ATLANTIC CITY ELECTRIC CO
For the period ended Jun 30, 2026. Filed Jul 30, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Jul 30, 2026
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10. Fair Value of Financial Assets and Liabilities
- Fair Value of Financial Assets and Liabilities (All Registrants)
Exelon measures and classifies fair value measurements in accordance with the hierarchy as defined by GAAP. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:
Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities that the Registrants have the ability to liquidate as of the reporting date.
Level 2 — inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.
Level 3 — unobservable inputs, such as internally developed pricing models or third-party valuations for the asset or liability due to little or no market activity for the asset or liability.
Exelon’s valuation techniques used to measure the fair value of the assets and liabilities shown in the tables below are in accordance with the policies discussed in Note 15 — Fair Value of Financial Assets and Liabilities of the 2025 Form 10-K.
Fair Value of Financial Liabilities Recorded at Amortized Cost
The following tables present the carrying amounts and fair values of the Registrants’ short-term liabilities, long-term debt, and trust preferred securities (long-term debt to financing trusts or junior subordinated debentures) as of June 30, 2026 and December 31, 2025. The Registrants haveno financial liabilities measured using the NAV practical expedient.
The carrying amounts of the Registrants’ short-term liabilities as presented in their Consolidated Balance Sheets are representative of their fair value (Level 2) because of the short-term nature of these instruments.
| June 30, 2026 · December 31, 2025 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Carrying Amount · Fair Value · Carrying Amount · Fair Value | ||||||||||
| Level 1 · Level 2 · Level 3 · Total · Level 1 · Level 2 · Level 3 · Total | ||||||||||
| Long-Term Debt, including amounts due within one year(a) | ||||||||||
| Exelon (b) | $51,040 | $— | $41,613 | $4,723 | $46,336 | $49,078 | $— | $40,637 | $4,318 | $44,955 |
| ComEd | 13,665 | — | 12,086 | — | 12,086 | 12,753 | — | 11,291 | — | 11,291 |
| PECO | 6,398 | — | 5,526 | — | 5,526 | 6,396 | — | 5,593 | — | 5,593 |
| BGE | 6,609 | — | 6,011 | — | 6,011 | 6,041 | — | 5,510 | — | 5,510 |
| PHI | 10,054 | — | 4,162 | 4,723 | 8,885 | 9,590 | — | 4,236 | 4,318 | 8,554 |
| Pepco | 4,931 | — | 2,492 | 2,129 | 4,621 | 4,632 | — | 2,546 | 1,861 | 4,407 |
| DPL | 2,421 | — | 648 | 1,462 | 2,110 | 2,344 | — | 657 | 1,410 | 2,067 |
| ACE | 2,134 | — | 813 | 1,132 | 1,945 | 2,033 | — | 819 | 1,047 | 1,866 |
| Long-Term Debt to Financing Trusts | ||||||||||
| Exelon | $390 | $— | $— | $399 | $399 | $390 | $— | $— | $403 | $403 |
| ComEd | 206 | — | — | 214 | 214 | 206 | — | — | 216 | 216 |
| PECO | 184 | — | — | 185 | 185 | 184 | — | — | 187 | 187 |
(a)Includes unamortized debt issuance costs, unamortized debt discount and premium, net, purchase accounting fair value adjustments, and finance lease liabilities which are not fair valued. Refer to Note 14 — Debt and Credit Agreements of the 2025 Form 10-K for unamortized debt issuance costs, unamortized debt discount and premium, net, and purchase accounting fair value adjustments and Note 9 — Leases of the 2025 Form 10-K for finance lease liabilities.
(b)Includes the net carrying amount and the estimated fair value (Level 2) of the Convertible Senior Notes $1 billion and $1 billion for the year ended June 30, 2026, respectively.
Recurring Fair Value Measurements
The following tables present assets and liabilities measured and recorded at fair value in the Registrants' Consolidated Balance Sheets on a recurring basis and their level within the fair value hierarchy at June 30, 2026 and December 31, 2025. Exelon and the Utility Registrants have immaterial andno financial assets or liabilities measured using the NAV practical expedient, respectively:
Exelon
| At June 30, 2026 | At December 31, 2025 | |||||||
|---|---|---|---|---|---|---|---|---|
| Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |
| Assets | ||||||||
| Cash equivalents(a) | $2,026 | $— | $— | $2,026 | $825 | $— | $— | $825 |
| Rabbi trust investments | ||||||||
| Cash equivalents | 108 | — | — | 108 | 101 | — | — | 101 |
| Mutual funds | 77 | — | — | 77 | 71 | — | — | 71 |
| Fixed income | — | 6 | — | 6 | — | 6 | — | 6 |
| Life insurance contracts | — | 81 | 19 | 100 | — | 79 | 21 | 100 |
| Rabbi trust investments subtotal | 185 | 87 | 19 | 291 | 172 | 85 | 21 | 278 |
| Interest rate derivative assets | ||||||||
| Derivatives designated as hedging instruments | — | 3 | — | 3 | — | 3 | — | 3 |
| Interest rate derivative assets subtotal | — | 3 | — | 3 | — | 3 | — | 3 |
| Total assets | 2,211 | 90 | 19 | 2,320 | 997 | 88 | 21 | 1,106 |
| Liabilities | ||||||||
| Commodity derivative liabilities | — | — | (128) | (128) | — | — | (131) | (131) |
| Interest rate derivative liabilities | ||||||||
| Derivatives designated as hedging instruments | — | — | — | — | — | (4) | — | (4) |
| Interest rate derivative liabilities subtotal | — | — | — | — | — | (4) | — | (4) |
| Deferred compensation obligation | — | (66) | — | (66) | — | (71) | — | (71) |
| Total liabilities | — | (66) | (128) | (194) | — | (75) | (131) | (206) |
| Total net assets (liabilities) | $2,211 | $24 | $(109) | $2,126 | $997 | $13 | $(110) | $900 |
(a)Exelon excludes cash of $180 million and $180 million at June 30, 2026 and December 31, 2025, respectively, and restricted cash of $224 million and $196 million at June 30, 2026 and December 31, 2025, respectively, and includes long-term restricted cash of $9 million and $50 million at June 30, 2026 and December 31, 2025, respectively, which is reported in Other deferred debits and other assets in the Consolidated Balance Sheets.
ComEd, PECO, and BGE
| ComEd | PECO | BGE | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| At June 30, 2026 | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total |
| Assets | ||||||||||||
| Cash equivalents(a) | $949 | $— | $— | $949 | $2 | $— | $— | $2 | $1,006 | $— | $— | $1,006 |
| Rabbi trust investments | ||||||||||||
| Cash equivalents | — | — | — | — | 2 | — | — | 2 | — | — | — | — |
| Mutual funds | — | — | — | — | 14 | — | — | 14 | 16 | — | — | 16 |
| Life insurance contracts | — | — | — | — | — | 25 | — | 25 | — | — | — | — |
| Rabbi trust investments subtotal | — | — | — | — | 16 | 25 | — | 41 | 16 | — | — | 16 |
| Total assets | 949 | — | — | 949 | 18 | 25 | — | 43 | 1,022 | — | — | 1,022 |
| Liabilities | ||||||||||||
| Commodity derivative liabilities(b) | — | — | (128) | (128) | — | — | — | — | — | — | — | — |
| Deferred compensation obligation | — | (9) | — | (9) | — | (7) | — | (7) | — | (4) | — | (4) |
| Total liabilities | — | (9) | (128) | (137) | — | (7) | — | (7) | — | (4) | — | (4) |
| Total net assets (liabilities) | $949 | $(9) | $(128) | $812 | $18 | $18 | $— | $36 | $1,022 | $(4) | $— | $1,018 |
| ComEd | PECO | BGE | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| At December 31, 2025 | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total |
| Assets | ||||||||||||
| Cash equivalents(a) | $393 | $— | $— | $393 | $93 | $— | $— | $93 | $205 | $— | $— | $205 |
| Rabbi trust investments | ||||||||||||
| Mutual funds | — | — | — | — | 13 | — | — | 13 | 10 | — | — | 10 |
| Life insurance contracts | — | — | — | — | — | 25 | — | 25 | — | — | — | — |
| Rabbi trust investments subtotal | — | — | — | — | 13 | 25 | — | 38 | 10 | — | — | 10 |
| Total assets | 393 | — | — | 393 | 106 | 25 | — | 131 | 215 | — | — | 215 |
| Liabilities | ||||||||||||
| Commodity derivative liabilities(b) | — | — | (131) | (131) | — | — | — | — | — | — | — | — |
| Deferred compensation obligation | — | (9) | — | (9) | — | (8) | — | (8) | — | (4) | — | (4) |
| Total liabilities | — | (9) | (131) | (140) | — | (8) | — | (8) | — | (4) | — | (4) |
| Total net assets (liabilities) | $393 | $(9) | $(131) | $253 | $106 | $17 | $— | $123 | $215 | $(4) | $— | $211 |
(a)ComEd excludes cash of $75 million and $77 million at June 30, 2026 and December 31, 2025, respectively, and restricted cash of $222 million and $193 million at June 30, 2026 and December 31, 2025, respectively. Additionally,
ComEd includes long-term restricted cash of $9 million and $50 million at June 30, 2026 and December 31, 2025, respectively, which is reported in Other deferred debits and other assets in the Consolidated Balance Sheets. PECO excludes cash of $37 million and $23 million at June 30, 2026 and December 31, 2025, respectively. BGE excludes cash of $8 million and $15 million at June 30, 2026 and December 31, 2025, respectively.
(b)The Level 3 balance consists of the current and noncurrent liability of $23 million and $105 million, respectively, at June 30, 2026 and $25 million and $106 million, respectively, at December 31, 2025 related to floating-to-fixed energy swap contracts with unaffiliated suppliers.
PHI, Pepco, DPL, and ACE
| At June 30, 2026 | At December 31, 2025 | |||||||
|---|---|---|---|---|---|---|---|---|
| PHI | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total |
| Assets | ||||||||
| Cash equivalents(a) | $34 | $— | $— | $34 | $83 | $— | $— | $83 |
| Rabbi trust investments | ||||||||
| Cash equivalents | 103 | — | — | 103 | 99 | — | — | 99 |
| Mutual funds | 9 | — | — | 9 | 9 | — | — | 9 |
| Fixed income | — | 6 | — | 6 | — | 6 | — | 6 |
| Life insurance contracts | — | 23 | 19 | 42 | — | 23 | 20 | 43 |
| Rabbi trust investments subtotal | 112 | 29 | 19 | 160 | 108 | 29 | 20 | 157 |
| Total assets | 146 | 29 | 19 | 194 | 191 | 29 | 20 | 240 |
| Liabilities | ||||||||
| Deferred compensation obligation | — | (8) | — | (8) | — | (9) | — | (9) |
| Total liabilities | — | (8) | — | (8) | — | (9) | — | (9) |
| Total net assets | $146 | $21 | $19 | $186 | $191 | $20 | $20 | $231 |
| Pepco | DPL | ACE | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| At June 30, 2026 | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total |
| Assets | ||||||||||||
| Cash equivalents(a) | $32 | $— | $— | $32 | $2 | $— | $— | $2 | $— | $— | $— | $— |
| Rabbi trust investments | ||||||||||||
| Cash equivalents | 102 | — | — | 102 | — | — | — | — | — | — | — | — |
| Life insurance contracts | — | 23 | 19 | 42 | — | — | — | — | — | — | — | — |
| Rabbi trust investments subtotal | 102 | 23 | 19 | 144 | — | — | — | — | — | — | — | — |
| Total assets | 134 | 23 | 19 | 176 | 2 | — | — | 2 | — | — | — | — |
| Liabilities | ||||||||||||
| Deferred compensation obligation | — | (1) | — | (1) | — | — | — | — | — | — | — | — |
| Total liabilities | — | (1) | — | (1) | — | — | — | — | — | — | — | — |
| Total net assets | $134 | $22 | $19 | $175 | $2 | $— | $— | $2 | $— | $— | $— | $— |
| Pepco | DPL | ACE | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| At December 31, 2025 | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total |
| Assets | ||||||||||||
| Cash equivalents(a) | $33 | $— | $— | $33 | $3 | $— | $— | $3 | $— | $— | $— | $— |
| Rabbi trust investments | ||||||||||||
| Cash equivalents | 98 | — | — | 98 | — | — | — | — | — | — | — | — |
| Life insurance contracts | — | 23 | 20 | 43 | — | — | — | — | — | — | — | — |
| Rabbi trust investments subtotal | 98 | 23 | 20 | 141 | — | — | — | — | — | — | — | — |
| Total assets | 131 | 23 | 20 | 174 | 3 | — | — | 3 | — | — | — | — |
| Liabilities | ||||||||||||
| Deferred compensation obligation | — | (1) | — | (1) | — | — | — | — | — | — | — | — |
| Total liabilities | — | (1) | — | (1) | — | — | — | — | — | — | — | — |
| Total net assets | $131 | $22 | $20 | $173 | $3 | $— | $— | $3 | $— | $— | $— | $— |
(a)PHI excludes cash of $47 million and $56 million at June 30, 2026 and December 31, 2025, respectively, and restricted cash of $2 million and $2 million at June 30, 2026 and December 31, 2025. Pepco excludes cash of $20 million and $22 million at June 30, 2026 and December 31, 2025, respectively. DPL excludes cash of $8 million and $9 million at June 30, 2026 and December 31, 2025, respectively. ACE excludes cash of $13 million and $22 million at June 30, 2026 and December 31, 2025, respectively and restricted cash of $2 million and $2 million at June 30, 2026 and December 31, 2025, respectively.
Reconciliation of Level 3 Assets and Liabilities
The following tables present the fair value reconciliation of Level 3 assets and liabilities measured at fair value on a recurring basis during the three and six months ended June 30, 2026 and 2025:
| Exelon | ComEd | PHI and Pepco | |
|---|---|---|---|
| Three Months Ended June 30, 2026 | Total | CommodityDerivatives | Life Insurance Contracts |
| Balance at March 31, 2026 | $(112) | $(133) | $20 |
| Total realized / unrealized gains (losses) | |||
| Included in net income(a) | — | — | — |
| Included in regulatory assets/liabilities(b) | 5 | 5 | — |
| Settlements | (2) | — | (1) |
| Balance at June 30, 2026(c) | $(109) | $(128) | $19 |
| The amount of total gains included in income attributed to the change in unrealized gains related to assets and liabilities at June 30, 2026 | $— | $— | $— |
| Exelon | ComEd | PHI and Pepco | |
|---|---|---|---|
| Three Months Ended June 30, 2025 | Total | CommodityDerivatives | Life Insurance Contracts |
| Balance at March 31, 2025 | $(129) | $(151) | $21 |
| Total realized / unrealized gains (losses) | |||
| Included in net income(a) | 1 | — | 1 |
| Included in regulatory assets/liabilities(b) | 16 | 16 | — |
| Balance at June 30, 2025(c) | $(112) | $(135) | $22 |
| The amount of total gains included in income attributed to the change in unrealized gains related to assets and liabilities at June 30, 2025 | $1 | $— | $1 |
| Exelon | ComEd | PHI and Pepco | |
|---|---|---|---|
| Six Months Ended June 30, 2026 | Total | CommodityDerivatives | Life Insurance Contracts |
| Balance at December 31, 2025 | $(110) | $(131) | $20 |
| Total realized / unrealized gains (losses) | |||
| Included in net income(a) | — | — | — |
| Included in regulatory assets/liabilities(b) | 3 | 3 | — |
| Settlements | (2) | — | (1) |
| Balance at June 30, 2026(c) | $(109) | $(128) | $19 |
| The amount of total gains included in income attributed to the change in unrealized gains related to assets and liabilities at June 30, 2026 | $— | $— | $— |
| Exelon | ComEd | PHI and Pepco | |
|---|---|---|---|
| Six Months Ended June 30, 2025 | Total | CommodityDerivatives | Life Insurance Contracts |
| Balance at December 31, 2024 | $(110) | $(132) | $21 |
| Total realized / unrealized gains (losses) | |||
| Included in net income(a) | 1 | — | 1 |
| Included in regulatory assets/liabilities(b) | (3) | (3) | — |
| Balance at June 30, 2025(c) | $(112) | $(135) | $22 |
| The amount of total gains included in income attributed to the change in unrealized gains related to assets and liabilities at June 30, 2025 | $1 | $— | $1 |
(a)Classified in Operating and maintenance expense in the Consolidated Statements of Operations and Comprehensive Income.
(b)For ComEd, this includes $7 million of decreases in fair value and an increase for realized gains due to settlements of $12 million recorded in Purchased power expense associated with floating-to-fixed energy swap contracts with unaffiliated suppliers for the three months ended June 30, 2026. Includes $5 million of increases in fair value and an increase for realized gains due to settlements of $11 million recorded in Purchased power expense associated with floating-to-fixed energy swap contracts with unaffiliated suppliers for the three months ended June 30, 2025. Includes $17 million of decreases in fair value and an increase for realized gains due to settlements of $20 million recorded in Purchased power expense associated with floating-to-fixed energy swap contracts with unaffiliated suppliers for the six months ended June 30, 2026. Includes $17 million of decreases in fair value and an increase for realized gains due to settlements of $20 million recorded in Purchased power expense associated with floating-to-fixed energy swap contracts with unaffiliated suppliers for the six months ended June 30, 2025.
(c)For ComEd, the balance of the current and noncurrent asset waszero as of June 30, 2026. The balance consists of a current and noncurrent liability of $23 million and $105 million, respectively, as of June 30, 2026.
Commodity Derivatives (Exelon and ComEd)
The table below discloses the significant unobservable inputs to the forward curve used to value mark-to-market derivatives.
| Type of trade · Fair Value at June 30, 2026 · Fair Value at December 31, 2025 · ValuationTechnique · UnobservableInput · 2026 Range & Arithmetic Average · 2025 Range & Arithmetic Average | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Commodity derivatives | $(128) | $(131) | DiscountedCash Flow | Forward power price(a) | $24.82 | - | $68.10 | $40.37 | $29.75 | - | $61.84 | $41.95 |
(a)An increase to the forward power price would increase the fair value.
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