Slide 1: May 2018 Investor Meetings
May 2018 Investor Meetings — <= Exelon.
Slide 2: Cautionary Statements Regarding Forward-Looking Information
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. The factors that could cause actual results to differ mat
Slide 3: Non-GAAP Financial Measures
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:
Slide 4: Non-GAAP Financial Measures Continued
Non-GAAP Financial Measures Continued 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 relat
Slide 5: Exelon: An Industry Leader
Exelon: An Industry Leader Note: All numbers reflect year-end 2017 5
Slide 6: The Exelon Value Proposition
The Exelon Value Proposition ▪ Regulated Utility Growth with utility EPS rising 6-8% annually from 2017- 2021 and rate base growth of 7.4%, representing an expanding majority of earnings ▪ ExGen’s strong free cash generation will support utility growth while also reducing debt by ~$3B over the next
Slide 7: 2018 Business Priorities and Commitments
2018 Business Priorities and Commitments Maintain industry leading operational excellence Effectively deploy ~$5.4B of 2018 utility capex Advance PJM power price formation changes in 2018 Prevail on legal challenges to the NY and IL ZEC programs Seek fair compensation for at-risk plants in NJ and PA
Slide 8: Exelon Utilities Overview
Exelon Utilities Overview Note: All numbers reflect year-end 2017 8
Slide 9: Exelon Utilities are an Industry Leader
Exelon Utilities are an Industry Leader US Utility Customers (millions) 10.0 9.9 9.2 9.2 6.8 6.0 5.6 5.4 5.1 5.0 4.9 4.9 4.0 3.1 EXC PCG SO DUK SRE FE XEL AEP EIX NEE D ED PEG ETR Total Capital Expenditures 2018-2020 ($B)(1) 31.0 23.0 21.7 18.1 17.7 13.7 13.0 11.5 11.1 10.9 10.2 3.6 DUK SO EXC(2) PC
Slide 10: Our Capital Plan Drives Leading Rate Base Growth
Our Capital Plan Drives Leading Rate Base Growth Capital Expenditures ($M) Rate Base ($B)(1) 5,400 +7.4% 46.0 5,225 5,150 43.5 5,100 40.7 1,500 37.8 12.0 1,400 1,500 1,500 11.3 34.6 10.6 9.9 800 9.2 8.6 850 825 825 8.0 7.6 7.1 1,000 6.6 8.0 1,050 1,000 7.6 1,100 6.9 6.4 5.7 2,125 16.6 17.4 1,725 1,8
Slide 11: Mechanisms Cover Bulk of Rate Base Growth
Mechanisms Cover Bulk of Rate Base Growth Rate Base Growth Breakout 2018-2021 ($B) 2.5 11.5 Base Rate Case 1.1 Tracker/Formula Rate 1.5 3.4 2.8 1.0 1.8 2.9 1.1 11.5 1.8 8.0 3.2 0.2 3.0 2018E 2019E 2020E 2021E Total Of the approximately $11.5 billion of rate base growth Exelon Utilities forecasts ove
Slide 12: Operating Highlights
Operating Highlights At CEG Merger (2012) 2015 Q1 2018 Operations Metric BGE ComEd PECO PHI BGE ComEd PECO PHI OSHA Recordable Rate Electric 2.5 Beta SAIFI (Outage Operations Frequency)(1) 2.5 Beta CAIDI (Outage Duration) Customer Satisfaction N/A Customer Service Level % of Calls Operations Answere
Slide 13: Trailing 12 Month ROEs vs Allowed ROE
Trailing 12 Month ROEs* vs Allowed ROE Trailing Twelve Month Earned ROEs* Allowed ROE Q4 2017 TTM Earned ROE Q1 2018 TTM Earned ROE 9.9% 9.9% 9.7% 10.3% 10.2% 9.5% 9.4% 8.1% 7.7% 7.6% 7.3% 5.6% 5.4% ACE Delmarva Pepco Legacy Exelon Consolidated Utilities Exelon Utilities Note: Represents the 12-mont
Slide 14: Utility Adjusted Operating Earnings
Exelon Utilities EPS* Growth of 6-8% to 2021 Exelon Utilities Operating Earnings* 2018-2021 $2.20 $2.20 $2.10 $2.10 $2.00 $2.00 Utility Adjusted Operating Earnings* $1.90 $1.90 $1.80 $1.80 $1.80 $1.70 $1.70 $1.60 $1.50 $1.50 $0.00 2018E 2019E 2020E 2021E Rate base growth combined with PHI ROE improv
Slide 15: Exelon Utilities' Distribution Rate Case Updates
Exelon Utilities’ Distribution Rate Case Updates Rate Case Schedule and Key Terms Requested Revenue Expected Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ROE / Requirement Order Equity Ratio (6) Delmarva Authorized: Authorized: Feb 9, FO (MD) $13.4M 9.50%/NA 2018 CF IT RT EH IB RB FO (1) 8.69% /
Slide 16: Exelon Generation Overview
Exelon Generation Overview Note: All numbers reflect year-end 2017 (1) Capacity factor excludes impacts of Salem 16
Slide 17: Constellation Overview
Constellation Overview Note: All numbers reflect year-end 2017 (1) As calculated based on the national average generation supply mix used in EPA eGRID2014. 17
Slide 18: Best in Class at ExGen and Constellation
Best in Class at ExGen and Constellation Exelon Generation Operational Metrics Constellation Metrics • Continued best in class performance across our Nuclear fleet: − Capacity factor for Exelon owned and 74% retail power 24% power new operated units was 94.1%(1) customer renewal customer win rate ra
Slide 19: Exelon Generation: Gross Margin Update as of May 2, 2018
Exelon Generation: Gross Margin Update as of May 2, 2018 Change from December 31, March 31, 2018 2017 (1) Gross Margin Category ($M) 2018 2019 2020 2018 2019 2020 Open Gross Margin (2,5) $4,600 $3,950 $3,800 $250 $50 $50 (including South, West, Canada hedged gross margin) Capacity and ZEC Revenues(2
Slide 20: Driving Costs and Capital Out of the Generation Business
Driving Costs and Capital Out of the Generation Business Adjusted O&M* ($M)(1,2) Capital Expenditures ($M)(1,3,4) 2,275 -1.9% 4,550 4,300 4,275 4,300 375 1,850 1,825 1,825 75 125 175 950 900 825 800 950 875 875 850 2018E 2019E 2020E 2021E 2018E 2019E 2020E 2021E Committed Growth Nuclear Fuel Base Co
Slide 21: Historical Nuclear Capital Investment
Historical Nuclear Capital Investment Nuclear Non-Fuel Capital Expenditures(1) ($M) Nuclear Baseline CAGR Cancelled Growth Fukushima -0.8% Growth(4) Nuclear Baseline (excluding Fuel) (2,3) 1,000 975 900 50 50 925 25 825 850 25 150 775 325 250 250 175 25 175 175 650 50 650 25 100 25 600 600 575 50 75
Slide 22: ZEC & Policy Updates
ZEC & Policy Updates Illinois & New York ZEC New Jersey ZEC PJM Price Formation Legal Challenges • On April 12, 2018, the NJ ZEC bill Illinois: Fast Start: passed both the Senate and • Oral arguments for the 7th Circuit • Fast start NOPR was initiated by Assembly with bipartisan support occurred on
Slide 23: Financial Overview
Financial Overview 23 = = Exelon.
Slide 24: 2018 Adjusted Operating Earnings Guidance as of May 2, 2018
2018 Adjusted Operating Earnings* Guidance as of May 2, 2018 $2.90 - $3.20(2) Key Year-Over-Year Drivers $0.25 - $0.35 BGE • BGE: Return to normal storm $2.60(1) (historical average) and inflation impacts $0.40 - $0.50 PECO BGE $0.33 • PECO: Favorable weather, higher transmission revenue, offset by
Slide 25: Announced Cost Reductions
Cost Management is Integral to Our Business Strategy ExGen and BSC Cost Reductions Since Constellation Merger 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 CEG Merger Synergies of $170M in 2012, $350M in 2013, Announced Cost Reductions and $500M Run-Rate beginning in 2014 CENG Service Agreement
Slide 26: ExGen's Strong Available Cash Flow Supports Utility Growth and Debt Reduction
ExGen’s Strong Available Cash Flow* Supports Utility Growth and Debt Reduction 2018-2021 Exelon Generation Available Cash Flow and Uses of Cash* ($B) ~$7.6 (~$0.7) ($3.3-$3.7) (~$0.4-$0.6) ($2.7-$3.3) ExGen Cumulative Committed ExGen Utility Investment External Dividend ExGen/HoldCo Available Cash G
Slide 27: Impacts from Tax Reform
Impacts from Tax Reform Tax Impacts Key Takeaways 2018 2019 2020 2021 • Changes in federal tax policy are expected to increase run- rate EPS by $0.10 per share in 2019 Cumulative Incremental Rate Base from Tax Policy $0.9 $1.4 $1.7 $2.0 • Utility rate base is expected to be $1.7B higher in 2020 than
Slide 28: Tax Reform Yields Significant Customer Bill Savings
Tax Reform Yields Significant Customer Bill Savings DPL ACE ComEd • MD PSC accepted DPL’s proposal to • ACE has filed a request with NJ BPU to • ICC approved ComEd’s petition seeking provide $14M in annual tax savings to provide $23M in annual tax savings to approval to pass along approximately cust
Slide 29: Maintaining Strong Investment Grade Credit Ratings is a Top Financial Priority
Maintaining Strong Investment Grade Credit Ratings is a Top Financial Priority Exelon S&P FFO/Debt %*(1,4) ExGen Debt/EBITDA Ratio*(5) 25% 21% 4.0 18%-20% 20% 3.0x 3.0 15% 2.5x 2.1x S&P Threshold 2.0 10% Book Excluding Non-Recourse 5% 1.0 0% 0.0 2018 Target 2018 Target Credit Ratings by Operating Co
Slide 30: Raising Dividend Growth Rate to 5% Annually through 2020
Raising Dividend Growth Rate to 5% Annually through 2020 Dividends per Share(1) Implied Exelon Utilities less HoldCo(2) Dividend Implied ExGen(2) Dividend 5% $1.53 $1.45 $1.38 $1.31 2017A 2018E 2019E 2020E Assuming a steady 70% payout ratio on Utility less HoldCo earnings, ExGen’s contribution to th
Slide 31: 2017 Exelon Recognition and Partnerships
2017 Exelon Recognition and Partnerships Sustainability Diversity & Inclusion Dow Jones Sustainability Index HeforShe Exelon named to Dow Jones Sustainability Index for 12th Exelon joined U.N. Women’s HeForShe campaign, which is focused consecutive year on gender equality. Pledge includes a $3 milli
Slide 32: Appendix
Appendix 32 = = Exelon.
Slide 33: 2018 Projected Sources and Uses of Cash
2018 Projected Sources and Uses of Cash Total Exelon Cash (1) All amounts rounded to the nearest $25M. ($M)(1) BGE ComEd PECO PHI ExGen Corp(8) Figures may not add due to rounding. Utilities 2018E Balance (2) Gross of posted counterparty collateral Beginning Cash Balance* (2) 1,450 (3) Figures refle
Slide 34: Exelon Debt Maturity Profile
Exelon Debt Maturity Profile(1) (1, 2) LT Debt Balances (as of 3/31/18) BGE 2.6B 500 As of 3/31/18 ComEd 7.9B ($M) PECO 2.9B PHI 5.8B ExGen recourse 6.8B ExGen non-recourse 2.2B HoldCo 6.3B Consolidated 34.5B 910 2,512 1,023 1,225 1,200 850 500 600 1,189 175 312 1,430 1,400 1,275 1,150 1,125 900 900
Slide 35: EPS Sensitivities
EPS Sensitivities 2018 2019 2020 Henry Hub Natural Gas ExGen EPS Impact* (1) + $1/MMBtu $0.15 $0.32 $0.50 - $1/MMBtu ($0.15) ($0.31) ($0.47) NiHub ATC Energy Price + $5/MWh $0.06 $0.16 $0.26 - $5/MWh ($0.05) ($0.16) ($0.26) PJM-W ATC Energy Price + $5/MWh $0.02 $0.08 $0.13 - $5/MWh ($0.01) ($0.07) (
Slide 36: Exelon Generation Disclosures
Exelon Generation Disclosures Data as of March 31, 2018 These disclosures were presented on May 2, 2018, and are not being updated at this time 36
Slide 37: Portfolio Management Strategy
Portfolio Management Strategy Align Hedging & Financials Portfolio Management Over Time Exercising Market Views Establishing Minimum Hedge Targets % Hedged High End of Profit % Hedged Low End of Profit Purely ratable Capital Credit Rating Structure Actual hedge % Capital & Market views on timing, pr
Slide 38: Components of Gross Margin Categories
Components of Gross Margin Categories Gross margin from Gross margin linked to power production and sales other business activities Open Gross Capacity and ZEC MtM of “Power” New “Non Power” “Non Power” Margin Revenues Hedges(2) Business Executed New Business •Generation Gross •Expected capacity •Ma
Slide 39: ExGen Disclosures
ExGen Disclosures Gross Margin Category ($M) (1) 2018 2019 2020 Open Gross Margin (including South, West & Canada hedged GM) (2,5) $4,600 $3,950 $3,800 (2,5,6) Capacity and ZEC Revenues $2,300 $2,000 $1,850 (2,3) Mark-to-Market of Hedges $300 $450 $250 Power New Business / To Go $350 $650 $850 Non-P
Slide 40: ExGen Disclosures
ExGen Disclosures Generation and Hedges 2018 2019 2020 (1) Exp. Gen (GWh) 202,200 203,300 192,800 Midwest 96,500 97,200 96,700 Mid-Atlantic(2,6) 59,600 54,300 48,700 ERCOT 24,000 26,400 23,200 New York(2,6) 15,700 16,600 15,500 New England 6,400 8,800 8,700 % of Expected Generation Hedged (3) 91%-94
Slide 41: ExGen Hedged Gross Margin Sensitivities
ExGen Hedged Gross Margin* Sensitivities (1) Gross Margin* Sensitivities (with existing hedges) 2018 2019 2020 Henry Hub Natural Gas ($/MMBtu) + $1/MMBtu $95 $385 $635 - $1/MMBtu $(70) $(360) $(595) NiHub ATC Energy Price + $5/MWh $40 $190 $330 - $5/MWh $(40) $(185) $(330) PJM-W ATC Energy Price + $
Slide 42: ExGen Hedged Gross Margin Upside/Risk
ExGen Hedged Gross Margin* Upside/Risk 9,000 8,500 Approximate Gross Margin* ($ million)(1) $8,250 $8,200 8,000 $7,950 $7,900 7,500 7,000 $7,200 6,500 $6,700 6,000 2018 2019 2020 (1) Represents an approximate range of expected gross margin, taking into account hedges in place, between the 5th and 95
Slide 43: Illustrative Example of Modeling Exelon Generation 2019 Gross Margin
Illustrative Example of Modeling Exelon Generation 2019 Gross Margin* South, Mid- New Row Item Midwest ERCOT New York West & Atlantic England Canada (A) Start with fleet-wide open gross margin $3.95 billion (B) Capacity and ZEC $2 billion (C) Expected Generation (TWh) 97.2 54.3 26.4 16.6 8.8 (D) Hed
Slide 44: Additional ExGen Modeling Data
Additional ExGen Modeling Data Total Gross Margin Reconciliation (in $M)(1) 2018 2019 2020 Revenue Net of Purchased Power and Fuel Expense*(2,3) $8,525 $8,025 $7,700 Other Revenues(4) $(200) $(175) $(200) Direct cost of sales incurred to generate revenues for certain $(275) $(300) $(250) Constellati
Slide 45: Appendix Reconciliation of Non-GAAP Measures
Appendix Reconciliation of Non-GAAP Measures 45
Slide 46: Projected GAAP to Operating Adjustments
Projected GAAP to Operating Adjustments • Exelon’s projected 2018 adjusted (non-GAAP) operating earnings excludes the earnings effects of the following: − Mark-to-market adjustments from economic hedging activities − Unrealized gains and losses from NDT fund investments to the extent not offset by c
Slide 47: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations (1,2) (1,2) YE 2018 Exelon FFO Calculation ($M) YE 2018 Exelon Adjusted Debt Calculation ($M) GAAP Operating Income $3,525 Long-Term Debt (including current maturities) $33,000 Depreciation & Amortization $3,850 Short-Term Debt $1,175 EBITDA $7,375 + PPA and Operatin
Slide 48: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations (1,2) (1,2) YE 2018 ExGen FFO Calculation ($M) 2018 ExGen Adjusted Debt Calculation ($M) GAAP Operating Income $1,025 Long-Term Debt (including current maturities) $8,850 Depreciation & Amortization $1,800 Short-Term Debt $0 EBITDA $2,825 + PPA and Operating Lease Im
Slide 49: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations (1,2) (1,2) YE 2018 ExGen Net Debt Calculation ($M) YE 2018 ExGen Net Debt Calculation ($M) Long-Term Debt (including current maturities) $8,850 Long-Term Debt (including current maturities) $8,850 Short-Term Debt $0 Short-Term Debt $0 - Surplus Cash Adjustment ($900
Slide 50: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Legacy Consolidated Q1 2018 Operating ROE Reconciliation ($M) ACE Delmarva Pepco EXC EU Net Income (GAAP) $56 $94 $178 $1,321 $1,650 Operating Exclusions $0 $7 ($1) $26 $32 Adjusted Operating Earnings $56 $101 $177 $1,347 $1,682 Average Equity $1,046 $1,341 $2,433 $1
Slide 51: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations 2018 Adjusted Cash from Ops Calculation ($M)(1) BGE ComEd PECO PHI ExGen Other Exelon Net cash flows provided by operating activities (GAAP) $675 $1,550 $625 $1,225 $4,075 $200 $8,325 Other cash from investing activities - - - - ($275) - ($275) Counterparty collatera
Slide 52: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations ExGen Adjusted O&M Reconciliation ($M)(1) 2018 2019 2020 2021 GAAP O&M $5,225 $5,000 $4,925 $4,950 Decommissioning(2) 50 - - - TMI Retirement - - - - Oyster Creek Retirement - - - - Direct cost of sales incurred to generate revenues for certain Constellation and Powe