ComEd 2013 Annual Report Download - page 221

Hedge funds.Hedgefundinvestmentsincludethoseseekingto maximizeabsolute returnsusingabroadrangeofstrategiesto
enhance returnsandprovideadditional diversification.Thefairvalue ofhedgefunds is determinedusingNAVor ownershipinterest
oftheinvestments. Exelon hastheabilityto redeemtheseinvestmentsat NAVor itsequivalent subjecttocertainrestrictions which
mayincludealock-up periodor a gate.For Exelon’s investmentsthat have terms that allowredemption within a reasonable periodof
timefromthemeasurement date,thehedgefundinvestmentsare categorizedasLevel 2.For investmentsthat haverestrictionsthat
maylimitExelon’s abilityto redeemtheinvestmentsat themeasurement date or within a reasonable periodoftime,thehedgefund
investmentsare categorizedasLevel 3.
Real estate.Real estate investment trustsvalueddailybasedon quotedpricesinactivemarketsare categorizedasLevel 1.Real
estate commingledfunds are maintainedbyinvestment companiesandholdcertaininvestmentsinaccordancewithastatedset of
fundobjectives, which are consistent withExelon’s overall investment strategy. Sincethesefunds are not publiclyquoted, thefund
administratorsvalue thefunds usingthe net asset value per fundshare,derivedfromthequotedpricesinactivemarketsofthe
underlyingsecurities. Thesefunds havebeen categorizedasLevel 2.Other real estate funds are funds withadirectinvestment ina
pool ofreal estate properties. Thesefunds are valuedbyinvestment managerson a periodic basis usingpricingmodelsthat use
independent appraisalsfromsourceswithprofessional qualifications. Sincethesevaluation inputsare not highlyobservable,these
real estate funds havebeen categorizedasLevel 3.
Defined Contribution Savings Plan
TheRegistrantsparticipate invarious401(k) definedcontribution savings plansthat are sponsoredbyExelon.The plansare
qualifiedunder applicable sectionsoftheIRCandallowemployeesto contribute a portion oftheir pre-taxincomeinaccordancewith
specifiedguidelines. All Registrantsmatch a percentageoftheemployee contributionsup to certainlimits. Thefollowingtable
presentsExelon’s matchingcontributionsto thesavings plan for theyearsendedDecember 31,2013,2012 and2011:
For the Year Ended December 31,
2013 ..................................................................................................... $85
2012 ..................................................................................................... 67
2011 ..................................................................................................... 78
17. Severance
Exelon hasan ongoingseverance plan under which, ingeneral,the longer an employee workedprior to termination thegreater the
amount ofseverancebenefits. Exelon records aliabilityandexpenseorregulatoryasset for severanceonce terminationsare
probable ofoccurrenceandthe relatedseverancebenefitscan be reasonablyestimated. For severancebenefitsthat are
incremental to itsongoingseverance plan (“one-time termination benefits”), Exelon measurestheobligation andrecordtheexpense
at fairvalue at thecommunication date if there are no future servicerequirements, or,iffuture serviceis requiredto receivethe
termination benefit,ratablyover therequiredservice period.
Merger-Related Severance
Upon closingthemerger withConstellation,Exelon recordedaseveranceaccrual for the anticipatedemployee position reductions
asaresult ofthepost-merger integration.Themajorityofthesepositionsare corporate andGeneration support positions. Since
then,Exelon hasidentifiedspecific employeesto beseveredpursuant to themerger-relatedstaffingandselection process aswell as
employeesthat were previouslyidentifiedfor severancebut havesinceacceptedanother position withinExelon andare no longer
receivingaseverancebenefit.Exelon adjustsitsaccrual each quarter to reflectitsbestestimate ofremainingseverancecosts. In
addition,certainemployeesidentifiedduringthestaffingandselection process alsoreceive pension andother postretirement
benefitsthat are deemedcontractual termination benefits, which theRegistrantsrecordedduringthesecondquarter of2012.
Theamount ofseveranceexpenseassociatedwiththepost-merger integration recognizedfor theyear endedDecember 31,2013
for Exelon andGeneration was$6million and$6million,respectively. For Generation,$5million representsamountsbilled by BSC
through intercompanyallocations. There wasno severanceexpenseassociatedwithpost-merger integration recognizedfor theyear
endedDecember 31,2013 for ComEd, PECO and BGE. Estimatedcoststo beincurredafter December 31,2013 are not material.
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