Segment Information (Exelon, Generation, ComEd, PECO and BGE)

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.

Exelon has nine reportable segments, which include ComEd, PECO, BGE 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 and BGE each represent a single reportable segment, and as such, no separate segment information is provided for these Registrants. Exelon, ComEd, PECO and BGE's CODMs evaluate the performance of and allocate resources to ComEd, PECO and BGE 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.


•	Other Power Regions:

•

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 ComEd, PECO, and BGE. 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 years ended December 31, 2015, 2014, and 2013 is as follows:



	Generation ^(a)		ComEd		PECO		BGE		Other ^(b)		Intersegment Eliminations			Exelon
Operating revenues^(c):
2015
Competitive businesses electric revenues	$	15,944	$	—	$	—	$	—	$	—	$	(744	)	$	15,200
Competitive businesses natural gas revenues	2,433		—		—		—		—		—			2,433
Competitive businesses other revenues	758		—		—		—		—		(1		)	757
Rate-regulated electric revenues	—		4,905		2,486		2,490		—		(5		)	9,876
Rate-regulated natural gas revenues	—		—		546		645		—		(15		)	1,176
Shared service and other revenues	—		—		—		—		1,372		(1,367		)	5
2014
Competitive businesses electric revenues	$	14,533	$	—	$	—	$	—	$	—	$	(760	)	$	13,773



	Generation ^(a)			ComEd		PECO		BGE		Other ^(b)			Intersegment Eliminations			Exelon
Competitive businesses natural gas revenues	2,705			—		—		—		—			(1		)	2,704
Competitive businesses other revenues	155			—		—		—		—			(1		)	154
Rate-regulated electric revenues	—			4,564		2,448		2,460		—			(5		)	9,467
Rate-regulated natural gas revenues	—			—		646		705		—			(26		)	1,325
Shared service and other revenues	—			—		—		—		1,285			(1,279		)	6
2013
Competitive businesses electric revenues	$	13,862		$	—	$	—	$	—	$	—		$	(1,366	)	$	12,496
Competitive businesses natural gas revenues	1,721			—		—		—		—			—			1,721
Competitive businesses other revenues	47			—		—		—		—			(1		)	46
Rate-regulated electric revenues	—			4,464		2,500		2,405		—			(4		)	9,365
Rate-regulated natural gas revenues	—			—		600		660		—			(14		)	1,246
Shared service and other revenues	—			—		—		—		1,241			(1,227		)	14
Intersegment revenues^(d):
2015	$	745		$	4	$	2	$	14	$	1,367		$	(2,127	)	$	5
2014	762			4		2		25		1,280			(2,067		)	6
2013	1,367			3		1		13		1,237			(2,607		)	14
Depreciation and amortization
2015	$	1,054		$	707	$	260	$	366	$	63		$	—		$	2,450
2014	967			687		236		371		53			—			2,314
2013	856			669		228		348		52			—			2,153
Operating expenses ^(c):
2015	$	16,872		$	3,889	$	2,404	$	2,578	$	1,444		$	(2,131	)	$	25,056
2014	16,923			3,586		2,522		2,726		1,353			(2,071		)	25,039
2013	13,976			3,510		2,434		2,616		1,324			(2,618		)	21,242
Equity in earnings (losses) of unconsolidated affiliates
2015	$	(8	)	$	—	$	—	$	—	$	1		$	—		$	(7	)
2014	(20		)	—		—		—		—			—			(20		)
2013	10			—		—		—		—			—			10
Interest expense, net:
2015	$	365		$	332	$	114	$	99	$	123		$	—		$	1,033
2014	356			321		113		106		169			—			1,065
2013	357			579		115		122		183			—			1,356
Income (loss) before income taxes:
2015	$	1,850		$	706	$	521	$	477	$	(219	)	$	(5	)	$	3,330
2014	1,226			676		466		351		(227		)	(6		)	2,486
2013	1,675			401		557		344		(191		)	(13		)	2,773
Income taxes:
2015	$	502		$	280	$	143	$	189	$	(41	)	$	—		$	1,073



	Generation ^(a)		ComEd		PECO		BGE		Other ^(b)			Intersegment Eliminations			Exelon
2014	207		268		114		140		(63		)	—			666
2013	615		152		162		134		(20		)	1			1,044
Net income (loss):
2015	$	1,340	$	426	$	378	$	288	$	(177	)	$	(5	)	$	2,250
2014	1,019		408		352		211		(164		)	(6		)	1,820
2013	1,060		249		395		210		(171		)	(14		)	1,729
Capital expenditures:
2015	$	3,841	$	2,398	$	601	$	719	$	65		$	—		7,624
2014	3,012		1,689		661		620		95			—			6,077
2013	2,752		1,433		537		587		86			—			5,395
Total assets:
2015	$	46,529	$	26,532	$	10,367	$	8,295	$	15,389		$	(11,728	)	$	95,384
2014	44,951		25,358		9,860		8,056		9,711			(11,520		)	86,416

__________________________

(a)

Generation includes the six power marketing reportable segments shown below: Mid-Atlantic, Midwest, New England, New York, ERCOT and Other Power Regions. For the year ended December 31, 2015, intersegment revenues for Generation include revenue from sales to PECO of $224 million and sales to BGE of $502 million in the Mid-Atlantic region, and sales to ComEd of $18 million in the Midwest region, which eliminate upon consolidation. For the year ended December 31, 2014, intersegment revenues for Generation include revenue from sales to PECO of $198 million and sales to BGE of $387 million in the Mid-Atlantic region, and sales to ComEd of $176 million in the Midwest region, which eliminate upon consolidation. For the year ended December 31, 2013, intersegment revenues for Generation include revenue from sales to PECO of $405 million and sales to BGE of $455 million in the Mid-Atlantic region, and sales to ComEd of $506 million in the Midwest region, net of $7 million related to the unrealized mark-to-market losses related to the ComEd swap, which eliminate upon consolidation.


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

(c)

For the years ended December 31, 2015, 2014 and 2013, utility taxes of $105 million, $89 million and $79 million, respectively, are included in revenues and expenses for Generation. For the years ended December 31, 2015, 2014 and 2013, utility taxes of $236 million, $238 million and $241 million, respectively, are included in revenues and expenses for ComEd. For the years ended December 31, 2015, 2014 and 2013, utility taxes of $133 million, $128 million and $129 million, respectively, are included in revenues and expenses for PECO. For the years ended December 31, 2015, 2014 and 2013, utility taxes of $85 million, $86 million and $82 million are included in revenues and expenses for BGE, respectively.

(d)

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:



	2015							2014							2013
	Revenues from external customers^(b)		Intersegment revenues			Total revenues		Revenues from external customers^(b)(d)		Intersegment revenues^(d)			Total revenues		Revenues from external customers^(b)(d)		Intersegment revenues^(d)			Total revenues
Mid-Atlantic^(a)	$	5,974	$	(74	)	$	5,900	$	5,414	$	(155	)	$	5,259	$	5,261	$	(57	)	$	5,204
Midwest	4,712		(2		)	4,710		4,488		(13		)	4,475		4,298		(28		)	4,270
New England	2,217		(5		)	2,212		1,468		(46		)	1,422		1,279		(42		)	1,237
New York	996		(11		)	985		846		(3		)	843		717		(3		)	714
ERCOT	863		(6		)	857		938		(3		)	935		1,223		(7		)	1,216
Other Power Regions	1,182		(80		)	1,102		1,379		(70		)	1,309		1,084		(116		)	968
Total Revenues for Reportable Segments	$	15,944	$	(178	)	$	15,766	$	14,533	$	(290	)	$	14,243	$	13,862	$	(253	)	$	13,609
Other ^(c)	3,191		178			3,369		2,860		290			3,150		1,768		253			2,021
Total Generation Consolidated Operating Revenues	$	19,135	$	—		$	19,135	$	17,393	$	—		$	17,393	$	15,630	$	—		$	15,630

_______________________


(a)	On April 1, 2014, Generation assumed operational control of CENG's nuclear fleet. As a result, beginning on April 1, 2014, CENG's revenues are included on a fully consolidated basis.


(b)	Includes all wholesale and retail electric sales to third parties and affiliated sales to ComEd, PECO and BGE.

(c)

Other represents activities not allocated to a region. See text above for a description of included activities. Also includes a $7 million increase to revenues, a $289 million decrease to revenues, and a $767 million decrease to revenues for the amortization of intangible assets related to commodity contracts recorded at fair value for the years ended December 31, 2015, 2014, and 2013, respectively, unrealized mark-to-market gains of $203 million, losses of $174 million, and gains of $220 million for the years ended December 31, 2015, 2014, and 2013, respectively, and elimination of intersegment revenues.

(d)

Exelon corrected an error in the December 31, 2014 and December 31, 2013 balances within Intersegment revenues and Revenues from external customers for an overstatement of Intersegment revenues for Reportable Segments of $284 million and $252 million for the years ended December 31, 2014 and 2013, respectively, an understatement of Revenues from external customers for Reportable Segments of $284 million and $252 million for the years ended December 31, 2014 and 2013, respectively, an understatement of Intersegment revenues for Other of $284 million and $252 million for the years ended December 31, 2014 and 2013, respectively, and an overstatement of Revenues from external customers for Other of $284 million and $252 million for the years ended December 31, 2014 and 2013, respectively. The error is not considered material to any prior period, and there is no net impact to Total Revenues.

Generation total revenues net of purchased power and fuel expense:



	2015							2014									2013
	RNF from external customers^(b)		Intersegment RNF			Total RNF		RNF from external customers^(b)(d)			Intersegment RNF^d)			Total RNF			RNF from external customers^(b)(d)			Intersegment RNF^(d)			Total RNF
Mid-Atlantic^(a)	$	3,556	$	15		$	3,571	$	3,544		$	(113	)	$	3,431		$	3,287		$	(17	)	$	3,270
Midwest	2,912		(20		)	2,892		2,607			(8		)	2,599			2,606			(20		)	2,586
New England	519		(58		)	461		450			(99		)	351			299			(114		)	185
New York	584		50			634		439			44			483			(55		)	51			(4		)
ERCOT	425		(132		)	293		573			(256		)	317			627			(191		)	436
Other Power Regions	440		(190		)	250		517			(190		)	327			397			(196		)	201
Total Revenues net of purchased power and fuel expense for Reportable Segments	$	8,436	$	(335	)	$	8,101	$	8,130		$	(622	)	$	7,508		$	7,161		$	(487	)	$	6,674
Other ^(c)	678		335			1,013		(662		)	622			(40		)	272			487			759
Total Generation Revenues net of purchased power and fuel expense	$	9,114	$	—		$	9,114	$	7,468		$	—		$	7,468		$	7,433		$	—		$	7,433

____________________________


(a)	On April 1, 2014, Generation assumed operational control of CENG's nuclear fleet. As a result, beginning on April 1, 2014, CENG's revenue net of purchased power and fuel expense are included on a fully consolidated basis.


(b)	Includes purchases and sales from third parties and affiliated sales to ComEd, PECO and BGE.

(c)

Other represents activities not allocated to a region. See text above for a description of included activities. Also includes a $8 million increase in RNF, a $124 million decrease in RNF, and a $488 million decrease in RNF for the amortization of intangible assets related to commodity contracts recorded at fair value for the years ended December 31, 2015, 2014, and 2013, respectively, unrealized mark-to-market gains of $257 million, losses of $591 million, and gains of $504 million for the years ended December 31, 2015, 2014, and 2013, respectively, and the elimination of intersegment revenue net of purchased power and fuel expense.

(d)

Exelon corrected an error in the December 31, 2014 and December 31, 2013 balances within Intersegment RNF and RNF from external customers for an understatement of $8 million and an overstatement of $134 million of Intersegment RNF for Reportable Segments for the years ended December 31, 2014 and 2013, respectively, an understatement of RNF from external customers for Reportable Segments of $11 million and $134 million for the years ended December 31, 2014 and 2013, respectively, an overstatement of $8 million and an understatement $134 million of Intersegment RNF for Other for the years ended December 31, 2014 and 2013, respectively, and an overstatement of RNF from external customers for Other of $11 million and $134 million for the years ended December 31, 2014 and 2013, respectively. This also included an understatement of total RNF for Reportable Segments and an overstatement of total RNF for Other of $19 million for the year ended December 31, 2014. The error is not considered material to any prior period, and there is no net impact to Generation Total RNF for 2013 or 2014.