Safe Harbor Statement/Regulation G Information
Some of the statements contained in today’s presentation with respect to Pepco Holdings, Pepco, Delmarva Power and Atlantic City Electric, and each of their
respective subsidiaries, 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. These statements include declarations regarding each reporting company’s intents,
beliefs and current expectations. You can generally 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”, the negative or other variations of such terms, 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 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 forward-looking statements are qualified
in their entirety by, and should be read together with, the risk factors included in the “Risk Factors” section and other statements in each reporting company’s
annual report on Form 10-K for the year ended December 31, 2011 (as amended) and other SEC filings, and investors should refer to this risk factor section
and such other statements. The forward-looking statements contained herein are also qualified in their entirety by reference to, and should be read together
with, the following important factors, which 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: changes in governmental policies and regulatory actions affecting the energy
industry, including allowed rates of return, industry and rate structure, acquisition and disposal of assets and facilities, operation and construction of
transmission and distribution facilities, and the recovery of purchased power expenses; the outcome of pending and future rate cases, including the possible
disallowance of costs and expenses; the expenditures necessary to comply with regulatory requirements, including regulatory orders, and to implement
reliability enhancement, emergency response and customer service improvement programs; possible fines, penalties or other sanctions assessed by
regulatory authorities against Pepco Holdings’ regulated utilities; weather conditions affecting usage and emergency restoration costs; population growth rates
and changes in demographic patterns; changes in customer energy demand due to conservation measures and the use of more energy-efficient products;
general economic conditions, including the impact of an economic downturn or recession on energy usage; changes in and compliance with environmental
and safety laws and policies; changes in tax rates or policies or in rates of inflation; 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; rules and
regulations imposed by, and decisions of, Federal and/or state regulatory commissions, PJM, the North American Electric Reliability Corporation and other
applicable electric reliability organizations; legal and administrative proceedings (whether civil or criminal) and settlements that influence each reporting
company’s business and profitability; pace of entry into new markets; volatility in customer demand for electricity and natural gas; interest rate fluctuations and
the impact of credit and capital market conditions on the ability of a reporting company to obtain funding on favorable terms; and effects of geopolitical events,
including the threat of domestic terrorism or cyber attacks. Any forward-looking statements speak only as to the date of this presentation and each reporting
company undertakes no 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 any reporting company assess the impact of any such factor on such reporting company’s business 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.
PHI discloses net income from continuing operations and related per share data (both as historical information and earnings guidance) excluding certain items
(non-GAAP financial information) because management believes that these items are not representative of PHI’s ongoing business operations. Management
uses this information, and believes that such information is useful to investors, in evaluating PHI’s period-over-period performance. The inclusion of this
disclosure is intended to complement, and should not be considered as an alternative to, PHI’s reported net income from continuing operations and related
per share data in accordance with accounting principles generally accepted in the United States (GAAP).
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