(19) QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The quarterly data presented below reflect all adjustments necessary in the opinion of management for a fair presentation of the interim results. Quarterly data normally vary seasonally because of temperature variations, differences between summer and winter rates, and the scheduled downtime and maintenance of electric generating units. The totals of the four quarterly basic and diluted earnings per common share amounts may not equal the basic and diluted earnings per common share for the year due to changes in the number of common shares outstanding during the year.


	2011
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Total
	*(millions, except per share amounts)*
Total Operating Revenue	$	1,634		$	1,409		$	1,643		$	1,234		$	5,920
Total Operating Expenses		1,485			1,207	(a)		1,448			1,143			5,283
Operating Income		149			202			195			91			637
Other Expenses		(53	)		(53	)		(60	)		(62	)		(228	)
Income From Continuing Operations Before Income Tax Expense		96			149			135			29			409
Income Tax Expense Related to Continuing Operations (b)		34			54			55			6			149
Net Income From Continuing Operations		62			95	(a)		80			23			260
Income (Loss) From Discontinued Operations, net of taxes		2			(1	)		—			(4	)		(3	)
Net Income	$	64		$	94		$	80		$	19		$	257
Basic and Diluted Earnings Per Share of Common Stock
Earnings Per Share of Common Stock from Continuing Operations		0.27			0.42			0.35			0.10			1.15
Earnings (Loss) Per Share of Common Stock from Discontinued Operations		0.01			—			—			(0.02	)		(0.01	)
Basic and Diluted Earnings Per Share of Common Stock		0.28			0.42			0.35			0.08			1.14
Cash Dividends Per Common Share		0.27			0.27			0.27			0.27			1.08

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

(b)

Includes tax benefits of $14 million in the second quarter primarily associated with an interest benefit related to federal tax liabilities and a $22 million reversal of previously recognized tax benefits in the second quarter associated with the early termination of cross-border energy leases held in trust.


	2010
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Total
	(*millions, except per share amounts)*
Total Operating Revenue	$	1,819		$	1,636		$	2,067		$	1,517		$	7,039
Total Operating Expenses (a) (b)		1,688			1,443			1,855			1,429			6,415
Operating Income		131			193			212			88			624
Other Expenses (c)		(78	)		(84	)		(197	)		(115	)		(474	)
Income (Loss) From Continuing Operations Before Income Tax Expense		53			109			15			(27	)		150
Income Tax Expense (Benefit) Related to Continuing Operations		25	(d)		33	(e)		(6	)(f)		(41	)(f)		11
Net Income From Continuing Operations		28			76			21			14			139
Income (Loss) From Discontinued Operations, net of taxes		8			(130	)		(4	)		19			(107	)
Net Income (Loss)	$	36		$	(54	)	$	17		$	33		$	32
Basic and Diluted Earnings Per Share of Common Stock
Earnings Per Share of Common Stock from Continuing Operations		0.13			0.34			0.09			0.06			0.62
Earnings (Loss) Per Share of Common Stock from Discontinued Operations		0.03			(0.58	)		(0.01	)		0.08			(0.48	)
Basic and Diluted Earnings (Loss) Per Share of Common Stock		0.16			(0.24	)		0.08			0.14			0.14
Cash Dividends Per Common Share		0.27			0.27			0.27			0.27			1.08

(a)	Includes restructuring charges of $14 million and $16 million in the third and fourth quarters, respectively.

(b)	Includes expenses of $2 million and $9 million in the second and third quarters, respectively, related to the effects of Pepco divestiture-related claims.

(c)	Includes debt extinguishment costs of $135 million and $54 million in the third and fourth quarters, respectively.

(d)

Includes an $8 million reversal of accrued interest income on uncertain and effectively settled state tax positions and a $4 million reversal of deferred tax assets related to the Medicare Part D subsidy, partially offset by state income tax benefits of $8 million resulting from the planned restructuring of certain PHI subsidiaries.

(e)	Includes state income tax benefits of $8 million resulting from the restructuring of certain PHI subsidiaries.

(f)

Includes state income tax benefits of $13 million and $4 million in the third and fourth quarters, respectively, associated with the loss on extinguishment of debt and a $18 million Federal tax benefit in the fourth quarter related primarily to reversals of previously accrued interest on uncertain and effectively settled tax positions due to the final settlement with the IRS of the 1996-2002 tax years.

Quarterly Financial Information

(15) QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The quarterly data presented below reflect all adjustments necessary, in the opinion of management, for a fair presentation of the interim results. Quarterly data normally vary seasonally because of temperature variations and differences between summer and winter rates. Therefore, comparisons by quarter within a year are not meaningful.


	2011
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Total
	*(millions of dollars)*
Total Operating Revenue	$	534		$	506		$	603		$	435		$	2,078
Total Operating Expenses		491			454			521			400			1,866
Operating Income		43			52			82			35			212
Other Expenses		(18	)		(18	)		(21	)		(20	)		(77	)
Income Before Income Tax Expense		25			34			61			15			135
Income Tax Expense (a)		7			2			23			4			36
Net Income	$	18		$	32		$	38		$	11		$	99

(a)	Includes tax benefits of $5 million (after-tax) associated with an interest benefit related to federal tax liabilities and an additional tax benefit of $4 million (after-tax) related to the filing of amended state tax returns, each recorded in the second quarter.


	2010
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Total
	*(millions of dollars)*
Total Operating Revenue	$	552		$	539		$	706		$	491		$	2,288
Total Operating Expenses (a) (b)		516			462			617			463			2,058
Operating Income		36			77			89			28			230
Other Expenses		(22	)		(22	)		(19	)		(22	)		(85	)
Income Before Income Tax Expense		14			55			70			6			145
Income Tax Expense (Benefit)		6			23			33			(25	)		37
Net Income	$	8		$	32		$	37		$	31		$	108

(a)	Includes restructuring charges of $6 million and $9 million in the third and fourth quarters, respectively.

(b)	Includes expenses of $2 million and $9 million in the second and third quarters, respectively, related to the effects of divestiture-related claims.

Quarterly Financial Information

(17) QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The quarterly data presented below reflect all adjustments necessary, in the opinion of management, for a fair presentation of the interim results. Quarterly data normally vary seasonally because of temperature variations and differences between summer and winter rates. Therefore, comparisons by quarter within a year are not meaningful.


	2011
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Total
	*(millions of dollars)*
Total Operating Revenue	$	400		$	284		$	326		$	294		$	1,304
Total Operating Expenses		351			248			297			259			1,155
Operating Income		49			36			29			35			149
Other Expenses		(9	)		(9	)		(8	)		(10	)		(36	)
Income Before Income Tax Expense		40			27			21			25			113
Income Tax Expense (a)		17			5			10			10			42
Net Income	$	23		$	22		$	11		$	15		$	71

(a)

Includes tax benefits of $4 million (after-tax) associated with an interest benefit related to federal tax liabilities in the second quarter and an additional tax expense of $1 million (after-tax) resulting from a recalculation of interest on uncertain tax positions for open tax years in the third quarter.


	2010
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Total
	*(millions of dollars)*
Total Operating Revenue	$	394		$	296		$	377		$	333		$	1,400
Total Operating Expenses (a)		358			277			352			300			1,287
Operating Income		36			19			25			33			113
Other Expenses		(9	)		(10	)		(9	)		(9	)		(37	)
Income Before Income Tax Expense		27			9			16			24			76
Income Tax Expense		13			3			7			8			31
Net Income	$	14		$	6		$	9		$	16		$	45

(a)	Includes restructuring charges of $4 million and $4 million in the third and fourth quarters, respectively.

Quarterly Financial Information

(16) QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The quarterly data presented below reflect all adjustments necessary, in the opinion of management, for a fair presentation of the interim results. Quarterly data normally vary seasonally because of temperature variations and differences between summer and winter rates. Therefore, comparisons by quarter within a year are not meaningful.


	2011
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Total
	*(millions of dollars)*
Total Operating Revenue	$	315		$	304		$	399		$	250		$	1,268
Total Operating Expenses		289			256			347			237			1,129
Operating Income		26			48			52			13			139
Other Expenses		(15	)		(16	)		(18	)		(18	)		(67	)
Income (Loss) Before Income Tax Expense		11			32			34			(5	)		72
Income Tax Expense (Benefit) (a)		5			14			17			(3	)		33
Net Income (Loss)	$	6		$	18		$	17		$	(2	)	$	39

(a)	Includes tax expense of $1 million (after-tax) associated with interest related to federal tax liabilities in the second quarter and an additional tax expense of $3 million (after-tax) resulting from a recalculation of interest on uncertain tax positions for open tax years in the third quarter.


	2010
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Total
	*(millions of dollars)*
Total Operating Revenue	$	317		$	315		$	518		$	280		$	1,430
Total Operating Expenses (a)		296			258			451			265			1,270
Operating Income		21			57			67			15			160
Other Expenses		(16	)		(15	)		(17	)		(16	)		(64	)
Income (Loss) Before Income Tax Expense		5			42			50			(1	)		96
Income Tax Expense		7	(b)		16			20			—			43
Net (Loss) Income	$	(2	)	$	26		$	30		$	(1	)	$	53

(a)	Includes restructuring charges of $3 million and $3 million in the third and fourth quarters, respectively.

(b)	Includes $6 million charge for the reversal of erroneously accrued interest income on uncertain and effectively settled state income tax positions.