Income Taxes (Tables)

3 Months Ended

Mar. 31, 2014

Reconciliation of Consolidated Income Tax Expense from Continuing Operations

A reconciliation of PHI’s consolidated effective income tax rates from continuing operations is as follows:

	Three Months Ended March 31,
	2014					2013
	(millions of dollars)
Income tax at Federal statutory rate	$	42		35.0	%	$	26		35.0	%
Increases (decreases) resulting from:
State income taxes, net of Federal effect		7		5.8	%		5		6.8	%
Asset removal costs		(2	)	(1.7	)%		(3	)	(4.1	)%
Change in estimates and interest related to uncertain and effectively settled tax positions		(1	)	(0.8	)%		51		68.9	%
Establishment of valuation allowances related to deferred tax assets		—		—			101		136.5	%
Other, net		—		(0.3	)%		5		6.9	%
Consolidated income tax expense related to continuing operations	$	46		38.0	%	$	185		250.0	%

Delmarva Power & Light Co/De [Member]

Reconciliation of Consolidated Income Tax Expense from Continuing Operations

A reconciliation of DPL’s effective income tax rates is as follows:

	Three Months Ended March 31,
	2014				2013
	(millions of dollars)
Income tax at Federal statutory rate	$	22	35.0	%	$	15		35.0	%
Increases (decreases) resulting from:
State income taxes, net of Federal effect		3	4.8	%		2		4.7	%
Change in estimates and interest related to uncertain and effectively settled tax positions		—	—			(1	)	(2.4	)%
Other, net		—	0.5	%		—		0.8	%
Income tax expense	$	25	40.3	%	$	16		38.1	%

Atlantic City Electric Co [Member]

Reconciliation of Consolidated Income Tax Expense from Continuing Operations

A reconciliation of ACE’s consolidated effective income tax rates is as follows:

	Three Months Ended March 31,
	2014				2013
	(millions of dollars)
Income tax at Federal statutory rate	$	6	35.0	%	$	2		35.0	%
Increases (decreases) resulting from:
State income taxes, net of Federal effect		—	—			1		16.8	%
Adjustments to prior year taxes		—	—			4		65.6	%
Change in estimates and interest related to uncertain and effectively settled tax positions		—	—			(10	)	(167.7	)%
Other, net		—	2.5	%		—		—
Consolidated income tax expense (benefit)	$	6	37.5	%	$	(3	)	(50.3	)%

Potomac Electric Power Co [Member]

Reconciliation of Consolidated Income Tax Expense from Continuing Operations

A reconciliation of Pepco’s effective income tax rates is as follows:

	Three Months Ended March 31,
	2014					2013
	(millions of dollars)
Income tax at Federal statutory rate	$	17		35.0	%	$	9		35.0	%
Increases (decreases) resulting from:
State income taxes, net of Federal effect		3		6.3	%		2		8.0	%
Asset removal costs		(2	)	(4.2	)%		(3	)	(12.0	)%
Change in estimates and interest related to uncertain and effectively settled tax positions		(1	)	(2.1	)%		(5	)	(20.0	)%
Other, net		(1	)	(1.7	)%		(1	)	(3.0	)%
Income tax expense	$	16		33.3	%	$	2		8.0	%