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Intangible Assets

12 Months Ended

Dec. 31, 2011

5 Intangible Assets

Goodwill

Goodwill is the excess of the cost of an acquisition over the fair value of the net assets acquired. As of December 31, 2011 and 2010, our goodwill balance was primarily related to our retail energy reporting unit within our NewEnergy business segment. Goodwill is not amortized; rather, it is evaluated for impairment at least annually.

The changes in the gross amount of goodwill and the accumulated impairment losses for the years ended December 31, 2011 and 2010 are as follows:

At December 31,	2011			2010


	(In millions)
Balance as of January 1,
Gross goodwill	$	343.5		$	292.0
Accumulated impairment losses		(266.5	)		(266.5	)

Net goodwill		77.0			25.5
Goodwill acquired (1)		202.4			51.5
Impairment losses		—			—
Other purchase price adjustments		2.8			—

Balance as of December 31,
Gross goodwill		548.7			343.5
Accumulated impairment losses		(266.5	)		(266.5	)

Net goodwill	$	282.2		$	77.0

(1): We discuss the goodwill acquired in 2011 and 2010 in more detail in Note 15.

For tax purposes, $154.0 million of our gross goodwill balance at December 31, 2011 is deductible.

Intangible Assets Subject to Amortization

Intangible assets with finite lives are subject to amortization over their estimated useful lives. The primary assets included in this category are as follows:

At December 31,	2011							2010


	Gross Carrying Amount		Accumul- ated Amortiz- ation			Net Asset		Gross Carrying Amount		Accumul- ated Amortiz- ation			Net Asset

	(In millions)
Software	$	478.6	$	(322.7	)	$	155.9	$	596.8	$	(397.1	)	$	199.7
Permits and licenses		4.5		(1.6	)		2.9		2.7		(1.0	)		1.7
Other		233.3		(89.6	)		143.7		22.3		(8.2	)		14.1

Total	$	716.4	$	(413.9	)	$	302.5	$	621.8	$	(406.3	)	$	215.5

BGE had intangible assets with a gross carrying amount of $140.2 million and accumulated amortization of $76.8 million at December 31, 2011 and $250.2 million and accumulated amortization of $171.4 million at December 31, 2010 that are included in the table above. Substantially all of BGE's intangible assets relate to software.

We recognized amortization expense related to our intangible assets as follows:

Year Ended December 31,	2011		2010		2009


	(In millions)
Nonregulated businesses	$	87.8	$	64.8	$	74.2
BGE		25.4		25.8		23.6

Total Constellation Energy	$	113.2	$	90.6	$	97.8

The following is our, and BGE's, estimated amortization expense related to our intangible assets for 2012 through 2016 for the intangible assets included in our, and BGE's, Consolidated Balance Sheets at December 31, 2011:

Year Ended December 31,	2012		2013		2014		2015		2016


	(In millions)
Estimated amortization expense—Nonregulated businesses	$	82.8	$	62.1	$	40.9	$	22.4	$	14.0
Estimated amortization expense—BGE		20.7		16.3		10.3		6.9		1.7

Total estimated amortization expense—Constellation Energy	$	103.5	$	78.4	$	51.2	$	29.3	$	15.7

Unamortized Energy Contracts

As discussed in Note 1, unamortized energy contract assets and liabilities represent the remaining unamortized balance of nonderivative energy contracts acquired, certain contracts which no longer qualify as derivatives due to the absence of a liquid market, or derivatives designated as normal purchases and normal sales, which we previously recorded as derivative assets and liabilities. Unamortized energy contract assets also include the power purchase agreement entered into with CENG with an initial fair value of approximately $0.8 billion. See Note 16 for more details on this power purchase agreement.

We present separately in our Consolidated Balance Sheets the net unamortized energy contract assets and liabilities for these contracts. The table below presents the gross and net carrying amount and accumulated amortization of the net liability that we have recorded in our Consolidated Balance Sheets:

	2011

At December 31									2010

	Carrying Amount			Accumul- ated Amortiz- ation		Net (Liability) Asset			Carrying Amount			Accumul- ated Amortiz- ation		Net Asset

	(In millions)
Unamortized energy contracts, net	$	(1,454.9	)	$	1,152.5	$	(302.4	)	$	(1,360.9	)	$	1,473.8	$	112.9

We recognized amortization expense (income) of $395.4 million, $106.8 million, and ($353.1) million related to these energy contract assets for the years ended December 31, 2011, 2010, and 2009 for our nonregulated businesses.

The table below presents the estimated amortization for these assets and liabilities over the next five-years:

Year Ended December 31,	2012			2013			2014			2015			2016


	(In millions)
Estimated amortization expense (income)	$	(65.2	)	$	(81.2	)	$	(71.3	)	$	(65.6	)	$	(16.4	)

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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