Basis of Presenation (Exelon, Generation, Comed and PECO)

3 Months Ended

Mar. 31, 2012

Accounting Policies [Abstract]

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

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

Exelon is a utility services holding company engaged through its principal subsidiaries in the energy generation and energy distribution businesses.Prior to March 12, 2012, its principal, wholly owned subsidiaries included ComEd, PECO and Generation. On March 12, 2012, in conjunction with the Agreement and Plan of Merger (the “Merger Agreement”), Constellation merged into Exelon with Exelon continuing as the surviving corporation. As a result of the merger transaction, Generation includes Constellation's customer supply and generation businesses. BGE, formerly Constellation's regulated utility subsidiary, is now a subsidiary of Exelon. Refer to Note 3 - Merger and Acquisitionsfor further information regarding the merger transaction.

The energy generation business includes:

• Generation: The business consists of owned, contracted and investments in electric generating facilities and wholesale and retail customer supply of electric and natural gas products and services, including renewable energy products, risk management services and natural gas exploration and production activities. 

  The energy delivery businesses include:

• ComEd: Purchase and regulated retail sale of electricity and the provision of distribution and transmission services in northern Illinois, including the City of Chicago.
• PECO:Purchase and regulated retail sale of electricity and the provision of distribution and transmission services in southeastern Pennsylvania, including the City of Philadelphia, and the purchase and regulated retail sale of natural gas and the provision of distribution services in the Pennsylvania counties surrounding the City of Philadelphia.
• BGE:Purchase and regulated retail sale of electricity and the provision of distribution and transmission services in central Maryland, including the City of Baltimore, and the purchase and regulated retail sale of natural gas and the provision of distribution services in central Maryland, including the City of Baltimore.

For financial statement purposes, beginning on March 12, 2012, disclosures that solely relate to Constellation or BGE activities now also apply to Exelon, unless otherwise noted. When appropriate, Exelon, Generation, ComEd, PECOand BGE are named specifically for their related activities and disclosures.

BGE was acquired through a transaction under common control and Exelon did not apply push-down accounting to BGE. As a result, BGEwill continue to maintain its current reporting requirements as an SEC registrant. The information disclosed for BGE represents the activity of the standalone entity for the three months ended March 31, 2012 and 2011 and the financial position as of March 31, 2012 and December 31, 2011.However, for Exelon's financial reporting, Exelon is reporting BGE activity from March 12, 2012 through March 31, 2012.

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

The accompanying consolidated financial statements as of March 31, 2012 and 2011 and for the three months then ended are unaudited but, in the opinion of the management of each Registrant includes all adjustments that are considered necessary for a fair statement of its respective financial statements in accordance with GAAP. All adjustments are of a normal, recurring nature, except as otherwise disclosed. The December 31, 2011 Consolidated Balance Sheets were taken from audited financial statements. Certain prior year amounts in BGE's Consolidated Statements of Cash Flows, Exelon's, Generation'sand BGE's Consolidated Statement of Operations and in Exelon's, Generation's, ComEd's, PECO's and BGE'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. 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 all Registrants included in ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA of their respective 2011 Form 10-K.

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

Consolidated Variable Interest Entities

The Registrants' consolidated VIEs consist of:

• BondCo, a special purpose bankruptcy remote limited liability company formed by BGE to acquire, hold, and to issue and service bonds secured by rate stabilization property;
• a retail gas group formed to enter into a collateralized gas supply agreement with a third party gas supplier;
• a retail power supply company;
• a group of solar project limited liability companies formed to build, own, and operate solar power facilities; and
• several wind projects designed to develop, construct and operate wind generation facilities.

See Note 1 and Note 4 of the 2011 Form 10-K for Constellation and BGE for further information regarding investments in VIEs.

For each of the consolidated VIEs:

• The assets of the VIEs are restricted and can only be used to settle obligations of the respective VIE. In the case of BondCo, BGE is required to remit all payments it receives from all residential customers for non-bypassable rate stabilization charges to BondCo. During the three months ended March 31, 2012 and 2011, BGE remitted $ 20 million and $23 million, respectively, to BondCo.
• Except for providing capital funding to the solar entities for ongoing construction of the solar power facilities and a $75 million parental guarantee to the third party gas supplier in support of the retail gas group, during thethree months ended March 31, 2012, neither Exelon nor BGE:
• provided any additional financial support to the VIEs;
• had any contractual commitments or obligations to provide financial support to the VIEs; and
• the creditors of the VIEs did not have recourse to Exelon'sor BGE's general credit.

At March 31, 2012, Exelon's, Generation's and BGE's consolidated financial statements include the following consolidated VIEs, which were acquired as part of the merger:

		March 31, 2012
		Exelon		Generation		BGE
Current assets		$	525	$	474	$	50
Noncurrent assets			410		364		-
	Total assets	$	935	$	838	$	50
Current liabilities		$	415	$	340	$	74
Noncurrent liabilities			606		228		332
	Total liabilities	$	1,021	$	568	$	406

Unconsolidated Variable Interest Entities

Exelon's and Generation's variable interests in unconsolidated VIEs generally include three categories: (1) equity method investments, (2) energy purchase and sale contracts, and (3) fuel purchase commitments. As of the balance sheet date, the carrying amount of assets and liabilities in Exelon's and Generation's Consolidated Balance Sheets that relate to its involvement with the majority of the energy contracts and fuel purchase contracts with VIEs are predominately related to working capital accounts and generally represent the amounts owed by Exelon and Generation for the deliveries associated with the current billing cycles under the contracts. Further, Exelon and Generation have not provided or guaranteed the debt or equity support, or liquidity arrangements, performance guarantees or other commitments associated with these contracts, so there is no significant potential exposure to loss as a result of the involvement with these VIEs.

As of March 31, 2012, Exelon and Generation did haveexposure to loss associated with six VIEs for which they were not the primary beneficiary; including certain equity method investments and certain energy contracts. The following table presents summary information about the unconsolidated VIE entities for which we have exposure to loss:

				Equity
		Energy		Method
		Contract		Investment
March 31, 2012		VIEs		VIEs		Total
Total assets (a)		$	286	$	350	$	636
Total liabilities (a)			223		113		336
Registrants' ownership interest (a)			0		94		94
Other ownership interests (a)			63		143		206
Registrants' maximum exposure to loss:
	Letters of credit		14		0		14
	Carrying amount of our equity method investments		0		76		76
	Debt and payment guarantees		0		5		5

_________________

• These items represent amounts on the unconsolidated VIE balance sheets, not on Exelon's or Generation's balance sheets. These items are included to provide information regarding the relative size of the unconsolidated VIEs.

The variable interests noted above have been added as a result of the Constellation and Exelon merger. During the three months ended March 31, 2012, ComEd, PECO, BGE and legacy Generation assessed their contracts and determined there were no changes in their variable interests, primary beneficiary determinations or conclusions regarding consolidation of VIEs from December 31, 2011. See Note 1 of the Exelon 2011 Form 10-K and Note 1 and Note 4 of the 2011 10-K for BGE for further information regarding the Registrants' VIEs.