Exelon Reports Second Quarter 2024 Results

August 1, 2024

Earnings Release Highlights

GAAP net income of $0.45 per share and Adjusted (non-GAAP) operating earnings of $0.47 per share for the second quarter of 2024
Reaffirming full year 2024 Adjusted (non-GAAP) operating earnings guidance range of $2.40-$2.50 per share
Reaffirming fully regulated operating EPS compounded annual growth target of 5-7% through 2027
Strong utility reliability performance – achieved top quartile reliability performance at all utilities, with ComEd and Pepco Holdings achieving top decile in both outage frequency and outage duration for the second straight quarter
An order in Pepco’s “Climate Ready Pathway MD” multi-year plan was received in June

CHICAGO–(BUSINESS WIRE)–Exelon Corporation (Nasdaq: EXC) today reported its financial results for the second quarter of 2024.

“I am pleased to report strong second-quarter earnings and industry-leading operational performance as Exelon maintains our consistent track record of delivering results,” said President and CEO Calvin Butler. “We continue achieving the top-tier reliability our customers expect, and in an evolving regulatory environment, we are being nimble in our financial and regulatory strategies, ensuring our investments meet customers’ growing demands and needs.”

“We delivered second quarter adjusted operating earnings of $0.47 per share this year, $0.06 ahead of results in the second quarter of 2023, driven by increased revenue associated with the investments we are making on behalf of our customers, disciplined cost management and favorable weather conditions,” said Exelon Chief Financial Officer Jeanne Jones. “With most of our planned debt financing activity complete for the year and continued progress on our active rate cases, we remain on track to deliver Adjusted (non-GAAP) operating earnings at the midpoint or better of $2.40 to $2.50 per share for the full year.”

Second Quarter 2024

Exelon’s GAAP net income for the second quarter of 2024 increased to $0.45 per share from $0.34 per share in the second quarter of 2023. Adjusted (non-GAAP) operating earnings for the second quarter of 2024 increased to $0.47 per share from $0.41 per share in the second quarter of 2023. For the reconciliations of GAAP net income to Adjusted (non-GAAP) operating earnings, refer to the tables beginning on page 3.

GAAP net income and Adjusted (non-GAAP) operating earnings in the second quarter of 2024 primarily reflect:

Higher utility earnings primarily due to distribution and transmission rate increases at PHI, distribution rate increases at BGE, favorable weather at PECO, favorable impacts of the Pepco multi-year plan reconciliations, and higher transmission peak load at ComEd. This was partially offset by higher interest expense at PECO and BGE and higher depreciation and amortization expense at PECO, BGE, and PHI.
Higher costs at the Exelon holding company due to higher interest expense.

Operating Company Results¹

ComEd

ComEd’s second quarter of 2024 GAAP net income increased to $270 million from $249 million in the second quarter of 2023. ComEd’s Adjusted (non-GAAP) operating earnings for the second quarter of 2024 increased to $285 million from $251 million in the second quarter of 2023, primarily due to timing of distribution earnings, higher transmission peak loads, and higher rate base. These were partially offset by a lower allowed ROE and the absence of a return on the pension asset. Due to revenue decoupling, ComEd’s distribution earnings are not affected by actual weather or customer usage patterns.

PECO

PECO’s second quarter of 2024 GAAP net income decreased to $90 million from $97 million in the second quarter of 2023. PECO’s Adjusted (non-GAAP) operating earnings for the second quarter of 2024 decreased to $93 million from $98 million in the second quarter of 2023, primarily due to increases in interest expense and depreciation expense, partially offset by favorable weather.

BGE

BGE’s second quarter of 2024 GAAP net income increased to $44 million from $42 million in the second quarter of 2023. BGE’s Adjusted (non-GAAP) operating earnings for the second quarter of 2024 increased to $45 million from $43 million in the second quarter of 2023, primarily due to distribution rate increases, partially offset by an increase in depreciation and amortization expenses and an increase in interest expense. Due to revenue decoupling, BGE’s distribution earnings are not affected by actual weather or customer usage patterns.

___________

¹ Exelon’s four business units include ComEd, which consists of electricity transmission and distribution operations in northern Illinois; PECO, which consists of electricity transmission and distribution operations and retail natural gas distribution operations in southeastern Pennsylvania; BGE, which consists of electricity transmission and distribution operations and retail natural gas distribution operations in central Maryland; and PHI, which consists of electricity transmission and distribution operations in the District of Columbia and portions of Maryland, Delaware, and New Jersey and retail natural gas distribution operations in northern Delaware.

PHI

PHI’s second quarter of 2024 GAAP net income increased to $158 million from $103 million in the second quarter of 2023. PHI’s Adjusted (non-GAAP) operating earnings for the second quarter of 2024 increased to $162 million from $115 million in the second quarter of 2023, primarily due to the favorable impacts of the Pepco Maryland multi-year plans including the recognition of the reconciliations, the absence of an increase in environmental liabilities at Pepco, an increase in ACE and DPL Delaware electric distribution rates, and higher transmission rates at Pepco and DPL, partially offset by increases in depreciation expense and various operating expenses. Due to revenue decoupling, PHI’s distribution earnings related to Pepco Maryland, DPL Maryland, Pepco District of Columbia, and ACE are not affected by actual weather or customer usage patterns.

Recent Developments and Second Quarter Highlights

Dividend: On July 30, 2024, Exelon’s Board of Directors declared a regular quarterly dividend of $0.38 per share on Exelon’s common stock. The dividend is payable on September 13, 2024, to Exelon’s shareholders of record as of the close of business on August 12, 2024.
Rate Case Developments:
- Pepco Maryland Electric Distribution Rate Case: On June 10, 2024, the MDPSC issued an order approving an incremental increase in Pepco’s electric distribution rates of $45 million for the 12-month period ending March 31, 2025, reflecting an ROE of 9.5%. The MDPSC did not approve electric distribution rate increases for 2025, 2026, and the 2027 nine-month extension period.
Financing Activities:
- On March 13, 2024, ComEd issued $800 million of its First Mortgage Bonds, consisting of $400 million of its First Mortgage 5.30% Series Bonds due on June 1, 2034 and $400 million of its First Mortgage 5.65% Series Bonds due on June 1, 2054. ComEd used the proceeds to repay existing indebtedness, outstanding commercial paper obligations, and for general corporate purposes.
- On June 6, 2024, BGE issued $800 million of its Notes, consisting of $400 million aggregate principal of its 5.30% notes due June 1, 2034 and $400 million aggregate principal of its 5.65% notes due June 1, 2054. BGE used the proceeds to repay outstanding commercial paper obligations and for general corporate purposes.

Adjusted (non-GAAP) Operating Earnings Reconciliation

Adjusted (non-GAAP) operating earnings for the second quarter of 2024 do not include the following items (after tax) that were included in reported GAAP net income:

(in millions, except per share amounts)	Exelon Earnings per Diluted Share		Exelon			ComEd		PECO		BGE		PHI
2024 GAAP net income	$	0.45	$	448		$	270	$	90	$	44	$	158
Change in environmental liabilities (net of taxes of $0)		—		(1	)		—		—		—		(1	)
Change in FERC audit liability (net of taxes of $5)		0.01		15			14		—		—		—
Cost management charge (net of taxes of $3, $1, $0, and $2, respectively)		0.01		9			—		3		1		5
2024 Adjusted (non-GAAP) operating earnings	$	0.47	$	472		$	285	$	93	$	45	$	162

Adjusted (non-GAAP) operating earnings for the second quarter of 2023 do not include the following items (after tax) that were included in reported GAAP net income:

(in millions, except per share amounts)	Exelon Earnings per Diluted Share		Exelon		ComEd		PECO		BGE		PHI
2023 GAAP net income	$	0.34	$	343	$	249	$	97	$	42	$	103
Mark-to-market impact of economic hedging activities (net of taxes of $1)		—		3		—		—		—		—
Change in environmental liabilities (net of taxes of $1)		0.01		11		—		—		—		11
SEC matter loss contingency (net of taxes of $0)		0.05		46		—		—		—		—
Separation costs (net of taxes of $2, $1, $0, $0, and $1, respectively)		0.01		5		2		1		1		1
2023 Adjusted (non-GAAP) operating earnings	$	0.41	$	408	$	251	$	98	$	43	$	115

__________

Note:

Amounts may not sum due to rounding.

Unless otherwise noted, the income tax impact of each reconciling item between GAAP net income and Adjusted (non-GAAP) operating earnings is based on the marginal statutory federal and state income tax rates for each Registrant, taking into account whether the income or expense item is taxable or deductible, respectively, in whole or in part. For all items, the marginal statutory income tax rates for 2024 and 2023 ranged from 24.0% to 29.0%.

Webcast Information

Exelon will discuss second quarter 2024 earnings in a conference call scheduled for today at 9 a.m. Central Time (10 a.m. Eastern Time). The webcast and associated materials can be accessed at https://investors.exeloncorp.com.

About Exelon

Exelon (Nasdaq: EXC) is a Fortune 200 company and the nation’s largest utility company, serving more than 10.5 million customers through six fully regulated transmission and distribution utilities — Atlantic City Electric (ACE), Baltimore Gas and Electric (BGE), Commonwealth Edison (ComEd), Delmarva Power & Light (DPL), PECO Energy Company (PECO), and Potomac Electric Power Company (Pepco). 20,000 Exelon employees dedicate their time and expertise to supporting our communities through reliable, affordable and efficient energy delivery, workforce development, equity, economic development and volunteerism. Follow @Exelon on Twitter | X.

Non-GAAP Financial Measures

In addition to net income as determined under generally accepted accounting principles in the United States (GAAP), Exelon evaluates its operating performance using the measure of Adjusted (non-GAAP) operating earnings because management believes it represents earnings directly related to the ongoing operations of the business. Adjusted (non-GAAP) operating earnings exclude certain costs, expenses, gains and losses, and other specified items. This measure is intended to enhance an investor’s overall understanding of period over period operating results and provide an indication of Exelon’s baseline operating performance excluding items that are considered by management to be not directly related to the ongoing operations of the business. In addition, this measure is among the primary indicators management uses as a basis for evaluating performance, allocating resources, setting incentive compensation targets, and planning and forecasting of future periods. Adjusted (non-GAAP) operating earnings is not a presentation defined under GAAP and may not be comparable to other companies’ presentation. Exelon has provided the non-GAAP financial measure as supplemental information and in addition to the financial measures that are calculated and presented in accordance with GAAP. Adjusted (non-GAAP) operating earnings should not be deemed more useful than, a substitute for, or an alternative to the most comparable GAAP net income measures provided in this earnings release and attachments. This press release and earnings release attachments provide reconciliations of Adjusted (non-GAAP) operating earnings to the most directly comparable financial measures calculated and presented in accordance with GAAP, are posted on Exelon’s website: https://investors.exeloncorp.com, and have been furnished to the Securities and Exchange Commission on Form 8-K on August 1, 2024.

Cautionary Statements Regarding Forward-Looking Information

This press release contains certain forward-looking statements within the meaning of federal securities laws that are subject to risks and uncertainties. Words such as “could,” “may,” “expects,” “anticipates,” “will,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “predicts,” “should,” and variations on such words, and similar expressions that reflect our current views with respect to future events and operational, economic, and financial performance, are intended to identify such forward-looking statements.

The factors that could cause actual results to differ materially from the forward-looking statements made by Exelon Corporation, Commonwealth Edison Company, PECO Energy Company, Baltimore Gas and Electric Company, Pepco Holdings LLC, Potomac Electric Power Company, Delmarva Power & Light Company, and Atlantic City Electric Company (Registrants) include those factors discussed herein, as well as the items discussed in (1) the Registrants’ 2023 Annual Report on Form 10-K filed with the SEC in (a) Part I, ITEM 1A. Risk Factors, (b) Part II, ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and (c) Part II, ITEM 8. Financial Statements and Supplementary Data: Note 18, Commitments and Contingencies; (2) the Registrants’ Second Quarter 2024 Quarterly Report on Form 10-Q (to be filed on August 1, 2024) in (a) Part II, ITEM 1A. Risk Factors, (b) Part I, ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and (c) Part I, ITEM 1. Financial Statements: Note 11, Commitments and Contingencies; and (3) other factors discussed in filings with the SEC by the Registrants.

Investors are cautioned not to place undue reliance on these forward-looking statements, whether written or oral, which apply only as of the date of this press release. None of the Registrants undertakes any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this press release.

Earnings Release Attachments Table of Contents

Consolidating Statement of Operations	2

Consolidated Balance Sheets	3

Consolidated Statements of Cash Flows	5

Reconciliation of GAAP Net Income to Adjusted (non-GAAP) Operating Earnings and Analysis of Earnings	7

Statistics
ComEd	8
PECO	9
BGE	12
Pepco	15
DPL	16
ACE .	18


Consolidating Statements of Operations (unaudited) (in millions)

	ComEd			PECO			BGE			PHI			Other (a)			Exelon
Three Months Ended June 30, 2024
Operating revenues	$	2,079		$	891		$	928		$	1,471		$	(8	)	$	5,361
Operating expenses
Purchased power and fuel		763			323			343			562			1			1,992
Operating and maintenance		449			270			250			281			(41	)		1,209
Depreciation and amortization		374			107			162			235			16			894
Taxes other than income taxes		94			52			80			126			8			360
Total operating expenses		1,680			752			835			1,204			(16	)		4,455
Gain on sale of assets		5			2			—			—			—			7
Operating income		404			141			93			267			8			913
Other income and (deductions)
Interest expense, net		(123	)		(57	)		(53	)		(92	)		(158	)		(483	)
Other, net		20			9			8			29			(2	)		64
Total other income and (deductions)		(103	)		(48	)		(45	)		(63	)		(160	)		(419	)
Income (loss) before income taxes		301			93			48			204			(152	)		494
Income taxes		31			3			4			46			(38	)		46
Net income (loss) attributable to common shareholders	$	270		$	90		$	44		$	158		$	(114	)	$	448

Three Months Ended June 30, 2023
Operating revenues	$	1,901		$	828		$	797		$	1,305		$	(13	)	$	4,818
Operating expenses
Purchased power and fuel		685			302			272			467			1			1,727
Operating and maintenance		355			239			198			304			101			1,197
Depreciation and amortization		350			99			158			243			16			866
Taxes other than income taxes		88			47			76			112			1			324
Total operating expenses		1,478			687			704			1,126			119			4,114
Operating income (loss)		423			141			93			179			(132	)		704
Other income and (deductions)
Interest expense, net		(120	)		(48	)		(44	)		(81	)		(134	)		(427	)
Other, net		17			6			5			25			86			139
Total other income and (deductions)		(103	)		(42	)		(39	)		(56	)		(48	)		(288	)
Income (loss) before income taxes		320			99			54			123			(180	)		416
Income taxes		71			2			12			20			(32	)		73
Net income (loss) attributable to common shareholders	$	249		$	97		$	42		$	103		$	(148	)	$	343

Change in net income (loss) from 2023 to 2024	$	21		$	(7	)	$	2		$	55		$	34		$	105


Consolidating Statements of Operations (unaudited) (in millions)

	ComEd			PECO			BGE			PHI			Other (a)			Exelon
Six Months Ended June 30, 2024
Operating revenues	$	4,174		$	1,945		$	2,225		$	3,077		$	(18	)	$	11,403
Operating expenses
Purchased power and fuel		1,670			727			807			1,197			—			4,401
Operating and maintenance		867			563			514			607			(70	)		2,481
Depreciation and amortization		737			210			312			481			33			1,773
Taxes other than income taxes		188			103			169			254			17			731
Total operating expenses		3,462			1,603			1,802			2,539			(20	)		9,386
Gain on sales of assets		5			4			—			—			—			9
Operating income		717			346			423			538			2			2,026
Other income and (deductions)
Interest expense, net		(246	)		(112	)		(103	)		(183	)		(306	)		(950	)
Other, net		41			18			16			57			7			139
Total other income and (deductions)		(205	)		(94	)		(87	)		(126	)		(299	)		(811	)
Income (loss) before income taxes		512			252			336			412			(297	)		1,215
Income taxes		49			13			28			86			(67	)		109
Net income (loss) attributable to common shareholders	$	463		$	239		$	308		$	326		$	(230	)	$	1,106

Six Months Ended June 30, 2023
Operating revenues	$	3,568		$	1,940		$	2,053		$	2,841		$	(22	)	$	10,380
Operating expenses
Purchased power and fuel		1,172			786			764			1,094			2			3,818
Operating and maintenance		692			510			419			613			113			2,347
Depreciation and amortization		688			197			325			484			33			1,727
Taxes other than income taxes		182			97			159			232			9			679
Total operating expenses		2,734			1,590			1,667			2,423			157			8,571
Operating income (loss)		834			350			386			418			(179	)		1,809
Other income and (deductions)
Interest expense, net		(237	)		(97	)		(88	)		(157	)		(261	)		(840	)
Other, net		34			15			8			51			141			249
Total other income and (deductions)		(203	)		(82	)		(80	)		(106	)		(120	)		(591	)
Income (loss) before income taxes		631			268			306			312			(299	)		1,218
Income taxes		142			5			65			54			(60	)		206
Net income (loss) attributable to common shareholders	$	489		$	263		$	241		$	258		$	(239	)	$	1,012

Change in net income (loss) from 2023 to 2024	$	(26	)	$	(24	)	$	67		$	68		$	9		$	94

__________

(a)	Other primarily includes eliminating and consolidating adjustments, Exelon’s corporate operations, shared service entities, and other financing and investment activities.


Exelon Consolidated Balance Sheets (unaudited) (in millions)

	June 30, 2024			December 31, 2023
Assets
Current assets
Cash and cash equivalents	$	934		$	445
Restricted cash and cash equivalents		530			482
Accounts receivable
Customer accounts receivable		3,053			2,659
Customer allowance for credit losses		(372	)		(317	)
Customer accounts receivable, net		2,681			2,342
Other accounts receivable		1,136			1,101
Other allowance for credit losses		(108	)		(82	)
Other accounts receivable, net		1,028			1,019
Inventories, net
Fossil fuel		53			94
Materials and supplies		771			707
Regulatory assets		1,945			2,215
Other		615			473
Total current assets		8,557			7,777
Property, plant, and equipment, net		75,646			73,593
Deferred debits and other assets
Regulatory assets		8,703			8,698
Goodwill		6,630			6,630
Receivable related to Regulatory Agreement Units		3,840			3,232
Investments		270			251
Other		1,467			1,365
Total deferred debits and other assets		20,910			20,176
Total assets	$	105,113		$	101,546

	June 30, 2024			December 31, 2023
Liabilities and shareholders’ equity
Current liabilities
Short-term borrowings	$	1,454		$	2,523
Long-term debt due within one year		1,308			1,403
Accounts payable		2,810			2,846
Accrued expenses		1,241			1,375
Payables to affiliates		5			5
Customer deposits		425			411
Regulatory liabilities		433			389
Mark-to-market derivative liabilities		23			74
Unamortized energy contract liabilities		7			8
Other		569			557
Total current liabilities		8,275			9,591
Long-term debt		43,039			39,692
Long-term debt to financing trusts		390			390
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits		12,358			11,956
Regulatory liabilities		10,198			9,576
Pension obligations		1,562			1,571
Non-pension postretirement benefit obligations		524			527
Asset retirement obligations		272			267
Mark-to-market derivative liabilities		121			106
Unamortized energy contract liabilities		23			27
Other		2,199			2,088
Total deferred credits and other liabilities		27,257			26,118
Total liabilities		78,961			75,791
Commitments and contingencies
Shareholders’ equity
Common stock		21,152			21,114
Treasury stock, at cost		(123	)		(123	)
Retained earnings		5,835			5,490
Accumulated other comprehensive loss, net		(712	)		(726	)
Total shareholders’ equity		26,152			25,755
Total liabilities and shareholders’ equity	$	105,113		$	101,546


Exelon Consolidated Statements of Cash Flows (unaudited) (in millions)

	Six Months Ended June 30,
		2024			2023
Cash flows from operating activities
Net income	$	1,106		$	1,012
Adjustments to reconcile net income to net cash flows provided by operating activities:
Depreciation, amortization, and accretion		1,774			1,727
Gain on sales of assets		(9	)		—
Deferred income taxes and amortization of investment tax credits		72			94
Net fair value changes related to derivatives		—			4
Other non-cash operating activities		246			(222	)
Changes in assets and liabilities:
Accounts receivable		(443	)		387
Inventories		(25	)		44
Accounts payable and accrued expenses		(120	)		(734	)
Collateral received (paid), net		13			(187	)
Income taxes		(39	)		97
Regulatory assets and liabilities, net		265			(516	)
Pension and non-pension postretirement benefit contributions		(125	)		(85	)
Other assets and liabilities		(261	)		140
Net cash flows provided by operating activities		2,454			1,761
Cash flows from investing activities
Capital expenditures		(3,466	)		(3,685	)
Other investing activities		(1	)		10
Net cash flows used in investing activities		(3,467	)		(3,675	)
Cash flows from financing activities
Changes in short-term borrowings		(670	)		(1,600	)
Proceeds from short-term borrowings with maturities greater than 90 days		150			400
Repayments on short-term borrowings with maturities greater than 90 days		(549	)		(150	)
Issuance of long-term debt		4,225			5,200
Retirement of long-term debt		(903	)		(1,209	)
Dividends paid on common stock		(761	)		(717	)
Proceeds from employee stock plans		22			19
Other financing activities		(67	)		(84	)
Net cash flows provided by financing activities		1,447			1,859
Increase (decrease) in cash, restricted cash, and cash equivalents		434			(55	)
Cash, restricted cash, and cash equivalents at beginning of period		1,101			1,090
Cash, restricted cash, and cash equivalents at end of period	$	1,535		$	1,035