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&lt;p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;&lt;b&gt;(4)&amp;#xA0;&lt;u&gt;RECENTLY
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&lt;p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;&lt;i&gt;Disclosures about
Pension and Postretirement Plan Assets (ASC 715)&lt;/i&gt;&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;The FASB issued new
disclosure requirements about the plan assets of a defined benefit
pension or other postretirement plan that will be effective
starting with financial statement reporting periods ending
December&amp;#xA0;31, 2009 for PHI. Comparative disclosures are not
required for earlier periods presented. The new requirements would
expand current disclosures to be in line with FASB guidance on fair
value measurement disclosures.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;The disclosures are to
provide users an understanding of: (1)&amp;#xA0;the investment
allocation decisions made, (2)&amp;#xA0;factors used in investment
policies and strategies, (3)&amp;#xA0;plan assets by major investment
types, (4)&amp;#xA0;inputs and valuation techniques used to measure the
fair value of plan assets, (5)&amp;#xA0;significant concentrations of
risk within the plan, and (6)&amp;#xA0;the effects of fair value
measurement using significant unobservable inputs on changes in the
value of plan assets for the period. PHI is evaluating the impact
that this new guidance will have on PHI&amp;#x2019;s financial statement
footnote disclosures.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;&lt;i&gt;Transfers and Servicing
(ASC 860)&lt;/i&gt;&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;The FASB issued new
guidance that removes the concept of a qualifying special-purpose
entity (QSPE) from the current guidance on transfers and servicing
and the QSPE scope exception in current guidance on consolidation.
The new guidance also changes the requirements for derecognizing
financial assets and requires additional disclosures about a
transferor&amp;#x2019;s continuing involvement in transferred financial
assets.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;The new guidance is
effective for transfers of financial assets occurring in fiscal
periods beginning after November&amp;#xA0;15, 2009, therefore, this
guidance will be effective on January&amp;#xA0;1, 2010 for PHI.
Comparative disclosures are encouraged but not required for earlier
periods presented. PHI is evaluating the impact that this new
guidance will have on its overall financial condition and financial
statements.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"&gt;&lt;font size="1"&gt;&amp;#xA0;&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;&lt;i&gt;Consolidation of
Variable Interest Entities (ASC 810)&lt;/i&gt;&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;The FASB issued new
consolidation guidance regarding variable interest entities that
eliminates the existing quantitative analysis requirement and adds
new qualitative factors to determine whether consolidation is
required. The new qualitative factors would be applied on a
quarterly basis to interests in variable interest entities. Under
the new guidance, the holder of the interest with the power to
direct the most significant activities of the entity and the right
to receive benefits or absorb losses significant to the entity
would consolidate. The new guidance retained the existing provision
that allowed entities created before December&amp;#xA0;31, 2003 to be
scoped out from a consolidation assessment if exhaustive efforts
are taken and there is insufficient information to determine the
primary beneficiary.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;The new guidance is
effective for fiscal periods beginning after November&amp;#xA0;15, 2009
for existing and newly created entities; therefore, this guidance
will be effective on January&amp;#xA0;1, 2010 for PHI. Comparative
disclosures under this new guidance are encouraged but not required
for earlier periods presented. PHI is evaluating the impact that
this new guidance will have on its overall financial condition and
financial statements.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;&lt;i&gt;Fair Value Measurement
of Liabilities (ASC 820)&lt;/i&gt;&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;The FASB issued new
guidance on the fair value measurement of liabilities when there is
a lack of observable market information. The guidance clarifies
that, when a quoted price is not available for the identical
liability, an entity can use either the quoted price of the
identical liability when it is traded as an asset, quoted price for
a similar liability, or quoted price for a similar liability when
traded as an asset. If these prices are not available, then
entities can employ an income or market valuation approach that
considers what the entity would pay to transfer the identical
liability or would receive to enter into the identical liability.
The guidance is effective for PHI starting October&amp;#xA0;1, 2009.
PHI is evaluating the impact of this new guidance on PHI&amp;#x2019;s
overall financial condition and financial statements.&lt;/font&gt;&lt;/p&gt;
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(ASC 860)&lt;/i&gt;&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;The FASB issued new
guidance that removes the concept of a qualifying special-purpose
entity (QSPE) from the current guidance on transfers and servicing
and the QSPE scope exception in current guidance on consolidation.
The new guidance also changes the requirements for derecognizing
financial assets and requires additional disclosures about a
transferor&amp;#x2019;s continuing involvement in transferred financial
assets.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;The new guidance is
effective for transfers of financial assets occurring in fiscal
periods beginning after November&amp;#xA0;15, 2009, therefore, this
guidance will be effective on January&amp;#xA0;1, 2010 for Pepco.
Comparative disclosures are encouraged but not required for earlier
periods presented. Pepco is evaluating the impact that this new
guidance will have on its overall financial condition and financial
statements.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;&lt;i&gt;Fair Value Measurement
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&lt;p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;The FASB issued new
guidance on the fair value measurement of liabilities when there is
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that, when a quoted price is not available for the identical
liability, an entity can use either the quoted price of the
identical liability when it is traded as an asset, quoted price for
a similar liability, or quoted price for a similar liability when
traded as an asset. If these prices are not available, then
entities can employ an income or market valuation approach that
considers what the entity would pay to transfer the identical
liability or would receive to enter into the identical liability.
The guidance is effective for Pepco starting October&amp;#xA0;1, 2009.
We are assessing the impact of this new guidance on Pepco&amp;#x2019;s
overall financial condition and financial statements.&lt;/font&gt;&lt;/p&gt;
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&lt;p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;&lt;b&gt;(4)&amp;#xA0;&lt;u&gt;RECENTLY
ISSUED ACCOUNTING STANDARDS, NOT YET ADOPTED&lt;/u&gt;&lt;/b&gt;&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;&lt;i&gt;Transfers and Servicing
(ASC 860)&lt;/i&gt;&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;The FASB issued new
guidance that removes the concept of a qualifying special-purpose
entity (QSPE) from the current guidance on transfers and servicing
and the QSPE scope exception in current guidance on consolidation.
The new guidance also changes the requirements for derecognizing
financial assets and requires additional disclosures about a
transferor&amp;#x2019;s continuing involvement in transferred financial
assets.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;The new guidance is
effective for transfers of financial assets occurring in fiscal
periods beginning after November&amp;#xA0;15, 2009, therefore, this
guidance will be effective on January&amp;#xA0;1, 2010 for DPL.
Comparative disclosures are encouraged but not required for earlier
periods presented. DPL is evaluating the impact that this new
guidance will have on its overall financial condition and financial
statements.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;&lt;i&gt;Consolidation of
Variable Interest Entities (ASC 810)&lt;/i&gt;&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;The FASB issued new
consolidation guidance regarding variable interest entities that
eliminates the existing quantitative analysis requirement and adds
new qualitative factors to determine whether consolidation is
required. The new qualitative factors would be applied on a
quarterly basis to interests in variable interest entities. Under
the new guidance, the holder of the interest with the power to
direct the most significant activities of the entity and the right
to receive benefits or absorb losses significant to the entity
would consolidate. The new guidance retained the existing provision
that allowed entities created before December&amp;#xA0;31, 2003 to be
scoped out from a consolidation assessment if exhaustive efforts
are taken and there is insufficient information to determine the
primary beneficiary.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;The new guidance is
effective for fiscal periods beginning after November&amp;#xA0;15, 2009
for existing and newly created entities; therefore, this guidance
will be effective on January&amp;#xA0;1, 2010 for DPL. Comparative
disclosures under this new guidance are encouraged but not required
for earlier periods presented. DPL is evaluating the impact that
this new guidance will have on its overall financial condition and
financial statements.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;&lt;i&gt;Fair Value Measurement
of Liabilities (ASC 820)&lt;/i&gt;&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;The FASB issued new
guidance on the fair value measurement of liabilities when there is
a lack of observable market information. The guidance clarifies
that, when a quoted price is not available for the identical
liability, an entity can use either the quoted price of the
identical liability when it is traded as an asset, quoted price for
a similar liability, or quoted price for a similar liability when
traded as an asset. If these prices are not available, then
entities can employ an income or market valuation approach that
considers what the entity would pay to transfer the identical
liability or would receive to enter into the identical liability.
The guidance is effective for DPL starting October&amp;#xA0;1, 2009. We
are assessing the impact of this new guidance on DPL&amp;#x2019;s
overall financial condition and financial statements.&lt;/font&gt;&lt;/p&gt;
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&lt;p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;&lt;b&gt;(4)&amp;#xA0;&lt;u&gt;RECENTLY
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&lt;p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;&lt;i&gt;Transfers and Servicing
(ASC 860)&lt;/i&gt;&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;The FASB issued new
guidance that removes the concept of a qualifying special-purpose
entity (QSPE) from the current guidance on transfers and servicing
and the QSPE scope exception in current guidance on consolidation.
The new guidance also changes the requirements for derecognizing
financial assets and requires additional disclosures about a
transferor&amp;#x2019;s continuing involvement in transferred financial
assets.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;The new guidance is
effective for transfers of financial assets occurring in fiscal
periods beginning after November&amp;#xA0;15, 2009, therefore, this
guidance will be effective on January&amp;#xA0;1, 2010 for ACE.
Comparative disclosures are encouraged but not required for earlier
periods presented. ACE is evaluating the impact that this new
guidance will have on its overall financial condition and financial
statements.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;&lt;i&gt;Consolidation of
Variable Interest Entities (ASC 810)&lt;/i&gt;&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;The FASB issued new
consolidation guidance regarding variable interest entities that
eliminates the existing quantitative analysis requirement and adds
new qualitative factors to determine whether consolidation is
required. The new qualitative factors would be applied on a
quarterly basis to interests in variable interest entities. Under
the new guidance, the holder of the interest with the power to
direct the most significant activities of the entity and the right
to receive benefits or absorb losses significant to the entity
would consolidate. The new guidance retained the existing provision
that allowed entities created before December&amp;#xA0;31, 2003 to be
scoped out from a consolidation assessment if exhaustive efforts
are taken and there is insufficient information to determine the
primary beneficiary.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;The new guidance is
effective for fiscal periods beginning after November&amp;#xA0;15, 2009
for existing and newly created entities; therefore, this guidance
will be effective on January&amp;#xA0;1, 2010 for ACE. Comparative
disclosures under this new guidance are encouraged but not required
for earlier periods presented. ACE is evaluating the impact that
this new guidance will have on its overall financial condition and
financial statements.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;&lt;i&gt;Fair Value Measurement
of Liabilities (ASC 820)&lt;/i&gt;&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;The FASB issued new
guidance on the fair value measurement of liabilities when there is
a lack of observable market information. The guidance clarifies
that, when a quoted price is not available for the identical
liability, an entity can use either the quoted price of the
identical liability when it is traded as an asset, quoted price for
a similar liability, or quoted price for a similar liability when
traded as an asset. If these prices are not available, then
entities can employ an income or market valuation approach that
considers what the entity would pay to transfer the identical
liability or would receive to enter into the identical liability.
The guidance is effective for PHI starting October&amp;#xA0;1, 2009. We
are assessing the impact of this new guidance on ACE&amp;#x2019;s
overall financial condition and financial statements.&lt;/font&gt;&lt;/p&gt;
&lt;/div&gt;</NonNumbericText>
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