ComEd 2013 Annual Report Download - page 167

value,includinggoodwill,indicatedno impairment ofgoodwill;therefore,thesecondstep wasnot required. ComEd performeda
qualitativeassessment asofNovember 1,2012,for its2012 annual goodwill impairment assessment anddeterminedthat itsfair
value wasnot more likelythan not less than itscarryingvalue.Therefore,ComEd did not performaquantitativeassessment.Aspart
ofitsqualitativeassessment,ComEd evaluated, amongother things, management’s bestestimate ofprojectedoperatingandcapital
cash flows for ComEd’s business (includingtheimpactsoftheMay2012 Order)aswell aschangesincertainother market
conditions, such asthediscount rate and EBITDAmultiples.
Other Intangible Assets
For discussion surroundingExelon’s andGeneration’s unamortizedenergy contracts, tradenameandretail relationshipsrecordedin
conjunction withtheMerger,refer to Note 4—Merger andAcquisitions.
Exelon’s, Generation’s andComEd’s other intangible assets, includedin unamortizedenergy contractassetsanddeferreddebits
andother assetsintheirConsolidatedBalanceSheets, consistedofthefollowingasofDecember 31,2013:
Weighted
Average
Amortization
Years (e)
Estimated amortization expense
Gross (f)
Accumulated
Amortization Net 2014 2015 2016 2017 2018
Exelon Windacquisition (a)...................... 18.0$224$(41)$183$14$14$14$14$14
Antelope Valleyacquisition (b) .................... 25.0190(4) 18688888
Chicagosettlement—1999 agreement (c) ........... 21.8 100 (76) 2433344
Chicagosettlement—2003 agreement (d) ........... 17.9 62(38) 2444433
Total intangible assets.............................. $576 $(159) $417$29$29$29$29$29
(a)InDecember 2010,Generation acquiredall oftheequityinterestsofJohnDeere Renewables, LLC (later namedExelon Wind), adding735 MWs ofinstalled,
operatingwindcapacitylocatedineightstates.
(b) Refer to Note 4—Merger andAcquisitionsfor additional information regardingAntelope Valley.
(c) InMarch 1999, ComEd enteredinto a settlement agreement withtheCityof ChicagoassociatedwithComEd’s franchiseagreement.Under the terms ofthe
settlement,ComEd agreedto makepaymentsto theCityof Chicagoeach year from1999 to 2002.Theintangible asset recognizedasaresult ofthesepaymentsis
beingamortizedratablyover theremainingtermofthefranchiseagreement, which ends in 2020.
(d) InFebruary2003,ComEd enteredinto separate agreementswiththeCityof Chicagoandwith MidwestGeneration, LLC (MidwestGeneration). Under the terms of
thesettlement agreement withtheCityof Chicago,ComEd agreedto paytheCityof Chicago a total of$60million over a ten-year period, beginningin 2003.The
intangible asset recognizedasaresult ofthesettlement agreement is beingamortizedratablyover theremainingtermoftheCityof Chicagofranchiseagreement,
which ends in 2020.Asrequiredbythesettlement,ComEd alsomadeapayment of$2million to a third-partyon theCityof Chicago’s behalf. Under the terms ofthe
agreement with MidwestGeneration,ComEd receivedpaymentsof$32 million from MidwestGeneration to relieveMidwestGeneration’s obligation under the1999
fossilsale agreement withComEd to buildthegeneration facilityintheCityof Chicago.ThepaymentsreceivedbyComEd, which havebeen recordedinother long-
termliabilities, are beingrecognizedratably(approximately$2million annually) asan offset to amortization expenseover theremainingtermofthefranchise
agreement.
(e)Weighted-averageamortization periodwascalculatedat thedate ofacquisition for acquiredassetsor settlement agreement.
(f) Excludes $67 million ofother miscellaneousunamortizedenergy contractsthat havebeen acquiredat variouspointsintime.
Thefollowingtable summarizestheamortization expense relatedto intangible assetsfor each oftheyearsendedDecember 31,
2013,2012 and2011:
For the Year
Ended
December 31,
2013 ............................................................................................. $27
2012 ............................................................................................. 20
2011 ............................................................................................. 19
Acquired Intangible Assets
Accountingguidancefor business combinationsrequiresthat theacquirer mustrecognizeseparatelyidentifiable intangible assetsin
the application ofpurchaseaccounting. Thevaluation oftheacquiredintangible assets discussedbelowwere estimatedbyapplying
theincome approach, which is basedupon discountedprojectedfuture cash flows associatedwiththerespectivePPAs. Key
assumptionsusedinthevaluation oftheseintangible assetsincludeforecastedpower pricesand discount rates. Thosemeasures
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