Segment Information

12 Months Ended

Dec. 31, 2011

Segment Information

(5) SEGMENT INFORMATION

Pepco Holdings' management has identified its operating segments at December 31, 2011 as Power Delivery, Pepco Energy Services and Other Non-Regulated. In the tables below, the Corporate and Other column is included to reconcile the segment data with consolidated data and includes unallocated Pepco Holdings' (parent company) capital costs, such as financing costs. Segment financial information for continuing operations for the years ended December 31, 2011, 2010 and 2009, is as follows:

	Year Ended December 31, 2011
	(millions of dollars)
	Power Delivery		Pepco Energy Services		Other Non- Regulated			Corporate and Other (a)			PHI Consolidated
Operating Revenue	$	4,650	$	1,238	$	48		$	(16	)	$	5,920
Operating Expenses (b)		4,150		1,206		(30	)(c)		(43	)		5,283
Operating Income		500		32		78			27			637
Interest Income		1		1		4			(5	)		1
Interest Expense		208		3		13			30			254
Impairment Losses		—		—		—			(5	)		(5	)
Other Income (Expenses)		29		3		(4	)		2			30
Preferred Stock Dividends		—		—		3			(3	)		—
Income Tax Expense (d)		112		9		27			1			149
Net Income (Loss) from Continuing Operations		210		24		35	(c)		(9	)		260
Total Assets		11,008		565		1,499			1,838			14,910
Construction Expenditures	$	888	$	14	$	—		$	39		$	941

(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 the Corporate and Other segment and are allocated to Power Delivery once the assets are placed in service. Corporate and Other includes intercompany amounts of $(16) million for Operating Revenue, $(15) million for Operating Expense, $(22) million for Interest Income, $(22) million for Interest Expense, and $(3) million for Preferred Stock Dividends.

(b) Includes depreciation and amortization expense of $426 million, consisting of $394 million for Power Delivery, $17 million for Pepco Energy Services, $2 million for Other Non-Regulated, and $13 million for Corporate and Other.

(c) Includes $39 million pre-tax ($3 million after-tax) gain from the early termination of cross-border energy leases held in trust.

(d) Includes tax benefits of $14 million for Power Delivery primarily associated with an interest benefit related to federal tax liabilities and a $22 million reversal of previously recognized tax benefits for Other Non-Regulated associated with the early termination of cross-border energy leases held in trust.

	Year Ended December 31, 2010
	(millions of dollars)
	Power Delivery			Pepco Energy Services		Other Non- Regulated			Corporate and Other (a)			PHI Consolidated
Operating Revenue	$	5,114		$	1,883	$	54		$	(12	)	$	7,039
Operating Expenses (b)(c)		4,611	(d)		1,812		6			(14	)		6,415
Operating Income		503			71		48			2			624
Interest Income		2			1		3			(6	)		—
Interest Expense		207			16		12			71			306
Other Income (Expenses)		20			2		(2	)		1			21
Loss on Extinguishment of Debt		—			—		—			(189	)(e)		(189	)
Preferred Stock Dividends		—			—		3			(3	)		—
Income Tax Expense (Benefit)		112	(f)		22		9			(132	)(g)		11
Net Income (Loss) from Continuing Operations		206			36		25			(128	)		139
Total Assets		10,621			623		1,537			1,582			14,363
Construction Expenditures	$	765		$	7	$	—		$	30		$	802

(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 the Corporate and Other segment and are allocated to Power Delivery once the assets are placed in service. Corporate and Other includes intercompany amounts of $(12) million for Operating Revenue, $(10) million for Operating Expense, $(36) million for Interest Income, $(36) million for Interest Expense, and $(3) million for Preferred Stock Dividends.

(b) Includes depreciation and amortization expense of $393 million, consisting of $357 million for Power Delivery, $24 million for Pepco Energy Services, $1 million for Other Non-Regulated, and $11 million for Corporate and Other.

(c) Includes restructuring charge of $30 million, consisting of $29 million for Power Delivery and $1 million for Corporate and Other.

(d) Includes $11 million expense related to effects of Pepco divestiture-related claims.

(e) Includes $174 million ($104 million after-tax) related to loss on extinguishment of debt and $15 million ($9 million after-tax) related to the reclassification of treasury rate lock losses from AOCL to income related to cash tender offers for debt made in 2010.

(f) Includes $12 million of net Federal and state income tax benefits primarily related to adjustments of accrued interest on uncertain and effectively settled tax positions.

(g) Includes $14 million of state tax benefits resulting from the restructuring of certain PHI subsidiaries and $17 million of state income tax benefits associated with the loss on extinguishment of debt, partially offset by a charge of $3 million to write off deferred tax assets related to the subsidy pursuant to the prescription drug benefit (Medicare Part D) under the Medicare Prescription Drug Improvement and Modernization Act of 2003 (the Medicare Act).

	Year Ended December 31, 2009
	(millions of dollars)
	Power Delivery			Pepco Energy Services		Other Non- Regulated		Corporate and Other (a)			PHI Consolidated
Operating Revenue	$	4,980		$	2,383	$	51	$	(12	)	$	7,402
Operating Expenses (b)		4,475	(c)		2,294		4		(19	)		6,754
Operating Income		505			89		47		7			648
Interest Income		3			1		4		(6	)		2
Interest Expense		211			30		14		85			340
Other Income		11			3		2		1			17
Preferred Stock Dividends		—			—		3		(3	)		—
Income Tax Expense (Benefit)		109			23		5		(33	)		104
Net Income (Loss) from Continuing Operations		199	(d)		40		31		(47	)		223
Total Assets		10,239			734		1,515		1,294			13,782
Construction Expenditures	$	622		$	12	$	—	$	30		$	664

(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 the Corporate and Other segment and are allocated to Power Delivery once the assets are placed in service. Corporate and Other includes intercompany amounts of $(12) million for Operating Revenue, $(4) million for Operating Expense, $(76) million for Interest Income, $(73) million for Interest Expense, and $(3) million for Preferred Stock Dividends.

(b) Includes depreciation and amortization expense of $349 million, consisting of $323 million for Power Delivery, $18 million for Pepco Energy Services, $2 million for Other Non-Regulated, and $6 million for Corporate and Other.

(c) Includes $40 million ($24 million after-tax) gain related to effects of Pepco divestiture-related claims.

(d) Includes $11 million after-tax state income tax benefit, net of fees, related to a change in the tax reporting for the disposition of certain assets in prior years.

Potomac Electric Power Co [Member]

Segment Information

(5) SEGMENT INFORMATION

The company 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

The company 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

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