Exelon 2014 Annual Report Download - page 139

Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
The following table summarizes total incurred interest, capitalized interest and credits to AFUDC by year:
2014 (a) 2013 2012 (b)
Total incurred interest (c) .................................................................... $1,144 1,423 1,003
Capitalized interest ........................................................................ 63 54 67
Credits to AFUDC debt and equity ............................................................ 37 35 25
(a) On April 1, 2014, Generation assumed operational control of CENG’s nuclear fleet. As a result, the 2014 financial results include CENG’s financial position and
results of operations beginning April 1, 2014.
(b) Exelon activity for the year ended December 31, 2012 includes the results of Constellation and BGE for March 12, 2012—December 31, 2012. Generation activity for
the year ended December 31, 2012 includes the results of Constellation for March 12, 2012—December 31, 2012. BGE activity represents the activity for the year
ended December 31, 2012.
(c) Includes interest expense to affiliates.
Guarantees
Exelon recognizes at the inception of a guarantee, a liability for the fair market value of the obligations it has undertaken in issuing
the guarantee, including the ongoing obligation to perform over the term of the guarantee in the event that the specified triggering
events or conditions occur.
The liability that is initially recognized at the inception of the guarantee is reduced as Exelon is released from risk under the
guarantee. Depending on the nature of the guarantee, the release from risk of Exelon may be recognized only upon the expiration or
settlement of the guarantee or by a systematic and rational amortization method over the term of the guarantee. See Note 22—
Commitments and Contingencies for additional information.
Asset Impairments
Long-Lived Assets. Exelon evaluates the carrying value of its long-lived assets or asset groups, excluding goodwill, when
circumstances indicate the carrying value of those assets may not be recoverable. Indicators of impairment may include a
deteriorating business climate, including, but not limited to, current energy prices and market conditions, condition of the asset,
specific regulatory disallowance, or plans to dispose of a long-lived asset significantly before the end of its useful life. Exelon
determines if long-lived assets and asset groups are impaired by comparing their undiscounted expected future cash flows to their
carrying value. When the undiscounted cash flow analysis indicates a long-lived asset or asset group is not recoverable, the amount
of the impairment loss is determined by measuring the excess of the carrying amount of the long-lived asset or asset group over its
fair value less costs to sell.
Cash flows for long-lived assets and asset groups are determined at the lowest level for which identifiable cash flows are largely
independent of the cash flows of other assets and liabilities. The cash flows from the generating units are generally evaluated at a
regional portfolio level along with cash flows generated from the customer supply and risk management activities, including cash
flows from contracts that are accounted for as intangible contract assets and liabilities recorded on the balance sheet. In certain
cases, generation assets may be evaluated on an individual basis where those assets are contracted on a long-term basis with a
third party and operations are independent of other generation assets (typically contracted renewables). See Note 8—Impairment of
Long-Lived Assets for additional information.
Goodwill. Goodwill represents the excess of the purchase price paid over the estimated fair value of the assets acquired and
liabilities assumed in the acquisition of a business. Goodwill is not amortized, but is tested for impairment at least annually or on an
interim basis if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit
below its carrying value. See Note 10—Intangible Assets for additional information regarding Exelon’s, Generation’s and ComEd’s
goodwill.
Equity Method Investments. Exelon and Generation regularly monitor and evaluate equity method investments to determine
whether they are impaired. An impairment is recorded when the investment has experienced a decline in value that is other than
temporary in nature. Additionally, if the project in which Generation holds an investment recognizes an impairment loss, Exelon and
Generation would record their proportionate share of that impairment loss and evaluate the investment for an other than temporary
decline in value.
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