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Pepco Holdings Reports Second-Quarter 2012 Financial Results; Reaffirms Full-Year 2012 Earnings Guidance

Earnings Guidance

Pepco Holdings today reaffirmed its earnings guidance range for 2012 of between $1.15 and $1.30 per share. The guidance range:

  • excludes the results of discontinued operations and the impact of any special, unusual or extraordinary items,
  • assumes normal weather conditions, and
  • excludes the after-tax net mark-to-market effects of economic hedging activities associated with the retail energy supply business of Pepco Energy Services.

Recent Events

Operations

  • On June 29, 2012, Pepco Holdings’ service territories were severely impacted by a violent and destructive wind storm that uprooted trees across the service territory, causing significant damage to the electric system. Given the timing of the storm, the impact to second quarter results was negligible, as most of the costs incurred for the restoration effort will be reflected in the third quarter. In the second quarter, a total of $3.0 million of incremental storm costs were incurred. Of this cost, $1.2 million was charged to capital expenditures, $1.5 million was deferred as a regulatory asset, and $0.3 million was charged to operation and maintenance expense. The total incremental cost of system restoration is currently estimated to be in the range of $70 million to $85 million. This estimate is based on assumptions related to the costs of services provided by third parties, and actual costs may vary from this estimate. Recovery of the incremental system restoration expenses will be pursued during the next cycle of distribution base rate cases.
  • Power Delivery electric sales were 11,435 gigawatt hours (GWh) in the second quarter of 2012, compared to 11,823 GWh for the same period in the prior year. In the electric service territory, cooling degree days decreased by 11 percent for the three months ended June 30, 2012, compared to the same period in 2011. Weather-adjusted electric sales were 11,282 GWh in the second quarter of 2012, compared to 11,580 GWh for the same period in the prior year, a decrease of 3 percent.
  • As of June 30, 2012, Delmarva Power’s installation and activation of smart meters in its Delaware electric service territory was complete and Pepco had installed approximately 97 percent of its smart meters in its District of Columbia service territory (88 percent activated) and 46 percent of its smart meters in its Maryland service territory (7 percent activated). On May 8, 2012, the Maryland Public Service Commission (MPSC) authorized Delmarva Power to proceed with the implementation of the smart meters in Maryland. The respective Public Service Commissions have approved the creation of a regulatory asset to defer Advanced Metering Infrastructure costs between rate cases, as well as the accrual of a return on the deferred costs.

Regulatory Matters

  • On July 20, 2012, the MPSC approved an $18 million annual increase in Pepco’s electric distribution base rates based on a 9.31 percent return on equity. The MPSC also directed Pepco to reduce the amount of the rate increase by the annual costs of certain energy advisory programs and seek recovery of these costs through the Empower Maryland Program. This reduction is currently estimated at $1.5 million. The new rates were effective July 20, 2012. The MPSC also authorized lower depreciation rates resulting in an annual reduction of depreciation expense of approximately $27 million.
  • On July 20, 2012, the MPSC approved an $11 million annual increase in Delmarva Power’s electric distribution base rates based on a 9.81 percent return on equity. The new rates were effective July 20, 2012. The MPSC also authorized lower depreciation rates resulting in an annual reduction of depreciation expense of approximately $4 million.

Financing

  • On August 2, 2012, PHI and its utility subsidiaries amended their $1.5 billion credit facility to extend the expiration date by one year to August 1, 2017 and to decrease certain fees and interest rates payable to the lenders under the facility. All other terms and conditions of the credit facility remain unchanged.
  • On June 26, 2012, Delmarva Power issued $250 million of 30-year first mortgage bonds. The bonds bear interest at an annual fixed rate of 4.00 percent and are due June 1, 2042. Delmarva Power used $31 million of the net proceeds to redeem all $31 million outstanding of 5.20 percent tax-exempt bonds due 2019. The balance of the proceeds was used to repay Delmarva Power commercial paper (that was issued to temporarily fund capital expenditures and working capital, and to redeem $65.7 million of tax-exempt bonds prior to maturity) and for general corporate purposes.

Further details regarding changes in consolidated earnings between 2012 and 2011 can be found in the following schedules. Additional information regarding financial results and recent regulatory events can be found in the Pepco Holdings, Inc. Form 10-Q for the quarter ended June 30, 2012, as filed with the Securities and Exchange Commission, and which is also available at www.pepcoholdings.com/investors.

Conference Call for Investors

Pepco Holdings, Inc. will host a conference call to discuss second quarter results on Tuesday, August 7 at 11 a.m. E.T. Investors, members of the media and other interested persons may access the conference call on the Internet at http://www.pepcoholdings.com/investors or by calling 1-866-314-5232 before 10:55 a.m. The pass code for the call is 60898926. International callers may access the call by dialing 1-617-213-8052, using the same pass code, 60898926. An on-demand replay will be available for seven days following the call. To hear the replay, dial 1-888-286-8010 and enter pass code 30946731. International callers may access the replay by dialing 1-617-801-6888 and entering the same pass code 30946731. An audio archive will be available at PHI's website, http://www.pepcoholdings.com/investors.

Note: If any non-GAAP financial information (as defined by the Securities and Exchange Commission in Regulation G) is used during the quarterly earnings conference call, a presentation of the most directly comparable GAAP measure and a reconciliation of the differences will be available at http://www.pepcoholdings.com/investors promptly after the conclusion of the conference call.

About PHI: Pepco Holdings, Inc. (NYSE: POM) is one of the largest energy delivery companies in the Mid-Atlantic region, serving about 2 million customers in Delaware, the District of Columbia, Maryland and New Jersey. PHI subsidiaries Pepco, Delmarva Power and Atlantic City Electric provide regulated electricity service; Delmarva Power also provides natural gas service. PHI also provides energy efficiency and renewable energy services through Pepco Energy Services.

Forward-Looking Statements: Some of the statements contained in this news release with respect to Pepco Holdings, Pepco, Delmarva Power and Atlantic City Electric, including each of their respective subsidiaries (each, a “Reporting Company”), are forward-looking statements within the meaning of the U.S. federal securities laws, and are subject to the safe harbor created thereby and by the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by terminology such as “may,” “might,” “will,” “should,” “could,” “expects,” “intends,” “assumes,” “seeks to,” “plans,” “anticipates,” “believes,” “projects,” “estimates,” “predicts,” “potential,” “future,” “goal,” “objective,” or “continue” or the negative of such terms or other variations thereof or comparable terminology, or by discussions of strategy that involve risks and uncertainties. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause one or more Reporting Company’s or their subsidiaries’ actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Therefore, forward-looking statements are not guarantees or assurances of future performance, and actual results could differ materially from those indicated by the forward-looking statements. These factors should be read together with the risk factors included in the “Risk Factors” section and other statements contained in each Reporting Company’s annual report, as amended, filed in 2012, and quarterly reports filed in 2012, and investors should refer to these risk factor sections and other statements. All of such factors and forward-looking statements are difficult to predict, contain uncertainties, are beyond each Reporting Company’s control and may cause actual results to differ materially from those contained in forward-looking statements. Any forward-looking statements speak only as to the date this news release was issued, and none of the Reporting Companies undertakes any obligation to update any forward-looking statements to reflect events or circumstances after the date on which such statements are made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for a Reporting Company to predict all such factors, nor can the impact of any such factor be assessed on such Reporting Company’s or its subsidiaries’ business (viewed independently or together with the business or businesses of some or all of the other Reporting Companies or their subsidiaries) or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. The foregoing factors should not be construed as exhaustive.

Pepco Holdings, Inc.
Earnings Per Share Variance
2012 / 2011
         
Three Months Ended June 30,
 
Pepco
Power Energy Other Non- Corporate Total
Delivery   Services   Regulated   and Other   PHI
2011 Earnings (loss) per share from Continuing Operations (GAAP) (1) $ 0.32 $ 0.03 $ 0.08 $ (0.01 ) $ 0.42
 

2011 Adjustment (2)

-- Pepco Energy Services Retail Energy Supply – Net Mark-to- market Losses  

-

      0.01       -       -       0.01  
 
2011 Adjusted earnings (loss) per share from Continuing Operations (Non-GAAP) 0.32 0.04 0.08 (0.01 ) 0.43
 

Change from 2011 Adjusted earnings (loss) per share from Continuing Operations

Regulated Operations
-- Distribution Revenue
-Weather (estimate) (3) - - - - -
-Rate Increases 0.01 - - - 0.01
-Other Distribution Revenue 0.01 - - - 0.01
-- Network Transmission Revenue 0.02 - - - 0.02
-- Standard Offer Service Margin - - - - -
-- Operation & Maintenance (0.05 ) - - - (0.05 )
-- Depreciation (0.01 ) - - - (0.01 )
-- Other, net (0.01 ) - - - (0.01 )
Pepco Energy Services
-- Retail Energy Supply - (0.01 ) - - (0.01 )
-- Energy Services - (0.01 ) - - (0.01 )
Other Non-Regulated - - (0.02 ) - (0.02 )
Corporate and Other - - - - -
Net Interest Expense (0.01 ) - - - (0.01 )
Income Tax Adjustments   (0.05 )     -       (0.03 )     (0.02 )     (0.10 )
 
2012 Adjusted earnings (loss) per share from Continuing Operations (Non-GAAP) 0.23 0.02 0.03 (0.03 ) 0.25
 

2012 Adjustments (2)

-- Pepco Energy Services Retail Energy Supply – Net Mark-to- market Gains - 0.03 - - 0.03
-- Pepco Energy Services – Asset Impairment Charge   -       (0.01 )     -       -       (0.01 )
 
2012 Earnings (loss) per share from Continuing Operations (GAAP) (4) $ 0.23     $ 0.04     $ 0.03     $ (0.03 )   $ 0.27  
 
(1)   The 2011 weighted average number of basic and diluted shares outstanding was 226 million.
 
(2) Management believes the non-GAAP adjustments are not representative of the Company's ongoing business operations.
 
(3) The effect of weather compared to the 20-year average weather is estimated to have no impact on earnings per share.
 
(4) The 2012 weighted average number of diluted shares outstanding was 229 million.
 
Pepco Holdings, Inc.
Earnings Per Share Variance
2012 / 2011
         
Six Months Ended June 30,
 
Pepco
Power Energy Other Non- Corporate Total
Delivery   Services   Regulated   and Other   PHI
2011 Earnings (loss) per share from Continuing Operations (GAAP) (1) $ 0.53 $ 0.08 $ 0.11 $ (0.03 ) $ 0.69
 

2011 Adjustment (2)

-- Pepco Energy Services Retail Energy Supply – Net Mark-to- market Losses  

-

      0.02       -       -       0.02  
 
2011 Adjusted earnings (loss) per share from Continuing Operations (Non-GAAP) 0.53 0.10 0.11 (0.03 ) 0.71
 

Change from 2011 Adjusted earnings (loss) per share from Continuing Operations

Regulated Operations
-- Distribution Revenue
-Weather (estimate) (3) (0.03 ) - - - (0.03 )
-Rate Increases 0.02 - - - 0.02
-Other Distribution Revenue 0.01 - - - 0.01
-- Network Transmission Revenue 0.03 - - - 0.03
-- Standard Offer Service Margin (0.01 ) - - - (0.01 )
-- Operation & Maintenance (0.07 ) - - - (0.07 )
-- Depreciation (0.03 ) - - - (0.03 )

-- Other, net

0.02 - - - 0.02
Pepco Energy Services
-- Retail Energy Supply - (0.02 ) - - (0.02 )
-- Energy Services - (0.02 ) - - (0.02 )
Other Non-Regulated - - (0.01 ) - (0.01 )
Corporate and Other - - - 0.01 0.01
Net Interest Expense (0.01 ) - - - (0.01 )
Income Tax Adjustments (0.01 ) - (0.02 ) (0.01 ) (0.04 )
Dilution   (0.01 )     -       -       -       (0.01 )
2012 Adjusted earnings (loss) per share from Continuing Operations (Non-GAAP) 0.44 0.06 0.08 (0.03 ) 0.55
 

2012 Adjustments (2)

-- Pepco Energy Services Retail Energy Supply – Net Mark-to- market Gains - 0.03 - - 0.03
-- Pepco Energy Services – Asset Impairment Charge   -       (0.01 )     -       -       (0.01 )
 
2012 Earnings (loss) per share from Continuing Operations (GAAP) (4) $ 0.44     $ 0.08     $ 0.08     $ (0.03 )   $ 0.57  
 
(1)   The 2011 weighted average number of basic and diluted shares outstanding was 226 million.
 
(2) Management believes the non-GAAP adjustments are not representative of the Company's ongoing business operations.
 
(3) The effect of weather compared to the 20-year average weather is estimated to have decreased earnings by $0.03 per share.
 
(4) The 2012 weighted average number of diluted shares outstanding was 229 million.
 

 

SEGMENT INFORMATION

 
 
Three Months Ended June 30, 2012
(millions of dollars)
  Pepco   Other   Corporate  
Power Energy Non- and PHI
Delivery Services Regulated Other (a) 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
Preferred Stock Dividends - - - - -
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)
  Pepco   Other   Corporate  
Power Energy Non- and PHI
Delivery Services Regulated Other (a) 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 the Power Delivery segment for purposes of assessing impairment. Total assets also include capital expenditures related to certain hardware and software expenditures which primarily benefit the Power Delivery business. 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 Expense, $(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.
 

SEGMENT INFORMATION – continued

 
 

Six Months Ended June 30, 2012
(millions of dollars)
  Pepco   Other   Corporate  
Power Energy Non- and PHI
Delivery Services   Regulated Other (a) 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 the Power Delivery segment for purposes of assessing impairment. Total assets also include capital expenditures related to certain hardware and software expenditures which primarily benefit the Power Delivery business. 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 Expense, $(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)
  Pepco   Other   Corporate  
Power Energy Non- and PHI
Delivery Services Regulated Other (a) 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 the Power Delivery segment for purposes of assessing impairment. Total assets also include capital expenditures related to certain hardware and software expenditures which primarily benefit the Power Delivery business. 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 Expense, $(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.
 
PEPCO HOLDINGS, INC. AND SUBSIDIARIES    
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)        
 
Three Months Ended Six Months Ended
June 30, June 30,
  2012       2011     2012       2011  
(millions of dollars, except per share data)
Operating Revenue
Power Delivery

$

984

$

1,093

$

2,039

$ 2,342
Pepco Energy Services 185 311 413 688
Other   10     8     19     20  
 
Total Operating Revenue   1,179     1,412     2,471     3,050  
 
Operating Expenses
Fuel and purchased energy 555 812 1,239 1,811
Other services cost of sales 49 43 94 86
Other operation and maintenance 224 209 449 443
Depreciation and amortization 111 105 221 210
Other taxes 105 109

209

220
Gain on early termination of finance leases held in trust - (39 ) - (39 )
Deferred electric service costs (20 ) (29 ) (35 ) (32 )
Impairment losses   3     -     3     -  
 
Total Operating Expenses   1,027     1,210     2,180     2,699  
 
Operating Income   152     202     291     351  
 
Other Income (Expenses)
Interest expense (65 ) (63 ) (130 ) (125 )
Loss from equity investments - - - (1 )
Other income   10     10     18     20  
 
Total Other Expenses   (55 )   (53 )   (112 )   (106 )
 
Income from Continuing Operations Before Income Tax Expense 97 149 179 245
 
Income Tax Expense Related to Continuing Operations   35     54     49     88  
 
Net Income from Continuing Operations 62 95 130 157
 
(Loss) Income from Discontinued Operations, net of Income Taxes   -     (1 )   -     1  
 
Net Income $ 62   $ 94   $ 130   $ 158  
 
Basic and Diluted Share Information
Weighted average shares outstanding – Basic (millions)   228     226     228     226  
 
Weighted average shares outstanding – Diluted (millions)   229     226     229     226  
 
Earnings per share of common stock from Continuing Operations – Basic and Diluted $ 0.27 $ 0.42 $ 0.57 $ 0.69
 
Earnings per share of common stock from Discontinued Operations – Basic and Diluted   -     -     -     0.01  
 
Earnings per share – Basic and Diluted $ 0.27   $ 0.42   $ 0.57   $ 0.70  
 
PEPCO HOLDINGS, INC. AND SUBSIDIARIES    
CONSOLIDATED BALANCE SHEETS
(Unaudited)        
 
June 30, December 31,
  2012     2011  
(millions of dollars)
ASSETS
 
CURRENT ASSETS
Cash and cash equivalents $ 39 $ 109
Restricted cash equivalents 9 11
Accounts receivable, less allowance for uncollectible accounts of $41 million and $49 million, respectively 840 929
Inventories 149 132
Derivative assets 9 5
Prepayments of income taxes 44 74
Deferred income tax assets, net 42 59
Prepaid expenses and other   157     120  
 
Total Current Assets   1,289     1,439  
 
INVESTMENTS AND OTHER ASSETS
Goodwill 1,407 1,407
Regulatory assets 2,288 2,196
Investment in finance leases held in trust 1,375 1,349
Income taxes receivable 218 84
Restricted cash equivalents 15 15
Assets and accrued interest related to uncertain tax positions 65 37
Derivative assets 8 -
Other   166     163  
 
Total Investments and Other Assets   5,542     5,251  
 
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment 13,303 12,855
Accumulated depreciation   (4,713 )   (4,635 )
 
Net Property, Plant and Equipment   8,590     8,220  
 
 
TOTAL ASSETS $ 15,421   $ 14,910  
 
PEPCO HOLDINGS, INC. AND SUBSIDIARIES    
CONSOLIDATED BALANCE SHEETS
(Unaudited)        
June 30, December 31,
  2012     2011  
(millions of dollars, except shares)
LIABILITIES AND EQUITY
 
CURRENT LIABILITIES
Short-term debt $ 875 $ 732
Current portion of long-term debt and project funding 49 112
Accounts payable and accrued liabilities 526 549
Capital lease obligations due within one year 12 8
Taxes accrued 79 110
Interest accrued 50 47
Liabilities and accrued interest related to uncertain tax positions 9 3
Derivative liabilities 18 26
Other   258     274  
 
Total Current Liabilities   1,876     1,861  
 
DEFERRED CREDITS
Regulatory liabilities 525 526
Deferred income taxes, net 3,104 2,863
Investment tax credits 21 22
Pension benefit obligation 305 424
Other postretirement benefit obligations 446 469
Liabilities and accrued interest related to uncertain tax positions 6 32
Derivative liabilities 10 6
Other   182     191  
 
Total Deferred Credits   4,599     4,533  
 
LONG-TERM LIABILITIES
Long-term debt 4,203 3,794
Transition bonds issued by ACE Funding 276 295
Long-term project funding 13 13
Capital lease obligations   70     78  
 
Total Long-Term Liabilities   4,562     4,180  
 
COMMITMENTS AND CONTINGENCIES
 
EQUITY
Common stock, $.01 par value, 400,000,000 shares authorized, 228,851,815 and 227,500,190 shares outstanding, respectively 2 2
Premium on stock and other capital contributions 3,354 3,325
Accumulated other comprehensive loss (51 ) (63 )
Retained earnings   1,079     1,072  
 
Total Equity   4,384     4,336  
 
TOTAL LIABILITIES AND EQUITY $ 15,421   $ 14,910  
 
POWER DELIVERY SALES AND REVENUES
  Three Months Ended   Six Months Ended
    June 30,   June 30,
Power Delivery Sales (Gigawatt Hours) 2012   2011 2012   2011
Regulated T&D Electric Sales    
Residential 3,571 3,855 7,766 8,630
Commercial and industrial 7,807 7,913 14,888 15,218
Transmission and other   57   55   125   123
Total Regulated T&D Electric Sales   11,435   11,823   22,779   23,971
 
Default Electricity Supply Sales
Residential 2,982 3,401 6,560 7,699
Commercial and industrial 1,402 1,495 2,795 3,053
Other   14   18   29   37
Total Default Electricity Supply Sales   4,398   4,914   9,384   10,789
 
 
 
Power Delivery Electric Revenue (Millions of dollars)
Regulated T&D Electric Revenue
Residential $ 154 $ 154 $ 316 $ 322
Commercial and industrial 230 223 431 425
Transmission and other   88   78   177   160
Total Regulated T&D Electric Revenue $ 472 $ 455 $ 924 $ 907
 
Default Electricity Supply Revenue
Residential $ 314 $ 376 $ 672 $ 845
Commercial and industrial 135 165 265 333
Other   25   41   49   83
Total Default Electricity Supply Revenue $ 474 $ 582 $ 986 $ 1,261
 
Other Electric Revenue $ 14 $ 17 $ 31 $ 33
 
Total Electric Operating Revenue $ 960 $ 1,054 $ 1,941 $ 2,201
 
Power Delivery Gas Sales and Revenue        
Regulated Gas Sales (Bcf)
Residential 1 1 4 5
Commercial and industrial - 1 2 3
Transportation and other   1   1   3   4
Total Regulated Gas Sales   2   3   9   12
 
Regulated Gas Revenue (Millions of dollars)
Residential $ 10 $ 16 $ 53 $ 73
Commercial and industrial 7 8 26 39
Transportation and other   2   2   5   5
Total Regulated Gas Revenue $ 19 $ 26 $ 84 $ 117
 
Other Gas Revenue $ 5 $ 13 $ 14 $ 24
 
Total Gas Operating Revenue $ 24 $ 39 $ 98 $ 141
 
Total Power Delivery Operating Revenue $ 984 $ 1,093 $ 2,039 $ 2,342
 
POWER DELIVERY – CUSTOMERS  
June 30, 2012   June 30, 2011
 
Regulated T&D Electric Customers (in thousands)
Residential 1,638 1,635
Commercial and industrial 199 198
Transmission and other 2 2
Total Regulated T&D Electric Customers 1,839 1,835
 
 
Regulated Gas Customers (in thousands)
Residential 114 114
Commercial and industrial 9 9
Transportation and other - -
Total Regulated Gas Customers 123 123
 

WEATHER DATA - CONSOLIDATED ELECTRIC SERVICE TERRITORY

  Three Months Ended   Six Months Ended
June 30,   June 30,
2012   2011   2012   2011
   
Heating Degree Days 323 324 2,073 2,679
20 Year Average 434 437 2,766 2,739
Percentage Difference from Average -26% -26% -25% -2%
Percentage Difference from Prior Year - -23%
 
Cooling Degree Days 463 522 475 522
20 Year Average 373 372 375 374
Percentage Difference from Average 24% 40% 27% 40%
Percentage Difference from Prior Year -11% -9%
 
PEPCO ENERGY SERVICES        
Operating Summary Three Months Ended Six Months Ended

(Millions of dollars)

June 30, June 30,
2012   2011 2012   2011
 
Retail Electric Sales (GWh) 639 (3) 1,865 1,497 (3) 3,874
 
Retail Energy Supply (1)
Operating Revenue (2) $ 121 $ 248 $ 287 $ 565
Cost of Goods Sold (2)   96   230   239   523
Gross Margin 25 (4) 18 48 (5) 42
 
Operation and Maintenance Expenses 6 9 12 19
Depreciation   3   3   7   5
Operating Expense 9 12 19 24
 
Operating Income 16 6 29 18
 
Energy Services
Operating Revenue (2) $ 66 $ 66 $ 131 $ 131
Cost of Goods Sold (2)   50   45   97   92
Gross Margin 16 21 34 39
 
Operation and Maintenance Expenses (6) 14 11 24 21
Depreciation   2   2   4   4
Operating Expense 16 13 28 25
 
Operating Income 8 6 14
 
Unallocated Overhead Cost   2   1   4   3
 
Operating Income $ 14 $ 13 $ 31 $ 29
 
Notes:
(1)   Includes power generation.
 
(2) Certain transactions among Pepco Energy Services businesses are not eliminated.
 
(3) Retail electric sales decreased due to the continuing expiration of existing retail supply contracts in connection with the wind-down of the Retail Energy Supply business.
 
(4) Gross margin increased due to mark-to-market (MTM) gains of $12 million in the 2012 period and MTM losses of $3 million in the 2011 period, as well as favorable wholesale gas prices. Partially offsetting the increases were lower revenues due to the wind-down of the Retail Energy Supply business.
 
(5) Gross margin increased due to MTM gains of $12 million in the 2012 period and MTM losses of $7 million in the 2011 period, as well as favorable wholesale gas prices. Partially offsetting the increases were lower revenues due to the wind-down of the Retail Energy Supply business.
 
(6) Operation and maintenance expenses increased due to a $3 million impairment charge related to long-lived assets.




Stock quotes in this article: POM 

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