Exelon Reports Third Quarter 2024 Results

Earnings Release Highlights

• GAAP net income of $0.70 per share and Adjusted (non-GAAP) operating earnings of $0.71 per share for the third quarter of 2024
• Reaffirming full year 2024 Adjusted (non-GAAP) operating earnings guidance range of $2.40-$2.50 per share
• Reaffirming adjusted (non-GAAP) operating EPS compounded annual growth target of 5-7% through 2027
• Strong utility reliability performance - all utilities achieved top quartile in reliability, with ComEd and Pepco Holdings continuing to achieve top decile in SAIFI and SAIDI performance
• DPL filed a natural gas distribution rate case with the Delaware Public Service Commission (DEPSC) in September seeking an increase in gas distribution rates to support investments in infrastructure to maintain safety, reliability, and service for customers, while also offering more predictability in customer bills throughout the year

Exelon Corporation (NASDAQ:EXC) today reported its financial results for the third quarter of 2024.

"Our strong third quarter performance highlights the dedication of our 20,000 employees delivering top quartile service despite unprecedented challenges," said Exelon President and Chief Executive Officer Calvin Butler. "This summer, our regions faced record-breaking severe weather, including an historic number of tornadoes in the Chicago area. Yet, we maintained top quartile reliability, with ComEd and Pepco Holdings performing in the top decile. We're also making progress on our work with regulators to invest in a resilient grid, and doing our part to keep energy affordability front and center. As we approach the end of 2024, we remain focused on building a cleaner and brighter future for our customers and communities."

"Exelon delivered another quarter of strong financial performance, with third quarter adjusted operating earnings of $0.71 per share, and we remain on track to meet our full year earnings guidance of $2.40 to $2.50 per share," said Exelon Chief Financial Officer Jeanne Jones. "Our disciplined approach to financial management, combined with operational excellence, continues to drive strong results across our local energy companies. We are making $34.5 billion of critical investments in our energy infrastructure for our customers, which gives us the confidence to deliver our long-term earnings per share growth target of 5-7% through 2027."

Third Quarter 2024

Exelon's GAAP net income for the third quarter of 2024 remained relatively consistent with the prior period at $0.70 per share. Adjusted (non-GAAP) operating earnings for the third quarter of 2024 increased to $0.71 per share from $0.67 per share in the third quarter of 2023. For the reconciliations of GAAP net income to Adjusted (non-GAAP) operating earnings, refer to the tables beginning on page 3.

The GAAP net income and Adjusted (non-GAAP) operating earnings in the third quarter of 2024 primarily reflects higher utility earnings due to distribution rate increases at BGE, distribution and transmission rate increases at PHI, timing of distribution earnings and a higher return on regulatory assets at ComEd, and decreased storm costs at PHI. This was partially offset by higher interest expense at PECO, BGE, and PHI; higher credit loss expense at PECO and BGE; higher depreciation and amortization expense at PECO and BGE; and lower carrying costs recovery related to the CMC regulatory asset at ComEd.

Operating Company Results¹

ComEd

ComEd's third quarter of 2024 GAAP net income increased to $360 million from $333 million in the third quarter of 2023. ComEd's Adjusted (non-GAAP) operating earnings for the third quarter of 2024 increased to $360 million from $338 million in the third quarter of 2023, primarily due to timing of distribution earnings, higher distribution rate base, and higher return on regulatory assets. These were partially offset by a lower allowed distribution ROE, the absence of a return on the pension asset within distribution earnings, and lower carrying costs recovery related to the CMC regulatory asset. Due to revenue decoupling, ComEd's distribution earnings are not affected by actual weather or customer usage patterns.

PECO

PECO's third quarter of 2024 GAAP net income decreased to $117 million from $146 million in the third quarter of 2023. PECO's Adjusted (non-GAAP) operating earnings for the third quarter of 2024 decreased to $118 million from $149 million in the third quarter of 2023, primarily due to increases in credit loss expense, interest expense, and depreciation expense.

BGE

BGE's third quarter of 2024 GAAP net income remained relatively consistent with the prior period at $45 million. BGE's Adjusted (non-GAAP) operating earnings for the third quarter of 2024 decreased to $45 million from $47 million in the third quarter of 2023. GAAP net income remained relatively consistent primarily due to favorable distribution rates, offset by increases in interest expense, depreciation and amortization expense, and credit loss expense. Due to revenue decoupling, BGE's distribution earnings are not affected by actual weather or customer usage patterns.

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^{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 third quarter of 2024 GAAP net income increased to $278 million from $232 million in the third quarter of 2023. PHI's Adjusted (non-GAAP) operating earnings for the third quarter of 2024 increased to $278 million from $234 million in the third quarter of 2023, primarily due to higher electric distribution and transmission rates, and a decrease in storm costs and various operating expenses, partially offset by an increase in interest expense. 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 Third Quarter Highlights

• Dividend: On October 29, 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 December 13, 2024, to Exelon's shareholders of record as of the close of business on November 11, 2024.
• Rate Case Developments:
  • DPL Delaware Natural Gas Distribution Rate Case: On September 20, 2024, DPL filed an application with the DEPSC to increase its annual natural gas rates by $36 million, reflecting an ROE of 10.65%. DPL currently expects a decision in the first quarter of 2026 but cannot predict if the DEPSC will approve the application as filed.
• Financing Activities:
  • On August 28, 2024, ACE issued $175 million of its First Mortgage Bonds, consisting of $75 million of its First Mortgage 5.29% Series Bonds due on August 28, 2034 and $100 million of its First Mortgage 5.49% Series Bonds due on August 28, 2039. ACE used the proceeds of the sale of the ACE Bonds to repay existing indebtedness and for general corporate purposes.
  • On September 10, 2024, PECO Energy Company (PECO) issued $575 million aggregate principal amount of its First and Refunding Mortgage Bonds, 5.250% Series due September 15, 2054. PECO used the net proceeds from the sale of the Bonds to refinance currently outstanding commercial paper and for general corporate purposes.

Adjusted (non-GAAP) Operating Earnings Reconciliation

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

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

Webcast Information

Exelon will discuss third 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 Oct. 30, 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' Third Quarter 2024 Quarterly Report on Form 10-Q (to be filed on October 30, 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.

Exelon uses its corporate website, www.exeloncorp.com, investor relations website, investors.exeloncorp.com, and social media channels to communicate with Exelon's investors and the public about the Registrants and other matters. Exelon's posts through these channels may be deemed material. Accordingly, Exelon encourages investors and others interested in the Registrants to routinely monitor these channels, in addition to following the Registrants' press releases, Securities and Exchange Commission filings and public conference calls and webcasts. The contents of Exelon's websites and social media channels are not, however, incorporated by reference into this press release.