Schedule I

12 Months Ended

Dec. 31, 2012

Schedule I

Schedule I, Condensed Financial Information of Parent Company is submitted below.

PEPCO HOLDINGS, INC. (Parent Company)

STATEMENTS OF INCOME

	For the Year Ended December 31,
	2012			2011			2010
	(millions of dollars, except share data)
OPERATING REVENUE	$	—		$	—		$	—
OPERATING EXPENSES
Other operation and maintenance		1			1			5
Total operating expenses		1			1			5
OPERATING LOSS		(1	)		(1	)		(5	)
OTHER INCOME (EXPENSES)
Interest expense		(33	)		(29	)		(72	)
Loss on extinguishment of debt		—			—			(189	)
Income from equity investments		304			281			287
Impairment losses		—			(5	)		—
Total other income		271			247			26
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE		270			246			21
INCOME TAX BENEFIT RELATED TO CONTINUING OPERATIONS		(15	)		(14	)		(118	)
NET INCOME FROM CONTINUING OPERATIONS		285			260			139
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES		—			(3	)		(107	)
NET INCOME	$	285		$	257		$	32
COMPREHENSIVE INCOME	$	300		$	300		$	167
EARNINGS PER SHARE
Basic earnings per share of common stock from Continuing Operations	$	1.25		$	1.15		$	0.62
Basic loss per share of common stock from Discontinued Operations		—			(0.01	)		(0.48	)
Basic earnings per share of common stock	$	1.25		$	1.14		$	0.14
Diluted earnings per share of common stock from Continuing Operations	$	1.24		$	1.15		$	0.62
Diluted loss per share of common stock from Discontinued Operations		—			(0.01	)		(0.48	)
Diluted earnings per share of common stock	$	1.24		$	1.14		$	0.14

The accompanying Notes are an integral part of these financial statements.

PEPCO HOLDINGS, INC. (Parent Company)

BALANCE SHEETS

	As of December 31,
	2012			2011
	(millions of dollars, except share data)
ASSETS
Current Assets
Cash and cash equivalents	$	262		$	257
Prepayments of income taxes		12			51
Accounts receivable and other		7			7
		281			315
Investments and Other Assets
Goodwill		1,398			1,398
Notes receivable from subsidiary companies		—			154
Investment in consolidated companies		3,897			3,654
Other		55			24
		5,350			5,230
Total Assets	$	5,631		$	5,545
LIABILITIES AND EQUITY
Current Liabilities
Short-term debt	$	464		$	465
Interest and taxes accrued		11			11
Accounts payable due to associated companies		2			25
		477			501
Deferred Credits
Liabilities and accrued interest related to uncertain tax positions		3			3
Long-Term Debt		705			705
Commitments and Contingencies (Note 4)
Equity
Common stock, $.01 par value; authorized 400,000,000 shares; 230,015,427 and 227,500,190 shares outstanding, respectively		2			2
Premium on stock and other capital contributions		3,383			3,325
Accumulated other comprehensive loss		(48	)		(63	)
Retained earnings		1,109			1,072
Total equity		4,446			4,336
Total Liabilities and Equity	$	5,631		$	5,545

The accompanying Notes are an integral part of these financial statements.

PEPCO HOLDINGS, INC. (Parent Company)

STATEMENTS OF CASH FLOWS

	For the Year Ended December 31,
	2012			2011			2010
	(millions of dollars)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	285		$	257		$	32
Loss from discontinued operations, net of income taxes		—			3			107
Adjustments to reconcile net income to net cash from operating activities:
Distributions from related parties less than earnings		(119	)		(207	)		(150	)
Deferred income taxes		(31	)		(16	)		(5	)
Changes in:
Prepaid and other		(23	)		23			24
Accounts payable		6			2			1
Interest and taxes		39			42			(130	)
Other assets and liabilities		4			11			31
Net Cash From (Used By) Operating Activities		161			115			(90	)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of Conectiv Energy wholesale power generation business		—			—			1,035
Net Cash From Investing Activities		—			—			1,035
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid on common stock		(248	)		(244	)		(241	)
Common stock issued for the Dividend Reinvestment Plan and employee-related compensation		51			47			47
Issuance of long-term debt		—			—			250
Capital distribution to subsidiaries, net		(110	)		(20	)		(31	)
Reacquisitions of long-term debt		—			—			(1,644	)
Decrease in notes receivable from associated companies		154			—			318
(Repayments) issuances of short-term debt, net		(1	)		235			(94	)
Costs of issuances		(2	)		(7	)		(4	)
Net Cash (Used By) From Financing Activities		(156	)		11			(1,399	)
Net increase (decrease) in cash and cash equivalents		5			126			(454	)
Cash and cash equivalents at beginning of year		257			131			585
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	262		$	257		$	131

The accompanying Notes are an integral part of these financial statements.

NOTES TO FINANCIAL INFORMATION

(1) BASIS OF PRESENTATION

Pepco Holdings, Inc. (Pepco Holdings) is a holding company and conducts substantially all of its business operations through its subsidiaries. These condensed financial statements and related footnotes have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X. These statements should be read in conjunction with the consolidated financial statements and notes thereto of Pepco Holdings included in Part II, Item 8 of this Form 10-K.

Pepco Holdings owns 100% of the common stock of all its significant subsidiaries.

(2) RECLASSIFICATIONS AND ADJUSTMENTS

Certain prior period amounts have been reclassified in order to conform to the current period presentation.

(3) DEBT

For information concerning Pepco Holdings’ long-term debt obligations, see Note (11), “Debt,” to the consolidated financial statements of Pepco Holdings.

(4) COMMITMENTS AND CONTINGENCIES

For information concerning Pepco Holdings’ material contingencies and guarantees, see Note (16), “Commitments and Contingencies” to the consolidated financial statements of Pepco Holdings.

(5) INVESTMENT IN CONSOLIDATED COMPANIES

Pepco Holdings’ majority owned subsidiaries are recorded using the equity method of accounting. A breakout of the balance in Investment in consolidated companies is as follows:

	2012		2011
	(millions of dollars)
Conectiv	$	1,473	$	1,300
Potomac Electric Power Company		1,643		1,502
Potomac Capital Investment Corporation		539		499
Pepco Energy Services, Inc.		238		350
PHI Service Company		4		3
Total investment in consolidated companies	$	3,897	$	3,654

(6) DISCONTINUED OPERATIONS

In April 2010, the Board of Directors approved a plan for the disposition of PHI’s competitive wholesale power generation, marketing and supply business, which had been conducted through Conectiv Energy. On July 1, 2010, PHI completed the sale of Conectiv Energy’s wholesale power generation business to Calpine for $1.64 billion. The disposition of Conectiv Energy’s remaining assets and businesses, consisting of its load service supply contracts, energy hedging portfolio, certain tolling agreements and other assets not included in the Calpine sale, has been completed.

(7) RELATED PARTY TRANSACTIONS

As of December 31, 2012 and 2011, PHI had the following balances on its balance sheets due (to) from related parties:

	2012			2011
	(millions of dollars)
(Payable to) Receivable from Related Party (current) (a)
Potomac Capital Investment Corporation	$	—		$	(37	)
Conectiv		—			29
Conectiv Communications, Inc.		(4	)		(4	)
Potomac Electric Power Company		—			(15	)
PHI Service Company		1			2
Other		1			—
Total	$	(2	)	$	(25	)
Receivable from Related Party (non-current) (b)
Potomac Capital Investment Corporation	$	—		$	154
Money Pool Balance with Pepco Holdings (included in cash and cash equivalents)	$	262		$	257

(a) Included in Accounts payable due to associated companies.

(b) Included in Notes receivable from subsidiary companies.