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Basis of Presenation (Exelon, Generation, Comed and PECO)
6 Months Ended
Jun. 30, 2011
General Policies [Abstract]  
Basis of Presentation (Exelon, Generation, ComEd and PECO)

1. Basis of Presentation (Exelon, Generation, ComEd and PECO)

Exelon is a utility services holding company engaged, through its principal subsidiaries, in the energy generation and energy delivery businesses. The generation business consists of the electric generating facilities, the wholesale energy marketing operations and competitive retail supply operations of Generation. The energy delivery businesses include the purchase and regulated retail sale of electricity and the provision of distribution and transmission services by ComEd in northern Illinois, including the City of Chicago, and by PECO in southeastern Pennsylvania, including the City of Philadelphia, and the purchase and regulated retail sale of natural gas and the provision of distribution services by PECO in the Pennsylvania counties surrounding the City of Philadelphia.

 

Through its business services subsidiary, BSC, Exelon provides its subsidiaries with a variety of support services at cost, including legal, human resources, financial, information technology and supply management services. The costs of BSC, including support services, are directly charged or allocated to the applicable subsidiaries using a cost-causative allocation method. Corporate governance type costs that cannot be directly assigned are allocated based on a Modified Massachusetts formula, which is a method that utilizes a combination of gross revenues, total assets, and direct labor costs for the allocation base. The results of Exelon's corporate operations are presented as “Other” within the Combined Notes to the Consolidated Financial Statements and include intercompany eliminations unless otherwise disclosed.

 

Exelon owns 100% of all of its significant consolidated subsidiaries, either directly or indirectly, except for ComEd, of which Exelon owns more than 99%, and PECO, of which Exelon owns 100% of the common stock but none of PECO's preferred securities. Exelon has reflected the third-party interests in ComEd, which totaled less than $1 million at June 30, 2011, as equity, and PECO's preferred securities as preferred securities of subsidiary in its Consolidated Financial Statements.

 

Generation owns 100% of all of its significant consolidated subsidiaries, either directly or indirectly, except for Exelon SHC, Inc., of which Generation owns 99% and the remaining 1% is indirectly owned by Exelon, which is eliminated in Exelon's consolidated financial statements; and certain Exelon Wind projects, of which Generation holds majority interests ranging from 94% to 99%, which are presented as Noncontrolling interest on Exelon's and Generation's Consolidated Balance Sheets.

 

Exelon's Consolidated Financial Statements include the accounts of entities in which Exelon has a controlling financial interest, other than certain financing trusts of ComEd and PECO, and Generation's and PECO's proportionate interests in jointly owned electric utility property, after the elimination of intercompany transactions. A controlling financial interest is evidenced by either a voting interest greater than 50% or the results of a model that identifies Exelon or one of its subsidiaries as the primary beneficiary of a VIE. Investments and joint ventures, in which Exelon does not have a controlling financial interest and certain financing trusts of ComEd and PECO, are accounted for under the equity or cost method of accounting.

 

Each of Generation's, ComEd's and PECO's Consolidated Financial Statements includes the accounts of its subsidiaries. All intercompany transactions have been eliminated.

 

The accompanying consolidated financial statements as of June 30, 2011 and 2010 and for the three and six months then ended are unaudited but, in the opinion of the management of each of Exelon, Generation, ComEd and PECO, include all adjustments that are considered necessary for a fair presentation of its respective financial statements in accordance with GAAP. All adjustments are of a normal, recurring nature, except as otherwise disclosed. The December 31, 2010 Consolidated Balance Sheets were taken from audited financial statements. Certain prior year amounts in Exelon's and Generation's Consolidated Statements of Cash Flows and in Exelon's, ComEd's and PECO's Consolidated Balance Sheets have been reclassified between line items for comparative purposes. The reclassifications did not affect the Registrants' net income or cash flows from operating activities. See Note 14Supplemental Financial Information for further discussion of the reclassifications to Exelon's and Generation's Consolidated Statements of Cash Flows. These Combined Notes to Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the SEC for Quarterly Reports on Form 10-Q. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These notes should be read in conjunction with the Notes to Consolidated Financial Statements of Exelon, Generation, ComEd and PECO included in ITEM 8 of their 2010 Form 10-K.

Variable Interest Entities (Exelon, Generation, ComEd and PECO)

 

During the six months ended June 30, 2011, the Registrants assessed their interests and determined there were no significant changes in their variable interest conclusions, primary beneficiary or consolidation determinations from December 31, 2010. For further information regarding the Registrants' VIEs, see Note 1 of the 2010 Form 10-K.