Leases (All Registrants)

Lessee

The Registrants have operating leases for which they are the lessees. The following tables outline the significant types of operating leases at each registrant and other terms and conditions of the lease agreements. The Registrants do not have material finance leases.

Exelon

Generation

ComEd

PECO

BGE

PHI

Pepco

DPL

ACE

Contracted generation

●

Real estate

●

Vehicles and equipment

●



(in years)	Exelon	Generation	ComEd	PECO	BGE	PHI	Pepco	DPL	ACE
Remaining lease terms	1-87	1-37	1-34	1-15	1-87	1-13	1-13	1-13	1-8
Options to extend the term	3-30	3-30	3-10	N/A	N/A	3-30	5	3-30	N/A
Options to terminate within	1-3	2	N/A	N/A	3	N/A	N/A	N/A	N/A

The components of lease costs for the three months ended March 31, 2019 were as follows:



	Exelon		Generation		ComEd		PECO		BGE		PHI		Pepco		DPL		ACE
Operating lease costs	$	68	$	46	$	1	$	—	$	8	$	10	$	3	$	3	$	1
Variable lease costs	73		68		—		—		—		2		—		1		—
Short-term lease costs	9		8		—		—		—		—		—		—		—
Total lease costs ^(a)	$	150	$	122	$	1	$	—	$	8	$	12	$	3	$	4	$	1

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(a)	Excludes $3 million, $2 million, $1 million and $1 million of sublease income recorded at Exelon, Generation, PHI and DPL.

The following table provides additional information regarding the presentation of operating lease ROU assets and lease liabilities within the Registrants’ Consolidated Balance Sheets as of March 31, 2019:



	Exelon^(a)		Generation^(a)		ComEd		PECO		BGE		PHI		Pepco		DPL		ACE
Operating lease ROU assets
Other deferred debits and other assets	$	1,465	$	1,027	$	5	$	2	$	97	$	314	$	67	$	75	$	26

Operating lease liabilities
Other current liabilities	249		173		3		1		31		36		8		11		6
Other deferred credits and other liabilities	1,395		1,023		4		1		66		284		60		72		20
Total operating lease liabilities	$	1,644	$	1,196	$	7	$	2	$	97	$	320	$	68	$	83	$	26

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(a)	Exelon's and Generation's operating ROU assets and lease liabilities include $631 million and $778 million, respectively, related to contracted generation.

The weighted average remaining lease terms, in years, and discount rates for operating leases as of March 31, 2019 were as follows:



	Exelon		Generation		ComEd		PECO		BGE		PHI		Pepco		DPL		ACE
Remaining lease term	10.0		10.7		2.9		4.4		5.6		9.4		9.9		9.8		5.3
Discount rate	4.6	%	4.8	%	3.3	%	3.4	%	3.6	%	4.1	%	3.9	%	3.9	%	3.5	%

Future minimum lease payments for operating leases as of March 31, 2019 were as follows:



Year	Exelon		Generation		ComEd		PECO		BGE		PHI		Pepco		DPL		ACE
2019	$	214	$	154	$	2	$	1	$	19	$	33	$	8	$	7	$	5
2020	289		202		2		1		34		43		9		12		5
2021	244		162		2		—		32		42		9		11		5
2022	174		112		1		—		16		40		8		11		4
2023	139		99		—		—		—		39		8		10		3
Remaining years	1,052		840		—		—		18		194		42		52		7
Total	2,112		1,569		7		2		119		391		84		103		29
Interest	468		373		—		—		22		71		16		20		3
Total operating lease liabilities	$	1,644	$	1,196	$	7	$	2	$	97	$	320	$	68	$	83	$	26

Future minimum lease payments for operating leases under the prior lease accounting guidance as of December 31, 2018 were as follows:



	Exelon^(a)(b)		Generation^(a)(b)		ComEd^(a)(c)		PECO^(a)(c)		BGE^(a)(c)(d)(e)		PHI^(a)		Pepco^(a)		DPL^(a)(c)		ACE^(a)
2019	$	140	$	33	$	7	$	5	$	35	$	48	$	11	$	14	$	7
2020	149		46		5		5		35		46		10		13		6
2021	143		46		4		5		33		43		9		12		5
2022	126		47		4		5		18		42		8		12		5
2023	97		46		3		5		3		39		8		10		4
Remaining years	723		545		—		—		19		159		40		35		5
Total minimum future lease payments	$	1,378	$	763	$	23	$	25	$	143	$	377	$	86	$	96	$	32

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(a)	Includes amounts related to shared use land arrangements.


(b)	Excludes Generation’s contingent operating lease payments associated with contracted generation.

(c)

Amounts related to certain real estate leases and railroad licenses effectively have indefinite payment periods. As a result, ComEd, PECO, BGE and DPL have excluded these payments from the remaining years as such amounts would not be meaningful. ComEd's, PECO’s, BGE’s and DPL's average annual obligation for these arrangements, included in each of the years 2019 - 2023, was $3 million, $5 million, $1 million and $1 million respectively. Also includes amounts related to shared use land arrangements.


(d)	Includes all future lease payments on a 99-year real estate lease that expires in 2106.


(e)	The BGE column above includes minimum future lease payments associated with a 6-year lease for the Baltimore City conduit system that became effective during the fourth quarter of 2016. BGE's total commitments under the lease agreement are $26 million, $28 million, $28 million and $14 million related to years 2019 - 2022, respectively.

Cash paid for amounts included in the measurement of lease liabilities for the three months ended March 31, 2019 were as follows:



	Exelon		Generation		ComEd		PECO		BGE		PHI		Pepco		DPL		ACE
Operating cash flows from operating leases	$	78	$	52	$	1	$	—	$	14	$	8	$	2	$	2	$	1