Income Taxes (Tables)

9 Months Ended

Sep. 30, 2015

Reconciliation of Consolidated Income Tax Expense

A reconciliation of PHI’s consolidated effective income tax rates is as follows:

	Three Months Ended September 30,										Nine Months Ended September 30,
	2015					2014					2015					2014
	(millions of dollars)
Income tax at Federal statutory rate	$	49		35.0	%	$	40		35.0	%	$	106		35.0	%	$	116		35.0	%
Increases (decreases) resulting from:
State income taxes, net of Federal effect		8		5.7	%		6		5.3	%		18		5.9	%		21		6.3	%
Asset removal costs		(3	)	(2.1	)%		(4	)	(3.5	)%		(11	)	(3.6	)%		(9	)	(2.7	)%
Energy efficiency-related tax deductions		(2	)	(1.4	)%		(4	)	(3.5	)%		(6	)	(2.0	)%		(4	)	(1.2	)%
Merger-related costs		—		—			—		—			4		1.3	%		7		2.1	%
Other, net		(3	)	(2.2	)%		(4	)	(3.2	)%		(5	)	(1.6	)%		(6	)	(1.9	)%
Consolidated income tax expense	$	49		35.0	%	$	34		30.1	%	$	106		35.0	%	$	125		37.6	%

Potomac Electric Power Co [Member]

Reconciliation of Consolidated Income Tax Expense

A reconciliation of Pepco’s effective income tax rates is as follows:

	Three Months Ended September 30,										Nine Months Ended September 30,
	2015					2014					2015					2014
	(millions of dollars)
Income tax at Federal statutory rate	$	32		35.0	%	$	37		35.0	%	$	67		35.0	%	$	79		35.0	%
Increases (decreases) resulting from:
State income taxes, net of Federal effect		5		5.4	%		6		5.7	%		10		5.3	%		13		5.7	%
Asset removal costs		(3	)	(3.3	)%		(4	)	(3.8	)%		(11	)	(5.8	)%		(9	)	(4.0	)%
Other, net		(2	)	(2.3	)%		(1	)	(0.7	)%		(4	)	(1.9	)%		(1	)	(0.6	)%
Income tax expense	$	32		34.8	%	$	38		36.2	%	$	62		32.6	%	$	82		36.1	%

Delmarva Power & Light Co/De [Member]

Reconciliation of Consolidated Income Tax Expense

A reconciliation of DPL’s effective income tax rates is as follows:

	Three Months Ended September 30,										Nine Months Ended September 30,
	2015					2014					2015					2014
	(millions of dollars)
Income tax at Federal statutory rate	$	8		35.0	%	$	13		35.0	%	$	32		35.0	%	$	46		35.0	%
Increases (decreases) resulting from:
State income taxes, net of Federal effect		1		4.2	%		2		5.6	%		5		5.6	%		7		5.4	%
Depreciation		(1	)	(4.2	)%		(1	)	(2.8	)%		(2	)	(2.2	)%		(1	)	(0.8	)%
Other, net		1		2.5	%		(1	)	(1.7	)%		—		0.5	%		(1	)	(0.4	)%
Income tax expense	$	9		37.5	%	$	13		36.1	%	$	35		38.9	%	$	51		39.2	%

Atlantic City Electric Co [Member]

Reconciliation of Consolidated Income Tax Expense

A reconciliation of ACE’s consolidated effective income tax rates is as follows:

	Three Months Ended September 30,										Nine Months Ended September 30,
	2015					2014					2015					2014
	(millions of dollars)
Income tax at Federal statutory rate	$	7		35.0	%	$	13		35.0	%	$	15		35.0	%	$	22		35.0	%
Increases (decreases) resulting from:
State income taxes, net of Federal effect		1		4.8	%		2		5.4	%		3		6.8	%		4		6.3	%
Depreciation		(1	)	(4.8	)%		—		—			(2	)	(4.5	)%		(1	)	(1.6	)%
Other, net		—		(1.7	)%		(1	)	(2.6	)%		—		(0.9	)%		(1	)	(1.6	)%
Consolidated income tax expense	$	7		33.3	%	$	14		37.8	%	$	16		36.4	%	$	24		38.1	%