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Intangible Assets
12 Months Ended
Dec. 31, 2011
Intangible Assets  
Intangible Assets

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 )