Exelon 2014 Annual Report Download - page 251

Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
CENG Integration-Related Severance
In connection with the Master Agreement, Generation and CENG recorded a severance accrual in the fourth quarter of 2013 for the
anticipated employee position reductions as a result of the integration of $2 million and $16 million, respectively. The majority of
these positions are corporate and support positions at CENG. On April 1, 2014, the date the NOSA was executed, Generation
consolidated the $19 million CENG severance liability pursuant to the Master Agreement. For the years ended December 31, 2014
and 2013, respectively, Exelon and Generation recorded severance benefit costs associated with the employee reductions of $3
million and $2 million within Operating and maintenance expense in their Consolidated Statements of Operations and
Comprehensive Income. The estimated amount of severance payments associated with this plan is expected to be approximately
$24 million. As of December 31, 2014, management recorded its best estimate of severance benefits, which could be adjusted
through the completion of the integration process if additional employee position reductions are identified or if employees resign prior
to their agreed upon service termination date. Estimated costs to be incurred after December 31, 2014 are not material.
Amounts included in the table below represent the severance liability recorded by Exelon related to the CENG integration:
Year Ended December 31, 2014
Severance Liability
Balance at December 31, 2013 ............................................................................... $ 2
Integration of CENG (a) ...................................................................................... 19
Severance charges ........................................................................................ 3
Payments ................................................................................................ (11)
Balance at December 31, 2014 ............................................................................... $13
(a) Includes the fair value of the CENG integration-related obligation as of April 1, 2014, the date of consolidation. Note this includes an additional $3 million of severance
charges incurred in the first quarter of 2014 by CENG. See Note 5—Investment in Constellation Energy Nuclear Group, LLC for additional information.
Cash payments under the severance plan began in 2014. Substantially all cash payments under the plan are expected to be made
by the end of 2015.
Constellation Merger-Related Severance
Upon closing the merger with Constellation, Exelon recorded a severance accrual for the anticipated employee position reductions
as a result of the post-merger integration. The majority of these positions are corporate and Generation support positions. Since
then, Exelon has identified specific employees to be severed pursuant to the merger-related staffing and selection process as well as
employees that were previously identified for severance but have since accepted another position within Exelon and are no longer
receiving a severance benefit. Exelon adjusts its accrual each quarter to reflect its best estimate of remaining severance costs.
The amount of severance expense associated with the post-merger integration recognized for the twelve months ended
December 31, 2014 and 2013 is not material. Estimated costs to be incurred after December 31, 2014 are not immaterial.
For the year ended December 31, 2012, Exelon recorded the following severance benefit costs associated with identified job
reductions within Operating and maintenance expense in their Consolidated Statements of Operations and Comprehensive Income,
except for those costs that were capitalized as regulatory assets related to ComEd and BGE:
Year Ended December 31, 2012
Severance Benefits (a)
Severance charges ........................................................................................ $124
Stock compensation ....................................................................................... 7
Other charges ............................................................................................ 7
Total severance benefits .................................................................................... $138
(a) The amounts above include $46 million at Generation, $14 million at ComEd, $7 million at PECO, and $7 million at BGE, for amounts billed by BSC through
intercompany allocations for the year ended December 31, 2012.
(b) Exelon, ComEd and BGE established regulatory assets of $35 million, $16 million and $19 million, respectively, for severance benefits costs for the year ended
December 31, 2012. The majority of these costs are expected to be recovered over a five-year period.
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