MANAGING TODAY’S CHALLENGES
Positioning for Tomorrow’s Growth
44th EEI Financial Conference • Hollywood, Florida • November 1 - 4, 2009
Some of the statements contained in today’s presentations are forward-looking statements within the meaning of Section 21E of
the Securities Exchange Act of 1934 and are subject to the safe harbor created by the Private Securities Litigation Reform Act of
1995. These statements include all financial projections and any declarations regarding management’s intents, beliefs or current
expectations. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,”
“plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of such terms or other comparable
terminology. Any forward-looking statements are not guarantees of future performance, and actual results could differ materially
from those indicated by the forward-looking statements. Forward-looking statements involve estimates, assumptions, known and
unknown risks, uncertainties and other factors that may cause 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. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no
obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or
otherwise. A number of factors could cause actual results or outcomes to differ materially from those indicated by the forward-
looking statements contained in this presentation. These factors include, but are not limited to, prevailing governmental policies
and regulatory actions affecting the energy industry, including with respect to allowed rates of return, industry and rate structure,
acquisition and disposal of assets and facilities, operation and construction of plant facilities, recovery of purchased power
expenses, and present or prospective wholesale and retail competition; changes in and compliance with environmental and safety
laws and policies; weather conditions; population growth rates and demographic patterns; competition for retail and wholesale
customers; general economic conditions, including potential negative impacts resulting from an economic downturn; growth in
demand, sales and capacity to fulfill demand; changes in tax rates or policies or in rates of inflation; rules and changes in
accounting standards or practices; changes in project costs; unanticipated changes in operating expenses and capital
expenditures; the ability to obtain funding in the capital markets on favorable terms; restrictions imposed by Federal and/or state
regulatory commissions, PJM and other regional transmission organizations (NY ISO, ISO New England), the North American
Electric Reliability Council and other applicable electric reliability organizations; legal and administrative proceedings (whether civil
or criminal) and settlements that affect our business and profitability; pace of entry into new markets; volatility in market demand
and prices for energy, capacity and fuel; interest rate fluctuations and credit market concerns; and effects of geopolitical events,
including the threat of domestic terrorism. Readers are referred to the most recent reports filed with the Securities and Exchange
Commission.
the Securities Exchange Act of 1934 and are subject to the safe harbor created by the Private Securities Litigation Reform Act of
1995. These statements include all financial projections and any declarations regarding management’s intents, beliefs or current
expectations. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,”
“plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of such terms or other comparable
terminology. Any forward-looking statements are not guarantees of future performance, and actual results could differ materially
from those indicated by the forward-looking statements. Forward-looking statements involve estimates, assumptions, known and
unknown risks, uncertainties and other factors that may cause 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. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no
obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or
otherwise. A number of factors could cause actual results or outcomes to differ materially from those indicated by the forward-
looking statements contained in this presentation. These factors include, but are not limited to, prevailing governmental policies
and regulatory actions affecting the energy industry, including with respect to allowed rates of return, industry and rate structure,
acquisition and disposal of assets and facilities, operation and construction of plant facilities, recovery of purchased power
expenses, and present or prospective wholesale and retail competition; changes in and compliance with environmental and safety
laws and policies; weather conditions; population growth rates and demographic patterns; competition for retail and wholesale
customers; general economic conditions, including potential negative impacts resulting from an economic downturn; growth in
demand, sales and capacity to fulfill demand; changes in tax rates or policies or in rates of inflation; rules and changes in
accounting standards or practices; changes in project costs; unanticipated changes in operating expenses and capital
expenditures; the ability to obtain funding in the capital markets on favorable terms; restrictions imposed by Federal and/or state
regulatory commissions, PJM and other regional transmission organizations (NY ISO, ISO New England), the North American
Electric Reliability Council and other applicable electric reliability organizations; legal and administrative proceedings (whether civil
or criminal) and settlements that affect our business and profitability; pace of entry into new markets; volatility in market demand
and prices for energy, capacity and fuel; interest rate fluctuations and credit market concerns; and effects of geopolitical events,
including the threat of domestic terrorism. Readers are referred to the most recent reports filed with the Securities and Exchange
Commission.
Safe Harbor Statement
1
2009 - - Progress on Many Fronts
We are confident in our plan and are optimistic about longer term growth
Note: See Safe Harbor Statement at the beginning of today’s presentation.
Long-Term Strategic Objective | Status |
Drive earnings growth | · Four rate cases filed requesting a total revenue increase of $146 million · Significant T&D investments planned (65% growth in rate base 2008 - 2013) |
Maintain dividend and grow longer-term | · Commitment to the dividend |
Reduce overall business risk and strengthen investment grade ratings | · Collateral management through credit intermediation agreement · Strategic analysis of Retail Energy Supply |
Invest in core T&D business | · Two significant projects - MAPP and Blueprint underway · 2009 capital spending tracking to plan |
Implement Blueprint initiatives | · Vendors selected · AMI deployment in DE to begin by year-end 2009 · Legislation adopted in DC approving AMI deployment · DOE award of $168 million for Smart Grid projects |
Achieve supportive regulatory outcomes | · Decoupling adopted in DC; 60% of regulated distribution revenue decoupled · Pursuit of surcharges to minimize regulatory lag |
Prudently manage complementary competitive energy businesses | · Cumberland plant online - June 1, 2009; Delta plant on schedule · Expanding energy services business |
2
Transmission & Distribution
Competitive Energy / Other
2009 - - 2013
Forecast
Business Mix*
70 - - 75%
25 - - 30%
Note: See Safe Harbor Statement at the beginning of today’s presentation.
• Growing regulated
infrastructure
infrastructure
• Leading edge of
industry transformation
industry transformation
• Complementary
competitive energy
businesses
competitive energy
businesses
• Disciplined growth
strategy
strategy
… together offer an
Attractive total return
Investing in PHI
* Percentages based on projected operating income.
PHI Investments
3
Recent Events
· Environmental permitting for Burches
Hill to Chalk Point segment expected
to be complete by early Q1 - 2010
Hill to Chalk Point segment expected
to be complete by early Q1 - 2010
· Cost estimates for various routes
through Dorchester County to be
finalized Q4 - 2009
through Dorchester County to be
finalized Q4 - 2009
· PSC hearings on need and
determination for CPCN for MAPP
tentatively scheduled for March 2010;
existing CPCN to be used for Burches
Hill to Chalk Point segment
determination for CPCN for MAPP
tentatively scheduled for March 2010;
existing CPCN to be used for Burches
Hill to Chalk Point segment
· Project is in due diligence phase of
DOE loan guarantee program
DOE loan guarantee program
• Cost of project - $1.2 billion
• Construction activities to begin Q4 2009
• In-service date - 2014
• Total length - 150 miles (~ 30 miles on new right-of-way)
Mid-Atlantic Power Pathway (MAPP)
4
(Dollars in Millions)
• Current total estimated cost of project (2008 - 2015) is $1.2 billion
• Application filed with the Department of Energy (DOE) seeking loans or loan
guarantees ($684 million)
guarantees ($684 million)
– Calvert Cliffs to Indian River segment; construction expected to begin 2011
– Application passed the first two levels of DOE review
– Currently in due diligence phase; decision expected before construction begins
Note: See Safe Harbor Statement at the beginning of today’s presentation.
MAPP - -
Construction Cost and Timing Estimates
5
· Key vendors selected
· Delaware deployment
– Completed field acceptance testing of the AMI
equipment and systems in Q3 - 2009
equipment and systems in Q3 - 2009
– Meter deployment to begin Q4 - 2009
– Dynamic Pricing Working Group started work
· District of Columbia approval of AMI
– Legislation adopted in June approving AMI
deployment, subject to PSC agreeing to the
sufficiency of federal grants
deployment, subject to PSC agreeing to the
sufficiency of federal grants
– Legislation provides for cost recovery, and a return
on costs, by the creation of a regulatory asset
on costs, by the creation of a regulatory asset
· Full deployment expected by 2014, contingent
upon regulatory approvals
upon regulatory approvals
Combines Smart Grid technology with energy
efficiency programs to help customers control
their energy use and cost, while providing
distribution rate base growth for the Company
efficiency programs to help customers control
their energy use and cost, while providing
distribution rate base growth for the Company
Note: See Safe Harbor Statement at the beginning of today’s presentation.
Blueprint for the Future
6
Blueprint for the Future -
Construction Cost and Timing Estimates
(Dollars in Millions)
• Current total estimated cost of project (2008 - 2014) is $422 million
• Department of Energy awarded $168 million in federal stimulus funds for
Smart Grid projects in the District of Columbia, Maryland and New Jersey
Smart Grid projects in the District of Columbia, Maryland and New Jersey
• Grants will be finalized through negotiations with DOE
Note: See Safe Harbor Statement at the beginning of today’s presentation.
Note: Construction cost and timing estimates do not reflect the impact of federal stimulus funds.
7
Advantages of decoupling:
• Fosters energy conservation as it aligns the interests of customers and utilities
• Eliminates revenue fluctuations due to weather and changes in customer usage patterns
• Provides for more predictable utility distribution revenues
• Provides for more reliable fixed-cost recovery
82%
Note: See Safe Harbor Statement at the beginning of today’s presentation.
60%
Decoupling Status
8
Authorized Return on Equity | 2008 Actual | Latest Available | |
Delmarva Power | |||
Delaware-Electric | 10.00% | 9.3% | 10.1% (2) |
Delaware-Gas | 10.25% | 9.4% | 9.6% (3) |
Maryland | 10.00% | 9.8% | 9.8% (4) |
Pepco | |||
Maryland | 10.00% | 11.2% | 9.4% (3) |
District of Columbia | 9.50% (5) | 7.8% | 7.8% (4) |
Atlantic City Electric | |||
New Jersey | 9.75% | 9.3% | 8.3% (2) |
(1) Unadjusted ROE represents the Return on Equity prior to any adjustments for regulatory commission
treatment in a base rate case or any other adjustments to actual financials.
treatment in a base rate case or any other adjustments to actual financials.
(2) March 2009
(3) June 2009
(4) December 2008
(5) Reflects 50 basis point reduction for Bill Stabilization Adjustment.
Distribution Summary (Unadjusted ROE)1
9
Note: See Safe Harbor Statement at the beginning of today’s presentation.
(1) Test period adjusted for known and measurable changes in all cases; NJ test period to be updated for actuals during the proceeding.
(2) Return on equity and revenue requirement as filed by the company assuming Bill Stabilization Adjustment approval. Return on equity
recommendation has been updated in the DPL - MD case to 10.75%. The Pepco - DC and ACE - NJ cases may have updated return on
equity recommendations should current market conditions continue.
recommendation has been updated in the DPL - MD case to 10.75%. The Pepco - DC and ACE - NJ cases may have updated return on
equity recommendations should current market conditions continue.
(3) In the filings, a three year rolling average treatment of pension, OPEB, and bad debt expense was requested. The average of these costs
would be recovered through a surcharge (updated annually) with the difference between the average and the actual costs incurred
deferred for future recovery.
would be recovered through a surcharge (updated annually) with the difference between the average and the actual costs incurred
deferred for future recovery.
(4) An interim rate increase of $2.5 million will be put into effect on November 17, 2009, subject to refund.
Distribution Rate Cases - Summary
10
Note: See Safe Harbor Statement at the beginning of today’s presentation.
(1) Administrative Law Judge to convene a prehearing conference by year end to set a procedural schedule.
(2) Opening order for the case was issued October 6, 2009, with the intervention period ending on November 6,
2009. Procedural schedule is expected to be set following the end of the intervention period.
2009. Procedural schedule is expected to be set following the end of the intervention period.
(3) Maryland and Delaware statutes require completion of cases within seven months or rates can be put into effect
subject to refund; no statute in the District of Columbia, target to complete cases within nine months of filing;
New Jersey has a nine month statute in place with BPU option to grant extensions.
subject to refund; no statute in the District of Columbia, target to complete cases within nine months of filing;
New Jersey has a nine month statute in place with BPU option to grant extensions.
Distribution Rate Cases - Timeline
11
Note: See Safe Harbor Statement at the beginning of today’s presentation.
* Return on equity recommendation has been updated to 10.75%.
Delmarva Power - Maryland Electric Case
12
Note: See Safe Harbor Statement at the beginning of today’s presentation.
Pepco - - DC Electric Case
13
Vineland
Delta
«
«
2009 Capacity (4,350 MW)
(Owned and contracted)
An Eastern PJM, mid-merit focused generator
Financials (as of 9/30/09)
Property, Plant & Equipment $1,340 M
Construction Work in Process $ 269 M
Employees 424
Note: Excludes units under development
Existing sites
Conectiv Energy Generating Facilities
14
Economic recession and mild weather have
lowered demand and dampened volatility
lowered demand and dampened volatility
PJM MAAC Average Load
Gas CC Hourly Spark Spread
(Jan 2008 - Jul 2009)
Jul-08
Jul-09
Year-to-date MAAC load is at the same level experienced 6 years ago
15
• All fuel prices have significantly
decreased since last summer -
decreased since last summer -
with natural gas falling the most -
resulting in much lower power prices
resulting in much lower power prices
• More efficient combined cycle plants
have displaced “expensive coal”
plants - - older sub-critical vintage or
those with high transportation or
environmental costs
have displaced “expensive coal”
plants - - older sub-critical vintage or
those with high transportation or
environmental costs
• Mild weather, efficiency gains, and the
economy have reduced demand -
further reducing the marginal price to
serve the last MW of load
economy have reduced demand -
further reducing the marginal price to
serve the last MW of load
This has adversely impacted
our 2009 fleet results
our 2009 fleet results
Low prices and decreased demand have displaced
“expensive coal” generation and compressed margins
“expensive coal” generation and compressed margins
16
MWHR
$/MWHR
Fleet Generation Volume
Average Generation Unit Margin
Lower fleet runs and narrower spreads have resulted in
generation margins that are significantly less than 2008
generation margins that are significantly less than 2008
YTD Generation volumes are
23% less than 2008 results
23% less than 2008 results
YTD Generation unit margins are
58% less than 2008 results
58% less than 2008 results
2008
2008
2009
2009
17
Natural gas has experienced 2-3 year pricing cycles
On the positive-side, markets expect
commodity price recovery in 2010-11
commodity price recovery in 2010-11
18
$215
$206
$308
$265
$285
$335
$380
$435
$270
$300
$340
$410
$380
$480
$259
$255
$319
$407
Note: See Safe Harbor Statement at the beginning of today’s presentation.
Conectiv Energy Gross Margin Forecast -
narrowed 2010 and 2011 ranges
narrowed 2010 and 2011 ranges
19
Delta Project - on time; on budget for June 2011
Commercial Operation
Commercial Operation
• 545 MW dual fuel combined cycle plant
located in Peach Bottom Township, PA
located in Peach Bottom Township, PA
• Project Cost: $470 million
• Project Summary:
– Construction ~30% complete
– Similar design with Siemens technology as
Hay Road and Bethlehem plants
Hay Road and Bethlehem plants
– 6-year tolling agreement with Constellation
provides stable earnings
provides stable earnings
– Permits and infrastructure allow for
expansion
expansion
20
Vineland Solar Project -
Largest solar facility in New Jersey
Largest solar facility in New Jersey
Note: See Safe Harbor Statement at the beginning of today’s presentation.
4 MW Solar PV project located in Vineland, NJ
Project Cost: $20 million
Project Summary
• Supports initiative to increase renewable
energy portfolio
energy portfolio
• 25 Year PPA with City of Vineland
• Located on 28-acre site
Project Status
• Phase I: 2.3 MW September 2009
• Phase II: 1.7 MW December 2009
21
PES has shifted its strategic focus from
Energy Supply to Energy Services
Energy Supply to Energy Services
PES earnings contributed
19¢/share in 2008
Energy
Services 8¢
Services 8¢
Energy
Supply 11¢
Supply 11¢
Overview
• PES provides retail energy services to large commercial, industrial, and
government customers
government customers
• Energy Services
– Energy Performance Contracting (energy efficiency)
– Renewable Energy and Combined Heat and Power
• Energy Supply
– Retail Electric and Natural Gas Supply
• PHI intends to conclude a strategic analysis
of this business during the 4th quarter 2009
of this business during the 4th quarter 2009
– Power Generation
• Slated for retirement in 2012
22
• PES continues to include a cost of
capital component for all retail supply
proposals to reflect credit market
conditions
capital component for all retail supply
proposals to reflect credit market
conditions
• For all successful proposals, PES
has been using collateral-free
hedges
has been using collateral-free
hedges
– However, PES’s retention rate
has been less than 15%
has been less than 15%
• PES expectations of gross margins
over the long term:
over the long term:
– Historically we have achieved
approximately $3.00/MWh, although
margins have been in the
$6.00+/MWh range in 2009
approximately $3.00/MWh, although
margins have been in the
$6.00+/MWh range in 2009
– $0.30/Dth range for natural
gas
gas
Note: See Safe Harbor Statement at the beginning of today’s presentation.
Retail electric and natural gas business
23
• PES is well positioned to grow its energy efficiency business
– Energy Performance Contracting does not require capital expenditures or
contingent capital; it fits well with PHI’s strategic direction
contingent capital; it fits well with PHI’s strategic direction
– PES has installed over $750 million of energy efficiency projects since
1995
1995
– PES was ranked the 10th largest ESCO in North America in a recent
2009 survey
2009 survey
• PES is growing its development capability to pursue federal energy
efficiency contracts
efficiency contracts
– PES is among a select group of companies qualified to bid on energy
efficiency projects at all federal facilities
efficiency projects at all federal facilities
– PES has grown its sales and engineering staff by 40% since 12/31/08
Focused on growing our energy
efficiency business
efficiency business
24
* Excludes special items. See appendix for reconciliation to GAAP.
Third Quarter 2009
Financial Performance - Drivers
Financial Performance - Drivers
25
Liquidity Position
PHI maintains sufficient liquidity to execute the business plan
Note: See Safe Harbor Statement at the beginning of today’s presentation.
Millions of Dollars
26
Millions of Dollars
(1) Midpoint of projected cash from operations range, includes tax refund from NOL carry back and
assumes the return of cash collateral per the PES retail energy supply backlog schedule. Excludes
any impact from the recent DOE stimulus fund awards.
assumes the return of cash collateral per the PES retail energy supply backlog schedule. Excludes
any impact from the recent DOE stimulus fund awards.
(2) Reflects Pepco Holdings and Utility debt maturities; excludes debt maturities related to the Atlantic
City Electric securitization bonds.
City Electric securitization bonds.
Note: See Safe Harbor Statement at the beginning of today’s presentation.
2010 Principal Sources & Uses of Cash
27
Note: See Safe Harbor Statement at the beginning of today’s presentation.
2009
• Renewed $400 mm PHI 364-day credit facility in October; new maturity is
October 15, 2010
• Evaluating pre-funding a portion of the $450 mm PHI debt due May/June 2010
2010
• Evaluation of capital expenditures continues
– Delay of $400 mm announced early 2009
– Evaluating additional delay of 2010 capital expenditures
• Potential sources
– Stimulus funds
– Possible acceleration of PES collateral return
– Small equity issuance
– Utility debt issuances
– Sale of selected assets
– Capacity to fund with short-term debt
2010 financing is manageable - more specifics to be provided in Q1 - 2010
Financing and Funding
28
$1,024
$1,013
$1,120
$1,234
$1,144
Construction Expenditures - Projection
$781
Note: See Safe Harbor Statement at the beginning of today’s presentation.
29
Power Delivery - A Driver of Growth
Total Rate Base
Growth - 65%
Growth - 65%
Electric Distribution Rate
Base Growth - 39%
Base Growth - 39%
Transmission Rate
Base Growth - 158%
Base Growth - 158%
* Actual 2008 year end rate base, projected 2009 - 2013 year end rate bases.
$4,678
$7,712
$5,033
$5,566
$6,192
$3,383
$3,614
$3,854
$4,068
$4,455
$4,708
$231
$233
$243
$250
$259
$263
$1,064
$1,186
$1,469
$1,874
$2,462
$2,741
*
Note: See Safe Harbor Statement at the beginning of today’s presentation.
30
Cross-Border Energy Leases - Status
Note: See Safe Harbor Statement at the beginning of today’s presentation.
• Investment
– Carrying value of cross-border leases is evaluated each quarter
– Equity investment of $1.4 billion as of September 30, 2009
• Path forward
– Concluding the appeals process with IRS; expect appeals effort to end by year
-end 2009
-end 2009
– Two litigation paths - - pursue in Tax Court or pay the tax and sue for refund in
District Court or Federal Court of Claims; either process could take 18 - 24 mos.
District Court or Federal Court of Claims; either process could take 18 - 24 mos.
• Recent court decision
– October 21, 2009 U.S. Court of Federal Claims issued a decision in favor of the
taxpayer regarding a lease-in lease-out cross-border lease transaction
taxpayer regarding a lease-in lease-out cross-border lease transaction
– Transaction subject to the court ruling is similar to PHI’s cross-border energy
lease investments
lease investments
– Currently evaluating the implications of this decision
31
Potential mitigation to cash outflow would be the liquidation of the lease portfolio -
PHI could generate sufficient cash proceeds to cover the $695 million of taxes and
interest due within a 6 - 12 month period to satisfy the tax obligation
PHI could generate sufficient cash proceeds to cover the $695 million of taxes and
interest due within a 6 - 12 month period to satisfy the tax obligation
Note: See Safe Harbor Statement at the beginning of today’s presentation.
Cross-Border Energy Leases - Alternatives
• Cash payment to the IRS for a disallowance of tax
benefits would only be required if one of the following
occurs:
benefits would only be required if one of the following
occurs:
– Future settlement with the IRS
– Litigation is pursued in District Court or Federal Court of Claims, in which case
a payment would be made currently to the IRS for the 2001 and 2002 tax years
under audit (approximately $72 million plus interest); a suit for refund of the
payment is sought through the litigation process
a payment would be made currently to the IRS for the 2001 and 2002 tax years
under audit (approximately $72 million plus interest); a suit for refund of the
payment is sought through the litigation process
– Litigation is pursued in Tax Court, and PHI receives an unfavorable decision; in
the worst case of a total disallowance of tax benefits, PHI would be obligated to
pay approximately $595 million of additional taxes and $100 million of interest
at the time a decision is rendered based on September 30, 2009 balances
the worst case of a total disallowance of tax benefits, PHI would be obligated to
pay approximately $595 million of additional taxes and $100 million of interest
at the time a decision is rendered based on September 30, 2009 balances
32
Earnings Guidance
Note: See Safe Harbor Statement at the beginning of today’s presentation.
• PHI will begin providing annual earnings per share
guidance
guidance
• The announcement of guidance for 2010 is targeted
for the March Analyst Conference
for the March Analyst Conference
33
POM Investment Case
Note: See Safe Harbor Statement at the beginning of today’s presentation.
• Long-term earnings growth
• Commitment to dividend
• Investment grade credit quality
• Improved liquidity position
• Focus on lowering business risk
34
Appendix
35
Note: See Safe Harbor Statement at the beginning of today’s presentation.
Regulated T&D Electric Sales
· Although industrial sales have decreased year-to-date versus last year, the earnings impact is less
due to smaller margins earned in this class.
due to smaller margins earned in this class.
· 60% of regulated distribution sales will be decoupled at 11/1/09. By mid-year 2010, 80% are expected
to be decoupled.
to be decoupled.
· Estimated 2010 weather normalized billed sales are expected to be flat relative to 2009.
· Year-to-date 2009 customer growth is .5% compared to 2008; estimated 2010 customer growth is
expected to be .6% relative to 2009.
expected to be .6% relative to 2009.
36
* Excludes special items. See slide 39 in appendix for reconciliation to GAAP.
Year-to-Date 2009
Financial Performance - Drivers
Financial Performance - Drivers
37
(1) Management believes the special items are not representative of the Company’s ongoing business operations.
(2) Excludes gain from the Mirant bankruptcy settlement $0.07 and MD Income Tax Benefit $0.05.
Third Quarter 2009 Financial Performance
38
Year-to-Date 2009 Financial Performance
(1) Management believes the special items are not representative of the Company’s ongoing business operations.
(2) Excludes gains from the Mirant bankruptcy settlement $0.11 and MD Income Tax Benefit $0.05.
(3) Excludes the adjustment to the equity value of the cross-border energy leases $0.43 and the interest accrued on
the related income tax obligations of $0.03.
the related income tax obligations of $0.03.
39