Exelon 2015 Annual Report Download - page 299

Table of Contents
Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
Generation’s ownership interest in CENG, and approximately $132 million related to the settlement of pre-existing transactions between CENG and
Generation. The net gain on the consolidation of CENG of $261 million is net of a $7 million payment to EDF.
The fair value of CENG’s assets and liabilities recorded in consolidation was determined based on significant estimates and assumptions
that are judgmental in nature, including projected future cash flows (including timing); discount rates reflecting risk inherent in the future cash
flows; and future market prices. There were also judgments made to determine the expected useful lives assigned to each class of assets
acquired and duration of liabilities assumed.
The valuations necessary to assess the fair values of certain assets and liabilities were considered preliminary as a result of the short time
period between the execution of the NOSA and the end of the second quarter of 2014. The estimates of the fair value of assets and liabilities could
be modified for up to one year from April 1, 2014, as more information was obtained about the fair value of assets and liabilities. The principal
items that have been revised include the asset retirement obligation liabilities and related asset retirement costs. These items have been updated
with inputs from a third party engineering firm with corresponding adjustments recorded in 2014 and the first quarter of 2015. See Note 16—Asset
Retirement Obligations for discussion of the impacts of adjustments recorded during 2014 and 2015 related to updated estimates of the CENG
asset retirement obligation liabilities. In the period of such revisions, these and any other material changes to the fair value assessments have
resulted in adjustments to the amounts recorded upon consolidation. In addition, the asset or liability adjustments impacting depreciation and/or
accretion expense recorded after the consolidation date have impacted Generation’s post-consolidation results of operations.
Generation recorded the assets and liabilities of CENG at fair value as of April 1, 2014. The following assets and liabilities of CENG were
recorded within Generation’s Consolidated Balance Sheets as of the date of integration, adjusted for the modifications discussed above:
Fair Values
Exelon and
Generation
Current assets $ 499
Nuclear decommissioning trust fund 1,955
Property, plant and equipment 3,073
Nuclear fuel 482
Other assets 10
Total assets 6,019
Current liabilities 237
Asset retirement obligation 1,816
Pension and other employee benefit obligations 281
Unamortized energy contract liabilities 171
Other liabilities 114
Total liabilities 2,619
Total net assets $ 3,400
Generation also recorded the fair value of the noncontrolling interest on its Consolidated Balance Sheets of approximately $1.5 billion, net of
the fair value of $152 million for certain specified additional distribution rights under the Operating Agreement. In addition, the noncontrolling
interest was further reduced by the $400 million special cash distribution to EDF.
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Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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