Regulation FD prohibits the Company, or specified persons acting on its behalf, from selectively disclosing material nonpublic corporate information to persons identified in this policy as "Covered Recipients", including securities analysts and shareholders. Pepco Holdings and its subsidiaries, and persons acting on their behalf, will comply fully with Regulation FD.
Regulation FD applies to statements made by the Company, as well as statements made on behalf of the Company by the following Company representatives.
The persons described in the first seven bullet points above are sometimes referred to in this policy collectively as "Senior Officials."
To be covered by Regulation FD, a statement must be made to any of the following (collectively, "Covered Recipients"):
The information covered must be material nonpublic information. Materiality is not a defined term, but the established standard for materiality is whether there is a substantial likelihood that the information, if known, would be viewed by the reasonable investor either (i) as having significantly altered the total mix of information available or (ii) as being important in making an investment decision. In addition, the following is a non-exclusive list of types of information which should be reviewed carefully, under the circumstances, to determine whether it is material:
The SEC has specifically warned that a private discussion with an analyst who is seeking guidance regarding an earnings estimate involves a "high degree of risk under Regulation FD." In the SEC’s view, if a Company officer communicates selectively to the analyst nonpublic information about the Company's anticipated earnings (e.g., statements that earnings will be higher than, lower than, or even the same as what analysts have been forecasting), the Company likely will have violated Regulation FD. This is true whether the information about earnings is communicated expressly or through indirect "guidance," the meaning of which is apparent though implied. Thus, any comment by or on behalf of the Company regarding earnings guidance or the earnings forecasts of securities analysts must be in the form of a public communication.
The information disclosed selectively must be disclosed publicly. The timing of the public disclosure depends upon whether the disclosure was intentional or non-intentional.
Public disclosure can be accomplished in any of the following ways:
The SEC has indicated that making the information available on the Company's website may constitute adequate public disclosure, depending on the particular facts and circumstances. The Office of the Corporate Secretary should be consulted in advance whenever public disclosure through the Company's website (or by any other means of broad, non-exclusionary communication not described above) is desired to comply with Regulation FD's public disclosure requirements.
Violation of Regulation FD could result in any one of the following sanctions against the Company:
In addition, the SEC may issue a cease and desist order, or obtain other monetary or non-monetary sanctions (such as a bar from serving as a public company officer), against any person who is responsible for a violation of Regulation FD.
The list of persons provided above is as of December 2015. Other persons not specifically named above may be deemed to be covered by this policy if they are otherwise described under the section of this policy entitled "Which Company personnel are covered?"
Note: The investment analyst firms which typically write reports on Pepco Holdings for public release are listed below; however, the requirements of Regulation FD apply to any securities analyst, institutional investor, investment company or shareholder with whom the Company or any of the persons who may be covered by Regulation FD has contact.
Argus Research Company Bank of America - Merrill Lynch Barclays Citi Credit Suisse - North America Edward Jones Hilliard Lyons Evercore ISI J.P. Morgan KeyBanc Capital Markets Morgan Stanley Morningstar SunTrust Robinson Humphrey USCA Securities Wellington Shields & Co. Wells Fargo Securities Williams Capital Group
Communications made to the Company's outside lawyers and accountants (i.e., professionals who owe the Company a duty of trust or confidence) are excluded from the requirements of Regulation FD. Also, disclosure to an investment banking firm would be excluded from Regulation FD so long as it was made under a similar duty of trust or confidence or pursuant to an express agreement to keep the disclosed information confidential.
As a matter of policy, the Company will maintain communications with the investment community and will coordinate all such communications through the Investor Relations Department. Accordingly, the individuals who are authorized to speak with analysts or stockholders are as follows:
Communications With Authorized Individuals
Analysts, including at conferences or industry group meetings provided that all such communications by any authorized individual (other than Donna J. Kinzel, Margaret Barry or Brian M. Shivery) must occur in the presence of Ms. Kinzel, Ms. Barry or Mr. Shivery.
Joseph M. Rigby David M. Velazquez Kevin C. Fitzgerald Frederick J. Boyle William M. Gausman John U. Huffman Donna J. Kinzel Kevin M. McGowan Margaret Barry Brian M. Shivery
Stockholders (other than with respect to routine stock transfer and other routine stockholder inquiries)
Joseph M. Rigby David M. Velazquez Kevin C. Fitzgerald Frederick J. Boyle William M. Gausman John U. Huffman Donna J. Kinzel Kevin M. McGowan Margaret Barry Brian M. Shivery Jane K. Storero (and appointed designees of each of them)
Stockholders (with respect to routine stock transfer and other routine stockholder inquiries) Representatives of Shareholder Services Margaret Barry Donna J. Kinzel Brian M. Shivery Jane K. Storero (and appointed designees of each of them)
Donna J. Kinzel, Margaret Barry and Brian M. Shivery may consult with any Company employee to gather answers to questions. If you receive such inquiries from any member of the investment community or any stockholder, please refer the caller to Donna J. Kinzel, Margaret Barry or Brian M. Shivery (302-429-3004).
The announcement of earnings will be made by a press release prior to or simultaneously with any discussion of earnings.
Group meetings, one-on-one meetings and private telephone calls with analysts are permitted under Regulation FD, but material nonpublic information about the Company must not be disclosed in such meetings. Extreme caution must be exercised in these meetings or on these calls to ensure that only material, publicly disclosed information is discussed. Specific situations in which extreme caution should be taken may include, without limitation, (i) responding to questions by analysts regarding prospective financial results, (ii) responding to questions seeking a reaffirmation or update of, or other information regarding, previously disclosed earnings guidance, or (iii) discussions regarding earnings forecasts or other analyses prepared by securities analysts. Furthermore, non-verbal cues utilized by the person speaking, such as "tone", "emphasis" and "demeanor," depending on the circumstances, may indicate an intentional selective disclosure of material nonpublic information that would violate Regulation FD absent a simultaneous public disclosure. If material nonpublic information is to be released intentionally a public disclosure should be prepared in advance and released simultaneously. If an unintentional disclosure of material nonpublic information is made, it will be necessary to make a public disclosure of the information within the time periods discussed above.
If any person makes, or a Senior Official becomes aware of, an unintentional disclosure of material information, the person or Senior Official should immediately contact the Company’s General Counsel (202-872-3585) or the Vice President - Corporate Governance (202-872-3487) in order that the required disclosure under Regulation FD may be made within the time periods required by Regulation FD.