Segment Information

6 Months Ended

Jun. 30, 2012

Segment Information

(5) SEGMENT INFORMATION

Pepco Holdings’ management has identified its operating segments at June 30, 2012 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 three and six months ended June 30, 2012 and 2011 is as follows:

	Three Months Ended June 30, 2012
	(millions of dollars)
	Power Delivery		Pepco Energy Services			Other Non- Regulated		Corporate and Other  (a)			PHI Consolidated
Operating Revenue	$	984	$	185		$	14	$	(4	)	$	1,179
Operating Expenses (b)		860		171	(c)		2		(6	)		1,027
Operating Income		124		14			12		2			152
Interest Income		—		—			1		(1	)		—
Interest Expense		53		—			4		8			65
Other Income		8		—			—		2			10
Income Tax Expense		25		6			2		2			35
Net Income (Loss) from Continuing Operations		54		8			7		(7	)		62
Total Assets		11,734		536			1,499		1,652			15,421
Construction Expenditures	$	285	$	5		$	—	$	8		$	298

(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 $(4) million for Operating Revenue, $(1) million for Operating Expenses, $(6) million for Interest Income and $(5) million for Interest Expense.

(b) Includes depreciation and amortization expense of $111 million, consisting of $100 million for Power Delivery, $4 million for Pepco Energy Services and $7 million for Corporate and Other.

(c) Includes impairment losses of $3 million associated primarily with Pepco Energy Services’ investment in a landfill gas-fired electric generation facility.

	Three Months Ended June 30, 2011
	(millions of dollars)
	Power Delivery		Pepco Energy Services		Other Non- Regulated			Corporate and Other  (a)			PHI Consolidated
Operating Revenue	$	1,093	$	311	$	14		$	(6	)	$	1,412
Operating Expenses (b)		957		298		(38	)(c)		(7	)		1,210
Operating Income		136		13		52			1			202
Interest Income		—		—		1			(1	)		—
Interest Expense		52		1		4			6			63
Other Income		8		1		—			1			10
Income Tax Expense (Benefit) (d)		20		5		30			(1	)		54
Net Income (Loss) from Continuing Operations		72		8		19	(c)		(4	)		95
Total Assets (excluding Assets Held For Sale)		10,803		615		1,461			1,354			14,233
Construction Expenditures	$	204	$	6	$	—		$	6		$	216

(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 $(6) million for Operating Revenue, $(4) million for Operating Expenses, $(5) million for Interest Income and $(5) million for Interest Expense.

(b) Includes depreciation and amortization expense of $105 million, consisting of $97 million for Power Delivery, $5 million for Pepco Energy Services, $1 million for Other Non-Regulated and $2 million for Corporate and Other.

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

	Six Months Ended June 30, 2012
	(millions of dollars)
	Power Delivery		Pepco Energy Services			Other Non- Regulated		Corporate and Other  (a)			PHI Consolidated
Operating Revenue	$	2,039	$	413		$	27	$	(8	)	$	2,471
Operating Expenses (b)		1,814		382	(c)		3		(19	)		2,180
Operating Income		225		31			24		11			291
Interest Income		—		—			2		(2	)		—
Interest Expense		106		1			7		16			130
Other Income		16		—			1		1			18
Preferred Stock Dividends		—		—			1		(1	)		—
Income Tax Expense		34		12			2		1			49
Net Income (Loss) from Continuing Operations		101		18			17		(6	)		130
Total Assets		11,734		536			1,499		1,652			15,421
Construction Expenditures	$	565	$	10		$	—	$	14		$	589

(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 $(8) million for Operating Revenue, $(7) million for Operating Expenses, $(11) million for Interest Income, $(10) million for Interest Expense and $(1) million for Preferred Stock Dividends.

(b) Includes depreciation and amortization expense of $221 million, consisting of $199 million for Power Delivery, $10 million for Pepco Energy Services, $1 million for Other Non-Regulated and $11 million for Corporate and Other.

(c) Includes impairment losses of $3 million associated primarily with Pepco Energy Services’ investment in a landfill gas-fired electric generation facility.

	Six Months Ended June 30, 2011
	(millions of dollars)
	Power Delivery		Pepco Energy Services		Other Non- Regulated			Corporate and Other  (a)			PHI Consolidated
Operating Revenue	$	2,342	$	688	$	28		$	(8	)	$	3,050
Operating Expenses (b)		2,088		659		(36	)(c)		(12	)		2,699
Operating Income		254		29		64			4			351
Interest Income		—		—		2			(2	)		—
Interest Expense		102		2		7			14			125
Other Income (Expenses)		16		2		(1	)		2			19
Preferred Stock Dividends		—		—		1			(1	)		—
Income Tax Expense (Benefit) (d)		49		11		32			(4	)		88
Net Income (Loss) from Continuing Operations		119		18		25	(c)		(5	)		157
Total Assets (excluding Assets Held For Sale)		10,803		615		1,461			1,354			14,233
Construction Expenditures	$	364	$	7	$	—		$	16		$	387

(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 $(8) million for Operating Revenue, $(6) million for Operating Expenses, $(10) million for Interest Income, $(9) million for Interest Expense and $(1) million for Preferred Stock Dividends.

(b) Includes depreciation and amortization expense of $210 million, consisting of $194 million for Power Delivery, $9 million for Pepco Energy Services, $1 million for Other Non-Regulated and $6 million for Corporate and Other.

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

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.