ComEd 2015 Annual Report Download - page 386

Table of Contents
Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
(a) Represents cash settlements only.
(b) In connection with the Employee Matters Agreement between EDF and Exelon, Exelon assumed the pension plan assets of Nine Mile Point Nuclear Station, LLC and
Constellation Energy Nuclear Group, LLC resulting in transfers into Level 3 of $56 million.
(c) As of January 1, 2015 and January 1, 2014, hedge fund investments that contained redemption restrictions limiting Exelon’s ability to redeem the investments within a reasonable
period of time were classified as Level 3 investments. As of December 31, 2014, restrictions for certain investments no longer applied, therefore allowing redemption within a
reasonable period of time from the measurement date at NAV. As such, these hedge fund investments are reflected as transfers out of Level 3 to Level 2 of $43 million in 2014.
There were no transfers between Level 1 and Level 2 during the twelve months ended December 31, 2015 for the pension and other
postretirement benefit plan assets.

. Investments with maturities of three months or less when purchased, including certain short-term fixed income securities
and money market funds, are considered cash equivalents. The fair values are based on observable market prices and, therefore, are included in
the recurring fair value measurements hierarchy as Level 1.
. Equities consist of individually held equity securities, equity mutual funds and equity commingled funds in domestic and foreign
markets. With respect to individually held equity securities, the trustees obtain prices from pricing services, whose prices are obtained from direct
feeds from market exchanges, which Exelon is able to independently corroborate. Equity securities held individually, including real estate
investment trusts, rights and warrants, are primarily traded on exchanges that contain only actively traded securities due to the volume trading
requirements imposed by these exchanges. Equity securities are valued based on quoted prices in active markets and are categorized as Level 1.
Certain private placement equity securities are categorized as Level 3 because they are not publicly traded and are priced using significant
unobservable inputs.
Equity commingled funds and mutual funds are maintained by investment companies that hold certain investments in accordance with a
stated set of fund objectives, which are consistent with the plans’ overall investment strategy. The values of some of these funds are publicly
quoted. For mutual funds which are publicly quoted, the funds are valued based on quoted prices in active markets and have been categorized as
Level 1. For equity commingled funds and mutual funds which are not publicly quoted, the fund administrators value the funds using the NAV per
fund share, derived from the quoted prices in active markets of the underlying securities. These funds have been categorized as Level 2.
. For fixed income securities, which consist primarily of corporate debt securities, foreign government securities, municipal
bonds, asset and mortgage-backed securities, commingled funds, mutual funds and derivative instruments, the trustees obtain multiple prices
from pricing vendors whenever possible, which enables cross-provider validations in addition to checks for unusual daily movements. A primary
price source is identified based on asset type, class or issue for each security. With respect to individually held fixed income securities, the
trustees monitor prices supplied by pricing services and may use a supplemental price source or change the primary price source of a given
security if the portfolio managers challenge an assigned price and the trustees determine that another price source is considered to be preferable.
Exelon has obtained an understanding of how these prices are derived, including the nature and observability of the inputs used in deriving such
prices. Additionally, Exelon selectively corroborates the fair values of securities by comparison to other
379
Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,
except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.