Goodwill

9 Months Ended

Sep. 30, 2014

Goodwill

(6) GOODWILL

PHI’s goodwill balance of $1,407 million was unchanged during the nine months ended September 30, 2014. Substantially all of PHI’s goodwill balance was generated by Pepco’s acquisition of Conectiv (known as Conectiv, LLC, and the parent of DPL and ACE, and referred to herein as Conectiv) in 2002 and is allocated entirely to the Power Delivery reporting unit based on the aggregation of its regulated public utility company components for purposes of assessing impairment under FASB guidance on goodwill and other intangibles (ASC 350).

PHI’s annual impairment test as of November 1, 2013 indicated that goodwill was not impaired. For the nine months ended September 30, 2014, PHI concluded that there were no events or circumstances requiring it to perform an interim goodwill impairment test. PHI will perform its next annual impairment test as of November 1, 2014.

Delmarva Power & Light Co/De [Member]

Goodwill

(6) GOODWILL

DPL’s goodwill balance of $8 million was unchanged during the nine months ended September 30, 2014. All of DPL’s goodwill was generated by its acquisition of Conowingo Power Company in 1995.

DPL’s annual impairment test as of November 1, 2013 indicated that goodwill was not impaired. For the nine months ended September 30, 2014, DPL concluded that there were no events or circumstances requiring it to perform an interim goodwill impairment test. DPL will perform its next annual impairment test as of November 1, 2014.