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Intangible Assets (Exelon, Generation, ComEd, PHI, Pepco, DPL, and ACE)
 12 Months Ended
Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets (All Registrants) Intangible Assets (Exelon, Generation, ComEd, PHI, Pepco, DPL and ACE)
Goodwill
The following table presents the gross amount of goodwill, accumulated impairment loss and carrying amount of goodwill of Exelon, ComEd and PHI as of December 31, 2019 and 2018. There were no additions, impairments or measurement period adjustments during the years ended December 31, 2019 and 2018.
 
Gross amount
 
Accumulated impairment loss
 
Carrying amount
Exelon
$
8,660

 
$
1,983

 
$
6,677

ComEd(a)
4,608

 
1,983

 
2,625

PHI(b)
4,005

 
—

 
4,005


__________
(a)
Reflects goodwill recorded in 2000 from the PECO/Unicom merger (predecessor parent company of ComEd).
(b)
Reflects goodwill recorded in 2016 from the PHI merger.
Goodwill is not amortized, but is subject to an assessment for impairment at least annually, or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of ComEd's and PHI's reporting units below their carrying amounts. A reporting unit is an operating segment or one level below an operating segment (known as a component) and is the level at which goodwill is tested for impairment. A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and its operating results are regularly reviewed by segment management. ComEd has a single operating segment. PHI's operating segments are Pepco, DPL and ACE. See Note 5 — Segment Information for additional information. There is no level below these operating segments for which operating results are regularly reviewed by segment management. Therefore, the ComEd, Pepco, DPL and ACE operating segments are also considered reporting units for goodwill impairment testing purposes. Exelon's and ComEd's $2.6 billion of goodwill has been assigned entirely to the ComEd reporting unit, while Exelon's and PHI's $4.0 billion of goodwill has been assigned to the Pepco, DPL and ACE reporting units in the amounts of $2.1 billion, $1.4 billion and $0.5 billion, respectively.
Entities assessing goodwill for impairment have the option of first performing a qualitative assessment to determine whether a quantitative assessment is necessary. As part of the qualitative assessments, Exelon, ComEd and PHI evaluate, among other things, management's best estimate of projected operating and capital cash flows for their businesses, outcomes of recent regulatory proceedings, changes in certain market conditions, including the discount rate and regulated utility peer EBITDA multiples, and the passing margin from their last quantitative assessments
performed. If an entity bypasses the qualitative assessment, a quantitative two-step, fair value-based test is performed. The first step compares the fair value of the reporting unit to its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the second step is performed. The second step requires an allocation of fair value to the individual assets and liabilities using purchase price allocation authoritative guidance in order to determine the implied fair value of goodwill.
Application of the goodwill impairment test requires management judgment, including the identification of reporting units and determining the fair value of the reporting unit, which management estimates using a weighted combination of a discounted cash flow analysis and a market multiples analysis. Significant assumptions used in these fair value analyses include discount and growth rates, utility sector market performance and transactions, projected operating and capital cash flows for ComEd's, Pepco's, DPL's and ACE's businesses and the fair value of debt. In applying the second step, if needed, management must estimate the fair value of specific assets and liabilities of the reporting unit.
2019 and 2018 Goodwill Impairment Assessment. ComEd and PHI qualitatively determined that it was more likely than not that the fair values of their reporting units exceeded their carrying values and, therefore, did not perform quantitative assessments as of November 1, 2019 and 2018 for ComEd and as of November 1, 2019 for PHI. The last quantitative assessments performed were as of November 1, 2016 for ComEd and November 1, 2018 for PHI.
PHI performed a quantitative test for its 2018 annual goodwill impairment assessment as of November 1, 2018. The first step of the test comparing the estimated fair values of the Pepco, DPL and ACE reporting units to their carrying values, including goodwill, indicated no impairments of goodwill; therefore, no second step was required.
While the annual assessments indicated no impairments, certain assumptions used to estimate reporting unit fair values are highly sensitive to changes. Adverse regulatory actions or changes in significant assumptions could potentially result in future impairments of Exelon's, ComEd's and PHI’s goodwill, which could be material. Based on the results of the last quantitative goodwill test performed, the estimated fair values of the ComEd, Pepco, DPL and ACE reporting units would have needed to decrease by more than 30%, 30%, 20% and 30%, respectively, for ComEd and PHI to fail the first step of their respective impairment tests.
Other Intangible Assets and Liabilities
Exelon’s, Generation’s, ComEd’s and PHI's other intangible assets and liabilities, included in Unamortized energy contract assets and liabilities and Other deferred debits and other assets in their Consolidated Balance Sheets, consisted of the following as of December 31, 2019 and 2018. The intangible assets and liabilities shown below are amortized on a straight line basis, except for unamortized energy contracts which are amortized in relation to the expected realization of the underlying cash flows:
 
 
December 31, 2019
 
December 31, 2018
 
 
Gross
 
Accumulated Amortization
 
Net
 
Gross
 
Accumulated Amortization
 
Net
Generation
 
 
 
 
 

 
 
 
 
 

Unamortized Energy Contracts
 
1,967

 
(1,612
)
 
355

 
1,957

 
(1,588
)
 
369

Customer Relationships
 
343

 
(190
)
 
153

 
325

 
(162
)
 
163

Trade Name
 
243

 
(193
)
 
50

 
243

 
(171
)
 
72

ComEd
 
 
 
 
 

 
 
 
 
 

Chicago Settlement Agreements
 
162

 
(155
)
 
7

 
162

 
(148
)
 
14

PHI
 
 
 
 
 

 
 
 
 
 

Unamortized Energy Contracts
 
(1,515
)
 
1,073

 
(442
)
 
(1,515
)
 
954

 
(561
)
Exelon Corporate
 
 
 
 
 
 
 
 
 
 
 
 
Software License
 
95

 
(44
)
 
51

 
95

 
(34
)
 
61

Exelon
 
$
1,295

 
$
(1,121
)
 
$
174

 
$
1,267

 
$
(1,149
)
 
$
118



The following table summarizes the amortization expense related to intangible assets and liabilities for each of the years ended December 31, 2019, 2018 and 2017:
For the Years Ended December 31,
 
Exelon (a)(b)
 
Generation (a)
 
ComEd
 
PHI(b)
2019
 
$
(28
)
 
$
74

 
$
7

 
$
(119
)
2018
 
(109
)
 
63

 
7

 
(188
)
2017
 
(237
)
 
83

 
7

 
(336
)
__________
(a)
At Exelon and Generation, amortization of unamortized energy contracts totaling $21 million, $14 million and $35 million for the years ended December 31, 2019, 2018 and 2017, respectively, was recorded in Operating revenues or Purchased power and fuel expense in their Consolidated Statements of Operations and Comprehensive Income.
(b)
At Exelon and PHI, amortization of the unamortized energy contract fair value adjustment amounts and the corresponding offsetting regulatory asset and liability amounts are amortized through Purchased power and fuel expense in their Consolidated Statements of Operations and Comprehensive Income.

The following table summarizes the estimated future amortization expense related to intangible assets and liabilities as of December 31, 2019:
For the Years Ending December 31,
 
Exelon
 
Generation
 
ComEd
 
PHI
2020
 
$
(13
)
 
$
85

 
$
7

 
$
(115
)
2021
 
2

 
84

 
—

 
(92
)
2022
 
(21
)
 
58

 
—

 
(89
)
2023
 
(18
)
 
53

 
—

 
(81
)
2024
 
22

 
50

 
—

 
(38
)

Renewable Energy Credits (Exelon and Generation)
Exelon’s and Generation’s RECs are included in Other current assets and Other deferred debits and other assets in the Consolidated Balance Sheets. Purchased RECs are recorded at cost on the date they are purchased. The cost of RECs purchased on a stand-alone basis is based on the transaction price, while the cost of RECs acquired through PPAs represents the difference between the total contract price and the market price of energy at contract inception. Generally, revenue for RECs that are sold to a counterparty under a contract that specifically identifies a power plant is recognized at a point in time when the power is produced. This includes both bundled and unbundled REC sales. Otherwise, the revenue is recognized upon physical transfer of the REC to the customer.
The following table presents the current and noncurrent Renewable Energy Credits as of December 31, 2019 and 2018:
 
As of December 31, 2019
 
As of December 31, 2018
 
Exelon
 
Generation
 
Exelon
 
Generation
Current REC's
345

 
336

 
279

 
270

Noncurrent REC's
86

 
86

 
52

 
52