliates | 51 |
| | 43 |
| | 38 |
| Other | 4 |
| | 4 |
| | 3 |
| Total operating expenses | 276 |
| | 47 |
| | 50 |
| Operating loss | (276 | ) | | (47 | ) | | (50 | ) | Other income and (deductions) | | | | | | Interest expense, net | (312 | ) | | (168 | ) | | (237 | ) | Equity in earnings of investments | 1,521 |
| | 2,461 |
| | 1,779 |
| Interest income from affiliates, net | 39 |
| | 43 |
| | 53 |
| Other, net | 7 |
| | (43 | ) | | (2 | ) | Total other income | 1,255 |
| | 2,293 |
| | 1,593 |
| Income before income taxes | 979 |
| | 2,246 |
| | 1,543 |
| Income taxes | (155 | ) | | (23 | ) | | (80 | ) | Net income | $ | 1,134 |
| | $ | 2,269 |
| | $ | 1,623 |
| Other comprehensive income (loss) | | | | | | Pension and non-pension postretirement benefit plans: | | | | | | Prior service benefit reclassified to periodic costs | $ | (48 | ) | | $ | (46 | ) | | $ | (30 | ) | Actuarial loss reclassified to periodic cost | 184 |
| | 220 |
| | 147 |
| Pension and non-pension postretirement benefit plan valuation adjustment | (181 | ) | | (99 | ) | | (497 | ) | Unrealized gain (loss) on cash flow hedges | 2 |
| | 9 |
| | (148 | ) | Unrealized gain on marketable securities | 1 |
| | — |
| | 1 |
| Unrealized (loss) gain on equity investments | (4 | ) | | (3 | ) | | 8 |
| Unrealized gain (loss) on foreign currency translation | 10 |
| | (21 | ) | | (9 | ) | Reversal of CENG equity method AOCI | — |
| | — |
| | (116 | ) | Other comprehensive (loss) income | (36 | ) |
| 60 |
|
| (644 | ) | Comprehensive income | $ | 1,098 |
| | $ | 2,329 |
| | $ | 979 |
|
See Notes to Financial Statements Exelon Corporation and Subsidiary Companies Schedule I – Condensed Financial Information of Parent (Exelon Corporate) Condensed Statements of Cash Flows | | | | | | | | | | | | | | For the Years Ended December 31, | (In millions) | 2016 | | 2015 | | 2014 | Net cash flows provided by operating activities | $ | 1,029 |
| | $ | 3,071 |
| | $ | 806 |
| Cash flows from investing activities | | | | | | Return on investment of direct financing lease termination | — |
| | — |
| | 335 |
| Changes in Exelon intercompany money pool | 1,390 |
| | (1,217 | ) | | (83 | ) | Note receivable from affiliates | — |
| | 550 |
| | — |
| Capital expenditures | — |
| | — |
| | 1 |
| Investment in affiliates | (1,757 | ) | | (212 | ) | | (70 | ) | Acquisition of business | (6,962 | ) | | — |
| | — |
| Other investing activities | 5 |
| | (55 | ) | | (126 | ) | Net cash flows (used in) provided by investing activities | (7,324 | ) |
| (934 | ) |
| 57 |
| Cash flows from financing activities | | | | | | Issuance of long-term debt | 1,800 |
| | 4,200 |
| | 1,150 |
| Retirement of long-term debt | (46 | ) | | (2,263 | ) | | (23 | ) | Issuance of common stock | — |
| | 1,868 |
| | — |
| Dividends paid on common stock | (1,166 | ) | | (1,105 | ) | | (1,065 | ) | Proceeds from employee stock plans | 55 |
| | 32 |
| | 35 |
| Other financing activities | (20 | ) | | (58 | ) | | (84 | ) | Net cash flows provided by financing activities | 623 |
| | 2,674 |
| | 13 |
| (Decrease) Increase in cash and cash equivalents | (5,672 | ) | | 4,811 |
| | 876 |
| Cash and cash equivalents at beginning of period | 5,690 |
| | 879 |
| | 3 |
| Cash and cash equivalents at end of period | $ | 18 |
| | $ | 5,690 |
| | $ | 879 |
|
See Notes to Financial Statements Exelon Corporation and Subsidiary Companies Schedule I – Condensed Financial Information of Parent (Exelon Corporate) Condensed Balance Sheets | | | | | | | | | | December 31, | (In millions) | 2016 | | 2015 | ASSETS | | | | Current assets | | | | Cash and cash equivalents | $ | 18 |
| | $ | 5,690 |
| Deposit with IRS | 1,250 |
| | — |
| Accounts receivable, net | | | | Other accounts receivable | 73 |
| | 272 |
| Accounts receivable from affiliates | 48 |
| | 20 |
| Notes receivable from affiliates | 88 |
| | 1,478 |
| Regulatory assets | 263 |
| | 241 |
| Other | — |
| | 5 |
| Total current assets | 1,740 |
| | 7,706 |
| Property, plant and equipment, net | 51 |
| | 53 |
| Deferred debits and other assets | | | | Regulatory assets | 4,033 |
| | 3,072 |
| Investments in affiliates | 34,869 |
| | 26,119 |
| Deferred income taxes | 2,107 |
| | 2,036 |
| Non-pension postretirement benefit asset | — |
| | 108 |
| Notes receivable from affiliates | 922 |
| | 933 |
| Other | 256 |
| | 404 |
| Total deferred debits and other assets | 42,187 |
| | 32,672 |
| Total assets | $ | 43,978 |
| | $ | 40,431 |
|
See Notes to Financial Statements Exelon Corporation and Subsidiary Companies Schedule I – Condensed Financial Information of Parent (Exelon Corporate) Condensed Balance Sheets | | | | | | | | | | December 31, | (In millions) | 2016 | | 2015 | LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | Current liabilities | | | | Short-term borrowings | $ | — |
| | $ | 188 |
| Long-term debt due within one year | 570 |
| | 60 |
| Accounts payable | 2 |
| | 5 |
| Accrued expenses | 489 |
| | 440 |
| Payables to affiliates | 706 |
| | — |
| Regulatory liabilities | 16 |
| | 63 |
| Pension obligations | 58 |
| | 52 |
| Other | 50 |
| | 1 |
| Total current liabilities | 1,891 |
| | 809 |
| Long-term debt | 7,193 |
| | 6,017 |
| Deferred credits and other liabilities | | | | Regulatory liabilities | 31 |
| | 31 |
| Pension obligations | 8,608 |
| | 7,520 |
| Non-pension postretirement benefit obligations | 7 |
| | — |
| Deferred income taxes | 226 |
| | 134 |
| Other | 182 |
| | 122 |
| Total deferred credits and other liabilities | 9,054 |
| | 7,807 |
| Total liabilities | 18,138 |
| | 14,633 |
| Commitments and contingencies |
| |
| Shareholders’ equity | | | | Common stock (No par value, 2000 shares authorized, 924 shares and 920 shares outstanding at December 31, 2016 and 2015, respectively) | 18,797 |
| | 18,678 |
| Treasury stock, at cost (35 shares at December 31, 2016 and 2015, respectively) | (2,327 | ) | | (2,327 | ) | Retained earnings | 12,030 |
| | 12,068 |
| Accumulated other comprehensive loss, net | (2,660 | ) | | (2,624 | ) | Total shareholders’ equity | 25,840 |
| | 25,795 |
| BGE preference stock not subject to mandatory redemption | — |
| | 3 |
| Total liabilities and shareholders’ equity | $ | 43,978 |
| | $ | 40,431 |
|
See Notes to Financial Statements Basis of Presentation Exelon Corporate is a holding company that conducts substantially all of its business operations through its subsidiaries. These condensed financial statements and related footnotes have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X. These statements should be read in conjunction with the consolidated financial statements and notes thereto of Exelon Corporation. Exelon Corporate owns 100% of all of its significant subsidiaries, either directly or indirectly, except for Commonwealth Edison Company (ComEd), of which Exelon Corporate owns more than 99%, and BGE, of which Exelon owns 100% of the common stock but none of BGE’s preferred stock. BGE redeemed all of its outstanding preferred stock in 2016. Mergers On March 23, 2016, Exelon completed the merger contemplated by the Merger Agreement among Exelon, Purple Acquisition Corp., a wholly owned subsidiary of Exelon (Merger Sub) and Pepco Holdings, Inc. (PHI). As a result of that merger, Merger Sub was merged into PHI (the PHI Merger) with PHI surviving as a wholly owned subsidiary of Exelon and Exelon Energy Delivery Company, LLC (EEDC), a wholly owned subsidiary of Exelon which also owns Exelon's interests in ComEd, PECO and BGE (through a special purpose subsidiary in the case of BGE). See Note 4—Mergers, Acquisitions, and Dispositions of the Combined Notes to Consolidated Financial Statements for additional information on the PHI Merger. Debt and Credit Agreements Short-Term Borrowings Exelon Corporate meets its short-term liquidity requirements primarily through the issuance of commercial paper. Exelon Corporate had no commercial paper borrowings at both December 31, 2016 and December 31, 2015. Credit Agreements On May 30, 2014, Exelon Corporate amended and extended its unsecured syndicated revolving credit facility with aggregate bank commitments of $600 million through May 2019. As of December 31, 2016, Exelon Corporation had available capacity under those commitments of $571 million. See Note 14—Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for further information regarding Exelon Corporation’s credit agreement.
Long-Term Debt The following tables present the outstanding long-term debt for Exelon Corporate as of December 31, 2016 and December 31, 2015: | | | | | | | | | | | | | | | | | | | | | | Maturity Date | | December 31, | | Rates | | 2016 | | 2015 | Long-term debt | | | | | | | | | | Junior subordinated notes | | | 6.5 | % | | 2024 | | $ | 1,150 |
| | $ | 1,150 |
| Contract payment - junior subordinated notes | | | 2.5 | % | | 2017 | | 19 |
| | 64 |
| Senior unsecured notes (a) | 1.6 | % | | 7.6 | % | | 2017 - 2046 | | 6,439 |
| | 4,639 |
| Total long-term debt | | | | | | | 7,608 |
| | 5,853 |
| Unamortized debt discount and premium, net | | | | | | | (8 | ) | | (4 | ) | Unamortized debt issuance costs | | | | | | | (57 | ) | | (47 | ) | Fair value adjustment of consolidated subsidiary | | | | | | | 220 |
| | 275 |
| Long-term debt due within one year | | | | | | | (570 | ) | | (60 | ) | Long-term debt | | | | | | | $ | 7,193 |
|
| $ | 6,017 |
|
___________ | | (a) | Senior unsecured notes include mirror debt that is held on both Generation and Exelon Corporation's balance sheets. |
The debt maturities for Exelon Corporate for the periods 2017, 2018, 2019, 2020, 2021 and thereafter are as follows: | | | | | 2017 | $ | 570 |
| 2018 | — |
| 2019 | — |
| 2020 | 1,450 |
| 2021 | 300 |
| Remaining years | 5,288 |
| Total long-term debt | $ | 7,608 |
|
Commitments and Contingencies See Note 24—Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for Exelon Corporate’s commitments and contingencies related to environmental matters and fund transfer restrictions. Related Party Transactions The financial statements of Exelon Corporate include related party transactions as presented in the tables below: | | | | | | | | | | | | | | For the Years Ended December 31, | (In millions) | 2016 | | 2015 | | 2014 | Operating and maintenance from affiliates: | | | | | | BSC (a) | $ | 51 |
| | $ | 43 |
| | $ | 38 |
| Interest income from affiliates, net: | | | | | | Generation | $ | 39 |
| | $ | 43 |
| | $ | 53 |
| Equity in earnings (losses) of investments: | | | | | | Exelon Energy Delivery Company, LLC (b) | $ | 1,041 |
| | $ | 1,079 |
| | $ | 958 |
| PCI | 6 |
| | — |
| | — |
| BSC | 1 |
| | — |
| | — |
| Exelon Ventures Company, LLC (c) | — |
| | — |
| | 926 |
| UII, LLC | (9 | ) | | 20 |
| | (6 | ) | Exelon Transmission Company, LLC | (13 | ) | | (8 | ) | | (7 | ) | Exelon Enterprise | (1 | ) | | (1 | ) | | (1 | ) | Generation | 496 |
| | 1,371 |
| | (91 | ) | Total equity in earnings of investments | $ | 1,521 |
| | $ | 2,461 |
| | $ | 1,779 |
| | | | | | | Cash contributions received from affiliates | $ | 1,912 |
| | $ | 3,209 |
| | $ | 1,370 |
|
| | | | | | | | | | December 31, | (in millions) | 2016 | | 2015 | Accounts receivable from affiliates (current): | | | | BSC (a) | $ | 15 |
| | $ | — |
| Generation | 22 |
| | 16 |
| ComEd | 3 |
| | 2 |
| PECO | 1 |
| | 1 |
| BGE | 1 |
| | 1 |
| PHISCO | 6 |
| | — |
| Total accounts receivable from affiliates (current) | $ | 48 |
| | $ | 20 |
| Notes receivable from affiliates (current): | | | | BSC (a) | $ | 88 |
| | $ | 226 |
| Generation (d) | — |
| | 1,252 |
| Total notes receivable from affiliates (current): | $ | 88 |
| | $ | 1,478 |
| Investments in affiliates: | | | | BSC (a) | $ | 194 |
| | $ | 191 |
| Exelon Energy Delivery Company, LLC (b) | 23,003 |
| | 14,163 |
| PCI | 77 |
| | — |
| UII, LLC | 92 |
| | 102 |
| Exelon Transmission Company, LLC | 5 |
| | 3 |
| Voluntary Employee Beneficiary Association trust | (5 | ) | | 7 |
| Exelon Enterprises | 21 |
| | 22 |
| Generation | 11,488 |
| | 11,637 |
| Other | (6 | ) | | (6 | ) | Total investments in affiliates | $ | 34,869 |
| | $ | 26,119 |
| Notes receivable from affiliates (non-current): | | | | Generation (d) | $ | 922 |
| | $ | 933 |
| Notes payable to affiliates (current): | | | | ComEd | $ | — |
| | $ | 188 |
| Accounts payable to affiliates (current): | | | | ComEd | $ | 345 |
| | $ | — |
| UII, LLC
| 361 |
| | — |
| Total accounts payable to affiliates (current) | $ | 706 |
| | $ | — |
|
_____________________ | | (a) | Exelon Corporate receives a variety of corporate support services from BSC, including legal, human resources, financial, information technology and supply management services. All services are provided at cost, including applicable overhead. |
| | (b) | Exelon Energy Delivery Company, LLC consists of ComEd, PECO, BGE, PHI, Pepco, DPL and ACE. |
| | (c) | Exelon Ventures Company, LLC primarily consisted of Generation and was fully dissolved as of December 31, 2014. Exelon Enterprises, Exelon Generation Company, LLC, and Exelon Consolidations are now directly owned Exelon Corporate investments as of December 31, 2014. |
| | (d) | In connection with the debt obligations assumed by Exelon as part of the Constellation merger, Exelon and subsidiaries of Generation (former Constellation subsidiaries) assumed intercompany loan agreements that mirror the terms and amounts of the third-party debt obligations of Exelon, resulting in intercompany notes payable included in Long-Term Debt to affiliate on Generation’s Consolidated Balance Sheets and intercompany notes receivable at Exelon Corporate, which are eliminated in consolidation on Exelon’s Consolidated Balance Sheets. |
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