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Derivative Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2013

Derivative Financial Instruments [Line Items]

Gain or loss on the hedged items and the offsetting loss or gain on the related interest rate swaps in interest expense


		Twelve Months Ended December 31,
	Income Statement	2013		2012		2011		2013		2012		2011
	Location	Gain (Loss) on Swaps						Gain (Loss) on Borrowings
Generation	Interest expense(a)	$	(15)	$	(6)	$	0	$	0	$	(6)	$	0
Exelon	Interest expense	$	(24)	$	(9)	$	1	$	11	$	(3)	$	(1)

______ ____

For the years ended December 31, 2013 and 2012, the loss on Generation swaps included $16 million and $12 realized in earnings, respectively, with $2 million and an immaterial amount excluded from hedge effectiveness testing, respectively.

Summary of the derivative fair value

Generation enters into interest rate derivative contracts to economically hedge risk associated with the interest rate component of commodity positions. The characterization of the interest rate derivative contracts between the proprietary trading activity in the above table is driven by the corresponding characterization of the underlying commodity position that gives rise to the interest rate exposure. Generation does not utilize proprietary trading interest rate derivatives with the objective of benefiting from shifts or changes in market interest rates.
Represents the netting of fair value balances with the same counterparty and any associated cash collateral.

	Generation										Other		Exelon
Description	Derivatives Designated as Hedging Instruments		Economic Hedges		Proprietary Trading (a)		Collateral and Netting (b)		Subtotal		Derivatives Designated as Hedging Instruments		Total
Mark-to-market derivative assets (Current Assets)	$	0	$	3	$	20	$	(19)	$	4	$	0	$	4
Mark-to-market derivative assets (Noncurrent Assets)		38		8		32		(32)		46		13		59
Total mark-to-market derivative assets	$	38	$	11	$	52	$	(51)	$	50	$	13	$	63

Mark-to-market derivative liabilities (Current Liabilities)	$	(1)	$	(1)	$	(19)	$	19	$	(2)	$	0	$	(2)
Mark-to-market derivative liabilities (Noncurrent Liabilities)		(31)		0		(32)		32		(31)		0		(31)
Total mark-to-market derivative liabilities		(32)		(1)		(51)		51		(33)		0		(33)

Total mark-to-market derivative net assets (liabilities)	$	6	$	10	$	1	$	0	$	17	$	13	$	30

Generation enters into interest rate derivative contracts to economically hedge risk associated with the interest rate component of commodity positions. The characterization of the interest rate derivative contracts between the proprietary trading activity in the above table is driven by the corresponding characterization of the underlying commodity position that gives rise to the interest rate exposure. Generation does not utilize proprietary trading interest rate derivatives with the objective of benefiting from shifts or changes in market interest rates.
Represents the netting of fair value balances with the same counterparty and any associated cash collateral.

		Generation								ComEd		Exelon
		Generation								ComEd		Exelon
						Collateral
		Economic		Proprietary		and		Subtotal		Economic		Total
Derivatives		Hedges		Trading		Netting(a)		(b)		Hedges(c)		Derivatives

Mark-to-market derivative assets
	(current assets)	$	2,616	$	1,476	$	(3,364)	$	728	$	0	$	728
Mark-to-market derivative assets
	(noncurrent assets)		1,344		285		(1,060)		569		0		569

Total mark-to-market derivative
	assets	$	3,960	$	1,761	$	(4,424)	$	1,297	$	0	$	1,297

Mark-to-market derivative liabilities
	(current liabilities)	$	(2,023)	$	(1,410)	$	3,292	$	(141)	$	(17)	$	(158)
Mark-to-market derivative liabilities
	(noncurrent liabilities)		(804)		(293)		988		(109)		(176)		(285)

Total mark-to-market derivative
	liabilities	$	(2,827)	$	(1,703)	$	4,280	$	(250)	$	(193)	$	(443)

Total mark-to-market derivative net
	assets (liabilities)	$	1,133	$	58	$	(144)	$	1,047	$	(193)	$	854

__________

(a) Exelon and Generation net all available amounts allowed under the derivative accounting guidance on the balance sheet. These amounts include unrealized derivative transactions with the same counterparty under legally enforceable master netting agreements and cash collateral. In some cases Exelon and Generation may have other offsetting exposures, subject to a master netting or similar agreement, such as trade receivables and payables, transactions that do not qualify as derivatives, letters of credit and other forms of non-cash collateral. These are not reflected in the table above.

(b) Current and noncurrent assets are shown net of collateral of $84 million and $72 million, respectively, and current and noncurrent liabilities are shown net of collateral of $(12) million and $0 million, respectively. The total cash collateral posted, net of cash collateral received and offset against mark-to-market assets and liabilities was $144 million at December 31, 2013.

(c) Includes current and noncurrent liabilities relating to floating-to-fixed energy swap contracts with unaffiliated suppliers.

		Generation								ComEd				Exelon
		Generation								ComEd				Exelon
		Economic				Collateral				Economic		Intercompany
		Hedges		Proprietary		and		Subtotal		Hedges		Eliminations		Total
	Derivatives	(a)		Trading		Netting(b)		(c)		(a)(d)		(a)		Derivatives
Mark-to-market derivative assets
	(current assets)	$	2,883	$	2,469	$	(4,418)	$	934	$	0	$	0	$	934
Mark-to-market derivative assets
	with affiliate (current assets)		226		0		0		226		0		(226)		0
Mark-to-market derivative assets
	(noncurrent assets)		1,792		724		(1,638)		878		0		0		878

Total mark-to-market derivative
	assets	$	4,901	$	3,193	$	(6,056)	$	2,038	$	0	$	(226)	$	1,812

Mark-to-market derivative liabilities
	(current liabilities)	$	(2,419)	$	(2,432)	$	4,519	$	(332)	$	(18)	$	0	$	(350)
Mark-to-market derivative liability
	with affiliate (current liabilities)		0		0		0		0		(226)		226		0
Mark-to-market derivative liabilities
	(noncurrent liabilities)		(1,080)		(689)		1,568		(201)		(49)		0		(250)

Total mark-to-market derivative
	liabilities	$	(3,499)	$	(3,121)	$	6,087	$	(533)	$	(293)	$	226	$	(600)

Total mark-to-market derivative net
	assets (liabilities)	$	1,402	$	72	$	31	$	1,505	$	(293)	$	0	$	1,212

__________

(a) Includes current and noncurrent assets for Generation and current and noncurrent liabilities for ComEd of $226 million related to the fair value of the five-year financial swap contract between Generation and ComEd, as described above. For Generation, excludes $28 million of noncurrent liability relating to an interest rate swap in connection with a loan agreement to fund Antelope Valley as discussed above.

(b) Exelon and Generation net all available amounts allowed under the derivative accounting guidance on the balance sheet. These amounts include unrealized derivative transactions with the same counterparty under legally enforceable master netting agreements and cash collateral. In some cases Exelon and Generation may have other offsetting exposures, subject to a master netting or similar agreement, such as trade receivables and payables, transactions that do not qualify as derivatives, and letters of credit. These are not reflected in the table above.

(c) Current and noncurrent assets are shown net of collateral of $113 million and $201 million, respectively, and current and noncurrent liabilities are shown net of collateral of $ (214) million and $ (131) million, respectively. The total cash collateral received, net of cash collateral posted and offset against mark-to-market assets and liabilities was $ (31) million at December 31, 2012.

(d) Includes current and noncurrent liabilities relating to floating-to-fixed energy swap contracts with unaffiliated suppliers.

The activity of accumulated OCI related to cash flow hedges

Total Cash Flow Hedge OCI Activity, Net of Income Tax

Generation

Exelon

Income Statement Location

Energy-Related Hedges

Total Cash Flow Hedges

Accumulated OCI derivative gain at

January 1, 2012

925

(a)(d)

488

Effective portion of changes in fair value

432

(b)

330

(e)

Reclassifications from accumulated OCI to

net income

Operating Revenues

(828)

(c)

(453)

Ineffective portion recognized in income

Operating Revenues

Accumulated OCI derivative gain at

December 31, 2012

532

(a)(d)

368

Effective portion of changes in fair value

(e)

Reclassifications from accumulated OCI to

net income

Operating Revenues

(413)

(c)

(277)

Accumulated OCI derivative gain at

December 31, 2013

119

(d)

120

__________

(a) Includes $133 million and $420 million of gains, net of taxes, related to the fair value of the five-year financial swap contract with ComEd for the years ended December 31, 2012 and 2011 .

(b) Includes $88 million of gains, net of taxes, related to the effective portion of changes in fair value of the five-year financial swap contract with ComEd for the year ended December 31, 2012. As of the merger date, cash flow hedges were discontinued, as such, this amount represents changes in fair value prior to the merger date.

(c) Includes $133 million and $375 million of losses, net of taxes, reclassified from accumulated OCI to recognize gains in net income related to settlements of the five-year financial swap contract with ComEd for the years ended December 31, 2013 and 2012, respectively.

(d) Excludes $5 million of losses and $20 million of losses, net of taxes, related to interest rate swaps and treasury rate locks for the years ended December 31, 2013 and 2012, respectively.

(e) Includes $15 million and $9 million of losses, net of taxes, related to the effective portion of changes in fair value of interest rate swaps and treasury rate locks at Generation for the year ended December 31, 2013 and 2012, respectively

Other Derivatives - Gain (loss) and reclassification

Prior to the merger, the five-year financial swap contract between Generation and ComEd was de-designated. As a result, all prospective changes in fair value are recorded to operating revenues and eliminated in consolidation.
Exelon and Generation have historically presented mark-to-market gains and losses within purchased power expense for all non-trading, energy-related derivatives that were not accounted for as cash flow hedges. In 2011, Exelon and Generation classified the mark-to-market gains and losses for contracts, where the underlying hedged transaction was an expected sale to hedge power, to operating revenues.

Change in fair value and reclassification of derivative contracts

	Generation							Intercompany Eliminations	Exelon
				Purchased
	Operating			Power				Operating
Year Ended December 31, 2013	Revenues		and Fuel		Total			Revenues (a)	Total
Change in fair value	$	285	$	180	$	465	$	(6)	$	459
Reclassification to realized at settlement		(65)		104		39		13		52
Net mark-to-market gains	$	220	$	284	$	504	$	7	$	511

	Generation							Intercompany Eliminations	Exelon
				Purchased
	Operating			Power				Operating
Year Ended December 31, 2012	Revenues		and Fuel		Total			Revenues (a)	Total
Change in fair value	$	(362)	$	215	$	(147)	$	(94)	$	(241)
Reclassification to realized at settlement		429		238		667		101		768
Net mark-to-market gains	$	67	$	453	$	520	$	7	$	527

	Exelon and Generation
				Purchased
	Operating			Power
Year Ended December 31, 2011 (As Reported)	Revenues		and Fuel		Total
Change in fair value	$	87	$	131	$	218
Reclassification to realized at settlement		(296)		(219)		(515)
Net mark-to-market (losses)(b)	$	(209)	$	(88)	$	(297)

	Exelon and Generation
				Purchased
	Operating			Power
Year Ended December 31, 2011 (Pro Forma)	Revenues		and Fuel		Total
Change in fair value	$	258	$	(40)	$	218
Reclassification to realized at settlement		(516)		1		(515)
Net mark-to-market (losses)(b)	$	(258)	$	(39)	$	(297)

		For the Years Ended
	Location on Income	December 31,
	Statement	2013		2012		2011
Change in fair value	Operating Revenue	$	(21)	$	(12)	$	23
Reclassification to realized at settlement	Operating Revenue		(18)		108		(26)

Net mark-to-market gains (losses)	Operating Revenue	$	(39)	$	96	$	(3)

Information on Generation's credit exposure for all derivative instruments, normal purchase normal sales, and applicable payables and receivables, net of collateral and instruments that are subject to master netting agreements

	Total						Number of		Net Exposure of
	Exposure						Counterparties		Counterparties
	Before Credit		Credit		Net		Greater than 10%		Greater than 10%
Rating as of December 31, 2013	Collateral		Collateral (a)		Exposure		of Net Exposure		of Net Exposure
Investment grade	$	1,621	$	172	$	1,449	$	1	$	491
Non-investment grade		27		9		18		0		0
No external ratings
Internally rated - investment grade		416		1		415		1		226
Internally rated - non-investment grade		30		2		28		0		0
Total	$	2,094	$	184	$	1,910	$	2	$	717

Net Credit Exposure by Type of Counterparty	December 31, 2013

Financial Institutions		$	256
Investor-owned utilities, marketers, power producers			684
Energy cooperatives and municipalities			907
Other			63
Total		$	1,910

As of December 31, 2013, credit collateral held from counterparties where Generation had credit exposure included $155 million of cash and $29 million of letters of credit

	For the Years Ended December 31,
Credit-Risk Related Contingent Feature		2013		2012
Gross Fair Value of Derivative Contracts Containing this Feature (a)		$	($1,056)	$	($1,849)
Offsetting Fair Value of In-the-Money Contracts Under Master Netting Arrangements (b)			$846		$1,426
Net Fair Value of Derivative Contracts Containing This Feature (c)		$	($210)	$	($423)

____________________

Amount represents the gross fair value of out-of-the-money derivative contracts containing credit-risk-related contingent ignoring the effects of master netting agreements.
Amount represents the offsetting fair value of in-the-money derivative contracts under legally enforceable master netting agreements with the same counterparty, which reduces the amount of any liability for which a Registrant could potentially be required to post collateral.
Amount represents the net fair value of out-of-the-money derivative contracts containing credit-risk related contingent features after considering the mitigating effects of offsetting positions under master netting arrangements and reflects the actual net liability upon which any potential contingent collateral obligations would be based.