Segment Information

6 Months Ended

Jun. 30, 2015

Segment Information

(5) SEGMENT INFORMATION

Pepco Holdings’ management has identified its operating segments at June 30, 2015 as Power Delivery and Pepco Energy Services. In the tables below, the Corporate and Other column is included to reconcile the segment data with consolidated data and includes the remaining operations of the former Other Non-Regulated segment, unallocated Pepco Holdings’ (parent company) capital costs, such as financing costs, and inter-company eliminations.

Segment financial information for the three and six months ended June 30, 2015 and 2014 are as follows:

	Three Months Ended June 30, 2015
	Power Delivery		Pepco Energy Services		Corporate and Other (a)			PHI Consolidated
	(millions of dollars)
Operating Revenue	$	1,078	$	63	$	(1	)	$	1,140
Operating Expenses (b)		940		62		(1	)		1,001
Operating Income		138		1		—			139
Interest Expense		60		—		11			71
Other Income		12		—		—			12
Income Tax Expense (Benefit)		29		—		(2	)		27
Net Income (Loss)		61		1		(9	)		53
Total Assets		14,184		233		1,715			16,132
Construction Expenditures	$	305	$	2	$	9		$	316

(a) Total Assets in this column includes Pepco Holdings’ goodwill balance of $1.4 billion, all of which is allocated to Power Delivery for purposes of assessing impairment. Total assets also include capital expenditures related to certain hardware and software expenditures which primarily benefit Power Delivery. These expenditures are recorded as incurred in Corporate and Other and are allocated to Power Delivery once the assets are placed in service. Corporate and Other includes intercompany amounts of $(1) million for Operating Revenue, $(3) million for Operating Expenses, $(1) million for Interest Expense and $(2) million for Interest and Dividend Income.

(b) Includes depreciation and amortization expense of $157 million, consisting of $147 million for Power Delivery, zero for Pepco Energy Services and $10 million for Corporate and Other.

	Three Months Ended June 30, 2014
	Power Delivery		Pepco Energy Services		Corporate and Other (a)			PHI Consolidated
	(millions of dollars)
Operating Revenue	$	1,040	$	79	$	(2	)	$	1,117
Operating Expenses (b)		881		77		8			966
Operating Income (Loss)		159		2		(10	)		151
Interest and Dividend Income		—		—		1			1
Interest Expense		56		—		11			67
Other Income (Expense)		13		1		(1	)		13
Income Tax Expense (Benefit)		45		1		(1	)		45
Net Income (Loss)		71		2		(20	)		53
Total Assets		13,471		297		1,302			15,070
Construction Expenditures	$	253	$	1	$	17		$	271

(a) Total Assets in this column includes Pepco Holdings’ goodwill balance of $1.4 billion, all of which is allocated to Power Delivery for purposes of assessing impairment. Total assets also include capital expenditures related to certain hardware and software expenditures which primarily benefit Power Delivery. These expenditures are recorded as incurred in Corporate and Other and are allocated to Power Delivery once the assets are placed in service. Corporate and Other includes intercompany amounts of $(2) million for Operating Revenue, $(3) million for Operating Expenses, $1 million for Interest Expense and $(1) million for Interest and Dividend Income.

(b) Includes depreciation and amortization expense of $132 million, consisting of $122 million for Power Delivery, $2 million for Pepco Energy Services and $8 million for Corporate and Other.

	Six Months Ended June 30, 2015
	Power Delivery		Pepco Energy Services			Corporate and Other (a)			PHI Consolidated
	(millions of dollars)
Operating Revenue	$	2,391	$	123		$	(3	)	$	2,511
Operating Expenses (b)		2,107		123			—			2,230
Operating Income (Loss)		284		—			(3	)		281
Interest Expense		118		—			21			139
Other Income		21		—			—			21
Income Tax Expense (Benefit)		64		(5	)		(2	)		57
Net Income (Loss)		123		5			(22	)		106
Total Assets		14,184		233			1,715			16,132
Construction Expenditures	$	546	$	2		$	14		$	562

(a) Total Assets in this column includes Pepco Holdings’ goodwill balance of $1.4 billion, all of which is allocated to Power Delivery for purposes of assessing impairment. Total assets also include capital expenditures related to certain hardware and software expenditures which primarily benefit Power Delivery. These expenditures are recorded as incurred in Corporate and Other and are allocated to Power Delivery once the assets are placed in service. Corporate and Other includes intercompany amounts of $(3) million for Operating Revenue, $(5) million for Operating Expenses, $(2) million for Interest Expense and $(4) million for Interest and Dividend Income.

(b) Includes depreciation and amortization expense of $316 million, consisting of $294 million for Power Delivery, $1 million for Pepco Energy Services and $21 million for Corporate and Other.

	Six Months Ended June 30, 2014
	Power Delivery		Pepco Energy Services		Corporate and Other (a)			PHI Consolidated
	(millions of dollars)
Operating Revenue	$	2,312	$	139	$	(4	)	$	2,447
Operating Expenses (b)		1,984		137		2			2,123
Operating Income (Loss)		328		2		(6	)		324
Interest and Dividend Income		—		—		1			1
Interest Expense		111		—		21			132
Other Income		25		1		—			26
Income Tax Expense (Benefit)		92		1		(2	)		91
Net Income (Loss)		150		2		(24	)		128
Total Assets		13,471		297		1,302			15,070
Construction Expenditures	$	517	$	1	$	35		$	553

(a) Total Assets in this column includes Pepco Holdings’ goodwill balance of $1.4 billion, all of which is allocated to Power Delivery for purposes of assessing impairment. Total assets also include capital expenditures related to certain hardware and software expenditures which primarily benefit Power Delivery. These expenditures are recorded as incurred in Corporate and Other and are allocated to Power Delivery once the assets are placed in service. Corporate and Other includes intercompany amounts of $(4) million for Operating Revenue, $(4) million for Operating Expenses and $(1) million for Interest and Dividend Income.

(b) Includes depreciation and amortization expense of $265 million, consisting of $246 million for Power Delivery, $4 million for Pepco Energy Services and $15 million for Corporate and Other.

Potomac Electric Power Co [Member]

Segment Information

(5) SEGMENT INFORMATION

Pepco operates its business as one regulated utility segment, which includes all of its services as described above.

Delmarva Power & Light Co/De [Member]

Segment Information

(5) SEGMENT INFORMATION

DPL operates its business as one regulated utility segment, which includes all of its services as described above.

Atlantic City Electric Co [Member]

Segment Information

(5) SEGMENT INFORMATION

ACE operates its business as one regulated utility segment, which includes all of its services as described above.