• Fair Disclosure

  • Regulation Fair Disclosure

  • 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.

    I. Summary of Regulation FD

    Which Company personnel are covered?

    Regulation FD applies to statements made by the Company, as well as statements made on behalf of the Company by the following Company representatives.

    • directors (including both employee directors and outside directors)
    • the president
    • any vice president in charge of a principal business unit, division or function (such as transmission, distribution, finance/treasury)
    • any other officer who performs policy making functions for the Company (including the CEO, CFO and COO)
    • any other person who performs a policy making function for the Company (including an executive officer of a Company subsidiary who performs policy making functions for the Company)
    • any investor relations officer (or person with similar functions)
    • any public relations officer (or person with similar functions)
    • any other officer, employee or agent of the Company who regularly communicates with Covered Recipients (as defined below) or stockholders
    • any other person who makes a type of communication covered by Regulation FD at the direction of any of the above-listed persons

    The persons described in the first seven bullet points above are sometimes referred to in this policy collectively as "Senior Officials."

    To whom must a statement be made in order to be covered by Regulation FD?

    To be covered by Regulation FD, a statement must be made to any of the following (collectively, "Covered Recipients"):

    • broker-dealers and associated persons (including securities analysts)
    • investment advisers and associated persons
    • institutional investment managers and associated persons
    • investment companies or an affiliated person thereof
    • stockholders of the Company (if the information is communicated under circumstances in which it is reasonably foreseeable that the stockholder will purchase or sell the Company's securities on the basis of the information)

    What kind of information is covered?

    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:

    • earnings information
    • mergers, acquisitions, divestitures, tender offers, joint ventures, or changes in assets
    • new products or discoveries
    • developments regarding customers or suppliers (such as the acquisition or loss of a contract)
    • changes in control or in management
    • a change in auditors or notification by the auditor that the Company may no longer rely on an auditor's audit report
    • events regarding the issuer's securities (such as defaults on senior securities, calls of securities for redemption, repurchase plans, stock splits or changes in dividends, changes to the rights of security holders, public or private sales of additional securities)
    • regulatory actions or outcomes of regulatory proceedings
    • bankruptcies or receiverships

    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.

    If material nonpublic information is disclosed selectively, what is required under Regulation FD to be done?


    The information disclosed selectively must be disclosed publicly. The timing of the public disclosure depends upon whether the disclosure was intentional or non-intentional.

    • A disclosure is "intentional" when the person making the disclosure either knows, or is reckless in not knowing, that the information being communicated is both material and nonpublic. Regulation FD requires that any intentional disclosure of material nonpublic information be accompanied by a simultaneous public disclosure of the information.
    • Any non-intentional disclosure of material nonpublic information covered by Regulation FD must be followed promptly by a public disclosure of that information. The term "promptly" is defined to mean as soon as reasonably practicable, but in no event after the later of 24 hours or the opening of trading on the next trading day on the NYSE, after a Senior Official learns that there has been an unintentional disclosure and the Senior Official knows, or is reckless in not knowing, that the information is both material and nonpublic.

    Public disclosure can be accomplished in any of the following ways:

    • Filing a Form 8-K with the SEC
    • Distributing a press release through a widely circulated news or wire service
    • Holding a conference call that members of the public can listen to by telephone or other electronic transmission such as an Internet webcast (after being given adequate notice of the call and the means for accessing it)

    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.

    What are the penalties for a violation of Regulation FD?

    Violation of Regulation FD could result in any one of the following sanctions against the Company:

    • a cease and desist order;
    • injunctive relief; or
    • civil monetary penalties.

    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.

    II. Applicability of Regulation FD to Pepco Holdings, Inc. and its Subsidiaries

    Who are the individuals who are covered by Regulation FD?

    Art Agra Matthew A. Likovich 
    Paul M. Barbas Vincent Maione 
    Margaret Barry Kevin M. McGowan 
    Marcus L. Beal, Jr. Laura L. Monica 
    Frederick J. Boyle Nicholas J. Morici 
    Ronald K. Clark Vincent Morris 
    Donna Cooper Lawrence C. Nussdorf 
    Jack B. Dunn, IV Patricia A. Oelrich 
    Kevin C. Fitzgerald Kenneth J. Parker 
    H. Russell Frisby, Jr. Joseph M. Rigby 
    Thomas H. Graham Brian M. Shivery
    Terence C. Golden Lester P. Silverman
    Robert Hainey Jeffery E. Snyder 
    John U. Huffman Gary R. Stockbridge
    Lendel G. Jones Jane K. Storero
    Michael J. Kelley Francis G. Tedesco
    Donna J. Kinzel David M. Velazquez
    Barbara J. Krumsiek    MaryBeth Vrees

    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?"

    Who are the investment analyst firms that regularly follow Pepco Holdings?

    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
    Credit Suisse - North America
    Edward Jones
    Hilliard Lyons
    Evercore ISI 
    J.P. Morgan
    KeyBanc Capital Markets
    Morgan Stanley
    SunTrust Robinson Humphrey 
    USCA Securities
    Wellington Shields & Co.
    Wells Fargo Securities
    Williams Capital Group 

    What about communications to lawyers, investment bankers and accountants?

    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.

    What is the Company's policy regarding communications with analysts and stockholders?

    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.