1.0.0.3 false Divestitures false 1 $ false false shares Standard http://www.xbrl.org/2003/instance shares xbrli 0 usd Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 usdPerShare Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares xbrli 0 2 NOTES TO FINANCIAL STATEMENTS 0 ceg_NotesToFinancialStatementsAbstract ceg false na duration string Notes To Financial Statements [Abstract] false false false false false true false false false 1 false false 0 0 false false Notes To Financial Statements [Abstract] false 3 Divestitures 1 us-gaap_DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock us-gaap true na duration string No definition available. false false false false false false false false false 1 false false 0 0 <table style="font-size:10pt; font-family:'Times New Roman',times,serif;"> <tr> <td> Divestitures In 2009, we continued to implement many of the strategic initiatives we identified in 2008 to improve liquidity and reduce our business risk. We discuss these initiatives in the Strategy section of our 2008 Annual Report on Form 10-K.         The transactions to sell a majority of our international commodities, our Houston-based gas trading and other operations were structured in two parts: <ul> <li style="list-style: none"> <dl compact="compact"> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"> </dt> <dd style="FONT-FAMILY: times">the assignment and transfer of a majority of the portfolio, and</dd> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"> </dt> <dd style="FONT-FAMILY: times">the execution of a Total Return Swap (TRS) mechanism for the remainder of the portfolio.</dd></dl></li></ul>         Under the TRS, we entered into offsetting trades with the buyers that matched the terms of the remaining third party contracts for which we were unable to complete assignment to the buyers as of the transaction dates. This structure transferred the risks associated with changes in commodity prices as of the transaction dates to the buyers in all instances. However, the trades under the TRS are newly executed transactions, and we remain the principal under both the unassigned third party trades and the matching trades with the buyers under the TRS with no right of either financial or legal offset. We continue to pursue the assignment of these remaining contracts to the buyers.         The matching contracts under the TRS include both derivatives and non-derivatives and were executed at prices that differed from market prices at closing, which resulted in a net cash payment to/from the buyers. We recorded the underlying contracts at fair value on a gross basis as assets or liabilities in our Consolidated Balance Sheets depending on whether the contract prices were above- or below-market prices at closing. As a result, the derivative contracts have been included in "Derivative Assets and Liabilities" and the nonderivative contracts have been included in "Unamortized Energy Contract Assets and Liabilities." The derivative contracts are subject to mark-to-market accounting until they are realized or assigned. The nonderivative contracts will be amortized into earnings as the underlying contracts are realized, or sooner if those contracts are assigned.         We record the cash proceeds we pay or receive at the inception of energy purchase and sale contracts based upon whether the contracts are in-the-money or out-of-the-money as follows: <div style="PADDING-RIGHT: 0pt; PADDING-LEFT: 0pt; PADDING-BOTTOM: 0pt; MARGIN-LEFT: 10%; WIDTH: 80%; PADDING-TOP: 0pt; POSITION: relative">   <div align="center"> <table cellspacing="0" cellpadding="0" width="100%" border="0"> <tr style="HEIGHT: 0px"> <td style="FONT-FAMILY: times" align="left"></td> <td style="FONT-FAMILY: times" width="12"></td> <td style="FONT-FAMILY: times" align="right" width="49"></td> </tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="bottom"> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align="center" colspan="3"> </th></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times"> In-the-money contractsproceeds paid</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right"> Investing Outflow</td></tr> <tr style="HEIGHT: 0px" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times"> Out-of-the-money contractsproceeds received</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right"> Financing Inflow</td></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top"> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" colspan="3"> </td></tr></table></div> </div>         After inception, we record the cash flows from all energy purchase and sale contracts as operating activities, except for out-of-the-money derivative contracts that were liabilities at inception. We record the ongoing cash flows from these out-of-the-money derivative contracts as financing activities, regardless of whether they are purchase or sale contracts. International Commodities Operation In January 2009, we entered into a definitive agreement to sell a majority of our international commodities operation. We completed this transaction on March 23, 2009 and recognized the following impacts during the nine months ended September 30, 2009: <ul> <li style="list-style: none"> <dl compact="compact"> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"> </dt> <dd style="FONT-FAMILY: times">a pre-tax loss of approximately $334.5 million representing net consideration paid to the buyer, the book value of net assets sold, and transaction costs,</dd> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"> </dt> <dd style="FONT-FAMILY: times">a reclassification of $165.7 million in losses on previously designated cash-flow hedge contracts, for which the forecasted transactions are now deemed probable of not occurring, from "Accumulated Other Comprehensive Loss" to "Nonregulated revenues" in the Consolidated Statements of Income (Loss),</dd> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"> </dt> <dd style="FONT-FAMILY: times">workforce reduction costs of $10.2 million, recorded as part of "Workforce reduction costs" in the Consolidated Statements of Income (Loss), and</dd> <dt style="MARGIN-BOTTOM: -11pt; FONT-FAMILY: times"> </dt> <dd style="FONT-FAMILY: times">other costs of $17.6 million related to leasehold improvements, furniture and computer hardware and software, recorded as part of "Impairment losses and other costs" in the Consolidated Statements of Income (Loss).</dd></dl></li></ul>         We removed the contracts that were assigned from our Consolidated Balance Sheet, paid the buyer approximately $90 million, and reflected the impact of this payment on our working capital in the operating activities section of our Consolidated Statements of Cash Flows.         The net cash payment to the buyer upon completion of the TRS was $2.5 million. As part of the consideration, we acquired matching nonderivative contracts that resulted in a net liability of approximately $75 million, which will be amortized into earnings as the underlying contracts are realized, or sooner if the original nonderivative contracts are assigned.         We have reflected the contracts under the TRS on a gross basis in cash flows from investing and financing activities in our Consolidated Statements of Cash Flows as follows: <div style="PADDING-RIGHT: 0pt; PADDING-LEFT: 0pt; PADDING-BOTTOM: 0pt; MARGIN-LEFT: 10%; WIDTH: 80%; PADDING-TOP: 0pt; POSITION: relative">   <div align="center"> <table cellspacing="0" cellpadding="0" width="100%" border="0"> <tr style="HEIGHT: 0px"> <td style="FONT-FAMILY: times" align="left"></td> <td style="FONT-FAMILY: times" width="12"></td> <td style="FONT-FAMILY: times" align="right" width="6"></td> <td style="FONT-FAMILY: times" width="59"></td> <td style="FONT-FAMILY: times" width="12"></td> </tr> <tr style="HEIGHT: 0px" valign="bottom"> <th style="FONT-FAMILY: times" align="left">Nine Months Ended September 30, 2009 </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="left" colspan="2">   </th> <th style="FONT-FAMILY: times">  </th></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="bottom"> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align="center" colspan="4"> </th> <th style="FONT-FAMILY: times"> </th></tr> <tr style="HEIGHT: 0px" valign="bottom"> <th style="FONT-FAMILY: times" align="left">   </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="center" colspan="2"> (In millions) </th> <th style="FONT-FAMILY: times">  </th></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times"> Investing activitiesContract and portfolio acquisitions</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">$</td> <td style="FONT-FAMILY: times" align="right"> (866.3</td> <td style="FONT-FAMILY: times"> )</td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="white"> <td style="FONT-FAMILY: times"> Financing activitiesProceeds from contract and portfolio acquisitions</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right"> 863.8</td> <td style="FONT-FAMILY: times">  </td></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top"> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" valign="bottom" colspan="4"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times"> Net cash flows from contract and portfolio acquisitions</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">$</td> <td style="FONT-FAMILY: times" align="right"> (2.5</td> <td style="FONT-FAMILY: times"> )</td></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top"> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times" valign="bottom" colspan="4"> </td> <td style="FONT-FAMILY: times" valign="bottom">  </td></tr></table></div> </div>         In addition to the March 23, 2009 transaction for a majority of our international commodities operation, on June 30, 2009 we completed the sale of a uranium market participant that we owned. We received cash proceeds of approximately $43 million and recorded a $27.2 million loss on this sale. This loss from our merchant energy segment is included in the "Net (loss) gain on divestitures" line in our Consolidated Statements of Income (Loss) for the nine months ended September 30, 2009. Houston-Based Gas and Other Trading Operations On February 3, 2009, we entered into a definitive agreement to sell our Houston-based gas trading operation. We transferred control of this operation on April 1, 2009. In addition, in the second quarter of 2009 we also sold certain other trading operations. In total, we received proceeds of approximately $61 million, and recorded a $102.7 million net loss on these sales in the nine months ended September 30, 2009. The net loss on sale primarily relates to nonderivative accrual contracts, which were not recorded on our Consolidated Balance Sheet, the cost associated with disposing of an entire portfolio and not merely individual contracts, and the cost of capital, including contingent capital, to support the operation.         The matching derivative and nonderivative transactions under the TRS discussed above were executed at prices that differed from market prices at closing. As a result, we record the ongoing cash flows related to the out-of-the-money derivative contracts that were liabilities at inception as financing cash flows. This resulted in cash outflows related to financing activities of $818.7 million in our Consolidated Statements of Cash Flows for the nine months ended September 30, 2009 associated with derivative liabilities that were out-of-the-money.         The net cash receipt from the buyers upon completion of the TRS was $91.9 million in the second quarter of 2009. We have reflected these contracts on a gross basis in cash flows from investing and financing activities in our Consolidated Statements of Cash Flows as follows: <div style="PADDING-RIGHT: 0pt; PADDING-LEFT: 0pt; PADDING-BOTTOM: 0pt; MARGIN-LEFT: 10%; WIDTH: 80%; PADDING-TOP: 0pt; POSITION: relative">   <div align="center"> <table cellspacing="0" cellpadding="0" width="100%" border="0"> <tr style="HEIGHT: 0px"> <td style="FONT-FAMILY: times" align="left"></td> <td style="FONT-FAMILY: times" width="12"></td> <td style="FONT-FAMILY: times" align="right" width="6"></td> <td style="FONT-FAMILY: times" width="59"></td> <td style="FONT-FAMILY: times" width="12"></td> </tr> <tr style="HEIGHT: 0px" valign="bottom"> <th style="FONT-FAMILY: times" align="left">Nine Months Ended September 30, 2009 </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="left" colspan="2">   </th> <th style="FONT-FAMILY: times">  </th></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="bottom"> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" align="center" colspan="4"> </th> <th style="FONT-FAMILY: times"> </th></tr> <tr style="HEIGHT: 0px" valign="bottom"> <th style="FONT-FAMILY: times" align="left">   </th> <th style="FONT-FAMILY: times"> </th> <th style="FONT-FAMILY: times" align="center" colspan="2"> (In millions) </th> <th style="FONT-FAMILY: times">  </th></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times"> Investing activitiesContract and portfolio acquisitions</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">$</td> <td style="FONT-FAMILY: times" align="right"> (1,287.4</td> <td style="FONT-FAMILY: times"> )</td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="white"> <td style="FONT-FAMILY: times"> Financing activitiesProceeds from contract and portfolio acquisitions</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times" align="right"> 1,379.3</td> <td style="FONT-FAMILY: times">  </td></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top"> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times" valign="bottom" colspan="4"> </td> <td style="FONT-FAMILY: times" valign="bottom"> </td></tr> <tr style="HEIGHT: 0px" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times"> Net cash flows from contract and portfolio acquisitions</td> <td style="FONT-FAMILY: times"> </td> <td style="FONT-FAMILY: times">$</td> <td style="FONT-FAMILY: times" align="right"> 91.9</td> <td style="FONT-FAMILY: times">  </td></tr> <tr style="FONT-SIZE: 1.5pt; HEIGHT: 0px" valign="top"> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times" valign="bottom" colspan="4"> </td> <td style="FONT-FAMILY: times" valign="bottom">  </td></tr></table></div> </div>         In addition, we incurred other costs of $5.5 million for the nine months ended September 30, 2009, respectively, related to leasehold improvements, furniture, computer hardware and software costs, which are recorded as part of "Impairment losses and other costs" on our Consolidated Statements of Income (Loss).         On April 1, 2009, we executed an agreement with the buyer of our Houston-based gas trading operation under which the buyer will provide us with the gas supply needed to support our retail gas customer supply business through March 31, 2011. This agreement was structured such that our requirements to post collateral are reduced. The supplier has liens on the assets of the retail gas supply business as well as our investment in the stock of these entities to secure our obligations under the gas supply agreement. In connection with this agreement, we posted approximately $160 million of collateral. This was subsequently reduced to $100 million. The initial $160 million posted represents approximately 25 percent of the previous collateral requirements to support this operation. We discuss the impact of the gas supply agreement on our retail gas customer supply business in more detail on page 13. Shipping Joint Venture As previously discussed in the Impairment Losses and Other Costs footnote, we completed the sale of our equity investment in a shipping joint venture during the third quarter of 2009. No gain or loss was recognized on the sale.</td></tr></table> Divestitures In 2009, we continued to implement many of the strategic initiatives we identified in 2008 to improve liquidity and reduce our business risk. We false false No definition available. No authoritative reference available. false false 1 2 false UnKnown UnKnown UnKnown false true