Slide 1: Earnings Conference Call First Quarter 2020
Earnings Conference Call First Quarter 2020 May 8, 2020
Slide 2: Cautionary Statements Regarding Forward-Looking Information
Cautionary Statements Regarding Forward-Looking Information This presentation contains certain written and oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties including among others those related to th
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: First Quarter Results
First Quarter Results Q1 2020 EPS Results(1) Q1 Highlights $0.87 • Offset earnings pressure from extremely warm winter $0.32 • All utilities had first quartile outage $0.60 frequency and duration performance ExGen $0.05 BGE $0.19 $0.19 • Top decile customer satisfaction for BGE, ComEd and PECO PECO
Slide 6: COVID-19: Focusing on Safety and Well Being of Our Employees
COVID-19: Focusing on Safety and Well Being of Our Employees Ensuring Employee Safety • As a provider of critical national infrastructure, Exelon routinely plans and drills for disruptive and catastrophic events ― More than half our employees are working remotely, including call centers ― Following
Slide 7: COVID-19: Operational Excellence is Even More Critical
COVID-19: Operational Excellence is Even More Critical Maintaining our infrastructure is critical to ensuring hospitals, health care providers, grocery stores and medical and food production facilities can provide their services and goods Exelon Utilities: • Sustained first quartile reliability perf
Slide 8: COVID-19: Supporting our Customers and Communities
COVID-19: Supporting our Customers and Communities Suspending utility customer disconnections • Extending our customer support policies, which include suspending service disconnections, waiving new late fees, and reconnecting customers who were previously disconnected • Offering assistance programs
Slide 9: Actively Managing the Challenge of COVID-19
Actively Managing the Challenge of COVID-19 Seeking Recovery for $250M in 2020 from Cost Reducing ExGen CapEx by COVID-19 Costs from Savings $125M Regulators ExGen outlook is projected to be ($0.10) per share from Q1 weather and from COVID-19 net of cost savings; Total ExGen free cash flow $100M low
Slide 10: First Quarter Adjusted Operating Earnings Drivers
First Quarter Adjusted Operating Earnings* Drivers Q1 2020 Adjusted Operating EPS* Results Q1 2020 vs. Guidance of $0.85 - $0.95 $0.87 • Adjusted (non-GAAP) operating ExGen $0.32 earnings drivers versus guidance: Exelon Utilities BGE $0.19 – Unfavorable weather – Timing of O&M PECO $0.14 Exelon Gene
Slide 11: Revising 2020 Adjusted Operating Earnings Guidance
Revising 2020 Adjusted Operating Earnings* Guidance $3.00 - $3.30(1) Guidance Assumptions $2.80 - $3.10(2) Stay-at-home orders and widespread business shut- downs from mid-March through mid-June. Load assumed to gradually recover over the subsequent months. ExGen $1.20 - $1.30 $1.10 - $1.20 Load • I
Slide 12: COVID-19 Impacts on Electric Utilities
COVID-19 Impacts on Electric Utilities Revenue Decoupling Mitigates Load Fluctuations Customer Breakdown of 2019 Non-Decoupled Volumes(2) ACE Non-Decoupled 37,316 C&I Percent of Electric Volumes (GWh) Decoupled Residential PECO DPL DE DPL MD 61% Pepco BGE ~70% of Exelon’s utilities revenues are subj
Slide 13: COVID-19 Impacts on Constellation
COVID-19 Impacts on Constellation Customer Breakdown of 2019 Load Served(1) Load Impacts and Sensitivities 210 TWh • Preliminary April data(2) suggests 10-15% C&I load reductions in PJM, with slightly lower reductions in Residential 70% Wholesale 30% ERCOT. Residential load up ~5-7% across most C&I
Slide 14: Exelon Generation: Gross Margin Update
Exelon Generation: Gross Margin* Update Change from March 31, 2020 December 31, 2019 Gross Margin Category ($M)(1) 2020 2021 2020 2021 Open Gross Margin*(2) $2,850 $3,350 $(750) $(100) (including South, West, New England, Canada hedged gross margin) Capacity and ZEC Revenues(2) $1,900 $1,850 - - (2,
Slide 15: 2020 Projected Sources and Uses of Cash
2020 Projected Sources and Uses of Cash Total Cash (1) All amounts rounded to the nearest ($M)(1) BGE ComEd PECO PHI ExGen Corp(9) Exelon Utilities Balance $25M. Figures may not sum due to rounding. Beginning Cash Balance* (2) 1,500 (2) Gross of posted counterparty Adjusted Cash Flow from Operations
Slide 16: Strong Liquidity Position and Investment Grade Credit Ratings
Strong Liquidity Position and Investment Grade Credit Ratings Significant Capacity Under Exelon’s Primary Revolving Credit Facility (RCF) ($B) As of 4/30/20 Corporate ExGen PECO BGE ComEd PHI Total Primary Revolving Credit Facility(1) 0.6 5.3 0.6 0.6 1.0 0.9 9.0 Commercial Paper - - - (0.1) - (0.2)
Slide 17: Delivering on our Business Strategy
Delivering on our Business Strategy Leading Rate Base Growth at the Utilities Strong Operational Performance at the Utilities Leader in Zero Carbon Electricity Constellation is the Premier Retail Business 17 Q1 2020 Earnings Release Slides
Slide 18: The Exelon Value Proposition
The Exelon Value Proposition ▪ Regulated Utility Growth targeting utility EPS rising 6-8% annually from 2019- 2023 and rate base growth of 7.3%, representing an expanding majority of earnings ▪ ExGen’s free cash generation will support utility growth, ExGen debt reduction, and the external dividend
Slide 19: Additional Disclosures
Additional Disclosures 19 Q1 2020 Earnings Release Slides
Slide 20: Operating Highlights
Operating Highlights Exelon Utilities Operational Metrics Exelon Generation Operational Performance Operations Metric YTD 2020 Exelon Nuclear Fleet(2) BGE ComEd PECO PHI • Best in class performance across our Nuclear fleet: OSHA Recordable Rate ― Q1 2020 Nuclear Capacity Factor: 93.9% Electric 2.5 B
Slide 21: Q1 2020 Adjusted Operating Earnings Waterfall
Q1 2020 Adjusted Operating Earnings* Waterfall ($0.01) Unfavorable Weather $0.02 Distribution and Transmission ($0.03) Unfavorable Weather Rate Increases ($0.02) Other $0.87 $0.87 $0.01 ($0.03) ($0.01) $0.02 $0.00 $0.02 $0.02 Distribution Formula Rate Timing $0.08 Income Tax Settlement ($0.01) Distr
Slide 22: Maintaining a Strong Investment Grade Credit Ratings and Liquidity Position
Maintaining a Strong Investment Grade Credit Ratings and Liquidity Position is a Top Financial Priority Credit Ratings by Operating Company Current Ratings(1) ExCorp ExGen ComEd PECO BGE ACE DPL Pepco Moody’s Baa2 Baa2 A1 Aa3 A3 A2 A2 A2 S&P BBB BBB+ A A A A A A Fitch BBB+ BBB A A+ A A- A A- Recent
Slide 23: Exelon Debt Maturity Profile
Exelon Debt Maturity Profile(1,2) As of 4/30/2020 LT Debt Balances (as of 4/30/20) (2) ($M) BGE 3.3B ComEd 9.7B PECO 3.6B PHI 6.7B 500 ExGen recourse(3) 5.0B 910 ExGen non-recourse 2.0B HoldCo 8.3B Consolidated 38.5B 1,512 1,023 500 1,225 1,200 850 500 600 2,150 650 1,189 175 1,550 1,430 1,400 1,250
Slide 24: Pension and OPEB Plans are Sufficiently Funded
Pension and OPEB Plans are Sufficiently Funded • Annual $500M contribution made in Q1; no additional funding is expected in 2020 • Rate of return on assets and changes to the discount rate is not expected to impact 2020 earnings • Pension and OPEB costs re-measured at year-end • Costs are recovered
Slide 25: Exelon Utilities
Exelon Utilities 25 Q1 2020 Earnings Release Slides
Slide 26: Utility Highlights
Utility Highlights ComEd PECO BGE Pepco Delmarva ACE (1) 2019 Electric Customer Mix (Percent of Revenues) Commercial & Industrial (C&I) 34% 25% 29% 44% 25% 28% Residential 50% 64% 56% 45% 56% 53% Public Authorities/Other 16% 11% 15% 12% 19% 19% (1) 2019 Electric Customer Mix (Percent of Volumes) Com
Slide 27: Bad Debt and COVID-19 Cost Recovery
Bad Debt and COVID-19 Cost Recovery Existing Bad Debt Recovery New COVID-19 Cost Recovery Illinois • Rider UF is an uncollectible rider which enables • The Commission has asked that all incremental COVID-19 ComEd the recovery of current year actual bad debt expenses be tracked costs resulting in no
Slide 28: Exelon Utilities Trailing Twelve Month Earned ROEs
Exelon Utilities Trailing Twelve Month Earned ROEs* Exelon Utilities’ Consolidated Trailing Twelve Month Earned ROEs* 10.2% 10.2% 10.1% 10.0% 9.6% 9.6% 9.7% 9.4% 9.3% 9.4% Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Exelon Utilities’ Consolidated TTM Earned ROE* h
Slide 29: 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 (1,2) Pepco DC $147.2M 10.30% / IT RT EH IB RB FO Q4 2020 Electric 3-Year MYP 50.68% DPL MD (1) 10.30% / I
Slide 30: Pepco DC (Electric) Distribution Rate Case Filing
Pepco DC (Electric) Distribution Rate Case Filing Multi-Year Plan Case Filing Details Notes Formal Case No. 1156 • May 30, 2019, Pepco DC filed a three year multi-year plan (MYP) request with the Public Test Year January 1 – December 31 Service Commission of the District of Columbia Test Period 2020
Slide 31: Delmarva MD (Electric) Distribution Rate Case Filing
Delmarva MD (Electric) Distribution Rate Case Filing Rate Case Filing Details Notes Case No. 9630 • December 5, 2019, Delmarva Power filed an application with the Maryland Public Service Test Year September 1, 2018 – August 31, 2019 Commission (MDPSC) seeking an increase in Test Period 12 months act
Slide 32: Delmarva DE (Gas) Distribution Rate Case Filing
Delmarva DE (Gas) Distribution Rate Case Filing Rate Case Filing Details Notes Docket No. 20-0150 • February 21, 2020, Delmarva Power filed an application with the Delaware Public Service Test Year April 1, 2019 – March 31, 2020 Commission (DPSC) seeking an increase in gas Test Period 9 months actua
Slide 33: Delmarva DE (Electric) Distribution Rate Case Filing
Delmarva DE (Electric) Distribution Rate Case Filing Rate Case Filing Details Notes Docket No. 20-0149 • March 6, 2020, Delmarva Power filed an application with the Delaware Public Service Test Year April 1, 2019 – March 31, 2020 Commission (DPSC) seeking an increase in Test Period 9 months actual +
Slide 34: ComEd Distribution Rate Case Filing
ComEd Distribution Rate Case Filing Rate Case Filing Details Notes Docket No. 20-0393 • April 16. 2020, ComEd filed its annual distribution formula rate update with the Illinois Test Year January 1, 2019 – December 31, 2019 Commerce Commission seeking a decrease to Test Period 2019 Actual Costs + 20
Slide 35: Exelon Generation Disclosures
Exelon Generation Disclosures March 31, 2020 35 Q1 2020 Earnings Release Slides
Slide 36: Load Volume Impact on Constellation
Load Volume Impact on Constellation Key Drivers Sample Price Buildup(1) Constellation is impacted in several ways when Sample Price Buildup ($/MWh) customer energy usage deviates from expectations 1. Unit Margin: unitized margins can realize higher or $/MWh lower than forecast as a result of actual
Slide 37: Portfolio Management Strategy
Portfolio Management Strategy Align Hedging & Financials Portfolio Management Over Time Exercising Market Views Establishing Minimum Hedge Targets % Hedged High End of Profit % Hedged Low End of Profit Purely ratable Capital Credit Rating Structure Actual hedge % Capital & Market views on timing, pr
Slide 38: Components of Gross Margin Categories
Components of Gross Margin* Categories Gross margin* from Gross margin* linked to power production and sales other business activities Open Gross Capacity and ZEC MtM of “Power” New “Non Power” “Non Power” Margin* Revenues Hedges(2) Business Executed New Business •Generation Gross •Expected capacity
Slide 39: ExGen Disclosures
ExGen Disclosures March 31, 2020 Gross Margin Category ($M)(1) 2020 2021 Open Gross Margin (including South, West, New England & Canada hedged GM)(2) $2,850 $3,350 Capacity and ZEC Revenues(2) $1,900 $1,850 (2,3) Mark-to-Market of Hedges $1,500 $450 Power New Business / To Go $300 $650 Non-Power Mar
Slide 40: ExGen Disclosures
ExGen Disclosures March 31, 2020 Generation and Hedges 2020 2021 (1) Expected Generation (GWh) 185,100 181,300 Midwest 97,100 95,500 Mid-Atlantic(2) 47,400 48,000 ERCOT 25,100 21,200 New York(2) 15,500 16,600 % of Expected Generation Hedged(3) 89%-92% 70%-73% Midwest 91%-94% 72%-75% Mid-Atlantic(2)
Slide 41: ExGen Hedged Gross Margin Sensitivities
ExGen Hedged Gross Margin* Sensitivities March 31, 2020 Gross Margin* Sensitivities (with existing hedges)(1,2) 2020 2021 Henry Hub Natural Gas ($/MMBtu) + $1/MMBtu $55 $350 - $1/MMBtu $(215) $(355) NiHub ATC Energy Price + $5/MWh $30 $110 - $5/MWh $(30) $(110) PJM-W ATC Energy Price + $5/MWh $5 $50
Slide 42: ExGen Hedged Gross Margin Upside/Risk
ExGen Hedged Gross Margin* Upside/Risk 9,000 8,500 8,000 Approximate Gross Margin* ($ million)(1) 7,500 $7,150 $7,150 7,000 $6,850 6,500 $6,500 6,000 5,500 5,000 4,500 4,000 2020 2021 (1) Represents an approximate range of expected gross margin*, taking into account hedges in place, between the 5th
Slide 43: Illustrative Example of Modeling Exelon Generation 2021 Total Gross Margin
Illustrative Example of Modeling Exelon Generation 2021 Total Gross Margin* Row Item Midwest Mid-Atlantic ERCOT New York (A) Start with fleet-wide open gross margin $3.35 billion (B) Capacity and ZEC $1.85 billion (C) Expected Generation (TWh) 95.5 48.0 21.2 16.6 (D) Hedge % (assuming mid-point of r
Slide 44: Additional ExGen Modeling Data
Additional ExGen Modeling Data Total Gross Margin Reconciliation (in $M)(1) 2020 2021 Revenue Net of Purchased Power and Fuel Expense*(2,3) $7,375 $7,225 Other Revenues(4) $(150) $(150) Direct cost of sales incurred to generate revenues for certain $(225) $(275) Constellation and Power businesses To
Slide 45: Appendix Reconciliation of Non-GAAP Measures
Appendix Reconciliation of Non-GAAP Measures 45 Q1 2020 Earnings Release Slides
Slide 46: Q1 GAAP EPS Reconciliation
Q1 GAAP EPS Reconciliation Three Months Ended March 31, 2020 ComEd PECO BGE PHI ExGen Other Exelon 2020 GAAP Earnings (Loss) Per Share $0.17 $0.14 $0.19 $0.11 $0.05 ($0.06) $0.60 Mark-to-market impact of economic hedging activities - - - - (0.10) - (0.10) Unrealized losses related to NDT funds - - -
Slide 47: Q1 GAAP EPS Reconciliation (continued)
Q1 GAAP EPS Reconciliation (continued) Three Months Ended March 31, 2019 ComEd PECO BGE PHI ExGen Other Exelon 2019 GAAP Earnings (Loss) Per Share $0.16 $0.17 $0.17 $0.12 $0.37 ($0.06) $0.93 Mark-to-market impact of economic hedging activities - - - - 0.03 - 0.03 Unrealized gains related to NDT fund
Slide 48: Projected GAAP to Operating Adjustments
Projected GAAP to Operating Adjustments • Exelon’s projected 2020 adjusted (non-GAAP) operating earnings excludes the earnings effects of the following: − Mark-to-market adjustments from economic hedging activities; − Unrealized gains and losses from NDT funds to the extent not offset by contractual
Slide 49: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations(1) (2) Exelon FFO/Debt = FFO (a) Adjusted Debt (b) Exelon FFO Calculation(2) GAAP Operating Income + Depreciation & Amortization = EBITDA - Interest Expense +/- Cash Taxes + Nuclear Fuel Amortization +/- Mark-to-Market Adjustments (Economic Hedges) +/- Other S&P Adju
Slide 50: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations(1) ExGen Debt/EBITDA = Net Debt (a) ExGen Debt/EBITDA = Net Debt (c) Operating EBITDA (b) Excluding Non-Recourse Operating EBITDA (d) ExGen Net Debt Calculation ExGen Net Debt Calculation Excluding Non-Recourse Long-Term Debt (including current maturities) Long-Term
Slide 51: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Consolidated EU Operating TTM ROE Reconciliation ($M) Q1 2020 Q4 2019 Q3 2019 Q2 2019 Q1 2019 Net Income (GAAP) $2,060 $2,065 $2,037 $2,011 $1,967 Operating Exclusions $31 $30 $33 $31 $33 Adjusted Operating Earnings $2,091 $2,095 $2,070 $2,042 $1,999 Average Equity $
Slide 52: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations 2020 Adjusted Cash from Ops Calculation ($M)(1) BGE ComEd PECO PHI ExGen Other Exelon Net cash flows provided by operating activities (GAAP) $625 $1,325 $750 $975 $4,600 ($225) $8,050 Other cash from investing activities - - - - ($275) - ($275) Counterparty collatera
Slide 53: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations ExGen Adjusted O&M Reconciliation ($M)(1) 2020 2021 GAAP O&M $4,700 $4,750 Decommissioning(2) $75 $75 Direct cost of sales incurred to generate revenues for certain Constellation and Power businesses(3) ($225) ($275) O&M for managed plants that are partially owned ($