Variable Interest Entities (All Registrants)

A VIE is a legal entity that possesses any of the following characteristics: an insufficient amount of equity at risk to finance its activities, equity owners who do not have the power to direct the significant activities of the entity (or have voting rights that are disproportionate to their ownership interest), or equity owners who do not have the obligation to absorb expected losses or the right to receive the expected residual returns of the entity. Companies are required to consolidate a VIE if they are its primary beneficiary, which is the enterprise that has the power to direct the activities that most significantly affect the entity’s economic performance.

At December 31, 2017, Exelon, Generation, PHI and ACE collectively consolidated five VIEs or VIE groups for which the applicable Registrant was the primary beneficiary. At December 31, 2016, Exelon, Generation, BGE, PHI and ACE collectively consolidated nine VIEs or VIE groups for which the applicable Registrant was the primary beneficiary (see Consolidated Variable Interest Entities below). As of December 31, 2017 and 2016, Exelon and Generation collectively had significant interests in seven and eight other VIEs, respectively, for which the applicable Registrant does not have the power to direct the entities’ activities and, accordingly, was not the primary beneficiary (see Unconsolidated Variable Interest Entities below).

Consolidated Variable Interest Entities

The carrying amounts and classification of the consolidated VIEs’ assets and liabilities included in the Registrants' consolidated financial statements at December 31, 2017 and 2016 are as follows:



	December 31, 2017
					Successor
	Exelon^(a)		Generation		PHI^(a)		ACE
Current assets	$	630	$	620	$	10	6
Noncurrent assets	9,317		9,286		31		23
Total assets	$	9,947	$	9,906	$	41	$	29
Current liabilities	$	306	$	270	$	36	32
Noncurrent liabilities	3,312		3,246		66		58
Total liabilities	$	3,618	$	3,516	$	102	$	90



	December 31, 2016
							Successor
	Exelon^(a)(b)		Generation		BGE		PHI^(a)		ACE
Current assets	$	954	$	916	$	23	$	14	$	9
Noncurrent assets	8,563		8,525		3		35		23
Total assets	$	9,517	$	9,441	$	26	$	49	$	32
Current liabilities	$	885	$	802	$	42	$	42	$	37
Noncurrent liabilities	2,713		2,612		—		101		89
Total liabilities	$	3,598	$	3,414	$	42	$	143	$	126

__________


(a)	Includes certain purchase accounting adjustments not pushed down to the ACE standalone entity.


(b)	Includes certain purchase accounting adjustments not pushed down to the BGE standalone entity.

Except as specifically noted below, the assets in the table above are restricted for settlement of the VIE obligations and the liabilities in the table can only be settled using VIE resources.

As of December 31, 2017, Exelon's and Generation's consolidated VIEs consist of:

Investments in Other Energy Related Companies

During 2015, Generation sold 69% of its equity interest in a company to a tax equity investor. The company holds an equity method investment in a distributed energy company that is an unconsolidated VIE (see unconsolidated VIE section for additional details). Generation and the tax equity investor contributed a total of $227 million of equity in proportion to their ownership interests to the company. The company meets the definition of a VIE because it has a similar structure to a limited partnership and the limited partners do not have kick-out rights with respect to the general partner. Generation is the primary beneficiary because Generation manages the day-to-day activities of the entity.

During 2015, Generation formed a limited liability company to build, own, and operate a backup generator. While Generation owns 100% of the backup generator company, it was determined that the entity is a VIE because the customer absorbs price variability from the entity through the fixed price backup generator agreement. Generation provides operating and capital funding to the backup generator company.

During the fourth quarter of 2017 Generation acquired a controlling financial interest in an energy development company. The company is in the development stage and requires additional subordinated financial support from the equity holders to fund activities. Generation is the majority owner with a 62% equity interest and has the power to direct the activities that most significantly affect the economic performance of the company.

Renewable Energy Project Companies

In July 2017, Generation entered into an arrangement to sell a 49% interest in ExGen Renewable Partners, LLC (the Renewable JV) to an outside investor for $400 million of cash plus immaterial working capital and other customary post-closing adjustments. The Renewable JV meets the definition of a VIE because the Renewable JV has a similar structure to a limited partnership and the limited partners do not have kick out rights with respect to the general partner. Generation is the primarily beneficiary because Generation manages the day-to-day activities of the entity; therefore, Generation will continue to consolidate the Renewable JV. The Renewable JV is a collection of wind and solar project entities and some of these project entities are VIEs that are consolidated by the Renewable JV. The details relating to these VIEs are discussed below.

Generation owns a number of limited liability companies that build, own, and operate solar and wind power facilities some of which are owned by the Renewable JV. While Generation or the Renewable JV owns 100% of the solar entities and 100% of the majority of the wind entities, it has been determined that certain of the solar and wind entities are VIEs because the entities require additional subordinated financial support in the form of a parental guarantee of debt, loans from the customers in order to obtain the necessary funds for construction of the solar facilities, or the customers absorb price variability from the entities through the fixed price power and/or REC purchase agreements. Generation is the primary beneficiary of these solar and wind entities that qualify as VIEs because Generation controls the design, construction, and operation of the facilities. Generation provides operating and capital funding to the solar and wind entities for ongoing construction, operations and maintenance and there is limited recourse related to Generation related to certain solar and wind entities.

While Generation or the Renewable JV owns 100% of the majority of the wind entities, six of the projects have noncontrolling equity interests of 1% held by third parties and one of the projects has noncontrolling equity interests related to its Class B Membership Interest (see additional details below). The entities with noncontrolling equity interests of 1% held by third parties meet the definition of a VIE because the entities have noncontrolling equity interest holders that absorb variability from the wind projects. Generation’s or the Renewable JV's current economic interests in five of these projects is significantly greater than its stated contractual governance rights and all of these projects have reversionary interest provisions that provide the noncontrolling interest holder with a purchase option, certain of which are considered bargain purchase prices, which, if exercised, transfers ownership of the projects to the noncontrolling interest holder upon either the passage of time or the achievement of targeted financial returns. The ownership agreements with the noncontrolling interests state that Generation or the Renewable JV are to provide financial support to the projects in proportion to its current 99% economic interests in the projects. Generation provides operating and capital funding to the wind project entities for ongoing construction, operations and maintenance and there is limited recourse to Generation related to certain wind project entities. However, no additional support to these projects beyond what was contractually required has been provided during 2017. Generation is the primary beneficiary of these wind entities because Generation controls the design, construction, and operation of the facilities.

In December 2016, Generation sold 100% of the Class B Membership Interests to a tax equity investor and retained 100% of the Class A Membership Interests of its equity interest in one of its wind entities that was previously consolidated under the voting interest model. The wind entity meets the definition of a VIE because the company has a similar structure to a limited partnership and the limited partners do not have kick-out rights with respect to the general partner. While Generation is the minority interest holder, Generation is the primary beneficiary, because Generation manages the day-to-day activities of the entity. Therefore, the entity continues to be consolidated by Generation.

The renewable energy project companies VIE group was previously separated into two VIE groups for solar project limited liability companies and wind project companies as of December 31, 2016.

Retail Power and Gas Companies

In March 2014, Generation began consolidating retail power and gas VIEs for which Generation is the primary beneficiary as a result of energy supply contracts that give Generation the power to direct the activities that most significantly affect the economic performance of the entities. Generation does not have an equity ownership interest in these entities, but provides approximately $30 million in credit support for the retail power and gas companies for which Generation is the sole supplier of energy. These entities are included in Generation’s consolidated financial statements, and the consolidation of the VIEs do not have a material impact on Generation’s financial results or financial condition.

CENG

CENG is a joint venture between Generation and EDF. On April 1, 2014, Generation, CENG, and subsidiaries of CENG executed the Nuclear Operating Services Agreement (NOSA) pursuant to which Generation now conducts all activities associated with the operations of the CENG fleet and provides corporate and administrative services to CENG and the CENG fleet for the remaining life of the CENG nuclear plants as if they were a part of the Generation nuclear fleet, subject to the CENG member rights of EDF. As a result of executing the NOSA, CENG qualifies as a VIE due to the disproportionate relationship between Generation’s 50.01% equity ownership interest and its role in conducting the operational activities of CENG and the CENG fleet conveyed through the NOSA. Further, since Generation is conducting the operational activities of CENG and the CENG fleet, Generation qualifies as the primary beneficiary of CENG and, therefore, is required to consolidate the results of operations and financial position of CENG.

Exelon and Generation, where indicated, provide the following support to CENG (see Note 26 — Related Party Transactions for additional information regarding Generation's and Exelon’s transactions with CENG):

•

under power purchase agreements with CENG, Generation purchased or will purchase 50.01% of the available output generated by the CENG nuclear plants not subject to other contractual agreements from January 2015 through the end of the operating life of each respective plant. However, pursuant to amendments dated March 31, 2015, the energy obligations under the Ginna Nuclear Power Plant (Ginna) PPAs were suspended during the term of the Reliability Support Services Agreement (RSSA), through the end of March 31, 2017. With the expiration of the RSSA, the PPA was reinstated beginning April 1, 2017. (see Note 3 — Regulatory Matters for additional details),


•	Generation provided a $400 million loan to CENG. As of December 31, 2017, the remaining obligation is $333 million, including accrued interest, which reflects the principal payment made in January 2015,

•

Generation executed an Indemnity Agreement pursuant to which Generation agreed to indemnify EDF against third-party claims that may arise from any future nuclear incident (as defined in the Price-Anderson Act) in connection with the CENG nuclear plants or their operations. Exelon guarantees Generation’s obligations under this Indemnity Agreement. (See Note 23 — Commitments and Contingencies for more details),


•	Generation and EDF share in the $637 million of contingent payment obligations for the payment of contingent retrospective premium adjustments for the nuclear liability insurance, and


•	Exelon has executed an agreement to provide up to $245 million to support the operations of CENG as well as a $165 million guarantee of CENG’s cash pooling agreement with its subsidiaries.

As of December 31, 2016, Exelon and Generation had the following consolidated VIEs that are no longer VIEs as of December 31, 2017:

Retail Gas Group

During 2009, Constellation formed a retail gas group to enter into a collateralized gas supply agreement with a third-party gas supplier. The retail gas group was determined to be a VIE because there was not sufficient equity to fund the group’s activities without additional credit support and a $75 million parental guarantee provided by Generation. As the primary beneficiary, Generation consolidated the retail gas group. During the second quarter of 2017, the collateral structure was terminated with the third-party gas supplier except for the $75 million parental guarantee provided by Generation. Although the parental guarantee remains, this is considered customary and reasonable for the unsecured position Generation has with the third-party gas supplier. As a result of the termination, the retail gas group no longer met the definition of a VIE. However, the retail gas group continues to be consolidated by Generation under the voting interest model.

Other Generating Facilities

Prior to 2017, Generation owned 90% of a biomass fueled, combined heat and power company. In the second quarter of 2015, the entity was deemed to be a VIE because the entity required additional subordinated financial support in the form of a parental guarantee provided by Generation for up to $275 million in support of the payment obligations related to the Engineering, Procurement and Construction contract for the facility in support of one of its other generating facilities. During the third quarter of 2017, the ownership of the entity increased to 99%, all payment obligations related to the EPC contract were satisfied, and the parental guarantee provided by Generation was terminated. As a result, the entity is now sufficiently capitalized and no longer meets the definition of a VIE. However, the biomass facility continues to be consolidated by Generation under the voting interest model.

As of December 31, 2017 and 2016, Exelon's and ACE's consolidated VIE consists of:

ACE Transition Funding

A special purpose entity formed by ACE for the purpose of securitizing authorized portions of ACE’s recoverable stranded costs through the issuance and sale of transition bonds. Proceeds from the sale of each series of transition bonds by ATF were transferred to ACE in exchange for the transfer by ACE to ATF of the right to collect a non-bypassable Transition Bond Charge from ACE customers pursuant to bondable stranded costs rate orders issued by the NJBPU in an amount sufficient to fund the principal and interest payments on transition bonds and related taxes, expenses and fees. During the three years ended December 31, 2017, 2016 and 2015, ACE transferred $48 million, $60 million and $61 million to ATF, respectively.

As of December 31, 2016, Exelon and BGE had the following consolidated VIE that is no longer a VIE as of December 31, 2017:

RSB BondCo LLC.

In 2007, BGE formed RSB BondCo LLC (BondCo), a special purpose bankruptcy remote limited liability company, to acquire and hold rate stabilization property and to issue and service bonds secured by the rate stabilization property. In June 2007, BondCo purchased rate stabilization property from BGE, including the right to assess, collect, and receive non-bypassable rate stabilization charges payable by all residential electric customers of BGE. These charges were assessed in order to recover previously incurred power purchase costs that BGE deferred pursuant to Senate Bill 1. In the second quarter of 2017 the rate stabilization bonds were fully redeemed and BGE remitted its final payment to BondCo. Upon redemption of the bonds, BondCo no longer meets the definition of a variable interest entity.

BondCo’s assets were restricted and could only be used to settle the obligations of BondCo. Further, BGE was required to remit all payments it received from customers for rate stabilization charges to BondCo. During 2017, 2016 and 2015, BGE remitted $22 million, $86 million and $86 million, respectively, to BondCo.

For each of the consolidated VIEs noted above, except as otherwise noted:


•	the assets of the VIEs are restricted and can only be used to settle obligations of the respective VIE;


•	Exelon, Generation, BGE, PHI and ACE did not provide any additional material financial support to the VIEs;


•	Exelon, Generation, BGE, PHI and ACE did not have 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, BGE’s, PHI's or ACE's general credit.

As of December 31, 2017 and 2016, ComEd, PECO, Pepco and DPL do not have any material consolidated VIEs.

Assets and Liabilities of Consolidated VIEs

Included within the balances above are assets and liabilities of certain consolidated VIEs for which the assets can only be used to settle obligations of those VIEs, and liabilities that creditors, or beneficiaries, do not have recourse to the general credit of the Registrants. As of December 31, 2017 and 2016, these assets and liabilities primarily consisted of the following:



		December 31, 2017
						Successor
		Exelon^(a)		Generation		PHI^(a)		ACE
Cash and cash equivalents		$	126	$	126	$	—	$	—
Restricted cash		64		58		6		6
Accounts receivable, net
	Customer	138		138		—		—
	Other	25		25		—		—
Inventory
	Materials and supplies	205		205		—		—
Other current assets		45		41		4		—
	Total current assets	603		593		10		6

Property, plant and equipment, net		6,186		6,186		—		—
Nuclear decommissioning trust funds		2,502		2,502		—		—
Other noncurrent assets		274		243		31		23
	Total noncurrent assets	8,962		8,931		31		23
	Total assets	$	9,565	$	9,524	$	41	$	29

Long-term debt due within one year		$	102	$	67	$	35	$	31
Accounts payable		114		114		—		—
Accrued expenses		65		64		1		1
Unamortized energy contract liabilities		18		18		—		—
Other current liabilities		7		7		—		—
	Total current liabilities	306		270		36		32

	Long-term debt	1,154		1,088		66		58
	Asset retirement obligations	2,035		2,035		—		—
	Unamortized energy contract liabilities	5		5		—		—
	Other noncurrent liabilities	112		112		—		—
	Noncurrent liabilities	3,306		3,240		66		58
	Total liabilities	$	3,612	$	3,510	$	102	$	90

__________


(a)	Includes certain purchase accounting adjustments not pushed down to the ACE standalone entity.



		December 31, 2016
								Successor
		Exelon^(a)(b)		Generation		BGE		PHI^(a)		ACE
Cash and cash equivalents		$	150	$	150	$	—	$	—	$	—
Restricted cash		59		27		23		9		9
Accounts receivable, net
	Customer	371		371		—		—		—
	Other	48		48		—		—		—
Mark-to-market derivative assets		31		31		—		—		—
Inventory
	Materials and supplies	199		199		—		—		—
Other current assets		50		44		—		5		—
	Total current assets	908		870		23		14		9

Property, plant and equipment, net		5,415		5,415		—		—		—
Nuclear decommissioning trust funds		2,185		2,185		—		—		—
Goodwill		47		47		—		—		—
Mark-to-market derivative assets		23		23		—		—		—
Other noncurrent assets		315		277		3		35		23
	Total noncurrent assets	7,985		7,947		3		35		23
	Total assets	$	8,893	$	8,817	$	26	$	49	$	32

Long-term debt due within one year		$	181	$	99	$	41	$	40	$	35
Accounts payable		269		269		—		—		—
Accrued expenses		119		116		1		2		2
Mark-to-market derivative liabilities		60		60		—		—		—
Unamortized energy contract liabilities		15		15		—		—		—
Other current liabilities		30		30		—		—		—
	Total current liabilities	674		589		42		42		37

	Long-term debt	641		540		—		101		89
	Asset retirement obligations	1,904		1,904		—		—		—
	Pension obligation^(c)	9		9		—		—		—
	Unamortized energy contract liabilities	22		22		—		—		—
	Other noncurrent liabilities	106		106		—		—		—
	Noncurrent liabilities	2,682		2,581		—		101		89
	Total liabilities	$	3,356	$	3,170	$	42	$	143	$	126

__________


(a)	Includes certain purchase accounting adjustments not pushed down to the ACE standalone entity.


(b)	Includes certain purchase accounting adjustments not pushed down to the BGE standalone entity.


(c)	Includes the CNEG retail gas pension obligation, which is presented as a net asset balance within the Prepaid pension asset line item on Generation’s balance sheet. See Note 16 - Retirement Benefits for additional details.

Unconsolidated Variable Interest Entities

Exelon’s and Generation’s variable interests in unconsolidated VIEs generally include equity investments and energy purchase and sale contracts. For the equity investments, the carrying amount of the investments is reflected on Exelon’s and Generation’s Consolidated Balance Sheets in Investments. For the energy purchase and sale contracts (commercial agreements), the carrying amount of assets and liabilities in Exelon’s and Generation’s Consolidated Balance Sheets that relate to their involvement with the VIEs are predominately related to working capital accounts and generally represent the amounts owed by, or owed to, Exelon and Generation for the deliveries associated with the current billing cycles under the commercial agreements. Further, Exelon and Generation have not provided material debt or equity support, liquidity arrangements or performance guarantees associated with these commercial agreements.

As of December 31, 2017 and 2016, Exelon and Generation had significant unconsolidated variable interests in seven and eight VIEs, respectively, for which Exelon or Generation, as applicable, was not the primary beneficiary. These interests include certain equity method investments and certain commercial agreements. Exelon and Generation only include unconsolidated VIEs that are individually material in the tables below. However, Generation has several individually immaterial VIEs that in aggregate represent a total investment of $8 million. These immaterial VIEs are equity and debt securities in energy development companies. The maximum exposure to loss related to these securities is limited to the $8 million included in Investments on Exelon’s and Generation’s Consolidated Balance Sheets.

The following tables present summary information about Exelon and Generation’s significant unconsolidated VIE entities:



December 31, 2017	Commercial Agreement VIEs		Equity Investment VIEs		Total
Total assets^(a)	$	625	$	509	$	1,134
Total liabilities^(a)	37		228		265
Exelon's ownership interest in VIE^(a)	—		251		251
Other ownership interests in VIE^(a)	588		30		618
Registrants’ maximum exposure to loss:
Carrying amount of equity method investments	—		251		251
Contract intangible asset	8		—		8
Debt and payment guarantees	—		—		—
Net assets pledged for Zion Station decommissioning^(b)	2		—		2



December 31, 2016	Commercial Agreement VIEs		Equity Investment VIEs		Total
Total assets^(a)	$	638	$	567	$	1,205
Total liabilities^(a)	215		287		502
Exelon's ownership interest in VIE^(a)	—		248		248
Other ownership interests in VIE^(a)	423		32		455
Registrants’ maximum exposure to loss:
Carrying amount of equity method investments	—		264		264
Contract intangible asset	9		—		9
Debt and payment guarantees	—		3		3
Net assets pledged for Zion Station decommissioning^(b)	9		—		9

__________


(a)	These items represent amounts on the unconsolidated VIE balance sheets, not on Exelon’s or Generation’s Consolidated Balance Sheets. These items are included to provide information regarding the relative size of the unconsolidated VIEs.

(b)

These items represent amounts on Exelon’s and Generation’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 $39 million and $113 million as of December 31, 2017 and December 31, 2016, respectively; offset by payables to ZionSolutions LLC of $37 million and $104 million as of December 31, 2017 and December 31, 2016, respectively. These items are included to provide information regarding the relative size of the ZionSolutions LLC unconsolidated VIE.

For each unconsolidated VIE, Exelon and Generation assessed the risk of a loss equal to their maximum exposure to be remote and accordingly, Exelon and Generation have not recognized a liability associated with any portion of the maximum exposure to loss. In addition, there are no agreements with, or commitments by, third parties that would materially affect the fair value or risk of their variable interests in these variable interest entities.

As of December 31, 2017, Exelon's and Generation's unconsolidated VIEs consist of:

Energy Purchase and Sale Agreements

Generation has several energy purchase and sale agreements with generating facilities. Generation has evaluated the significant agreements, ownership structures and risks of each entity, and determined that certain of the entities are VIEs because the entity absorbs risk through the sale of fixed price power and renewable energy credits. Generation has reviewed the entities and has determined that Generation is not the primary beneficiary of the VIEs because Generation does not have the power to direct the activities that most significantly impact the VIEs economic performance.

ZionSolutions

Generation has an asset sale agreement with EnergySolutions, Inc. and certain of its subsidiaries, including ZionSolutions, LLC (ZionSolutions), which is further discussed in Note 15 — Asset Retirement Obligations. Under this agreement, ZionSolutions can put the assets and liabilities back to Generation when decommissioning activities under the asset sale agreement are complete. Generation has evaluated this agreement and determined that, through the put option, it has a variable interest in ZionSolutions but is not the primary beneficiary. As a result, Generation has concluded that consolidation is not required. Other than the asset sale agreement, Exelon and Generation do not have any contractual or other obligations to provide additional financial support and ZionSolutions’ creditors do not have any recourse to Exelon’s or Generation’s general credit.

Investment in Distributed Energy Companies

In July 2014, Generation entered into an arrangement to purchase a 90% equity interest and 90% of the tax attributes of a distributed energy company. Generation contributed a total $85 million of equity. The distributed energy company meets the definition of a VIE because the company has a similar structure to a limited partnership and the limited partners do not have kick-out rights of the general partner. Generation is not the primary beneficiary; therefore, the investment continues to be recorded using the equity method.

During 2015, a company that is consolidated by Generation as a VIE entered into an arrangement to purchase a 90% equity interest and 99% of the tax attributes of another distributed energy company (see additional details in the Consolidated Variable Interest Entities section above). The equity holders (of which Generation is one) contributed to the distributed energy company a total of $227 million of equity in proportion to their ownership interests. The equity holders provided a parental guarantee of up to $275 million in support of equity contributions to the distributed energy company. As all equity contributions were made as of the first quarter of 2017, there is no further payment obligation under the parental guarantee. The distributed energy company meets the definition of a VIE because the company has a similar structure to a limited partnership and the limited partners do not have kick-out rights of the general partner. Generation is not the primary beneficiary; therefore, the investment is recorded using the equity method.

Both distributed energy companies from the 2015 and 2014 arrangements are considered related parties to Generation.

As of December 31, 2016, Exelon and Generation had the following unconsolidated VIE that is no longer a VIE as of December 31, 2017:

Investment in Energy Generating Facility

As of December 31, 2016, Generation had an equity investment in an energy generating facility. The entity was a VIE because Generation guaranteed the debt of the entity, provided equity support, and provided operating services to the entity. Generation was not the primary beneficiary of the entity because Generation did not have the power to direct the activities that most significantly impacted the VIE’s economic performance. During 2017, Generation sold its equity investment in the entity; therefore, the entity is no longer a VIE as of December 31, 2017.

ComEd, PECO and BGE

The financing trust of ComEd, ComEd Financing III, and the financing trusts of PECO, PECO Trust III and PECO Trust IV, are not consolidated in Exelon’s, ComEd’s, or PECO’s financial statements. These financing trusts were created to issue mandatorily redeemable trust preferred securities. ComEd and PECO have concluded that they do not have a significant variable interest in ComEd Financing III, PECO Trust III, or PECO Trust IV as each Registrant financed its equity interest in the financing trusts through the issuance of subordinated debt and, therefore, has no equity at risk.

The financing trust of BGE, BGE Capital Trust II, was created for the purpose of issuing mandatorily redeemable trust preferred securities. In the third quarter of 2017, BGE redeemed the securities pursuant to the optional redemption provisions of the Indenture, under which the subordinated debt securities were issued, and dissolved BGE Capital Trust II. Prior to dissolution, the BGE Capital Trust II was not consolidated in Exelon's or BGE's financial statements. BGE concluded it did not have a significant variable interest in BGE Capital Trust II as BGE financed its equity interest in the financing trust through the issuance of subordinated debt and, therefore, had no equity at risk. See Note 13 — Debt and Credit Agreements for additional information.