20. 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.


•	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 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 and nine months ended September 30, 2016 and 2015 is as follows:

Three Months Ended September 30, 2016 and 2015



									Successor
	Generation^(a)		ComEd		PECO		BGE		PHI^(b)		Other^(c)			Intersegment Eliminations			Exelon
Operating revenues^(d):
2016
Competitive businesses electric revenues	$	4,322	$	—	$	—	$	—	$	—	$	—		$	(499	)	$	3,823
Competitive businesses natural gas revenues	326		—		—		—		—		—			—			326
Competitive businesses other revenues	387		—		—		—		—		—			(1		)	386
Rate-regulated electric revenues	—		1,497		740		735		1,366		—			(8		)	4,330
Rate-regulated natural gas revenues	—		—		48		77		17		—			(5		)	137
Shared service and other revenues	—		—		—		—		11		362			(373		)	—
2015
Competitive businesses electric revenues	$	4,299	$	—	$	—	$	—	$	—	$	—		$	(204	)	$	4,095
Competitive businesses natural gas revenues	347		—		—		—		—		—			—			347
Competitive businesses other revenues	122		—		—		—		—		—			—			122
Rate-regulated electric revenues	—		1,376		691		655		—		—			(1		)	2,721
Rate-regulated natural gas revenues	—		—		49		70		—		—			(3		)	116
Shared service and other revenues	—		—		—		—		—		348			(348		)	—
Intersegment revenues^(e):
2016	$	500	$	4	$	2	$	7	$	11	$	362		$	(885	)	$	1
2015	205		1		1		3		—		347			(555		)	2
Net income (loss):
2016	$	271	$	37	$	122	$	56	$	166	$	(125	)	$	(1	)	$	526
2015	332		149		90		54		—		(36		)	(2		)	587
Total assets:
September 30, 2016	$	47,568	$	28,020	$	11,041	$	8,857	$	21,063	$	9,883		$	(11,897	)	$	114,535
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 September 30, 2016 include revenue from sales to PECO of $91 million and sales to BGE of $183 million in the Mid-Atlantic region, and sales to ComEd of $20 million in the Midwest region. For the three months ended September 30, 2015, intersegment revenues for Generation include revenue from sales to PECO of $61 million and sales to BGE of $141 million in the Mid-Atlantic region, and sales to ComEd of $2 million in the Midwest region. For the Successor period of three months ended September 30, 2016, intersegment revenues for Generation include revenue from sales to Pepco of $128 million, sales to DPL of $63 million, and sales to ACE of $15 million in the Mid-Atlantic region.


(b)	Amounts included represent activity for PHI's successor period, three months ended September 30, 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 nine months ended September 30, 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 September 30, 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 September 30, 2016							Three Months Ended September 30, 2015
	Revenues from external customers^(a)		Intersegment revenues			Total Revenues		Revenues from external customers^(a)(c)		Intersegment revenues^(c)			Total Revenues^(c)
Mid-Atlantic	$	1,813	$	(13	)	$	1,800	$	1,640	$	(8	)	$	1,632
Midwest	1,163		1			1,164		1,152		(1		)	1,151
New England	455		(4		)	451		520		—			520
New York	331		(8		)	323		254		(4		)	250
ERCOT	289		6			295		317		(1		)	316
Other Power Regions	271		(33		)	238		416		(40		)	376
Total Revenues for Reportable Segments	4,322		(51		)	4,271		4,299		(54		)	4,245
Other^(b)	713		51			764		469		54			523
Total Generation Consolidated Operating Revenues	$	5,035	$	—		$	5,035	$	4,768	$	—		$	4,768

__________


(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. Includes a $21 million decrease and $3 million decrease to revenues for the amortization of intangible assets and liabilities related to commodity contracts recorded at fair value for the three months ended September 30, 2016 and 2015, respectively, unrealized mark-to-market gains of $187 million and losses of $7 million for the three months ended September 30, 2016 and 2015, respectively, and elimination of intersegment revenues.

(c)

Exelon corrected an error in the September 30, 2015 balances within Intersegment Revenue and Revenue from external customers for an overstatement of $54 million of Intersegment Revenue for Reportable Segments for the three months ended September 30, 2015, an understatement of Revenue from external customers for Reportable Segments of $54 million for the three months ended September 30, 2015, an understatement of $54 million of Intersegment Revenue for Other for the three months ended September 30, 2015, and an overstatement of Revenue from external customers for Other of $54 million for the three months ended September 30, 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 September 30, 2016							Three Months Ended September 30, 2015
	RNF from external customers^(a)		Intersegment RNF			Total RNF		RNF from external customers^(a)(c)			Intersegment RNF^(c)			Total RNF^(c)
Mid-Atlantic	$	881	$	6		$	887	$	979		$	18		$	997
Midwest	782		(1		)	781		760			(4		)	756
New England	170		(10		)	160		148			(15		)	133
New York	195		(1		)	194		157			13			170
ERCOT	144		(51		)	93		166			(55		)	111
Other Power Regions	143		(66		)	77		154			(71		)	83
Total Revenues net of purchased power and fuel for Reportable Segments	2,315		(123		)	2,192		2,364			(114		)	2,250
Other^(b)	131		123			254		(115		)	114			(1		)
Total Generation Revenues net of purchased power and fuel expense	$	2,446	$	—		$	2,446	$	2,249		$	—		$	2,249

__________


(a)	Includes purchases and sales from/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. Includes a $22 million decrease and a $4 million decrease to RNF for the amortization of intangible assets and liabilities related to commodity contracts for the three months ended September 30, 2016 and 2015, respectively, unrealized mark-to-market gains of $88 million and losses of $139 million for the three months ended September 30, 2016 and 2015, respectively, accelerated nuclear fuel amortization associated with nuclear decommissioning as discussed in Note 7 — Early Nuclear Plant Retirements of the Combined Notes to Consolidated Financial Statements of $28 million for the three months ended September 30, 2016, and the elimination of intersegment revenue net of purchased power and fuel expense.

(c)

Exelon corrected an error in the September 30, 2015 balances within Intersegment RNF and RNF from external customers for an understatement of $12 million of Intersegment RNF for Reportable Segments for the three months ended September 30, 2015, and an overstatement of $12 million of Intersegment RNF for Other for the three months ended September 30, 2015. This also included an understatement of total RNF for Reportable Segments and an overstatement of total RNF for Other of $13 million for the three months ended September 30, 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):
Three months ended September 30, 2016 - Successor
Rate-regulated electric revenues	$	635	$	314	$	421	$	—		$	(4	)	$	1,366
Rate-regulated natural gas revenues	—		17		—		—						17
Shared service and other revenues	—		—		—		11			—			11
Three months ended September 30, 2015 - Predecessor
Rate-regulated electric revenues	$	592	$	295	$	386	$	44		$	—		$	1,317
Rate-regulated natural gas revenues	—		19		—		—			—			19
Shared service and other revenues	—		—		—		—			—			—
Intersegment revenues^(e):
Three months ended September 30, 2016 - Successor	$	1	$	2	$	1	$	11		$	(4	)	$	11
Three months ended September 30, 2015 - Predecessor	1		1		1		—			(3		)	—
Net income (loss):
Three months ended September 30, 2016 - Successor	$	79	$	44	$	47	$	(15	)	$	11		$	166
Three months ended September 30, 2015 - Predecessor	60		15		22		(6		)	—			91
Total assets:
September 30, 2016 - Successor	$	7,219	$	4,023	$	3,507	$	11,057		$	(4,743	)	$	21,063
December 31, 2015 - Predecessor	6,908		3,969		3,387		7,162			(5,238		)	16,188

__________


(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 September 30, 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.

Nine Months Ended September 30, 2016 and 2015



									Successor
	Generation^(a)		ComEd		PECO		BGE		PHI^(b)			Other^(c)			Intersegment Eliminations			Exelon
Operating revenues^(d):
2016
Competitive businesses electric revenues	$	11,677	$	—	$	—	$	—	$	—		$	—		$	(1,118	)	$	10,559
Competitive businesses natural gas revenues	1,515		—		—		—		—			—			—			1,515
Competitive businesses other revenues	171		—		—		—		—			—			(2		)	169
Rate-regulated electric revenues	—		4,031		1,971		1,998		2,485			—			(24		)	10,461
Rate-regulated natural gas revenues	—		—		322		423		46			—			(10		)	781
Shared service and other revenues	—		—		—		—		34			1,166			(1,199		)	1
2015
Competitive businesses electric revenues	$	12,360	$	—	$	—	$	—	$	—		$	—		$	(564	)	$	11,796
Competitive businesses natural gas revenues	1,901		—		—		—		—			—			—			1,901
Competitive businesses other revenues	580		—		—		—		—			—			1			581
Rate-regulated electric revenues	—		3,709		1,950		1,908		—			—			(3		)	7,564
Rate-regulated natural gas revenues	—		—		436		480		—			—			(12		)	904
Shared service and other revenues	—		—		—		—		—			1,007			(1,007		)	—
Intersegment revenues^(e):
2016	$	1,121	$	12	$	5	$	16	$	34		$	1,166		$	(2,351	)	$	3
2015	567		3		1		10		—			1,003			(1,581		)	3
Net income (loss):
2016	$	556	$	297	$	346	$	191	$	(91	)	$	(340	)	$	(3	)	$	956
2015	1,208		339		299		212		—			(96		)	(3		)	1,959

_________

(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 nine months ended September 30, 2016 include revenue from sales to PECO of $234 million and sales to BGE of $489 million in the Mid-Atlantic region, and sales to ComEd of $38 million in the Midwest region. For the nine months ended September 30, 2015, intersegment revenues for Generation include revenue from sales to PECO of $173 million and sales to BGE of $376 million in the Mid-Atlantic region, and sales to ComEd of $17 million in the Midwest region. For the Successor period of March 24, 2016 to September 30, 2016, intersegment revenues for Generation include revenue from sales to Pepco of $223 million, sales to DPL of $109 million, and sales to ACE of $28 million in the Mid-Atlantic region.


(b)	Amounts included represent activity for PHI's successor period, March 24, 2016 through September 30, 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 nine months ended September 30, 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 nine months ended September 30, 2016 and 2015.

(e)

Generation total revenues:



	Nine Months Ended September 30, 2016							Nine Months Ended September 30, 2015
	Revenues from external customers^(a)		Intersegment revenues			Total Revenues		Revenues from external customers^(a)(c)		Intersegment revenues^(c)			Total Revenues^(c)
Mid-Atlantic	$	4,776	$	(40	)	$	4,736	$	4,560	$	(69	)	$	4,491
Midwest	3,330		13			3,343		3,634		(1		)	3,633
New England	1,278		(6		)	1,272		1,752		(6		)	1,746
New York	906		(33		)	873		783		(5		)	778
ERCOT	659		6			665		691		(4		)	687
Other Power Regions	728		(42		)	686		940		(60		)	880
Total Revenues for Reportable Segments	11,677		(102		)	11,575		12,360		(145		)	12,215
Other^(b)	1,686		102			1,788		2,481		145			2,626
Total Generation Consolidated Operating Revenues	$	13,363	$	—		$	13,363	$	14,841	$	—		$	14,841

__________


(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. Includes a $10 million decrease to revenues and a $19 million increase to revenues for the amortization of intangible assets and liabilities related to commodity contracts recorded at fair value for the nine months ended September 30, 2016 and 2015, respectively, unrealized mark-to-market losses of $366 million and gains of $171 million for the nine months ended September 30, 2016 and 2015, respectively, and elimination of intersegment revenues.

(c)

Exelon corrected an error in the September 30, 2015 balances within Intersegment Revenue and Revenue from external customers for an overstatement of $144 million of Intersegment Revenue for Reportable Segments for the nine months ended September 30, 2015, an understatement of Revenue from external customers for Reportable Segments of $144 million for the nine months ended September 30, 2015, an understatement of $144 million of Intersegment Revenue for Other for the nine months ended September 30, 2015, and an overstatement of Revenue from external customers for Other of $144 million for the nine months ended September 30, 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:



	Nine Months Ended September 30, 2016							Nine Months Ended September 30, 2015
	RNF from external customers^(a)		Intersegment RNF			Total RNF		RNF from external customers^(a)(c)		Intersegment RNF^(c)			Total RNF^(c)
Mid-Atlantic	$	2,541	$	15		$	2,556	$	2,679	$	(2	)	$	2,677
Midwest	2,225		4			2,229		2,220		(15		)	2,205
New England	373		(23		)	350		425		(46		)	379
New York	607		(15		)	592		462		40			502
ERCOT	335		(104		)	231		344		(109		)	235
Other Power Regions	357		(104		)	253		341		(148		)	193
Total Revenues net of purchased power and fuel expense for Reportable Segments	6,438		(227		)	6,211		6,471		(280		)	6,191
Other^(b)	316		227			543		570		280			850
Total Generation Revenues net of purchased power and fuel expense	$	6,754	$	—		$	6,754	$	7,041	$	—		$	7,041

__________


(a)	Includes purchases and sales from/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. Includes a $15 million decrease to RNF and a $20 million increase to RNF for the amortization of intangible assets and liabilities related to commodity contracts for the nine months ended September 30, 2016 and 2015, respectively, unrealized mark-to-market losses of $113 million and gains of $258 million for the nine months ended September 30, 2016 and 2015, respectively, accelerated nuclear fuel amortization associated with nuclear decommissioning as discussed in Note 7 - Early Nuclear Plant Retirements of the Combined Notes to Consolidated Financial Statements of $38 million for the nine months ended September 30, 2016, and the elimination of intersegment revenue net of purchased power and fuel expense.

(c)

Exelon corrected an error in the September 30, 2015 balances within Intersegment RNF and RNF from external customers for an understatement of $22 million of Intersegment RNF for Reportable Segments for the nine months ended September 30, 2015, an understatement of RNF from external customers for Reportable Segments of $6 million for the nine months ended September 30, 2015, an overstatement of $22 million of Intersegment RNF for Other for the nine months ended September 30, 2015, and an overstatement of RNF from external customers for Other of $6 million for the nine months ended September 30, 2015. This also included an understatement of total RNF for Reportable Segments and an overstatement of total RNF for Other of $28 million for the nine months ended September 30, 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 September 30, 2016 - Successor
Rate-regulated electric revenues	$	1,184		$	593		$	714		$	3		$	(9	)	$	2,485
Rate-regulated natural gas revenues	—			46			—			—			—			46
Shared service and other revenues	—			—			—			34			—			34
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	—			—			—			—			—			—
Nine months ended September 30, 2015 - Predecessor
Rate-regulated electric revenues	$	1,641		$	875		$	1,003		$	161		$	—		$	3,680
Rate-regulated natural gas revenues	—			129			—			—			—			129
Shared service and other revenues	—			—			—			—			—			—
Intersegment revenues:
March 24, 2016 to September 30, 2016 - Successor	$	2		$	4		$	2		$	35		$	(9	)	$	34
January 1, 2016 to March 23, 2016 - Predecessor	1			2			1			—			(4		)	—
Nine months ended September 30, 2015 - Predecessor	4			4			2			—			(10		)	—
Net income (loss):
March 24, 2016 to September 30, 2016 - Successor	$	(12	)	$	(42	)	$	(55	)	$	(16	)	$	34		$	(91	)
January 1, 2016 to March 23, 2016 - Predecessor	32			26			5			(44		)	—			19
Nine months ended September 30, 2015 - Predecessor	128			55			37			(23		)	—			197

_________


(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 nine months ended September 30, 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.