Exelon's and ComEd's gross amount of goodwill, accumulated impairment losses and carrying amount of goodwill for the years ended December 31, 2012 and 2011 were as follows:

	2012 and 2011
			Accumulated
	Gross		Impairment		Carrying
	Amount(a)		Losses		Amount

Balance, January 1,	$	4,608	$	1,983	$	2,625

Impairment losses		0		0		0

Balance, December 31,	$	4,608	$	1,983	$	2,625

(a) Reflects goodwill recorded in 2000 from the PECO/Unicom (predecessor parent company of ComEd) merger net of amortization, resolution of tax matters and other non-impairment-related changes as allowed under previous authoritative guidance.

Goodwill is not amortized, but is subject to an assessment for impairment at least annually, or more frequently if events or circumstances indicate that goodwill is more likely than not impaired, such as a significant negative regulatory outcome, that would more likely than not reduce the fair value of the ComEd reporting unit below its carrying amount.

In September 2011, the FASB issued authoritative guidance amending existing guidance on the annual assessment of goodwill for impairment. Under the revised guidance, which became effective January 1, 2012, entities assessing goodwill for impairment have the option of performing a qualitative assessment before calculating the fair value of the reporting unit (i.e., step one of the two-step fair value based impairment test). If an entity determines, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying amount, the two-step fair value based impairment test is required. Otherwise, no further testing is required.

If an entity bypasses the qualitative assessment or performs the qualitative assessment, but determines that it is more likely than not that its fair value is less than its carrying amount, a 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 in order to determine the implied fair value of goodwill. If the implied fair value of goodwill is less than the carrying amount, an impairment loss is recorded as a reduction to goodwill and a charge to operating expense.

Exelon assesses goodwill impairment at its ComEd reporting unit. Accordingly, any goodwill impairment charge at ComEd will affect Exelon's consolidated results of operations. Under the effective authoritative guidance for fair value measurement, Exelon and ComEd estimate the fair value of the ComEd reporting unit using a weighted combination of a discounted cash flow analysis and a market multiples analysis. The discounted cash flow analysis relies on a single scenario reflecting “base case” or “best estimate” projected cash flows for ComEd's business and includes an estimate of ComEd's terminal value based on these expected cash flows using the generally accepted Gordon Dividend Growth formula, which derives a valuation using an assumed perpetual annuity based on the entity's residual cash flows. The discount rate is based on the generally accepted Capital Asset Pricing Model and represents the weighted average cost of capital of comparable companies. The market multiples analysis utilizes multiples of business enterprise value to earnings, before interest, taxes, depreciation and amortization (EBITDA) of comparable companies in estimating fair value. Significant assumptions used in estimating the fair value include discount and growth rates, utility sector market performance and transactions, projected operating and capital cash flows from ComEd's business and the fair value of debt. Management performs a reconciliation of the sum of the estimated fair value of all Exelon reporting units to Exelon's enterprise value based on its trading price to corroborate the results of the discounted cash flow analysis and the market multiple analysis.

2012 Interim Goodwill Impairment Assessment. In May 2012, the ICC issued a final Order (Order) in ComEd's 2011 formula rate proceeding under EIMA that reduced ComEd's annual revenue requirement being recovered in current rates by $168 million. Management concluded that the Order represented an event that required an interim goodwill impairment assessment and as a result, ComEd tested its goodwill for impairment as of May 31, 2012. The first step of the interim impairment assessment comparing the estimated fair value of ComEd to its carrying value, including goodwill, indicated no impairment of goodwill; therefore, the second step was not required. Consistent with prior annual impairment tests, the estimated fair value of ComEd was determined using a weighted combination of a discounted cash flow analysis and a market multiples analysis. The discounted cash flow analysis relies on a single scenario reflecting “base case” or management's best estimate of projected cash flows for ComEd's business. In performing the discounted cash flow analysis for the interim goodwill test, management assumed that ComEd would ultimately prevail in appealing certain aspects of the May Order, specifically the return on ComEd's pension asset and the use of year-end rate base in determining ComEd's annual revenue requirement being recovered in current rates. The disallowances related to the pension asset return and year-end rate base were estimated to reduce ComEd's revenue requirement recovered in rates by approximately $75 - $130 million annually. The assessment also reflected several favorable changes in certain market assumptions since the annual impairment assessment in 2011, including the weighted average cost of capital and market multiples.

Based on the results of the interim goodwill test, the estimated fair value of ComEd would have needed to decrease by more than 10 percent for ComEd to fail the first step of the impairment test.

On October 3, 2012, the ICC issued its Rehearing Order in response to ComEd's expedited rehearing request. The Rehearing Order adopted ComEd's position on the return on its pension asset resulting in an increase in ComEd's annual revenue. See Note 3 - Regulatory Matters for further detail.

2012 Annual Goodwill Impairment Assessment. ComEd performed a qualitative assessment as of November 1, 2012, for its 2012 annual goodwill impairment assessment and while certain factors indicated a reduction in fair value since May 31, 2012, ComEd determined that its fair value was not more likely than not less than its carrying value. Therefore, ComEd did not perform a quantitative assessment. As part of its qualitative assessment, ComEd evaluated, among other things, management's best estimate of projected operating and capital cash flows for ComEd's business (including the impacts of the Rehearing Order) as well as changes in certain other market conditions such as the discount rate and EBITDA multiples.

While neither the interim nor the annual assessments indicated an impairment of ComEd's goodwill, a change in management's assumption regarding the outcome of the IRS' challenge of Exelon's and ComEd's like-kind exchange income tax position, adverse regulatory actions such as early termination of EIMA, or changes in the significant assumptions described above could potentially result in a future impairment of ComEd's goodwill, which could be material. ComEd will assess whether its goodwill has been impaired in the first quarter of 2013 in connection with the reassessment of the like-kind exchange position and the associated charge to ComEd's earnings. See Note 12 for additional information.

Prior Goodwill Impairment Assessments. The 2011 and 2010 annual goodwill impairment assessments were performed as of November 1, 2011 and November 1, 2010, respectively. In each case, the first step of the annual impairment analysis, comparing the fair value of ComEd to its carrying value, including goodwill, indicated no impairment of goodwill; therefore, the second step was not required. ComEd will assess whether its goodwill has been impaired in the first quarter of 2013 in connection with the reassessment of the like-kind exchange position and the charge to ComEd's earnings. See Note 12 for additional information.

For discussion surrounding Exelon's and Generation's unamortized energy contracts, trade name and retail relationships recorded in conjunction with the Merger refer to Note 4 – Merger and Acquisitions.

Exelon's, Generation's and ComEd's other intangible assets, included in unamortized energy contract assets and deferred debits and other assets in their Consolidated Balance Sheets, consisted of the following as of December 31, 2012:

								Estimated amortization expense
		Gross		Accumulated Amortization		Net		2013		2014		2015		2016		2017
Generation
	Exelon Wind acquisition (a)	$	224	$	(26)	$	198	$	14	$	14	$	14	$	14	$	14
	Antelope Valley acquisition (b)		190		0		190		7		8		8		8		8
ComEd
	Chicago settlement – 1999 agreement (c)		100		(72)		28		3		3		3		3		4
	Chicago settlement – 2003 agreement (d)		62		(34)		28		4		4		4		4		3

Total intangible assets		$	576	$	(132)	$	444	$	28	$	29	$	29	$	29	$	29

(a) Refer to Note 4 – Merger and Acquisitions for additional information regarding Exelon Wind.

(b) Refer to Note 4 – Merger and Acquisitions for additional information regarding Antelope Valley.

(c) In March 1999, ComEd entered into a settlement agreement with the City of Chicago associated with ComEd's franchise agreement. Under the terms of the settlement, ComEd agreed to make payments to the City of Chicago each year from 1999 to 2002. The intangible asset recognized as a result of these payments is being amortized ratably over the remaining term of the franchise agreement, which ends in 2020.

(d) In February 2003, ComEd entered into separate agreements with the City of Chicago and with Midwest Generation, LLC (Midwest Generation). Under the terms of the settlement agreement with the City of Chicago, ComEd agreed to pay the City of Chicago a total of $60 million over a ten-year period, beginning in 2003. The intangible asset recognized as a result of the settlement agreement is being amortized ratably over the remaining term of the City of Chicago franchise agreement, which ends in 2020. As required by the settlement, ComEd also made a payment of $2 million to a third party on the City of Chicago's behalf. Under the terms of the agreement with Midwest Generation, ComEd received payments of $32 million from Midwest Generation to relieve Midwest Generation's obligation under the 1999 fossil sale agreement with ComEd to build the generation facility in the City of Chicago. The payments received by ComEd, which have been recorded in other long-term liabilities, are being recognized ratably (approximately $2 million annually) as an offset to amortization expense over the remaining term of the franchise agreement.

The following table summarizes the amortization expense related to intangible assets for each of the years ended December 31, 2012, 2011 and 2010:

For the Year Ended December 31,	Exelon		Generation		ComEd

2012	$	20	$	13	$	7
2011		19		12		7
2010		8		1		7

Accounting guidance for business combinations requires that the acquirer must recognize separately identifiable intangible assets in the application of purchase accounting. The valuation of the acquired intangible assets discussed below were estimated by applying the income approach, which is based upon discounted projected future cash flows associated with the respective PPAs. Those measures are based upon certain unobservable inputs, which are considered Level 3 inputs, pursuant to applicable accounting guidance.

Exelon Wind. The output of the acquired wind turbines has been sold under PPA contracts. The excess of the contract price of the PPAs over market prices was recognized as intangible assets at the acquisition date. Generation determined that the estimated acquisition-date fair value of the intangible assets was approximately $224 million, which is recorded in unamortized energy contract assets within Exelon's and Generation's Consolidated Balance Sheets.

Key assumptions used in the valuation of the intangible assets include forecasted power prices and discount rate. The measure is based upon certain unobservable inputs, which are considered Level 3 inputs, pursuant to applicable accounting guidance. The intangible assets are amortized on a straight-line basis over the period in which the associated contract revenues are recognized. The amortization expense is reflected as a decrease in operating revenue within Exelon's and Generation's Consolidated Statements of Operations and Comprehensive Income. The weighted-average amortization period for these intangibles is approximately 18 years.

Antelope Valley. Upon completion of the development project, all of the output will be sold under a PPA with Pacific Gas & Electric Company. The excess of the contract price of the PPA over forecasted MPR-based market prices was recognized as an intangible asset at the acquisition date. Generation determined that the estimated acquisition-date fair value of the intangible asset was approximately $190 million, which is recorded in unamortized energy contract assets within Exelon's and Generation's Consolidated Balance Sheets. While Generation expects to perform under the PPA once the construction of this project is complete, there is a risk of impairment if the project does not reach commercial operation.

Key assumptions used in the valuation of the intangible asset include forecasted MPR-based market prices and discount rate. The measure is based upon certain unobservable inputs, which are considered Level 3 inputs, pursuant to applicable accounting guidance. The fair value amounts are amortized over the life of the contract in relation to the present value of the underlying cash flows as of the acquisition date. The intangible asset will be amortized as a decrease in operating revenue within Exelon's and Generation's Consolidated Statements of Operations and Comprehensive Income over the 25 year term of the underlying PPA.

Renewable Energy Credits and Alternative Energy Credits (Exelon, Generation, ComEd and PECO).

Exelon's, Generation's, ComEd's and PECO's other intangible assets, included in other current assets and other deferred debits and other assets on the Consolidated Balance Sheets, include RECs (Exelon, Generation and ComEd) and AECs (Exelon and PECO). Revenue for RECs that are part of a bundled power sale is recognized when the power is produced and delivered to the customer. As of December 31, 2012, and 2011, PECO had current AECs of $17 million and $14 million, respectively, and noncurrent AECs of $9 million and $16 million, respectively. As of December 31, 2012, and 2011, Generation had current RECs of $61 million and $0 million, respectively, and noncurrent RECs of $45 million and $6 million, respectively. As of December 31, 2012, and 2011, ComEd, had current RECs of $18 million and $9 million, respectively, and noncurrent RECs of $49 million and $97, respectively. See Notes 1 – Significant Accounting Policies, 3 - Regulatory Matters and Note 19 - Commitments and Contingencies for additional information on RECs and AECs.