ComEd 2003 Annual Report Download - page 100

Notes to Consolidated Financial Statements
EXELON CORPORATION AND SUBSIDIARY COMPANIES
NOTE 07 ‰JOINTLY OWNED ELECTRIC UTILITY PLANT
Exelon’s undivided ownership interests in jointly owned electric plant at December 31, 2003 and 2002 were as follows:
Production Plant
December 31, 2003 Peach Bottom Salem Keystone Conemaugh Quad Cities Transmission
Operator Generation PSE&G Reliant Reliant Generation LDVT(a)
Ownership interest 50% 42.59% 20.99% 20.72% 75% 21%
Exelon’s share:
Plant $ 449 $ 106 $ 167 $ 210 $ 193 $ 56
Accumulated depreciation 239 24 106 138 18 23
Construction work in progress 1 48 2 1 24 —
(a) Lower Delaware Valley Transmission System (LDVT).
Production Plant Transmission
and Other PlantDecember 31, 2002 Peach Bottom Salem Keystone Conemaugh Quad Cities
Operator Generation PSE&G Reliant Reliant Generation Various Co.
Ownership interest 50% 42.59% 20.99% 20.72% 75% 21 to 44%
Exelon’s share:
Plant $ 417 $ 44 $ 131 $ 214 $ 171 $ 58
Accumulated depreciation 229 12 98 127 4 22
Construction work in progress 52 36 28 1 35 –
Exelon’s undivided ownership interests are financed with
Exelon funds and all operations are accounted for as if such
participating interests were wholly owned facilities. Direct
expenses of the jointly owned plants are included in the
corresponding operating expenses on the Consolidated
Statements of Income.
NOTE 08 ‰GOODWILL
Adoption of SFAS No. 142
Effective January 1, 2002, Exelon adopted SFAS No. 142. Pur-
suant to SFAS No. 142, goodwill is no longer amortized; how-
ever, in addition to an initial assessment, goodwill is subject
to an assessment for impairment at least annually, or more
frequently, if events or circumstances indicate that goodwill
might be impaired. The impairment assessment is per-
formed using a two-step, fair-value based test. 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 per-
formed. The second step compares the carrying amount of
the goodwill to the estimated fair value of the goodwill. If
the fair value of goodwill is less than the carrying amount,
an impairment loss is reported as a reduction to goodwill
and a charge to operating expense.
As of December 31, 2001, Exelon’s Consolidated Balance
Sheets reflected approximately $5.3 billion in goodwill net of
accumulated amortization, including $4.9 billion of goodwill,
net of accumulated amortization, related to the Merger re-
corded on ComEd’s Consolidated Balance Sheets, with the
remainder related to Enterprises. The first step of the transi-
tional impairment analysis indicated that Energy Delivery’s
goodwill was not impaired but that an impairment did exist
with respect to goodwill recorded in Enterprises’ reporting
units. InfraSource, Exelon Services and Exelon Energy Com-
pany were determined to be those reporting units of Enter-
prises that had goodwill allocated to them. The second step
of the analysis, which compared the fair value of each of En-
terprises’ reporting units’ goodwill to the carrying value at
December 31, 2001, indicated a total goodwill impairment of
$357 million ($243 million, net of income taxes and minority
interest). The fair value of the Enterprises’ reporting units
was determined using discounted cash flow models reflect-
ing the expected range of future cash flow outcomes related
to each of the Enterprises reporting units over the life of the
investment. These cash flows were discounted to 2002 using
a risk-adjusted discount rate.
The components of the net transitional impairment loss
recognized in the first quarter of 2002 as a cumulative effect
of a change in accounting principle were as follows:
Enterprises goodwill impairment (net of income taxes of
($103)) $(254)
Minority interest (net of income taxes of $4) 11
Elimination of AmerGen negative goodwill (net of income
taxes of $9) 13
Total cumulative effect of a change in accounting principle $(230)
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