| UNITED STATES SECURITIES AND EXCHANGE COMMISSION | |||||||||||
| Washington, D.C. 20549 | |||||||||||
| FORM | |||||||||||
| CURRENT REPORT | |||||||||||
| Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |||||||||||
| Date of Report (Date of earliest event reported) | |||||||||||
| Commission File Number | Name of Registrant; State or Other Jurisdiction of Incorporation; Address of Principal Executive Offices; and Telephone Number | IRS Employer Identification Number | ||||||||||||
(a | ||||||||||||||
| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | |||||
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
| EXELON CORPORATION: | ||||||||||||||
Indicate by check mark whether any of the registrants are emerging growth companies as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company | ||
| If an emerging growth company, indicate by check mark if any of the registrants have elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ | ||
Section 7 - Regulation FD
Item 7.01. Regulation FD Disclosure
On February 25, 2022, Exelon Corporation (“Exelon”) filed its 2021 Annual Report on Form 10-K with the Securities and Exchange Commission. The Exelon Consolidated Statement of Operations and Comprehensive Income for the year ended December 31, 2021, in the Form 10-K includes the results of Constellation Energy Generation, LLC (formerly Exelon Generation Company, LLC) (“Generation”), whose separation from Exelon was completed on February 1, 2022. Exelon’s GAAP Net Income and Adjusted (non-GAAP) Operating Earnings was $1.74 per share and $2.82 per share, respectively, for the year ended December 31, 2021.
GAAP Net Income and Adjusted (non-GAAP) Operating Earnings for Exelon’s utility subsidiaries and the holding company was $1.95 per share and $2.08 per share, respectively, for the year ended December 31, 2021. Beginning with the Form 10-Q to be filed for the first quarter of 2022, Exelon will present Generation’s financial results as discontinued operations for the period in 2022 prior to the separation on February 1, 2022 (January 1, 2022 to January 31, 2022) and for the three months ended March 31, 2021 and will report its utility and holding company financial results as continuing operations. Exelon is also required to recast its financial statements for the years ended December 31, 2021 and 2020 to present Generation’s financial results as discontinued operations in those periods. Accounting rules require that certain corporate overhead costs previously allocated to Generation be presented as part of Exelon’s continuing operations as these costs do not qualify as expenses of the discontinued operations.
Exelon reaffirms its guidance range for full year 2022 Adjusted (non-GAAP) Operating Earnings of $2.18-$2.32 per share from its utility subsidiaries and holding company, as first presented during its Analyst Day on January 10, 2022. The presentation that will be used for Exelon’s winter and spring 2022 investor meetings reflects these 2021 actual financial results as well as select 2021 operational metrics and is furnished as Exhibit 99.1 to this report. The presentation may also be accessed on the Investor Relations page of Exelon’s website: www.exeloncorp.com.
The information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth in such a filing.
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.
Exelon’s Adjusted (non-GAAP) Operating Earnings for the year ended December 31, 2021 do not include the following items (after tax) that were included in reported GAAP Net Income:
| Exelon Earnings per Diluted Share* | |||||
| 2021 GAAP Net Income | $1.74 | ||||
| Mark-to-market impact of economic hedging activities | (0.43) | ||||
| Unrealized gains related to NDT funds | (0.14) | ||||
| Asset impairments | 0.41 | ||||
| Plant retirements and divestitures | 0.88 | ||||
| Cost management program | 0.01 | ||||
| Change in environmental liabilities | 0.01 | ||||
| COVID-19 direct costs | 0.04 | ||||
| Asset retirement obligation | (0.04) | ||||
| Acquisition related costs | 0.02 | ||||
| ERP system implementation costs | 0.01 | ||||
| Separation costs | 0.09 | ||||
| Costs related to suspension of contractual offset | 0.15 | ||||
| Income tax-related adjustments | 0.05 | ||||
| Noncontrolling interests | 0.02 | ||||
| 2021 Adjusted (non-GAAP) Operating Earnings | $2.82 | ||||
*Amounts may not sum due to rounding.
Exelon's utility subsidiaries and holding company Adjusted (non-GAAP) Operating Earnings for the year ended December 31, 2021 do not include the following items (after tax) that were included in reported GAAP Net Income:
| Exelon's Utility Subsidiaries and Holding Company Earnings per Diluted Share* | |||||
| 2021 GAAP Net Income | $1.95 | ||||
| Mark-to-market impact of economic hedging activities | 0.01 | ||||
| Separation costs | 0.05 | ||||
| COVID-19 direct costs | 0.01 | ||||
| Income tax-related adjustments | 0.05 | ||||
| 2021 Adjusted (non-GAAP) Operating Earnings | $2.08 | ||||
*Amounts are per Exelon share and may not sum due to rounding.
Section 9 - Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
| Exhibit No. | Description | |||||||
| 101 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | |||||||
| 104 | The cover page from this Current Report on Form 8-K, formatted as Inline XBRL. | |||||||
* * * * *
This Current Report on Form 8-K contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. Words such as “could,” “may,” “expects,” “anticipates,” “will,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “predicts,” 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 include those factors discussed herein as well as the items discussed in (1) Exelon’s 2021 Annual Report on Form 10-K 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 19, Commitments and Contingencies and (2) other factors discussed in Exelon’s filings with the Securities and Exchange Commission.
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 Current Report on Form 8-K. Exelon undertakes no obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this Current Report on Form 8-K.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, each Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| EXELON CORPORATION | |||||
| /s/ Joseph Nigro | |||||
| Joseph Nigro | |||||
| Senior Executive Vice President and Chief Financial Officer | |||||
| Exelon Corporation | |||||
February 25, 2022
EXHIBIT INDEX
| Exhibit No. | Description | |||||||
| 101 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | |||||||
| 104 | The cover page from this Current Report on Form 8-K, formatted as Inline XBRL. | |||||||
Winter and Spring 2022 Investor Meetings
2 Cautionary Statements Regarding Forward-Looking Information This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. Words such as “could,” “may,” “expects,” “anticipates,” “will,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “predicts,” 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. Any reference to “E” after a year or time period indicates the information for that year or time period is an estimate. 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' 2021 Annual Report on Form 10-K 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 19, Commitments and Contingencies; and (2) 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 presentation. 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 presentation.
3 Non-GAAP Financial Measures Exelon reports its financial results in accordance with accounting principles generally accepted in the United States (GAAP). Exelon supplements the reporting of financial information determined in accordance with GAAP with certain non-GAAP financial measures, including: • Adjusted operating earnings exclude certain items that are considered by management to be not directly related to the ongoing operations of the business as described in the Appendix • Adjusted operating and maintenance expense excludes regulatory operating and maintenance costs for the utility businesses and certain excluded items as set forth in the reconciliation in the Appendix • Operating ROE is calculated using operating net income divided by average equity for the period. The operating income reflects all lines of business for the utility business (Electric Distribution, Gas Distribution, Transmission). • Adjusted cash from operations primarily includes cash flows from operating activities adjusted for common dividends, change in cash on hand, and the expected cash payment to Constellation in accordance with the separation agreement Due to the forward-looking nature of some forecasted non-GAAP measures, information to reconcile the forecasted adjusted (non-GAAP) measures to the most directly comparable GAAP measure may not be currently available, as management is unable to project all of these items for future periods. This information is intended to enhance an investor’s overall understanding of period over period financial results and provide an indication of Exelon’s baseline operating performance by excluding items that are considered by management to be not directly related to the ongoing operations of the business. In addition, this information 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. These non-GAAP financial measures are not a presentation defined under GAAP and may not be comparable to other companies’ presentations. Exelon has provided these non-GAAP financial measures as supplemental information and in addition to the financial measures that are calculated and presented in accordance with GAAP. These non-GAAP measures should not be deemed more useful than, a substitute for, or an alternative to the most comparable GAAP measures provided in the materials presented. Non-GAAP financial measures are identified by the phrase “non-GAAP” or an asterisk (*). Reconciliations of these non-GAAP measures to the most comparable GAAP measures are provided in the appendices and attachments to this presentation.
4 Who is Exelon? 1.3 million Electric customers 0.7 million Gas customers 2022E Rate Base: $9.0B Territory: MD Main City: Baltimore Population: 0.6M BGE 4.1 million Electric customers 2022E Rate Base: $19.3B Territory: IL Main City: Chicago Population: 2.7M ComEd 0.6 million Electric customers 2022E Rate Base: $3.3B Territory: NJ Main City: Atlantic City Population: 0.1M ACE 1.7 million Electric customers 0.5 million Gas customers 2022E Rate Base: $10.4B Territory: PA Main City: Philadelphia Population: 1.6M PECO 0.5 million Electric customers 0.1 million Gas customers 2022E Rate Base: $3.8B Territory: DE, MD Main City: Wilmington Population: 0.1M DPL 0.9 million Electric customers 2022E Rate Base: $6.2B Territory: MD, DC Main City: Washington, D.C. Population: 0.7M Pepco 6 T&D-only utilities Operate across seven regulatory jurisdictions 4 major metro areas served Including Chicago, Philadelphia, Baltimore, D.C. 18,700 Employees across our operating companies 10.5 million(1) Electric and gas customers served across our service territories 25,600 Square miles of combined service territory across our jurisdictions 182,550 Circuit miles of electric and gas distribution lines 11,150 Circuit miles of FERC-regulated electric transmission lines $18.0 billion Operating revenues recorded at our utilities in 2021 $52.0 billion Rate base estimate for 2022 $29.0 billion Projected capital investment through 2025 (1) Customer count reflects the sum of Exelon’s total gas and electric customer base; Exelon consolidated customer count may not sum due to rounding
5 Premier Utility by Scope and Scale Note: reflects most recent available data as of February 25, 2022 (1) Customer count reflects the sum of Exelon’s total gas and electric customer base (2) Includes transmission, distribution and generation; represents 2022E rate base projections as disclosed by the company.; for companies that do not disclose 2022E, reflects rate base projection calculated from stated growth rate 10.5 10.1 9.8 8.7 8.6 7.0 6.2 5.8 5.7 5.5 5.2 5.0 4.2 3.2 DExelon PCG SODUK SRE NEEFE XEL AEP EIX ED PEG ETR $92 $68 $58 $52 $52 $50 $46 $39 $39 $37 $33 $26 $26 PCGAEPDUK SREDSO Exelon XEL EIX ED ETR PEG FE Predominantly Regulated T&D Utility Vertically Integrated Utility Largest Utility by Customers(1) Among the Largest Regulated Utilities and the Largest Transmission and Distribution Utility by Rate Base(2)
6 Delivering Sustainable Value as the Premier T&D Utility Industry-Leading Platform Leading ESG Profile Operational Excellence Financial Discipline Sustainable Value SUSTAINABLE VALUE ✓ Strong Growth Outlook: Targeting investment of ~$29B of T&D capital from 2022- 2025 to meet customer needs, resulting in expected rate base growth of 8.1% and fully regulated operating EPS* growth of 6-8% from 2021-2025 ✓ Shareholder Returns: Targeting a ~60% dividend payout ratio of operating earnings* and growth in-line with those earnings through 2025 INDUSTRY-LEADING PLATFORM ✓ Size and Scale: Largest T&D utility in the country serving 10+ million customers ✓ Diversified Rate Base: Operate across 7 different regulatory jurisdictions ✓ Large Urban Footprint: Geographically positioned to lead the clean energy buildout in our densely-populated territories OPERATIONAL EXCELLENCE ✓ Safely Powering Reliability and Resilience: Track record of top quartile reliability performance ✓ Delivering a World-Class Customer Experience: Helping customers take control of energy usage while delivering top quartile customer satisfaction results ✓ Constructive Regulatory Environments: ~100% of rate base growth covered by alternative recovery mechanisms and ~77% decoupled from volumetric risk LEADING ESG PROFILE ✓ No Owned Generation Supply: Pure-play T&D utility ✓ Advancing Clean and Affordable Energy Choices: Building a smarter, stronger, and cleaner energy grid with options that meet customer needs at affordable rates ✓ Supporting Communities: Powering the economic health of the diverse communities we serve, while advancing social equity FINANCIAL DISCIPLINE ✓ Strong Balance Sheet: Maintain balance sheet capacity to firmly support investment grade credit ratings ✓ Organic Growth: Reinvestment of free cash to fund utility capital programs with no more than $1B of equity expected through 2025
7 Diverse, Fully Regulated T&D Utility Servicing Large Urban Areas Across Seven Regulatory JurisdictionsFully Regulated, Transmission and Distribution (1) Represents 2022E rate base (2) Other includes long-term regulatory assets, which generally earn a return consistent with rate base, including Energy Efficiency and the Solar Rebate Program 21% 65% 12% 2% Electric Transmission Electric Distribution Gas Delivery Other(2) ~$52B(1) 29% 21% 20% 18% 5% 4% 3% IL MD FERC Transmission PA DC NJ DE ~$52B(1) Exelon is a fully regulated, majority-electric T&D operator servicing seven different regulatory jurisdictions
8 Best-in-Class Operations Note: reflects 2020 company performance (the latest comparable data set for Exelon and its peers); peer data reflects only a subset (top 10) of the panel of companies that report operational metrics (1) Quartiles are calculated using reported results by the full panel of peer companies that are deemed most comparable to Exelon’s utilities each year; reflects 2019 quartiles to remain consistent with the data used for 2021 benchmarking (2) Reflects the average number of interruptions per customer reported by Exelon and 20 comparable peer utilities (sources: First Quartile (1QC) T&D, PSE&G Electric Peer Panel Survey, or EIA) (3) Reflects the average time to restore service to customer interruptions reported by Exelon and 20 comparable peer utilities (sources: First Quartile (1QC) T&D, PSE&G Electric Peer Panel Survey, or EIA) (4) Reflects the measurements of perceptions of reliability, customer service, price and management reputation by residential and small business customers reported to Escalent by Exelon and 18 comparable peer utilities (5) Reflects the percentage of calls responded to in 1 hour or less reported by Exelon and 50 comparable peer utilities (sources: PSE&G Peer Panel Gas Survey and AGA Best Practices Survey) Delivering a World-Class Customer ExperienceIndustry-Leading T&D Operator 0. 59 0. 59 0. 62 0. 65 0. 66 0. 83 0. 87 0. 89 0. 92 0. 93 Pe er D Pe er C Pe er F Pe er G Pe er A Ex el on Pe er B Pe er E Pe er H Top Quartile(1) Pe er I 72 80 83 97 98 10 1 10 5 10 6 10 8 11 0 Pe er G Top Quartile(1) Pe er A Ex el on Pe er F Pe er B Pe er D Pe er C Pe er E Pe er H Pe er I Better Better 2.5 Beta CAIDI(3)2.5 Beta SAIFI(2) Pe er I Pe er B 8. 108. 17 7. 81 Pe er C 8. 23 Pe er D 8. 03 Pe er A Ex el on 8. 00 7. 95 Pe er E 7. 90 Pe er F 7. 85 Pe er G 7. 84 Pe er H Top Quartile(1) 99 .9 0% Pe er C 10 0. 00 % Pe er A Pe er F Ex el on Pe er B 10 0. 00 % 10 0. 00 % 10 0. 00 % Pe er D 99 .9 9% 99 .9 8% Pe er E 99 .9 7% Pe er H 99 .9 0% Pe er G 99 .9 0% Top Quartile(1) Pe er I Gas Odor Response(5)Customer Satisfaction(4) Better Better
9 Constructive Regulatory Mechanisms (1) Expected 2017-2020E rate base growth as of December 31, 2016 (calculated from 2016E base year) (2) Reflects expected rate base growth for 2022E-2025E (calculated from 2021E base year) (3) Figure assumes implementation of multi-year plans for DPL Maryland and ComEd, which have not yet been filed. ComEd figures assume recovery through a multi-year plan beginning in 2024. ComEd has the option to file a multi-year plan or a future test year case but has not yet made a final determination. (4) ComEd distribution formula rate expires in 2022, but 2023 rates will be based on the final formula rate filing 2017-2020E Rate Base Growth of $9B(1) 2022-2025E Rate Base Growth of $17B(2) 29%13% 26% 18% 12% 2% 25% 23% 18% 7% 27% Multi-Year Plan(3) Traditional Base RatesComEd Distribution Formula(4) Fully Projected Future Test YearTracker MechanismsTransmission Formula 5 years ago, ~75% of growth was recovered via alternative recovery mechanisms; Exelon now projects an additional ~$8B of growth over a comparable period with almost 100% expected to be recovered through those mechanisms
10 Exelon is an Industry Leader in ESG DIVERSITY, EQUITY & INCLUSION (DE&I) • Executive Committee is 59% women or people of color • Created Executive-led Racial Equity Task Force in 2020 • Launched $36 million Racial Equity Capital Fund and $3 million Exelon HBCU Corporate Scholars Program WORKFORCE DEVELOPMENT AND SUPPLIER DIVERSITY • More than 65 company-sponsored workforce development programs address economic inequities in our communities • $2.2 billion of expenditures with diverse suppliers represented 37% of total sourced supplier spend in 2020 ENERGY AFFORDABILITY • Utility customer bills as % of median income below the national average • All utilities have programs in place to provide financial assistance to low-income households, and they connect customers to over $450M in financial energy assistance annually NET-ZERO CLIMATE COMMITMENT • No owned generation supply • Targeting reduction of our operations-driven Scope 1 and Scope 2 emissions 50% by 2030 through our Path to Clean initiative • Exploring new technologies to achieve net-zero by 2050 ADVANCING CLEAN AND AFFORDABLE ENERGY CHOICES • Green Power Connection Program enables interconnection of local renewables • Energy efficiency programs helped customers save 22.3 million MWhs in 2020 INDUSTRY PARTNERSHIP TO MITIGATE CLIMATE CHANGE • Launched the $20 million Climate Change Investment Initiative (2c2i) in 2019, driving investment in emerging technologies that support clean energy transition and resilience STRONG CORPORATE GOVERNANCE ACROSS THE ORGANIZATION • Ranked 41st out of the S&P 250 in Labrador Advisory Services’ 2021 Transparency Awards, which recognizes the quality and completeness of information that top U.S. companies make available to investors • Executive compensation is tied to customer, strategy, financial and operational goals • Stock ownership requirement for executives and directors aligns interests with stakeholders • Ranked in the top 14% of all S&P companies in the 2021 CPA-Zicklin Index for Corporate Political Disclosure and Accountability, earning designation as an index Trendsetter with its 92.9% score ENHANCING EXELON BOARD DE&I • 90% of Board members are independent, including independent Board Chair • 70% diverse Board of which 57% are people of color and 43% are women Environmental Social Governance
11 COMPANY AND OPERATIONS Reducing Operations-Driven Emissions by 50% by 2030 and Net-Zero by 2050 to Align with National Decarbonization Goals COMMUNITY SUPPORT Areas for Engagement and Advocacy Path to Clean: Reaching a Net-Zero Footprint Electrify 30% of our light and heavy-duty vehicle fleet by 2025 and 50% by 2030 Focus on efficiency, conservation and clean electricity for our operations Invest in equipment and processes to reduce SF6 leakage from our systems Modernize our natural gas infrastructure to minimize methane leaks and increase safety and reliability The Path to Meeting Exelon’s Scope 1 and 2, Operations-Driven Emissions Reduction Goals Exelon has aligned its corporate goal with the national science-based target, with existing solutions identified for 80% of the reductions and proactively investing in pilot technologies and solutions to address the remaining 20% 790 550 390 0 200 400 600 800 2020 Th ou sa nd M et ric T on s o f C O 2e 2015 Baseline 2030 Emissions Offsets 2050 Achieve net-zero operations by 2050 Cut operations- driven emissions in half by 2030 EMPOWERING CUSTOMERS Areas for Innovation and Technology Advancement Efficient grid management and grid modernization technologies to minimize system losses Leak detection technologies to reduce natural gas lifecycle emissions and increase safety Partner with communities to develop and implement clean energy solutions that are accessible to all customers Understand jurisdictional differences in energy use needs to develop reliable decarbonization solutions Invest in and support small businesses that are tackling climate problems in our communities Build connected communities that harness digital solutions to integrate clean technologies Driving Scope 3 Customer Emissions Reductions by Supporting Clean Energy Goals in Our Communities Transportation electrification, efficiency, and conservation programs for our customers Leverage alternative fuels to reduce natural gas lifecycle emissions Existing technology and policy supports 80% of targeted reductions
12 Financial Outlook
13 Customer Needs and Industry Trends Continue to Support Investment Growth $6.4B of electric transmission investment projected for 2022-2025 $3.7B of gas delivery investment projected for 2022-2025 $18.9B of electric distribution investment projected for 2022-2025 $21B $23B $26B $27B $48B $52B $56B $61B $65B 2021 - 2024E2018 - 2021E 2020 - 2023E2019 - 2022E 2023E2022E2022 - 2025E 2021E 2024E 2025E $29B +8.1% … and translates to higher rate base(2) growth 4-year capital investment(1) profile drives benefits for our customers... (1) 4-year capital outlook reflects forecast as presented on prior Q4 earnings calls (exception is 2022-2025E, which reflects capital forecast as presented at Analyst Day 2022) (2) Reflects year end rate base projections as presented on Analyst Day 2022
14 Projected Dividend Payout(4)Targeting 6-8% Operating Earnings* Growth to 2025(1) Long-Term Earnings Growth Supports a Sustainable Dividend $2.08(2) 2021 2022E $2.18-$2.32(3) $1.35 2022E Expect 6-8% operating EPS* growth through 2025 Project 6-8% dividend growth in-line with operating EPS* through 2025 6-8% 6-8% Exelon is projecting a ~60% dividend payout ratio of operating earnings* that will grow in-line with the targeted 6-8% operating EPS* growth (1) Includes after-tax interest expense associated with debt held at Corporate (2) 2021 results of Exelon’s utility subsidiaries and holding company based on 2021 average outstanding shares of 980M. Beginning with the Form 10-Q to be filed for the first quarter of 2022, Exelon will present Generation’s financial results as discontinued operations and will report its utility and holding company financial results as continuing operations. Accounting rules require that certain corporate overhead costs previously allocated to Generation will be presented as part of Exelon's continuing operations, as these costs do not qualify as expenses of the discontinued operations. (3) 2022E earnings guidance based on expected average outstanding shares of 983M. ComEd’s 2022E earning guidance is based on a forward 30-year Treasury yield as of 12/31/2021. (4) Dividend is subject to approval by the Board of Directors. 2022 projected dividend payout calculated using the midpoint of the earnings guidance band.
15 Exelon’s Trailing Twelve Month Earned ROEs* 9.5% 9.4% 9.6% 10.0% 8.7% 9.2% 2016 2017 20192018 20212020 Note: Represents the twelve-month periods December 31, 2016-2021 for Exelon’s utilities (excludes Corp). Earned ROEs* represent weighted average across all lines of business (Electric Distribution, Gas Distribution, and Electric Transmission). Gray-shaded area represents Exelon’s 9-10% targeted range. Delivering TTM ROEs* within our 9-10% targeted range
16 Managing Costs Below the Rate of Inflation Focused on Managing Costs and Customer Affordability $ in millions • Since 2016, adjusted O&M* is projected to increase 1.4% through 2022, which is a rate well below inflation that benefits customer bills • Exelon is prepared to successfully manage inflationary pressures through the following: – Investments in technology that are intended to reduce costs to customers – World-class Supply organization that can leverage economies of scale and proactive strategies in procurement – Large fleet ensures best practices and ability to support mutual assistance across Exelon platform – Multi-year labor agreements • Where we see potential pressure, we have already begun working with business partners to mitigate price increases and avoid long lead times through negotiations, utilizing alternative suppliers, and purchasing in bulk $3,725 $3,725 $3,900 $3,800 $3,950 $3,950 $4,050 2016 2017 2022E20212018 2019 2020 1.4% PECO U.S. Average 1.9% 1.6%1.8% PHI 1.5% BGE 1.4% ComEd Adjusted O&M* ($M)(1) Bill as Percent of Median Income(2) Exelon’s Customers’ Electricity Bills as a % of Median Income is Below the U.S. Average Addressing Inflationary Risks in a Variety of Ways (1) Reflects Exelon’s utilities (excludes Corp); numbers rounded to the nearest $25M (2) Sources: median household income from the U.S. Census Bureau’s 2020 American Community Survey 1-Year Experimental Estimates; annualized utility bill calculated using data found in forms EIA-861 and EIA-861S
17 2022-2025 Financing Plan ~$14 ~$29 ~($5) ~$5 ~$14 Utility Investment 2022-2025 Debt RefinanceAdjusted Cash from Operations*(1) 2022-2025 Debt Maturity Debt Issuance(2) ~$1 Equity Issuance $ in billions Note: Financing plan is subject to change (1) Adjusted Cash from Operations* is net of common dividends, change in cash on hand, and the $1.75B expected cash payment to Constellation in accordance with the separation agreement (2) Includes both utility and corporate debt. Anticipate maintaining ~51% equity to capital ratio at the utilities and corporate debt to total Exelon debt is anticipated to average approximately 27% over the forecast period Balanced investment and value return strategy results in limited equity needs over the next several years
18 Moody’s CFO (Pre-WC) / Debt %*S&P FFO / Debt %* Maintaining a Strong Balance Sheet is a Top Financial Priority Credit Ratings(3) ExCorp ComEd PECO BGE ACE DPL Pepco Moody’s Baa2 A1 Aa3 A3 A2 A2 A2 S&P BBB A A A A A A Fitch BBB A A+ A A A A 0% 12% 13% 14% 15% 12% 2022-2024E Average(1) Exelon Downgrade Threshold(2) 13-14% 0% 12% 13% 14% 15% Exelon Downgrade Threshold(2) 2022-2024E Average(1) 12% 13-14% (1) 2022 – 2024 average internal estimate based on S&P and Moody’s methodology, respectively (2) S&P and Moody’s downgrade thresholds based on their published reports for Exelon Corp (3) Current senior unsecured ratings for Exelon and BGE and current senior secured ratings for ComEd, PECO, ACE, DPL, and Pepco Strong balance sheet and low-risk attributes provide strategic and financial flexibility
19 Key Year-over-Year DriversAdjusted Operating Earnings* Guidance(1) 2022 Adjusted Operating Earnings* Guidance Incremental investments in utility infrastructure PECO electric and gas distribution rate cases Depreciation & amortization $0.77 $0.62 $0.53 $0.43 ($0.26) $2.08(2) ComEd 2021 PHI 2022 Original Guidance BGE PECO HoldCo $2.18 - $2.32(3) (1) Includes after-tax interest expense associated with debt held at Corporate (2) 2021 results of Exelon’s utility subsidiaries and holding company based on 2021 average outstanding shares of 980M. Beginning with the Form 10-Q to be filed for the first quarter of 2022, Exelon will present Generation’s financial results as discontinued operations and will report its utility and holding company financial results as continuing operations. Accounting rules require that certain corporate overhead costs previously allocated to Generation will be presented as part of Exelon's continuing operations, as these costs do not qualify as expenses of the discontinued operations. (3) 2022E earnings guidance based on expected average outstanding shares of 983M. ComEd’s 2022E earning guidance is based on a forward 30-year Treasury yield as of 12/31/2021.
20 Appendix
21 Analyst Day 2022 Capital Expenditures ($M) Analyst Day 2022 Rate Base ($B) Q4 2020 Capital Expenditures ($M) Q4 2020 Rate Base ($B) 4,225 4,475 4,500 4,600 1,500 1,450 1,475 1,375 825 825 6,725 2021E 2022E 2024E 750 2023E 6,550 775 6,725 6,725 4,350 4,525 4,650 4,875 4,850 1,400 1,500 1,525 1,600 1,725 875 900 975 950 2021 850 2022E 2024E2023E 2025E 6,9006,625 7,100 7,450 7,500 29.3 31.7 33.9 36.2 38.2 9.2 9.9 10.7 11.2 12.3 8.2 5.4 7.0 2020E 2021E 2023E 6.3 7.6 2022E 2024E 43.9 47.9 51.6 55.0 58.8 +7.6% 31.4 33.9 36.3 39.0 41.3 9.9 10.9 11.6 12.9 14.4 9.3 2022E 6.2 2023E 55.7 2021E 7.2 7.8 2024E 8.6 2025E 47.6 52.0 60.5 65.0 +8.1% Gas Delivery/Other(1) Electric Transmission Electric Distribution Utility Capex and Rate Base vs. Previous Disclosures Note: Numbers rounded to nearest $25M and may not sum due to rounding. Rate base reflects year-end estimates. Q4 2020 capital disclosures dated February 24, 2021. Analyst Day 2022 capital disclosures dated January 10, 2022, excluding 2021, which was updated for year-end actuals. (1) Other includes long-term regulatory assets, which generally earn a return consistent with rate base, including Energy Efficiency and the Solar Rebate Program Planning to invest $29.0B of capital from 2022-2025 for the benefit of our customers, supporting projected rate base growth of 8.1% from 2021-2025
22 Analyst Day 2022 Capital Expenditures ($M)Q4 2020 Capital Expenditures ($M) 1,925 2,025 2,050 2,000 1,975 450 450 500 575 675 2,650 2025E 2,550 2021 2022E 2023E 2,475 2024E 2,375 2,575 1,925 2,000 1,950 1,825 475 450 550 500 2,350 2024E 2,400 2021E 2023E2022E 2,450 2,500 Electric Transmission Electric Distribution ComEd Capital Expenditure Forecast Note: Numbers rounded to nearest $25M and may not sum due to rounding. Q4 2020 disclosures dated February 24, 2021. Analyst Day 2022 disclosures dated January 10, 2022, excluding 2021, which was updated for year-end actuals. Project ~$10.3B of capital being invested from 2022-2025
23 Analyst Day 2022 Capital Expenditures ($M)Q4 2020 Capital Expenditures ($M) 825 850 950 1,075 1,100 100 175 75 100 125 350 325 325 375 375 2021 2022E 2023E 1,375 1,300 1,325 2024E 2025E 1,550 1,575 750 850 925 1,025 175 125 75 75325 300 275 300 1,300 2023E2021E 2022E 2024E 1,2751,275 1,375 Gas Delivery Electric Transmission Electric Distribution PECO Capital Expenditure Forecast Note: Numbers rounded to nearest $25M and may not sum due to rounding. Q4 2020 disclosures dated February 24, 2021. Analyst Day 2022 disclosures dated January 10, 2022, excluding 2021, which was updated for year-end actuals. Project ~$5.8B of capital being invested from 2022-2025
24 Analyst Day 2022 Capital Expenditures ($M)Q4 2020 Capital Expenditures ($M) 475 500 450 475 500 300 275 400 400 400 400 475 475 500 500 1,325 2025E 1,200 2022E 2024E2021 2023E 1,225 1,375 1,400 450 475 450 475 325 325 375 325 425 450 400 400 2021E 2022E 2023E 1,200 2024E 1,2251,200 1,250 Gas Delivery Electric Transmission Electric Distribution BGE Capital Expenditure Forecast Note: Numbers rounded to nearest $25M and may not sum due to rounding. Q4 2020 disclosures dated February 24, 2021. Analyst Day 2022 disclosures dated January 10, 2022, excluding 2021, which was updated for year-end actuals. Project ~$5.3B of capital being invested from 2022-2025
25 Analyst Day 2022 Capital Expenditures ($M)Q4 2020 Capital Expenditures ($M) 1,125 1,175 1,200 1,325 1,275 550 600 525 550 550 100 100 75 2024E 75 2022E2021 2023E 75 2025E 1,750 1,850 1,825 1,950 1,875 1,075 1,125 1,175 1,275 525 550 475 475 5075 2022E 1,700 2021E 50 2023E 75 2024E 1,750 1,725 1,825 Electric DistributionElectric TransmissionGas Delivery PHI Consolidated Capital Expenditure Forecast Note: Numbers rounded to nearest $25M and may not sum due to rounding. Q4 2020 disclosures dated February 24, 2021. Analyst Day 2022 disclosures dated January 10, 2022, excluding 2021, which was updated for year-end actuals. Project ~$7.5B of capital being invested from 2022-2025
26 Analyst Day 2022 Capital Expenditures ($M)Q4 2020 Capital Expenditures ($M) 250 300 300 300 275 200 175 150 175 175 2024E2021 475 2023E2022E 2025E 450425 475 450 200 200 250 225 175 150 125 125 2021E 2022E 2024E 350 2023E 350 375 350 Electric DistributionElectric Transmission ACE Capital Expenditure Forecast Note: Numbers rounded to nearest $25M and may not sum due to rounding. Q4 2020 disclosures dated February 24, 2021. Analyst Day 2022 disclosures dated January 10, 2022, excluding 2021, which was updated for year-end actuals. Project ~$1.9B of capital being invested from 2022-2025
27 Analyst Day 2022 Capital Expenditures ($M)Q4 2020 Capital Expenditures ($M) 250 250 250 300 275 100 150 150 150 175 75 100 100 75 75 2025E 475 425 2021 2022E 2023E 2024E 500 525 525 225 200 225 275 100 150 125 125 75 50 50 75 2021E 425 2022E 2023E 425 2024E 400 450 Electric TransmissionGas Delivery Electric Distribution DPL Capital Expenditure Forecast Note: Numbers rounded to nearest $25M and may not sum due to rounding. Q4 2020 disclosures dated February 24, 2021. Analyst Day 2022 disclosures dated January 10, 2022, excluding 2021, which was updated for year-end actuals. Project ~$2.0B of capital being invested from 2022-2025
28 Analyst Day 2022 Capital Expenditures ($M)Q4 2020 Capital Expenditures ($M) 650 625 650 725 700 250 275 225 225 200 2021 900900 2025E2022E 900 2023E 2024E 950 900 650 725 725 775 250 275 200 225 2024E2022E 925 2021E 2023E 1,000 925 1,000 Electric Transmission Electric Distribution Pepco Capital Expenditure Forecast Note: Numbers rounded to nearest $25M and may not sum due to rounding. Q4 2020 disclosures dated February 24, 2021. Analyst Day 2022 disclosures dated January 10, 2022, excluding 2021, which was updated for year-end actuals. Project ~$3.7B of capital being invested from 2022-2025
29 Undergrounding Cable Initiative • DC Power Line Undergrounding is a multi-year program to underground more than 20 of the most vulnerable overhead distribution lines, spanning over 6-8 years with work that began in early 2019 • Expected to improve resiliency against major storms and to improve reliability by an estimated 95% on selected feeders Superconductor Technology • ComEd is the first utility in the U.S. to permanently install superconductor cable technology at a substation in Chicago’s Irving Park neighborhood • Superconductor technology can support 200 times the current of standard copper wire, and allows electricity to be rerouted creating a backup system that keeps electricity flowing in the event of a major power grid interruption Gas Replacement Programs • BGE STRIDE program replaced ~300 miles of gas main and more than 32,000 gas service pipes since 2014, connecting customer properties to gas mains with modern, durable equipment • Since 2015, PECO has replaced 334 miles of gas mains and approximately 27,000 services to ensure the safety and reliability for its customers Safely Powering Reliability and Resilience 0.78 0.65 0.72 0.67 0.59 0.57 2016 2017 202120202018 2019 Top Quartile(1) 91 84 86 87 80 78 2016 2017 2018 2019 20212020 Top Quartile(1) SAIFI 2.5 Beta(2,4) CAIDI 2.5 Beta(3,4) Better Better Grid Modernization Drives Consistent Reliability Performance(1) (1) Quartiles are calculated using reported results by the full panel of peer companies that are deemed most comparable to Exelon’s utilities each year; quartiles reflect data from two years prior to the indicated year, which is the latest data set available for the entirety of that year (2) Reflects the average number of interruptions per customer reported by Exelon and 20 comparable peer utilities (sources: First Quartile (1QC) T&D, PSE&G Electric Peer Panel Survey, or EIA) (3) Reflects the average time to restore service to customer interruptions reported by Exelon and 20 comparable peer utilities (sources: First Quartile (1QC) T&D, PSE&G Electric Peer Panel Survey, or EIA) (4) Higher frequency and duration of outages in 2018/2019 were due to minor weather events that were not declared as a major event day, and as a result were not excludable from calculations
30 Advancing Clean and Affordable Energy Choices Consistently Delivering Top Quartile Customer Satisfaction Scores(1) Rates 16% Below Largest U.S. Metro Cities Energy Efficiency • Offer nationally recognized energy efficiency portfolios, including incentives and behavioral programs across all our jurisdictions, saving 22.3M MWh in 2020 Smart Meters • 93.4% and 96.6% of electric and gas customers, respectively, have smart meters that allow greater customer participation in the energy system and enhance power grid operational capabilities Transportation Electrification • Enabling the installation of more than 7,000 residential, commercial, and/or utility-owned charging ports across Maryland, Washington D.C., Delaware, and New Jersey • Rebates and incentives support the development of make-ready infrastructure and/or installation of eligible smart chargers Distributed Energy Resource (DER) Enablement • Enabled more than 150,000 customers to connect 1,955 MW of local renewable generation to the grid through 2020 8.237.927.84 20192016 2017 8.107.97 2018 8.19 2020 Top Quartile(2) 2021 Customer Satisfaction 17 .2 8 16 .9 2 13 .2 1 13 .1 7 12 .4 6 11 .8 8 11 .8 5 11 .6 7 10 .6 6 N ew Y or k 26 .2 3 23 .0 6 Sa n Di eg o 20 .3 8 25 .8 3 Lo s A ng el es Bo st on De tr oi t Sa n Fr an ci sc o Ch ic ag o Ph oe ni x Top 20 City Average: 14.66 Ph ila de lp hi a Ba lti m or e W as hi ng to n D .C . U.S. Average: 13.08 Se at tle Sa n An to ni o Exelon Service Territory cents/kWh(3) Better (1) Reflects the measurements of perceptions of reliability, customer service, price and management reputation by residential and small business customers reported to Escalent by Exelon and 18 comparable peer utilities (2) Quartiles are calculated using reported results by the full panel of peer companies that are deemed most comparable to Exelon’s utilities each year; quartiles reflect data from two years prior to the indicated year, which is the latest data set available for the entirety of that year (3) Source: Edison Electric Institute Typical Bills and Average Rates report for Summer 2020; reflects residential average rates for the 12-month period ending 6/30/2020. High-population cities that do not provide data (e.g., Houston) are excluded from the analysis.
31 Maryland Pennsylvania Illinois New Jersey Delaware District of Columbia Our Jurisdictions are Driving to Clean (1) Delaware and D.C. have voluntary energy efficiency savings targets; all others have state-mandated targets. D.C. energy efficiency program has been filed, pending approval. • 40% reduction from 2006 levels by 2030 • Proposals for net-zero by 2045 • 26% reduction by 2025, and 80% reduction by 2050 • Achieve 26-28% reduction from 2005 to 2025; • 80% by 2050 in line with Paris Agreement • Reduce to 80% below 2006 levels by 2050 • Reduce GHG emissions 26% from 2005 by 2025 • Reduce emissions 50% by 2032 and achieve carbon neutrality by 2050 • 50% renewable by 2030 and 100% clean by 2040 • Alternative portfolio standard for 18% by 2021 • 100% clean by 2050 • Renewable portfolio standard of 25% by 2025, 40% by 2030, 50% by 2040 • 35% renewable by 2025; 50% by 2030; 100% clean by 2050 • 5.1% solar by 2021 • 3,500 MW from offshore wind by 2030; 7,500 MW from offshore wind by 2035 • 40% renewable by 2035 • 100% renewable by 2032 • 10% solar by 2041 • 300,000 EVs on the road by 2025 • Replace 25% of state government passenger car fleet with EVs and hybrids by 2025 • 1 million EVs on state roads by 2030 • 330,000 EVs on the road by 2025; 2 million EVs on the road by 2035 • Transition 20% of state government vehicles with EVs by 2025 • 25% of all car registrations by 2030; 100% by 2045 • 100% electrification of public and school buses when replaced at end-of-life • 2% annual reduction in electricity use to 2023 • Reduce electric usage by 3.1% by 2026 from 2009-2010 kWh sales forecasts • 21.5% cumulative savings by 2030, with additional annual savings goals established by the Commission thereafter • 2% annual reduction in electricity use to 2024 • Annual energy use reduction target of 0.7% by 2022 and by 1.5% annually from 2023 forward • 50% reduction in building energy use by 2032 GHG Reductions Electric Portfolio Transportation Electrification Energy Efficiency(1)
32 2021 Electric Customer Mix (% of Volumes) (1) Commercial & Industrial (C&I) 66% 59% 55% 62% 55% 52% Residential 33% 39% 44% 35% 45% 48% Public Authorities/Other 1% 2% 1% 3% 0% 1% 2021 Gas Customer Mix (% of Volumes) (1) Commercial & Industrial (C&I) - 25% 50% - 27% - Residential - 46% 37% - 39% - Public Authorities/Other - 29% 13% - 34% - Current Rate Recovery Mechanisms Traditional Base Rate Application - - - - X (2) X Distribution Formula Rate X (3) - - - - - Multi-Year Plan - - X X - - Fully Projected Future Test Year - X - - - - Transmission Formula Rate X X X X X X Tracker Mechanisms for Specified Investments/Programs X X X X X X Decoupling (4) X - X X X - MD Only X Bad Debt Tracker X - - - - X Major Storm Deferral X(5) - X X(6) X - MD Only X COVID Expense Deferral (7) X(5) X X X X X Note: “-” cells are indicative of categories that are not applicable to the respective utility (1) Percent of volumes by customer class may not sum due to rounding (2) In August 2019 the MDPSC approved PC-51, permitting the implementation of alternative ratemaking. DPL MD has not yet filed. (3) ComEd distribution formula rate expires in 2022, but 2023 rates will be based on the final formula rate filing. For 2024 rates, ComEd has the option to file a multi-year plan or a traditional future test year case but has not yet made a final determination. (4) ComEd’s formula rate includes a mechanism that eliminates volumetric risk. After the formula rate expires, a separate tariff will be required to eliminate the volumetric risk. ComEd intends to file that tariff in Q1 2022. ACE implemented the Conservation Incentive Program prospectively effective July 1, 2021, which eliminates the variable effects of weather and customer usage patterns for most customers. Certain classes for BGE, DPL MD, Pepco and ACE are not decoupled. (5) Under EIMA statute (220 ILCS 5/16-108.5), ComEd is able record expenses greater than $10 million resulting from a one-time event to a regulatory asset and amortize over 5 years (6) In the Pepco DC MYP case, the Company received approval on June 8, 2021 for the ability to request deferral of unexpected costs greater than $1M which could enable regulatory asset treatment for storm recovery (7) COVID-related costs were approved for deferral treatment in 2020 and 2021. Treatment of costs in 2022 are not yet known. PECO was authorized to recover incremental bad debt expense only in 2020 and 2021. Utility Highlights
33 • Distribution System Improvement Charge (DSIC) tracker provides a mechanism to begin recovering gas and electric infrastructure investments for reliability every six months • Strategic Infrastructure Development and Enhancement (STRIDE) program allows for contemporaneous recovery of the accelerated replacement of aging gas infrastructure (cast iron and bare steel mains and copper, bare steel and pre-1970 ¾” high pressure steel services) • EmPOWER MD allows for recovery on energy efficiency and demand response programs • Distribution System Improvement Charge (DSIC) mechanism provides recovery for Long-Term Infrastructure Improvement Plan (LTIIP) for electric and gas distribution in between rate cases • Future Energy Jobs Act (FEJA) permits recovery of energy efficiency programs and distributed generation rebates through formula rates • District of Columbia Power Line Undergrounding (DC PLUG) provides for contemporaneous recovery of reliability and resiliency investments to underground the most vulnerable feeders • PowerAhead program allows for a capital tracker recovery mechanism for certain resiliency investments • Infrastructure Investment Program (IIP) permits the recovery of certain capital investments, primarily related to safety and reliability, through a capital tracker recovery mechanism • ACE Energy Efficiency program allows for recovery on approximately $100M of energy efficiency programs over the next three years Tracker Recovery Mechanisms for Specified Investments/Programs Illinois Maryland New Jersey Pennsylvania Delaware District of Columbia
34 Non-Decoupled Load Volumes (GWh)(3)Revenue Decoupling Mitigates Load Fluctuations Revenue Decoupling Mitigates Impacts of Load Fluctuations 39% 59% PECO 41% 59% DPL DE 36,421 7,849 C&I Residential PECO DPL DE ComEd Pepco DPL MD ACE BGE Non-Decoupled Decoupled ~77% of Exelon’s distribution revenues are decoupled from volumetric risk(1,2) (1) Reflects 2021 electric and gas revenues; ComEd’s formula rate includes a mechanism that eliminates volumetric risk (2) Certain classes for BGE, DPL MD, Pepco and ACE are not decoupled (3) Reflects 2021 electric volumes; remainder of volumes not captured in chart reflect public authorities or other customers
35 Approved Electric Distribution Rate Case Financials Revenue Requirement Increase/(Decrease) Allowed ROE Common Equity Ratio Rate Effective Date ComEd (Electric) $45.8M 7.36% 48.70% Jan 1, 2022 PECO (Electric) $132.0M N/A(1) N/A(1) Jan 1, 2022 BGE (Electric) (2) $139.9M 9.50% 52.00% Jan 1, 2021 Pepco MD (Electric) (3) $52.2M 9.55% 50.50% Jun 28, 2021 Pepco D.C. (Electric) (4) $108.6M 9.275% 50.68% Jul 1, 2021 DPL MD (Electric) $11.7M 9.60% 50.53% Jul 16, 2020 DPL DE (Electric) $13.5M 9.60% 50.37% Oct 6, 2020 ACE (Electric) $41.0M 9.60% 50.21% Jan 1, 2022 (1) The PaPUC issued an order on November 18, 2021 approving the Joint Petition for Settlement with rates effective on January 1, 2022. The settlement does not stipulate any ROE, Equity Ratio or Rate Base. (2) Reflects a three-year cumulative multi-year plan for 2021 through 2023. The MDPSC awarded BGE electric revenue requirement increases of $59 million, $39 million, and $42 million, before offsets, in 2021, 2022, and 2023, respectively, and natural gas revenue requirement increases of $53 million, $11 million, and $10 million, before offsets, in 2021, 2022, and 2023, respectively. The MDPSC offset the 2021 revenue requirement increase with certain accelerated tax benefits, but deferred the decision to use additional tax benefits to offset the 2022 and 2023 increases. (3) Reflects a three-year cumulative multi-year plan for April 1, 2021 through March 31, 2024. The MDPSC awarded Pepco electric incremental revenue requirement increases of $21 million, $16 million, and $15 million, before offsets, for the 12-month periods ending March 31, 2022, 2023, and 2024, respectively. The MDPSC offset customer rate increases through March 31, 2022 with certain accelerated tax benefits, but deferred the decision to use additional tax benefits to offset customer rate increases for the periods after March 31, 2022. (4) Reflects a cumulative multi-year plan with 18-months remaining in 2021 through 2022. The DCPSC awarded Pepco electric incremental revenue requirement increases of $42 million and $67 million, before offsets, for the remainder of 2021 and 2022, respectively. However, the DCPSC utilized the acceleration of refunds for certain tax benefits along with other rate relief to partially offset the customer rate increases by $22 million and $40 million for the remainder of 2021 and 2022, respectively. Approved Distribution Rate Case Financials Approved Gas Distribution Rate Case Financials Revenue Requirement Increase/(Decrease) Allowed ROE Common Equity Ratio Rate Effective Date PECO (Gas) $29.1M 10.24% 53.38% Jul 1, 2021 BGE (Gas) $73.9M 9.65% 52.00% Jan 1, 2021 DPL DE (Gas) $2.3M 9.60% 50.37% Sep 21, 2020
36 Approved Electric Transmission Formula Rate Financials Revenue Requirement Increase/(Decrease)(1) Allowed ROE(2) Common Equity Ratio Rate Effective Date(3) ComEd $45M 11.50% 54.90% Jun 1, 2021 PECO $24M 10.35% 53.69% Jun 1, 2021 BGE $65M 10.50% 52.60% Jun 1, 2021 Pepco $12M 10.50% 50.27% Jun 1, 2021 DPL $52M 10.50% 50.44% Jun 1, 2021 ACE $51M 10.50% 50.00% Jun 1, 2021 (1) In 2020, ComEd, BGE, Pepco, DPL, and ACE's transmission revenue requirement included a one-time decrease in accordance with the April 24, 2020 settlement agreement related to excess deferred income taxes which now completed has resulted in an increase to the 2021 transmission revenue requirement. In 2020, PECO's transmission revenue requirement included a one-time decrease in accordance with the December 5, 2019 settlement agreement related to refunds which now completed has resulted in an increase to the 2021 transmission revenue requirement. (2) As part of the FERC-approved settlements of ComEd’s 2007 and PECO's 2017 rate cases, the rate of return on common equity is 11.50% and 10.35%, respectively, inclusive of a 50-basis-point incentive adder for being a member of a RTO, and the common equity component of the ratio used to calculate the weighted average debt and equity return for the transmission formula rate is currently capped at 55% and 55.75%, respectively. As part of the FERC-approved settlement of the ROE complaint against BGE, Pepco, DPL, and ACE, the rate of return on common equity is 10.50%, inclusive of a 50-basis-point incentive adder for being a member of a RTO. (3) All rates are effective June 1, 2021 - May 31, 2022, subject to review by interested parties pursuant to review protocols of each tariff Approved Electric Transmission Formula Rate Financials
37 Exelon Long-Term Debt Maturity Profile(1,2) LT Debt Balances (as of 12/31/21)(1,2) BGE $4.0B ComEd $10.0B PECO $4.4B PHI $7.5B Corp(3) $7.4B Exelon $33.3B ($M) As of 12/31/2021 1,150 850 833 807 750 360 997 303 1,250 1,178 258 763 295 833 1,430 675 700 600 1,400 650 741 750 1,275 2,150 1,550 750 2,150 910 500 850 600 75 175 1,225 1,200 1,650 185 2026 20512022 2050203920362023 202820272024 2025 20432029 20492030 2031 2032 2033 20372034 20402035 2038 2041 2042 2044 2045 2046 2047 2048 EXC RegulatedPHI Corp Corp(3) Exelon’s weighted average LTD maturity is approximately 17 years (1) Maturity profile excludes non-recourse debt, securitized debt, capital leases, fair value adjustments, unamortized debt issuance costs and unamortized discount/premium (2) Long-term debt balances reflect 2021 10-K GAAP financials, which include items listed in footnote 1 (3) Includes $258M intercompany loan from Exelon Corporate to ExGen (Legacy CEG notes maturing April 1, 2032), which were settled upon close
38 EPS* Sensitivities Interest Rate Sensitivity to +50 BP 2022E 2023E ComEd Distribution ROE (1) $0.04 $0.04 Pension Expense (2) $(0.00) $(0.00) Cost of Debt (3) $(0.01) $(0.01) Exelon Consolidated Effective Tax Rate 13.6% 15.1% Exelon Consolidated Cash Tax Rate 0.3% 4.1% Note: reflects EPS* sensitivities and tax rates as of 12/31/2021 (as presented at Analyst Day 2022) (1) Reflects +50 BP sensitivity on 30-year US Treasury Yield (2) Reflects +50 BP sensitivity on Exelon’s discount rate which is based on a spot-rate yield curve methodology, using Willis Towers Watson's RATE: Link 40-90 model, based on a bond universe of the 40-90% of bond yields (3) Reflects +50 BP sensitivity on Corporate debt
39 Exelon Distribution Rate Case Updates Rate Case Schedule and Key Terms Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Revenue Requirement Requested ROE / Equity Ratio Expected Order $13.5M (1,2) 9.60% / 50.37% Sep 15, 2021 (3) $132.0M (1,4) N/A / N/A (4) Nov 18, 2021 $45.8M (1,5) 7.36% / 48.70% Dec 1, 2021 $12.5M (1) 9.6% / N/A (6) Mar 2, 2022 $13.7M (1,7) 10.30% / 50.63% Q1 2023 PECO Electric Rate case filed Rebuttal testimony Initial briefs Final commission order Intervenor direct testimony Evidentiary hearings Reply briefs Settlement agreement CF IT RT EH IB RB FO SA ComEd DPL DE Electric FOIB RB FODPL MD IT RT FO DPL DE Gas CF Note: Unless otherwise noted, based on schedules of Illinois Commerce Commission (ICC), Maryland Public Service Commission (MDPSC), Pennsylvania Public Utility Commission (PAPUC), Delaware Public Service Commission (DPSC), Public Service Commission of the District of Columbia (DCPSC), and New Jersey Board of Public Utilities (NJBPU) that are subject to change (1) Revenue requirement includes changes in depreciation and amortization expense and other costs where applicable, which have no impact on pre-tax earnings (2) Requested revenue requirement excludes the transfer of $3.2M of revenues from the Distribution System Improvement Charge (DSIC) capital tracker into base distribution rates. As permitted by Delaware law, Delmarva Power implemented full allowable rates on October 6, 2020, subject to refund. (3) The DPSC issued a minute order on September 15, 2021 with new rates effective on September 17, 2021. The final order was received on January 26, 2022. (4) The PaPUC issued an order on November 18, 2021 approving the Joint Petition for Settlement with rates effective on January 1, 2022. The settlement does not stipulate any ROE, Equity Ratio or Rate Base. (5) Revenue requirement in initial filing was an increase of $51.2M. Through the discovery period in the current proceeding, ComEd agreed to ~($5.3M) in adjustments to limit issues in the case. (6) The settlement agreement is a black box settlement, which reflects a 9.6% ROE that is solely for the purposes of calculating AFUDC and regulatory asset carrying costs. On February 15, 2022, Chief Public Utility Law Judge issued a proposed order approving the settlement agreement without modification The proposed settlement order will become final on March 2, 2022, subject to modification or reversal by the MDPSC. (7) Requested revenue requirement excludes the transfer of $5.8M of revenues from the Distribution System Improvement Charge (DSIC) capital tracker into base distribution rates. As permitted by Delaware law, Delmarva Power will implement full proposed rates on August 14, 2022, subject to refund. SA
40 Reconciliation of Non-GAAP Measures
41 Projected GAAP to Operating Adjustments • Exelon’s projected 2022 adjusted (non-GAAP) operating earnings excludes the earnings effects of the following: − Costs related to the separation; − Adjustment to deferred income taxes as a result of changes in forecasted apportionment; and − Other items not directly related to the ongoing operations of the business.
42 GAAP to Non-GAAP Reconciliations(1) S&P Moody’s GAAP Operating Income + Depreciation & Amortization = EBITDA - Cash Paid for Interest +/- Cash Taxes +/- Other S&P FFO Adjustments = FFO (a) Long-Term Debt + Short-Term Debt + Underfunded Pension (after-tax) + Underfunded OPEB (after-tax) + Operating Lease Imputed Debt - Cash on Balance Sheet +/- Other S&P Debt Adjustments = Adjusted Debt (b) S&P FFO Calculation(2) S&P Adjusted Debt Calculation(2) Moody’s CFO (Pre-WC)/Debt (3) = CFO (Pre-WC) (c) Adjusted Debt (d) Moody’s CFO (Pre-WC) Calculation(3) Cash Flow From Operations +/- Working Capital Adjustment +/- Other Moody’s CFO Adjustments = CFO (Pre-Working Capital) (c) Long-Term Debt + Short-Term Debt + Underfunded Pension (pre-tax) + Operating Lease Imputed Debt +/- Other Moody’s Debt Adjustments = Adjusted Debt (d) S&P FFO/Debt (2) = FFO (a) Adjusted Debt (b) Moody’s Adjusted Debt Calculation(3) (1) Due to the forward-looking nature of some forecasted non-GAAP measures, information to reconcile the forecasted adjusted (non-GAAP) measures to the most directly comparable GAAP measure may not be currently available; therefore, management is unable to reconcile these measures (2) Calculated using S&P Methodology (3) Calculated using Moody’s Methodology
43 Q4 YTD GAAP EPS Reconciliation Twelve Months Ended December 31, 2021 ComEd PECO BGE PHI Other Exelon 2021 GAAP Earnings (Loss) Per Share $0.76 $0.51 $0.42 $0.57 ($0.31) $1.95 Mark-to-market impact of economic hedging activities - - - - 0.01 0.01 Separation costs 0.01 0.01 0.01 0.01 0.02 0.05 COVID-19 direct costs - - - - - 0.01 Income tax-related adjustments - - - 0.03 0.02 0.05 2021 Adjusted (non-GAAP) Operating Earnings (Loss) Per Share $0.77 $0.53 $0.43 $0.62 ($0.26) $2.08 Note: All amounts shown are per Exelon share and represent amounts related to Exelon’s utility subsidiaries and holding company earnings per share. Amounts may not sum due to rounding. Beginning with the Form 10-Q to be filed for the first quarter of 2022, Exelon will present Generation’s financial results as discontinued operations and will report its utility and holding company financial results as continuing operations. Accounting rules require that certain corporate overhead costs previously allocated to Generation will be presented as part of Exelon's continuing operations as these costs do not qualify as expenses of the discontinued operations.
44 GAAP to Non-GAAP Reconciliations Exelon Operating TTM ROE Reconciliation ($M)(1) 2016 2017 2018 2019 2020 2021 Net Income (GAAP) $1,103 $1,704 $1,836 $2,065 $1,737 $2,225 Operating Exclusions $461 ($24) $32 $30 $246 $82 Adjusted Operating Earnings $1,564 $1,680 $1,869 $2,095 $1,984 $2,307 Average Equity $16,523 $17,779 $19,367 $20,913 $22,690 $24,967 Operating (Non-GAAP) TTM ROE (Adjusted Operating Earnings/Average Equity) 9.5% 9.4% 9.6% 10.0% 8.7% 9.2% (1) Represents the twelve-month periods December 31, 2016-2021 for Exelon’s utilities (excludes Corp and PHI Corp). Earned ROEs* represent weighted average across all lines of business (Electric Distribution, Gas Distribution, and Electric Transmission). Components may not reconcile to 2021 10-K filing due to rounding.
45 GAAP to Non-GAAP Reconciliations Exelon Adjusted O&M Reconciliation ($M)(1) 2016 2017 2018 2019 2020 2021 2022 GAAP O&M $4,300 $4,025 $4,150 $4,000 $4,375 $4,200 $4,350 Regulatory Required O&M ($175) ($300) ($200) ($175) ($175) ($175) ($225) Operating Exclusions ($400) - ($50) ($50) ($275) ($75) ($50) Adjusted O&M (Non-GAAP) $3,725 $3,725 $3,900 $3,800 $3,950 $3,950 $4,050 (1) Reflects utility O&M (excludes Corp) and includes O&M from affiliates; numbers rounded to the nearest $25M and may not sum due to rounding
Thank you Please direct all questions to the Exelon Investor Relations team: InvestorRelations@ExelonCorp.com 312-394-2345
