Discontinued Operations (Tables)

9 Months Ended

Sep. 30, 2014

Income (Loss) from Discontinued Operations, Net of Income Taxes

PHI’s income (loss) from discontinued operations, net of income taxes, is comprised of the following:

	Three Months  Ended September 30,				Nine Months  Ended September 30,
	2014		2013		2014		2013
	(millions of dollars)
Cross-border energy lease investments	$	—	$	7	$	—	$	(327	)
Pepco Energy Services’ retail electric and natural gas supply businesses		—		1		—		5
Income (loss) from discontinued operations, net of income taxes	$	—	$	8	$	—	$	(322	)

Operating Results for Cross-Border Energy Lease Investments

The operating results for the cross-border energy lease investments were as follows:

	Three Months  Ended September 30,				Nine Months  Ended September 30,
	2014		2013		2014		2013
	(millions of dollars)
Operating revenue from PHI’s cross-border energy lease investments	$	—	$	—	$	—	$	7
Non-cash charge to reduce carrying value of PHI’s cross-border energy lease investments		—		—		—		(373	)
Total operating revenue	$	—	$	—	$	—	$	(366	)
Loss from operations of discontinued operations, net of income taxes (a)	$	—	$	—	$	—	$	(325	)
Net gains (losses) associated with the early termination of the cross-border energy lease investments, net of income taxes (b)		—		7		—		(2	)
Income (loss) from discontinued operations, net of income taxes	$	—	$	7	$	—	$	(327	)

(a) Includes income tax benefit of zero for each of the three months ended September 30, 2014 and 2013, and zero and $44 million for the nine months ended September 30, 2014 and 2013, respectively.

(b) Includes income tax expense (benefit) of approximately zero and $4 million for the three months ended September 30, 2014 and 2013, respectively, and zero and $(1) million for the nine months ended September 30, 2014 and 2013, respectively.

Operating Results for Retail Electric and Natural Gas Supply Businesses

The operating results for the retail electric and natural gas supply businesses of Pepco Energy Services are as follows:

	Three Months  Ended September 30,				Nine Months  Ended September 30,
	2014		2013		2014		2013
	(millions of dollars)
Operating revenue	$	—	$	—	$	—	$	84
Income from operations of discontinued operations, net of income taxes (a)	$	—	$	1	$	—	$	4
Net gains associated with accelerated disposition of retail electric and natural gas contracts, net of income taxes (b)		—		—		—		1
Income from discontinued operations, net of income taxes	$	—	$	1	$	—	$	5

(a) Includes income tax expense of zero and $1 million for the three months ended September 30, 2014 and 2013, respectively, and zero and $3 million for the nine months ended September 30, 2014 and 2013, respectively.

(b) Includes income tax expense of zero for each of the three months ended September 30, 2014 and 2013, and zero for each of the nine months ended September 30, 2014 and 2013.

Discontinued Operations [Member]

Derivative Gain for Retail Electric and Natural Gas Supply Businesses

For the three and nine months ended September 30, 2014 and 2013, the amount of the derivative gain for the retail electric and natural gas supply businesses of Pepco Energy Services recognized in Income (loss) from discontinued operations, net of income taxes is provided in the table below:

	Three Months  Ended September 30,				Nine Months  Ended September 30,
	2014		2013		2014		2013
	(millions of dollars)
Reclassification of mark-to-market to realized on settlement of contracts	$	—	$	—	$	—	$	10
Unrealized mark-to-market loss		—		—		—		—
Total net gain	$	—	$	—	$	—	$	10