| Segment Information (Exelon, Generation, ComEd, PECO and BGE) |
Segment Information (All Registrants)
Operating segments for each of the Registrants are determined based on information used by the chief operating decision maker(s) (CODM) in deciding how to evaluate performance and allocate resources at each of the Registrants. In the first quarter of 2016, following the consummation of the PHI Merger, three new reportable segments were added: Pepco, DPL and ACE. As a result, Exelon has twelve reportable segments, which include ComEd, PECO, BGE, PHI's three reportable segments consisting of Pepco, DPL, and ACE, and Generation’s six power marketing reportable segments consisting of the Mid-Atlantic, Midwest, New England, New York, ERCOT and all other power regions referred to collectively as “Other Power Regions”, which includes activities in the South, West and Canada. ComEd, PECO, BGE, Pepco, DPL and ACE each represent a single reportable segment, and as such, no separate segment information is provided for these Registrants. Exelon, ComEd, PECO, BGE, Pepco, DPL and ACE's CODMs evaluate the performance of and allocate resources to ComEd, PECO, BGE, Pepco, DPL and ACE based on net income and return on equity. Effective with the consummation of the PHI Merger, PHI's reportable segments have changed based on the information used by the CODM to evaluate performance and allocate resources. PHI's reportable segments consist of Pepco, DPL and ACE. PHI's Predecessor periods' segment information has been recast to conform to the current presentation. The reclassification of the segment information did not impact PHI's reported consolidated revenues or net income. PHI's CODM evaluates the performance of and allocates resources to Pepco, DPL and ACE based on net income and return on equity.
The basis for Generation's reportable segments is the integrated management of its electricity business that is located in different geographic regions, and largely representative of the footprints of ISO/RTO and/or NERC regions, which utilize multiple supply sources to provide electricity through various distribution channels (wholesale and retail). Generation's hedging strategies and risk metrics are also aligned to these same geographic regions. Descriptions of each of Generation’s six reportable segments are as follows:
| | • | Mid-Atlantic represents operations in the eastern half of PJM, which includes New Jersey, Maryland, Virginia, West Virginia, Delaware, the District of Columbia and parts of Pennsylvania and North Carolina. |
| | • | Midwest represents operations in the western half of PJM, which includes portions of Illinois, Pennsylvania, Indiana, Ohio, Michigan, Kentucky and Tennessee, and the United States footprint of MISO, excluding MISO’s Southern Region, which covers all or most of North Dakota, South Dakota, Nebraska, Minnesota, Iowa, Wisconsin, the remaining parts of Illinois, Indiana, Michigan and Ohio not covered by PJM, and parts of Montana, Missouri and Kentucky. |
| | • | New England represents the operations within ISO-NE covering the states of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont. |
| | • | New York represents operations within ISO-NY, which covers the state of New York in its entirety. |
| | • | ERCOT represents operations within Electric Reliability Council of Texas, covering most of the state of Texas. |
| | • | South represents operations in the FRCC, MISO’s Southern Region, and the remaining portions of the SERC not included within MISO or PJM, which includes all or most of Florida, Arkansas, Louisiana, Mississippi, Alabama, Georgia, Tennessee, North Carolina, South Carolina and parts of Missouri, Kentucky and Texas. Generation’s South region also includes operations in the SPP, covering Kansas, Oklahoma, most of Nebraska and parts of New Mexico, Texas, Louisiana, Missouri, Mississippi and Arkansas. |
| | • | West represents operations in the WECC, which includes California ISO, and covers the states of California, Oregon, Washington, Arizona, Nevada, Utah, Idaho, Colorado and parts of New Mexico, Wyoming and South Dakota. |
| | • | Canada represents operations across the entire country of Canada and includes AESO, OIESO and the Canadian portion of MISO. |
The CODMs for Exelon and Generation evaluate the performance of Generation’s power marketing activities and allocate resources based on revenue net of purchased power and fuel expense (RNF). Generation believes that RNF is a useful measurement of operational performance. RNF is not a presentation defined under GAAP and may not be comparable to other companies’ presentations or deemed more useful than the GAAP information provided elsewhere in this report. Generation’s operating revenues include all sales to third parties and affiliated sales to the Utility Registrants. Purchased power costs include all costs associated with the procurement and supply of electricity including capacity, energy and ancillary services. Fuel expense includes the fuel costs for Generation’s owned generation and fuel costs associated with tolling agreements. The results of Generation's other business activities are not regularly reviewed by the CODM and are therefore not classified as operating segments or included in the regional reportable segment amounts. These activities include natural gas, as well as other miscellaneous business activities that are not significant to Generation's overall operating revenues or results of operations. Further, Generation’s unrealized mark-to-market gains and losses on economic hedging activities and its amortization of certain intangible assets and liabilities relating to commodity contracts recorded at fair value from mergers and acquisitions are also not included in the regional reportable segment amounts. Exelon and Generation do not use a measure of total assets in making decisions regarding allocating resources to or assessing the performance of these reportable segments. An analysis and reconciliation of the Registrants’ reportable segment information to the respective information in the consolidated financial statements for the three months ended March 31, 2016 and 2015 is as follows:
Three Months Ended March 31, 2016 and 2015 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Successor | | | | | | | | Generation(a) | | ComEd | | PECO | | BGE | | PHI(b) | | Other(c) | | Intersegment
Eliminations | | Exelon | Operating revenues(d): | 2016 | | | | | | | | | | | | | | | | Competitive businesses electric revenues | $ | 3,695 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | (266 | ) | | $ | 3,429 |
| Competitive businesses natural gas revenues | 822 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 822 |
| Competitive businesses other revenues | 222 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 222 |
| Rate-regulated electric revenues | — |
| | 1,249 |
| | 644 |
| | 680 |
| | 90 |
| | — |
| | (6 | ) | | 2,657 |
| Rate-regulated natural gas revenues | — |
| | — |
| | 197 |
| | 249 |
| | 3 |
| | — |
| | (5 | ) | | 444 |
| Shared service and other revenues | — |
| | — |
| | — |
| | — |
| | 12 |
| | 405 |
| | (418 | ) | | (1 | ) | 2015 | | | | | | | | | | | | | | | | Competitive businesses electric revenues | $ | 4,397 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | (209 | ) | | $ | 4,188 |
| Competitive businesses natural gas revenues | 1,124 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 1,124 |
| Competitive businesses other revenues | 319 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | (1 | ) | | 318 |
| Rate-regulated electric revenues | — |
| | 1,185 |
| | 677 |
| | 713 |
| | — |
| | — |
| | (1 | ) | | 2,574 |
| Rate-regulated natural gas revenues | — |
| | — |
| | 308 |
| | 323 |
| | — |
| | — |
| | (7 | ) | | 624 |
| Shared service and other revenues | — |
| | — |
| | — |
| | — |
| | — |
| | 318 |
| | (316 | ) | | 2 |
| Intersegment revenues(e): | | | | | | | | | | | | | | | | 2016 | $ | 266 |
| | $ | 5 |
| | $ | 1 |
| | $ | 5 |
| | $ | 12 |
| | $ | 405 |
| | $ | (695 | ) | | $ | (1 | ) | 2015 | 210 |
| | 1 |
| | — |
| | 7 |
| | — |
| | 317 |
| | (533 | ) | | 2 |
| Net income (loss): | | | | | | | | | | | | | | | | 2016 | $ | 257 |
| | $ | 115 |
| | $ | 124 |
| | $ | 101 |
| | $ | (309 | ) | | $ | (164 | ) | | $ | (1 | ) | | $ | 123 |
| 2015 | 485 |
| | 90 |
| | 139 |
| | 109 |
| | — |
| | (84 | ) | | (1 | ) | | 738 |
| Total assets: | | | | | | | | | | | | | | | | March 31, 2016 | $ | 47,002 |
| | $ | 26,887 |
| | $ | 10,462 |
| | $ | 8,361 |
| | $ | 20,932 |
| | $ | 9,751 |
| | $ | (11,653 | ) | | $ | 111,742 |
| December 31, 2015 | 46,529 |
| | 26,532 |
| | 10,367 |
| | 8,295 |
| | — |
| | 15,389 |
| | (11,728 | ) | | 95,384 |
|
_________ | | (a) | Generation includes the six power marketing reportable segments shown below: Mid-Atlantic, Midwest, New England, New York, ERCOT and Other Power Regions. Intersegment revenues for Generation for the three months ended March 31, 2016 include revenue from sales to PECO of $79 million and sales to BGE of $173 million in the Mid-Atlantic region, and sales to ComEd of $5 million in the Midwest region. For the three months ended March 31, 2015, intersegment revenues for Generation include revenue from sales to PECO of $63 million and sales to BGE of $138 million in the Mid-Atlantic region, and sales to ComEd of $9 million in the Midwest region. For the Successor period of March 24, 2016 to March 31, 2016, intersegment revenues for Generation include revenue from sales to Pepco of $6 million, sales to DPL of $4 million, and sales to ACE of $1 million in the Mid-Atlantic region. |
| | (b) | Amounts included represent activity for the PHI's successor period, March 24, 2016 through March 31, 2016. PHI includes the three reportable segments: Pepco, DPL and ACE. See tables below for PHI's predecessor periods, including Pepco, DPL and ACE, for January 1, 2016 to March 23, 2016 and for the three months ended March 31, 2015. |
| | (c) | Other primarily includes Exelon’s corporate operations, shared service entities and other financing and investment activities. |
| | (d) | Includes gross utility tax receipts from customers. The offsetting remittance of utility taxes to the governing bodies is recorded in expenses on the Registrants’ Consolidated Statements of Operations and Comprehensive Income. See Note 19 — Supplemental Financial Information for total utility taxes for the three months ended March 31, 2016 and 2015. |
| | (e) | Intersegment revenues exclude sales to unconsolidated affiliates. The intersegment profit associated with Generation’s sale of certain products and services by and between Exelon’s segments is not eliminated in consolidation due to the recognition of intersegment profit in accordance with regulatory accounting guidance. For Exelon, these amounts are included in Operating revenues in the Consolidated Statements of Operations and Comprehensive Income. |
Generation total revenues:
| | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended March 31, 2016 | | Three Months Ended March 31, 2015 | | Revenues
from external
customers(a) | | Intersegment
revenues | | Total
Revenues | | Revenues
from external
customers(a)(c) | | Intersegment
revenues(c) | | Total
Revenues(c) | Mid-Atlantic | $ | 1,532 |
| | $ | (12 | ) | | $ | 1,520 |
| | $ | 1,556 |
| | $ | (43 | ) | | $ | 1,513 |
| Midwest | 1,089 |
| | 6 |
| | 1,095 |
| | 1,276 |
| | — |
| | 1,276 |
| New England | 471 |
| | (1 | ) | | 470 |
| | 865 |
| | (6 | ) | | 859 |
| New York | 218 |
| | (15 | ) | | 203 |
| | 307 |
| | 3 |
| | 310 |
| ERCOT | 163 |
| | — |
| | 163 |
| | 181 |
| | (1 | ) | | 180 |
| Other Power Regions | 222 |
| | 1 |
| | 223 |
| | 212 |
| | 2 |
| | 214 |
| Total Revenues for Reportable Segments | 3,695 |
|
| (21 | ) |
| 3,674 |
|
| 4,397 |
|
| (45 | ) |
| 4,352 |
| Other(b) | 1,044 |
| | 21 |
| | 1,065 |
| | 1,443 |
| | 45 |
| | 1,488 |
| Total Generation Consolidated Operating Revenues | $ | 4,739 |
|
| $ | — |
|
| $ | 4,739 |
|
| $ | 5,840 |
|
| $ | — |
|
| $ | 5,840 |
|
__________ | | (a) | Includes all wholesale and retail electric sales to third parties and affiliated sales to the Utility Registrants. |
| | (b) | Other represents activities not allocated to a region. See text above for a description of included activities. Also includes a $20 million and $40 million increase to revenues for the amortization of intangible assets related to commodity contracts recorded at fair value for the three months ended March 31, 2016 and 2015, respectively, unrealized mark-to-market gains of $63 million and $154 million for the three months ended March 31, 2016 and 2015, respectively, and elimination of intersegment revenues. |
| | (c) | Exelon corrected an error in the March 31, 2015 balances within Intersegment Revenue and Revenue from external customers for an overstatement of $43 million of Intersegment Revenue for Reportable Segments for the three months ended March 31, 2015, an understatement of Revenue from external customers for Reportable Segments of $43 million for the three months ended March 31, 2015, an understatement of $43 million of Intersegment Revenue for Other for the three months ended March 31, 2015, and an overstatement of Revenue from external customers for Other of $43 million for the three months ended March 31, 2015. This error is not considered material to any prior period, and there is no impact to Total Revenues. |
Generation total revenues net of purchased power and fuel expense:
| | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended March 31, 2016 | | Three Months Ended March 31, 2015 | | RNF from external customers(a) | | Intersegment RNF | | Total RNF | | RNF from external customers(a)(c) | | Intersegment RNF(c) | | Total RNF(c) | Mid-Atlantic | $ | 832 |
| | $ | 9 |
| | $ | 841 |
| | $ | 808 |
| | $ | (21 | ) | | $ | 787 |
| Midwest | 715 |
| | 3 |
| | 718 |
| | 709 |
| | (6 | ) | | 703 |
| New England | 86 |
| | (5 | ) | | 81 |
| | 182 |
| | (24 | ) | | 158 |
| New York | 141 |
| | (11 | ) | | 130 |
| | 169 |
| | 20 |
| | 189 |
| ERCOT | 81 |
| | (20 | ) | | 61 |
| | 88 |
| | (33 | ) | | 55 |
| Other Power Regions | 86 |
| | (10 | ) | | 76 |
| | 72 |
| | (26 | ) | | 46 |
| Total Revenues net of purchased power and fuel expense for Reportable Segments | 1,941 |
|
| (34 | ) |
| 1,907 |
|
| 2,028 |
|
| (90 | ) |
| 1,938 |
| Other(b) | 356 |
| | 34 |
| | 390 |
| | 379 |
| | 90 |
| | 469 |
| Total Generation Revenues net of purchased power and fuel expense | $ | 2,297 |
|
| $ | — |
|
| $ | 2,297 |
|
| $ | 2,407 |
|
| $ | — |
|
| $ | 2,407 |
|
__________ | | (a) | Includes purchases and sales from third parties and affiliated sales to the Utility Registrants. |
| | (b) | Other represents activities not allocated to a region. See text above for a description of included activities. Also includes a $19 million and $38 million increase to RNF for the amortization of intangible assets related to commodity contracts for the three months ended March 31, 2016 and 2015, respectively, unrealized mark-to-market gains of $103 million and $162 million for the three months ended March 31, 2016 and 2015, respectively, and the elimination of intersegment revenue net of purchased power and fuel expense. |
| | (c) | Exelon corrected an error in the March 31, 2015 balances within Intersegment RNF and RNF from external customers for an understatement of $4 million of Intersegment RNF for Reportable Segments for the three months ended March 31, 2015, an understatement of RNF from external customers for Reportable Segments of $5 million for the three months ended March 31, 2015, an overstatement of $4 million of Intersegment RNF for Other for the three months ended March 31, 2015, and an overstatement of RNF from external customers for Other of $5 million for the three months ended March 31, 2015. This also included an understatement of total RNF for Reportable Segments and an overstatement of total RNF for Other of $9 million for the three months ended March 31, 2015. The error is not considered material to any prior period, and there is no net impact to Generation Total RNF for 2015. |
Successor and Predecessor PHI:
| | | | | | | | | | | | | | | | | | | | | | | | | | Pepco | | DPL | | ACE | | Other(b) | | Intersegment
Eliminations | | PHI | Operating revenues(a): | | | | | | | | | | | | March 24, 2016 to March 31, 2016 - Successor | | | | | | | | | | | | Rate-regulated electric revenues | $ | 40 |
| | $ | 24 |
| | $ | 23 |
| | $ | 3 |
| | $ | — |
| | $ | 90 |
| Rate-regulated natural gas revenues | — |
| | 3 |
| | — |
| | — |
| | — |
| | 3 |
| Shared service and other revenues | — |
| | — |
| | — |
| | 12 |
| | — |
| | 12 |
| January 1, 2016 to March 23, 2016 - Predecessor | | | | | | | | | | | | Rate-regulated electric revenues | $ | 511 |
| | $ | 279 |
| | $ | 268 |
| | $ | 42 |
| | $ | (4 | ) | | $ | 1,096 |
| Rate-regulated natural gas revenues | — |
| | 56 |
| | — |
| | 1 |
| | — |
| | 57 |
| Shared service and other revenues | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Three months ended - March 31, 2015 - Predecessor | | | | | | | | | | | | Rate-regulated electric revenues | $ | 545 |
| | $ | 335 |
| | $ | 334 |
| | $ | 58 |
| | $ | (4 | ) | | $ | 1,268 |
| Rate-regulated natural gas revenues | — |
| | 86 |
| | — |
| | — |
| | — |
| | 86 |
| Shared service and other revenues | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Intersegment revenues: | | | | | | | | | | | | March 24, 2016 to March 31, 2016 - Successor | $ | — |
| | $ | — |
| | $ | — |
| | $ | 12 |
| | $ | — |
| | $ | 12 |
| January 1, 2016 to March 23, 2016 - Predecessor | 1 |
| | 2 |
| | 1 |
| | — |
| | (4 | ) | | — |
| Three months ended - March 31, 2015 - Predecessor | 1 |
| | 2 |
| | 1 |
| | — |
| | (4 | ) | | — |
| Net income (loss): | | | | | | | | | | | | March 24, 2016 to March 31, 2016 - Successor | $ | (140 | ) | | $ | (98 | ) | | $ | (105 | ) | | $ | 22 |
| | $ | 12 |
| | $ | (309 | ) | January 1, 2016 to March 23, 2016 - Predecessor | 32 |
| | 26 |
| | 5 |
| | (44 | ) | | — |
| | 19 |
| Three months ended - March 31, 2015 - Predecessor | 26 |
| | 32 |
| | 9 |
| | (14 | ) | | — |
| | 53 |
| Total assets: | | | | | | | | | | | | March 31, 2016 - Successor | $ | 6,877 |
| | $ | 3,959 |
| | $ | 3,393 |
| | $ | 11,077 |
| | $ | (4,374 | ) | | $ | 20,932 |
| December 31, 2015 - Predecessor | 6,908 |
| | 3,969 |
| | 3,387 |
| | 7,158 |
| | (5,238 | ) | | 16,184 |
|
_________ | | (a) | Includes gross utility tax receipts from customers. The offsetting remittance of utility taxes to the governing bodies is recorded in expenses on the Registrants’ Consolidated Statements of Operations and Comprehensive Income. See Note 19 — Supplemental Financial Information for total utility taxes for the three months ended March 31, 2016 and 2015. |
| | (b) | Other primarily includes PHI’s corporate operations, shared service entities and other financing and investment activities. For the predecessor periods presented, Other includes the activity of PHI’s unregulated businesses which were distributed to Exelon and Generation as a result of the PHI Merger. |
|