Income Tax Examination, Liability (Refund) Adjustment from Settlement with Taxing Authority

[Table of Contents](#i0fa971ac9e834218957059819155291f_10)Combined Notes to Consolidated Financial Statements(Dollars in millions, except per share data unless otherwise noted)  
Note 14 — Income Taxes\_\_\_\_\_\_\_\_\_\_(a)As of December 31, 2021, the interest receivable balance is not expected to be settled in cash within the next twelve months and therefore classified as non-current receivable. In December of 2021, Exelon received a refund of approximately $272 million related to an interest netting refund claim.The Registrants did not record material interest and penalty expense related to tax positions reflected in their Consolidated Balance Sheets. Interest expense and penalty expense are recorded in Interest expense, net and Other, net, respectively, in Other income and deductions in the Registrants' Consolidated Statements of Operations and Comprehensive Income.Description of tax years open to assessment by major jurisdiction

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| Major Jurisdiction | Open Years |  | Registrants Impacted |
| Federal consolidated income tax returns(a) | 2010-2020 |  | All Registrants |
| Delaware separate corporate income tax returns | Same as federal |  | DPL |
| District of Columbia combined corporate income tax returns | 2018-2020 |  | Exelon, PHI, Pepco |
| Illinois unitary corporate income tax returns | 2012-2020 |  | Exelon, ComEd |
| Maryland separate company corporate net income tax returns | Same as federal |  | BGE, Pepco, DPL |
| New Jersey separate corporate income tax returns | 2017-2018 |  | Exelon |
| New Jersey combined corporate income tax returns | 2019-2020 |  | Exelon |
| New Jersey separate corporate income tax returns | 2017-2020 |  | ACE |
| New York combined corporate income tax returns | 2011-2020 |  | Exelon |
| Pennsylvania separate corporate income tax returns | 2011-2016 |  | Exelon |
| Pennsylvania separate corporate income tax returns | 2018-2020 |  | Exelon |
| Pennsylvania separate corporate income tax returns | 2018-2020 |  | PECO |

\_\_\_\_\_\_\_\_\_\_(a)Certain registrants are only open to assessment for tax years since joining the Exelon federal consolidated group; BGE beginning in 2012 and PHI, Pepco, DPL, and ACE beginning in 2016. Other Tax MattersCENG Put Option (Exelon)On August 6, 2021, Generation entered into a settlement agreement pursuant to which Generation purchased EDF’s equity interest in CENG. Exelon recorded deferred tax liabilities of $290 million against Common Stock in Exelon’s Consolidated Balance Sheet. The deferred tax liabilities represent the tax effect on the difference between the net purchase price and EDF’s noncontrolling interest as of August 6, 2021. The deferred tax liabilities will reverse during the remaining operating lives and during decommissioning of the CENG nuclear plants. See Note 2 — Mergers, Acquisitions, and Dispositions for additional information.Long-Term Marginal State Income Tax Rate (All Registrants)Quarterly, Exelon reviews and updates its marginal state income tax rates and updates for material changes in state tax laws and state apportionment. The Registrants remeasure their existing deferred income tax balances to reflect the changes in marginal rates, which results in either an increase or a decrease to their net deferred income tax liability balances. Utility Registrants record corresponding regulatory liabilities or assets to the extent such amounts are probable of settlement or recovery through customer rates and an adjustment to income tax expense for all other amounts. The impacts to the Utility Registrants for the years ended December 31, 2021, 2020, and 2019 were not material.

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| December 31, 2021 | Exelon |  |  |  |  |  |  |
| Increase to Deferred Income Tax Liability and Income Tax Expense, Net of Federal Taxes | $ | 27  |  |  |  |  |  |  |  |
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| December 31, 2020 |  |  |  |  |  |  |  |
| Increase to Deferred Income Tax Liability and Income Tax Expense, Net of Federal Taxes | $ | 66  |  |  |  |  |  |  |  |
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| December 31, 2019 |  |  |  |  |  |  |  |
| Increase to Deferred Income Tax Liability and Income Tax Expense, Net of Federal Taxes | $ | 20  |  |  |  |  |  |  |  |
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