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Exelon Corporation 2014 Annual Report Corporate Profile Exelon Corporation is the nation’s leading competitive energy provider, with 2014 revenues of approximately $27.4 billion. Headquartered in Chicago, Exelon has operations and business activities in 47 states, the District of Columbia and Canada. Exelon is one of the largest competitive U.S. power generators, with approximately 32,750 megawatts of owned capacity comprising one of the nation’s cleanest and lowest-cost power generation fleets. The company’s Constellation business unit provides energy products and services to more than 2.5 million residential, public sector, and business customers. Exelon’s utilities deliver electricity to more than 6.7 million customers in central Maryland (BGE), northern Illinois (ComEd) and southeastern Pennsylvania (PECO), and natural gas to 1.2 million customers through BGE and PECO. Exelon is headquartered in Chicago and trades on the NYSE under the ticker EXC. Corporate Headquarters Shareholder Inquiries Exelon Corporation Exelon Corporation has appointed Wells Fargo Shareowner P.O. Box 805379 Services as its transfer agent, stock registrar, dividend Chicago, IL 60680-5379 disbursing agent and dividend reinvestment agent. Should you have questions concerning your registered shareholder account Transfer Agent or the payment or reinvestment of your dividends, or if you wish Wells Fargo Shareowner Services to make a stock transaction or stock transfer, you may call 800.626.8729 shareowner services at Wells Fargo at the toll-free number shown to the left or access its website at Employee Stock Purchase Plan www.shareowneronline.com. 877.582.5113 Morgan Stanley administers the Employee Stock Purchase Plan (ESPP), employee stock options and other employee Employee Stock Options equity awards. Should you have any questions concerning your 888.609.3534 employee plan shares or wish to make a transaction, you may call the toll-free numbers shown to the left or access its website Investor Relations Voice Mailbox at www.benefitaccess.com. 312.394.2345 The company had approximately 124,000 holders of record of Shareholder Services Voice Mailbox its common stock as of Dec. 31, 2014. 312.394.8811 The 2014 Form 10-K Annual Report to the Securities and Exchange Commission was filed on Feb. 13, 2015. To obtain a Independent Public Accountants copy without charge, write to Bruce G. Wilson, Senior Vice PricewaterhouseCoopers LLP President, Deputy General Counsel and Corporate Secretary, Exelon Corporation, Post Office Box 805379, Chicago, Illinois Website 60680-5379. www.exeloncorp.com Twitter @Exelon Stock Ticker EXC TABLE OF CONTENTS Page No. GLOSSARY OF TERMS AND ABBREVIATIONS ............................................................ 1 FILING FORMAT ....................................................................................... 5 FORWARD-LOOKING STATEMENTS ..................................................................... 5 WHERE TO FIND MORE INFORMATION .................................................................. 5 GENERAL DESCRIPTION OF OUR BUSINESS ............................................................ 6 General ........................................................................................... 6 Exelon Generation Company, LLC ..................................................................... 6 Commonwealth Edison Company ...................................................................... 6 PECO Energy Company ............................................................................. 6 Baltimore Gas and Electric Company ................................................................... 6 Environmental Regulation ............................................................................ 25 Executive Officers of the Registrants ................................................................... 31 MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES ................................................................. 34 SELECTED FINANCIAL DATA ............................................................................ 37 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ..... 39 Executive Overview ................................................................................. 39 Critical Accounting Policies and Estimates .............................................................. 56 Results of Operations ................................................................................ 69 Liquidity and Capital Resources ....................................................................... 96 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK .................................... 110 CERTIFICATIONS ..................................................................................... 120 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ................................................... 120 Exelon Corporation .................................................................................. 121 Combined Notes to Consolidated Financial Statements .................................................... 127 1. Significant Accounting Policies ...................................................................... 127 2. Variable Interest Entities ............................................................................ 138 3. Regulatory Matters ................................................................................ 145 4. Merger and Acquisitions ............................................................................ 169 5. Investment in CENG ............................................................................... 176 6. Accounts Receivable .............................................................................. 179 7. Property, Plant and Equipment ...................................................................... 179 8. Impairment of Long Lived Assets .................................................................... 180 9. Jointly Owned Electric Utility Plant ................................................................... 182 10. Intangible Assets ................................................................................. 183 11. Fair Value of Financial Assets and Liabilities .......................................................... 187 12. Derivative Financial Instruments .................................................................... 199 13. Debt and Credit Agreements ....................................................................... 213 14. Income Taxes ................................................................................... 219 15. Asset Retirement Obligations ...................................................................... 226 16. Retirement Benefits .............................................................................. 232 17. Severance ...................................................................................... 246 18. Preferred and Preference Securities ................................................................. 248 19. Common Stock .................................................................................. 249 20. Earnings Per Share and Equity ..................................................................... 254 21. Changes in Accumulated Other Comprehensive Income ................................................ 255 22. Commitments and Contingencies ................................................................... 258 23. Supplemental Financial Information ................................................................. 272 24. Segment Information ............................................................................. 276 25. Related Party Transactions ........................................................................ 280 26. Quarterly Data ................................................................................... 281 GLOSSARY OF TERMS AND ABBREVIATIONS Exelon Corporation and Related Entities Exelon Exelon Corporation Generation Exelon Generation Company, LLC ComEd Commonwealth Edison Company PECO PECO Energy Company BGE Baltimore Gas and Electric Company BSC Exelon Business Services Company, LLC Exelon Corporate Exelon’s holding company CENG Constellation Energy Nuclear Group, LLC Constellation Constellation Energy Group, Inc. Antelope Valley, AVSR Antelope Valley Solar Ranch One Exelon Transmission Company Exelon Transmission Company, LLC Exelon Wind Exelon Wind, LLC and Exelon Generation Acquisition Company, LLC Ventures Exelon Ventures Company, LLC AmerGen AmerGen Energy Company, LLC BondCo RSB BondCo LLC ComEd Financing III ComEd Financing III PEC L.P. PECO Energy Capital, L.P. PECO Trust III PECO Energy Capital Trust III PECO Trust IV PECO Energy Capital Trust IV BGE Trust II BGE Capital Trust II PETT PECO Energy Transition Trust Registrants Exelon, Generation, ComEd, PECO and BGE, collectively Other Terms and Abbreviations 1998 restructuring settlement PECO’s 1998 settlement of its restructuring case mandated by the Competition Act Act 11 Pennsylvania Act 11 of 2012 Act 129 Pennsylvania Act 129 of 2008 AEC Alternative Energy Credit that is issued for each megawatt hour of generation from a qualified alternative energy source AEPS Pennsylvania Alternative Energy Portfolio Standards AEPS Act Pennsylvania Alternative Energy Portfolio Standards Act of 2004, as amended AESO Alberta Electric Systems Operator AFUDC Allowance for Funds Used During Construction ALJ Administrative