Exelon 2015 Annual Report Download - page 323

Table of Contents
Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
Generation Exelon
Operating
Revenues
Purchased
Power and
Fuel
Other,
net
Operating
Revenues
Purchased
Power and
Fuel
Other,
net
Total gains (losses) included in net income for the year
ended December 31, 2014 $ 614 $ (88) $ 6 $ 614 $ (88) $ 6
Change in the unrealized gains (losses) relating to assets
and liabilities held for the year ended December 31,
2014 $ 663 $ (23) $ 4 $ 663 $ (23) $ 4
(a) Other, net activity consists of realized and unrealized gains (losses) included in income for the NDT funds held by Generation.
Valuation Techniques Used to Determine Fair Value
The following describes the valuation techniques used to measure the fair value of the assets and liabilities shown in the tables above.
 The Registrants’ cash equivalents include investments with maturities of
three months or less when purchased. The cash equivalents shown in the fair value tables are comprised of investments in mutual and money
market funds. The fair values of the shares of these funds are based on observable market prices and, therefore, have been categorized in Level 1
in the fair value hierarchy.
 The
trust fund investments have been established to satisfy Generation’s and CENG’s nuclear decommissioning obligations as required by the NRC.
The NDT funds hold debt and equity securities directly and indirectly through commingled funds and mutual funds, which are included in Equities,
Fixed Income and Other. Generation’s and CENG’s NDT fund investments policies outline investment guidelines for the trusts and limit the trust
funds’ exposures to investments in highly illiquid markets and other alternative investments. Investments with maturities of three months or less
when purchased, including certain short-term fixed income securities are considered cash equivalents and included in the recurring fair value
measurements hierarchy as Level 1 or Level 2.
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 Generation is able to independently corroborate. The fair values of equity securities held directly by the trust
funds are based on quoted prices in active markets and are categorized in Level 1. Equity securities held individually are primarily traded on the
New York Stock Exchange and NASDAQ-Global Select Market, which contain only actively traded securities due to the volume trading
requirements imposed by these exchanges.
For fixed income securities, multiple prices from pricing services are obtained 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. Generation has obtained an understanding of how these prices are
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(a) (a)
Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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