Slide 1: Exelon Analyst Day 2016
~ Exelon. | \\ i te \ | a nam TE q
Slide 2: Welcome and Agenda
Welcome and Agenda Dan Eggers Senior Vice President, Investor Relations
Slide 3: 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 4: 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 a
Slide 5: 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 6: Agenda
Agenda Time (ET) Presentation Topic Presenter Total Time 8:45 – 8:50 Welcome & Introductions Dan Eggers 5 minutes 8:50 – 9:10 Exelon Overview Chris Crane 20 minutes Denis O’Brien Anne Pramaggiore Calvin Butler 9:10 – 10:25 Exelon Utilities 75 minutes Craig Adams Dave Velazquez Q&A 10:25 – 10:40 BREA
Slide 7: Exelon Overview
Exelon Overview Chris Crane President & Chief Executive Officer
Slide 8: Exelon: An Industry Leader
Exelon: An Industry Leader Note: All numbers reflect year-end 2015; 2015 revenue number is Exelon and PHI combined 8
Slide 9: The Exelon Value Proposition
The Exelon Value Proposition Regulated Utility Growth with utility EPS rising 7-9% annually from 2016- 2020 and rate base growth of 6.1%, representing an expanding majority of earnings ExGen’s strong free cash generation will support utility growth while also reducing debt by ~$3B over the next
Slide 10: Capital Investment Concentrated on Exelon Utilities
Capital Investment Concentrated on Exelon Utilities Cumulative Capital Expenditures 2016-2020 ($B) $35 $30 $2.3 $4.3 $25 $20 $15 $25.2 $10 $5 $0 2016E 2017E 2018E 2019E 2020E ExGen Growth ExGen Baseline Utility Investment Utilities make up ~80% of capital investment from 2016-2020 Note: ExGen reflec
Slide 11: Driving Strong Rate Base Growth
Driving Strong Rate Base Growth Exelon Utilities Rate Base 2012-2020 ($B) +6.1% 40.6 38.2 36.7 34.7 10.9 32.0 10.0 9.5 9.1 8.4 8.1 +6.4% 7.3 7.7 21.6 6.9 19.9 6.3 17.9 18.7 6.0 6.9 5.6 6.2 6.5 5.1 5.3 5.8 5.2 5.0 4.6 4.7 4.3 13.0 13.6 14.0 14.7 10.6 12.2 8.5 8.7 9.5 2012A 2013A 2014A 2015A 2016E 201
Slide 12: Utility Adjusted Operating Earnings
Exelon Utilities EPS Growth of 7-9% to 2020 Exelon Utilities Operating Earnings 2016-2020 $2.00 $2.00 $1.90 $1.90 $1.80 $1.80 $1.70 $1.65 $1.70 Utility Adjusted Operating Earnings $1.60 $1.60 $1.50 $1.45 $1.50 $1.40 $1.30 $1.35 $1.20 $1.15 $1.10 $0.10 $0.00 2016E 2017E 2018E 2019E 2020E Rate base gr
Slide 13: ExGen's Strong Free Cash Flow Supports Utility Growth and Debt Reduction
ExGen’s Strong Free Cash Flow Supports Utility Growth and Debt Reduction 2016-2020 Exelon Generation Free Cash Flow(1,2,3) and Uses of Cash ($B) ~$8.2 (~$2.3) ($2.7 - $3.2) ($2.7 - $3.2) Cumulative ExGen Committed ExGen Growth CapEx Utility Investment ExGen Debt Reduction FCF 2016-2020(2) Redeployin
Slide 14: Taking Steps to Improve ExGen's Earnings Consistency
Taking Steps to Improve ExGen’s Earnings Consistency Improving Our Generation to Load Match Impact of State Nuclear Outcomes(1) Generation Produced (TWh) • New York: $0.08-0.10 per share annually (2) Load Delivered (TWh) 210 and ~$350M in additional after-tax cash through 2020 from implementation of
Slide 15: Maintaining Investment Grade Credit Ratings is a Top Financial Priority
Maintaining Investment Grade Credit Ratings is a Top Financial Priority Exelon S&P FFO/Debt %(1)(4) ExGen Debt/EBITDA Ratio(5) 18%-20% 20% 18% 4 3.4x 3.0x 15% 3 10% S&P Threshold 2 5% 1 0% 0 2016 Target 2016 Target Credit Ratings by Operating Company Current Ratings (2)(3) ExCorp ExGen ComEd PECO BG
Slide 16: Delivering Value Through Capital Allocation Policy
Delivering Value Through Capital Allocation Policy Our strong balance sheet underpins our capital allocation policy and capital decisions are made to maximize value to our customers and shareholders We are returning capital to shareholders by growing our dividend, targeting 2.5% annual increases thr
Slide 17: Diverging Paths for Economically Challenged Nuclear Plants
Diverging Paths for Economically Challenged Nuclear Plants Source: January 5, 2015 Response to the IL General Assembly Concerning House Resolution 1146 prepared by Illinois Commerce Commission, Illinois Power Agency, Illinois Environmental Protection Agency, and Illinois Department of Commerce and E
Slide 18: Fostering a Culture of Innovation
Fostering a Culture of Innovation 18
Slide 19: Exelon Utilities
Exelon Utilities Denis O’Brien Chief Executive Officer, Exelon Utilities
Slide 20: Exelon Utilities Overview
Exelon Utilities Overview Note: Rate base number is Exelon and PHI combined and denotes year-end 20
Slide 21: Exelon Utilities (EU) is an Industry Leader
Exelon Utilities (EU) is an Industry Leader US Utility Customers (millions) 10.0 9.7 8.2 7.9 6.0 5.5 5.4 5.1 5.0 4.9 4.8 4.5 3.8 3.0 EXC PGE SRE DUK FE XEL AEP PEG EIX ED NEE SO D ETR Total Regulated Capital Expenditures 2016-2018 ($B) 21.7 17.4 16.1 16.0 13.7 12.9 12.1 11.4 9.8 9.7 9.4 8.9 DUK PGE
Slide 22: Deploying Significant Capital for Our Customers
Deploying Significant Capital for Our Customers Capital Expenditures 2012-2020 ($M) 5,525 5,325 400 5,175 250 150 475 500 4,675 4,600 525 25 25 525 550 3,750 1,475 1,200 1,100 475 1,000 800 3,100 325 2,650 500 2,275 450 275 850 200 225 225 725 375 600 3,175 3,375 3,400 3,225 3,125 2,100 1,475 1,375
Slide 23: Driving Strong Rate Base Growth
Driving Strong Rate Base Growth Exelon Utilities Rate Base 2012-2020 ($B) +6.1% 40.6 38.2 36.7 34.7 10.9 32.0 10.0 9.5 9.1 8.4 +6.4% 8.1 7.3 7.7 21.6 6.9 19.9 6.3 17.9 18.7 6.0 6.9 5.6 6.2 6.5 5.1 5.3 5.8 5.2 5.0 4.6 4.7 4.3 13.0 13.6 14.0 14.7 10.6 12.2 8.5 8.7 9.5 2012A 2013A 2014A 2015A 2016E 201
Slide 24: Formulaic Mechanisms Cover Bulk of Rate Base Growth
Formulaic Mechanisms Cover Bulk of Rate Base Growth Rate Base Growth Breakout 2016-2020 ($B) 2.4 10.8 0.8 Base Rate Case 1.6 2.9 1.5 Tracker/Formula Rate 0.8 1.9 0.7 2.1 2.6 0.9 (0.2) 7.8 1.6 2.4 0.6 1.8 2016E 2017E 2018E 2019E 2020E Total Of the approximately $10.8 billion of rate base growth Exelo
Slide 25: Utility Adjusted Operating Earnings
Exelon Utilities EPS Growth of 7-9% to 2020 Exelon Utilities Operating Earnings 2016-2020 $2.00 $2.00 $1.90 $1.90 $1.80 $1.80 $1.70 $1.65 $1.70 Utility Adjusted Operating Earnings $1.60 $1.60 $1.50 $1.45 $1.50 $1.40 $1.30 $1.35 $1.20 $1.15 $1.10 $0.10 $0.00 2016E 2017E 2018E 2019E 2020E Rate base gr
Slide 26: Proven Track Record of Improving Operational Performance
Proven Track Record of Improving Operational Performance At CEG Merger (2012) 2015 2015 Operations Metric BGE PECO ComEd BGE PECO ComEd PHI OSHA Recordable Rate Electric 2.5 Beta SAIFI (Outage Operations Frequency) 2.5 Beta CAIDI (Outage Duration) Customer Satisfaction N/A Customer Service Level % o
Slide 27: BGE: A Proven Track Record of Enhancing Utility Value
BGE: A Proven Track Record of Enhancing Utility Value Leveraging the best practices of the Exelon Utilities platform, BGE has significantly improved operational metrics Outage Frequency (SAIFI) Operating ROE (%) 1.6 12.0% 10.6% 1.4 10.0% 1.2 1.2 8.6% 8.1% 1.0 8.0% 1.0 0.9 6.7% 0.8 0.8 0.8 6.0% 0.6 4
Slide 28: Wide Gaps in Earned vs Allowed Distribution ROEs at PHI
Wide Gaps in Earned vs Allowed Distribution ROEs at PHI 2015 Allowed ROE 2015 Earned ROE(1) 9.62% 9.70% 9.81%(2) 9.75%(2) 9.75% 10.0% 9.40% 9.0% 8.0% 7.40% 7.0% 6.72% 6.62% 6.73% 6.0% 5.0% 4.77% 4.75% 4.0% 3.0% 2.0% 1.0% 0.0% Pepco - MD Pepco - DC DPL - DE - Electric DPL - MD DPL - DE - Gas ACE - NJ
Slide 29: Near-Term PHI Regulatory Strategy
Near-Term PHI Regulatory Strategy • 6 distribution rate case filings and 3 transmission formula rate filings completed, seeking $465M total revenue increase • Rate cases include various initiatives including grid resiliency programs, economic incentive tariffs, and a Pay as You Go pre-paid metering
Slide 30: Long-Term PHI Regulatory Opportunity
Long-Term PHI Regulatory Opportunity Pursuing Existing Mechanisms Legislative Initiatives Pursuing alternative rate recovery Currently Pursuing: mechanisms for significant capital investment programs: • Maryland: advance legislation to allow for surcharge recovery of reliability and resiliency costs
Slide 31: Exelon Employees Support Their Communities
Exelon Employees Support Their Communities Note: Legacy Exelon data only 31
Slide 32: ComEd
ComEd Anne Pramaggiore President & Chief Executive Officer, ComEd
Slide 33: ComEd Overview
ComEd Overview Note: Equity Ratio for distribution only. Rate base number denotes year-end. 33
Slide 34: ComEd Capital Expenditure Forecast
ComEd Capital Expenditure Forecast Capital Expenditures 2012-2020 ($M) 2,575 2,425 350 400 2,150 250 1,900 625 1,775 150 1,725 575 400 1,600 25 275 325 25 250 1,425 300 1,250 150 50 500 275 450 1,600 1,500 1,450 1,425 1,450 1,275 925 1,000 825 2012A 2013A 2014A 2015A 2016E 2017E 2018E 2019E 2020E Sm
Slide 35: Energy Infrastructure Modernization Act (EIMA) Overview
Energy Infrastructure Modernization Act (EIMA) Overview • In October 2011, the Illinois General Assembly enacted the Energy Infrastructure Modernization Act (EIMA), setting in motion a $2.6 billion, ten-year investment by ComEd to strengthen and modernize the state’s electric grid • Investment Plan
Slide 36: EIMA Investments
EIMA Investments Reliability Investments ComEd System SAIFI (IEEE Standard) • 800 storm hardening and grid resiliency Without Major Event Days With Major Event Days engineering solutions completed 1.60 1.55 • 6,700 avoided underground cable faults and 1 EIMA EIMABegins Begins 1.40 million avoided cu
Slide 37: Substation/Resiliency & Grand Prairie Gateway Investments
Substation/Resiliency & Grand Prairie Gateway Investments Substation/Resiliency Investments • Includes proactive replacement of substation power transformers, breakers, relays, transmission underground cable and pumping plants, rebuilding overhead lines and replacing wood structures with more resili
Slide 38: ComEd Rate Base Growth
ComEd Rate Base Growth Rate Base 2012-2020 ($B) +4.8% 14.7 14.0 13.6 13.0 12.2 3.9 3.8 3.7 +7.7% 10.6 3.5 3.3 9.5 8.5 8.7 2.8 2.5 2.1 2.2 10.3 10.8 9.5 9.9 8.9 7.8 6.6 7.1 6.4 2012A 2013A 2014A 2015A 2016E 2017E 2018E 2019E 2020E Electric Transmission Electric Distribution ComEd Rate Base Growing at
Slide 39: Formula Rate Mechanism Covers All Rate Base Growth
Formula Rate Mechanism Covers All Rate Base Growth Rate Base Additions Breakdown 2016-2020 ($B)(1) 4.2 Formula Rate 0.7 0.4 0.6 0.9 1.6 2016E 2017E 2018E 2019E 2020E Total Tracker/Formula Rate Recovery Mechanisms Electric Distribution: (1) • Formula Rate • 2016 Filing Year: Based on 2015 costs and 2
Slide 40: ComEd Operational Performance
ComEd Operational Performance Secured passage of the Energy Infrastructure Modernization Act (EIMA) in 2011, ComEd has consistently delivered continuous operational improvement • Finished 2015 in the top decile in reliability and safety and top quartile in customer service • Emergency Preparedness &
Slide 41: Utility of the Future
Utility of the Future 3 trends are disrupting the …requiring us to respond differently utility industry than we have before Climate • Clean energy legislation Clean change is (renewables, EE) 1 requiring • Increase in weather action related outages Lean • Installation base of Technology solar is gro
Slide 42: Platform for Utility of the Future
Platform for Utility of the Future Producer Marketplace Consumer Enable interactions between producers Services & and consumers for Lead gen / Installation Ongoing Marketplace Transaction Product / Financing Customer marketing & integration operations curation execution service solutions service 4 s
Slide 43: Utility of the Future – Projects
Utility of the Future – Projects Community of the Future Infrastructure Convergence Smart Streetlights AMI Water Meters 43
Slide 44: Utility of the Future – Projects
Utility of the Future – Projects Superconductor Energy Marketplace 44
Slide 45: BGE
BGE Calvin Butler Chief Executive Officer, BGE
Slide 46: BGE Overview
BGE Overview Note: Rate base number denotes year-end 46
Slide 47: BGE celebrated its 200th anniversary as the first gas utility
BGE celebrated its 200th anniversary as the first gas utility in the country and our continued position as an innovator and regional force 47
Slide 48: BGE Capital Expenditure Forecast
BGE Capital Expenditure Forecast Capital Expenditures 2012-2020 ($M) 975 950 900 850 875 25 275 275 275 700 300 650 650 25 250 575 75 200 125 200 175 75 225 175 175 125 225 125 175 50 100 125 500 500 400 400 325 350 300 275 300 2012A 2013A 2014A 2015A 2016E 2017E 2018E 2019E 2020E Smart Grid/Smart M
Slide 49: Northeast Transmission System Improvement (NETSI) Project
Northeast Transmission System Improvement (NETSI) Project Key Facts • Driver: PJM identified thermal overloads based on NERC/PJM planning criteria during the Regional Transmission Expansion Planning (RTEP) process in 2009 and 2010 on the Graceton to Bagley 230 kV circuit and the Bagley to Raphael Ro
Slide 50: Strategic Infrastructure Development and Enhancement (STRIDE)
Strategic Infrastructure Development and Enhancement (STRIDE) 1929 2016 Key Facts • Project: BGE’s gas system infrastructure replacement plan is projected to be completed over a 30 year period and includes the accelerated replacement of five classes of assets: all pre-1982 plastic “Ski-Bar” service
Slide 51: BGE Rate Base Growth
BGE Rate Base Growth Rate Base 2012-2020 ($B) +7.4% 6.9 6.5 6.2 5.8 1.8 1.7 +4.6% 5.2 1.6 5.0 4.7 1.5 4.6 4.3 1.4 1.2 1.2 1.1 1.1 1.2 1.1 1.0 1.0 0.6 0.7 0.6 0.6 0.5 3.7 3.9 3.2 3.3 3.5 2.8 2.9 3.0 3.1 2012A 2013A 2014A 2015A 2016E 2017E 2018E 2019E 2020E Gas Delivery Electric Transmission Electric
Slide 52: Formulaic Mechanisms Cover Half of Rate Base Growth
Formulaic Mechanisms Cover Half of Rate Base Growth BGE Rate Base Additions Breakdown 2016-2020 ($B) 0.4 1.8 0.2 0.3 0.2 Base Rate Case 0.4 0.2 1.0 0.1 Tracker/Formula Rate 0.2 0.6 0.2 0.1 0.5 1.0 0.1 0.0 0.1 2016E 2017E 2018E 2019E 2020E Total Base Rate Case Recovery Mechanism Tracker/Formula Rate
Slide 53: BGE Operational Performance
BGE Operational Performance Since the merger in 2012, BGE has dramatically improved all aspects of operational performance • Top decile safety performance for employee safety • Top decile performance in gas odor response • Top quartile in operating performance for electric reliability (frequency of
Slide 54: PECO
PECO Craig Adams President & Chief Executive Officer, PECO
Slide 55: PECO Overview
PECO Overview Note: Rate base number denotes year-end 55
Slide 56: PECO Capital Expenditure Forecast
PECO Capital Expenditure Forecast Capital Expenditures 2012-2020 ($M) 775 775 750 750 675 675 175 25 200 200 200 600 150 550 50 175 100 75 75 75 450 100 125 175 75 100 100 75 100 100 50 50 500 500 475 475 350 375 325 225 225 2012A 2013A 2014A 2015A 2016E 2017E 2018E 2019E 2020E Smart Grid/Smart Mete
Slide 57: Accelerated Gas Pipeline Replacement Program
Accelerated Gas Pipeline Replacement Program Miles of Main Replaced / # Service Renewals Annual Gas Replacement Capex ($M) 4,500 60 $100 $102 4,000 50 $88 $90 3,500 $77 3,000 40 2,500 30 $50 2,000 $39 $40 $36 1,500 20 $31 1,000 $18 $21 Miles of Main Replaced (RHS) 10 500 # of Bare Steel Service Rene
Slide 58: Electric System 2020 Plan
Electric System 2020 Plan Key Facts • Scope: 5 year LTIIP plan focused on enhancing storm hardening and addressing aging infrastructure • Underground Cable Replacement • Storm Hardening Programs • Substation Upgrades • Budgeted Cost: $275 million • Regulatory Approval: Filed LTIIP on March 27, 2015
Slide 59: Post Substation, Marcus Hook, PA
Post Substation, Marcus Hook, PA Key Facts • Scope: Construct new 220kV-13kV, 62MVA Triplex substation in Marcus Hook PA. • Budgeted Cost: $43.3 million • Recovery Mechanism: Base rates • In Service Dates: (220kV ring bus- 5/27/16) (13kV Bus #3 & Bus #2- 9/1/16) • Benefits: • Provides electric capac
Slide 60: PECO Rate Base Growth
PECO Rate Base Growth Rate Base 2012-2020 ($B) +6.7% 8.1 7.7 7.3 6.9 2.0 1.8 +5.7% 6.3 1.7 6.0 1.5 5.6 5.3 1.4 1.1 5.1 1.3 1.0 1.2 1.0 1.1 1.0 1.0 0.9 0.8 0.7 0.7 0.7 4.9 5.1 4.4 4.7 3.7 3.9 4.0 3.3 3.5 2012A 2013A 2014A 2015A 2016E 2017E 2018E 2019E 2020E Gas Delivery Electric Transmission Electric
Slide 61: Recovery Mechanisms Evolving to be More Formulaic
Recovery Mechanisms Evolving to be More Formulaic Rate Base Additions Breakdown 2016-2020 ($B) 0.4 2.0 Base Rate Case 0.4 0.3 Tracker/Formula Rate 0.3 0.1 1.0 0.3 0.8 0.0 0.4 0.4 0.4 0.0 (0.6) 1.2 0.4 0.0 2016 2017 2018 2019 2020 Total Base Rate Case Recovery Mechanism Tracker/Formula Rate Recovery
Slide 62: PECO Operational Performance
PECO Operational Performance PECO has a consistent track record of delivering strong operational performance and driving year over year improvement • Three-year Top Decile performer in OSHA Recordable, Gas Odor Response and SAIFI • Achieved all-time best score for PECO in 2016 J.D. Power & Associate
Slide 63: Pepco Holdings
Pepco Holdings Dave Velazquez President & Chief Executive Officer, Pepco Holdings
Slide 64: Pepco Holdings Overview
Pepco Holdings Overview Note: All-time peak load is the sum of peak load at each PHI utility. Rate base number denotes year-end. 64
Slide 65: Pepco Holdings Capital Expenditure Forecast
Pepco Holdings Capital Expenditure Forecast Capital Expenditures 2016-2020 ($M) 1,550 1,500 50 1,425 50 50 1,350 50 525 1,225 475 50 525 425 275 975 975 850 875 900 2016E 2017E 2018E 2019E 2020E Gas Delivery Electric Transmission Electric Distribution $7B of Capital being invested from 2016-2020 Not
Slide 66: PHI Reliability Commitments and Investment
PHI Reliability Commitments and Investment Outage Frequency Capital Spend 2016-2020 ( $B) 1.8 1.76 Actual Merger Commitment $4.5 1.6 1.41 1.4 1.34 1.21 1.18 Merger commitment 1.2 1.16 $2.3 1.06 1.08 related reliability spend 1.04 1.02 1.0 0.8 $2.2 0.6 0.4 $2.2 0.2 $0.3 0.0 2011 2012 2013 2014 2015 2
Slide 67: PEPCO – Waterfront 230kV/138kV/13kV Substation
PEPCO – Waterfront 230kV/138kV/13kV Substation Key Facts • Project: Project consists of constructing a New Waterfront new 230kV/138kV/13kV substation with an Substation initial firm capacity of 140 MVA and an ultimate capacity of 350 MVA; installing 3 new underground transmission feeders 0.25 mile f
Slide 68: DPL – Transmission Upgrades
DPL – Transmission Upgrades Key Facts – Piney Grove to Wattsville • Project: New 30.9 mile 138kV line from Piney Grove Sub to Wattsville Sub, built as double circuit along with Circuit 6712 (Kenney to Wattsville Substations) and with rebuild of existing 69kV Circuit 6729 (Piney Grove to Kenney Subst
Slide 69: ACE – Transmission Upgrades
ACE – Transmission Upgrades Key Facts • Project: RTEP Projects to rebuild ~ 50 miles of transmission lines, modification of 7 substations, expansion of 3 substations and a rebuild of 1 substation • Cost: $163 million • Recovery Mechanism: Transmission portion will be recovered through ACE's FERC reg
Slide 70: Pepco Holdings Rate Base Growth
Pepco Holdings Rate Base Growth Rate Base 2016-2020 ($B) 10.9 +6.6% 0.4 10.0 9.5 0.4 9.1 0.3 8.4 0.3 3.1 0.3 2.7 2.6 2.3 2.1 7.0 7.3 6.4 6.6 6.0 2016E 2017E 2018E 2019E 2020E Gas Delivery Electric Transmission Electric Distribution PHI Rate Base growing at 6.6% CAGR from 2016-2020 Note: All numbers
Slide 71: Rate Base Growth by Mechanism
Rate Base Growth by Mechanism Rate Base Additions Breakdown 2016-2020 ($B) 0.8 2.7 Base Rate Case 0.3 Tracker/Formula Rate 0.6 0.5 1.3 0.5 0.3 0.2 0.2 0.7 0.3 0.4 1.4 0.3 0.2 0.1 0.2 2016E 2017E 2018E 2019E 2020E Total Base Rate Case Recovery Mechanism Tracker/Formula Rate Recovery Mechanism Electri
Slide 72: Integration Update
72 Integration Update Since merger close, we have been executing integration plans, which include standardizing processes to the Exelon management model, complying with merger commitments, and early capture of synergy value. Below are highlights: • Completed 100% of Day 1-100 requirement; now focus
Slide 73: Utility Appendix
Utility Appendix — «= Exelon.
Slide 74: Exelon Regulatory Jurisdictions
Exelon Regulatory Jurisdictions Rate Cases Illinois Pennsylvania Maryland District of Columbia Delaware New Jersey Partially Forcasted Test Fully Projected Future Test Yes Yes Yes(1) Yes Yes Year Year Required to update test Yes No Yes (1) No Yes No year to actual Statute - 7 months; rates No statut
Slide 75: Exelon Utilities Distribution Rate Case Schedule
Exelon Utilities Distribution Rate Case Schedule Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 IL Formula Final Order ComEd Electric Rate Case Expected Distribution Formula Rate Filed April 13 December ACE Electric NJ Rate Final Order Distribution Case Filed Expected Rates March 22 Q1/Q2 P
Slide 76: BGE Rate Case
BGE Rate Case Electric Gas Docket # 9406 Test Year December 2014 – November 2015 Common Equity Ratio 51.9% Authorized Returns ROE: 9.75%; ROR: 7.28% ROE: 9.65%; ROR: 7.23% Requested Rate of Return 7.95% 7.90% Rate Base $2.9B $1.2B Revenue Requirement Increase $41.7M $47.8M Distribution Increase as %
Slide 77: ACE Electric Distribution Rate Case
ACE Electric Distribution Rate Case Docket # ER16030252 Test Year 2015 Calendar Year Test Period 12 months actual Requested Common Equity Ratio 49.5% Requested Rate of Return ROE: 10.60%; ROR: 8.06% Proposed Rate Base (Adjusted) $1.3B Requested Revenue Requirement Increase $79.4M (excluding Sales &
Slide 78: ComEd April 2016 Distribution Formula Rate
ComEd April 2016 Distribution Formula Rate The 2016 distribution formula rate filing established the net revenue requirement used to set the rates that will take effect in January 2017 after the Illinois Commerce Commission's (ICC’s) review. There are two components to the annual distribution formul
Slide 79: Pepco MD Electric Distribution Rate Case
Pepco MD Electric Distribution Rate Case Case No. 9418 Test Year 2015 Calendar Year Test Period 12 months actual Requested Common Equity Ratio 49.6% Requested Rate of Return ROE: 10.60%; ROR: 8.01% Proposed Rate Base (Adjusted) $1.8B Requested Revenue Requirement Increase $126.6M (Updated on May 27,
Slide 80: DPL DE (Electric) Distribution Rate Case
DPL DE (Electric) Distribution Rate Case Docket # 16-0649 Test Year 2015 Calendar Year Test Period 12 months actual Requested Common Equity Ratio 49.4% Requested Rate of Return ROE: 10.60%; ROR: 7.19% Proposed Rate Base (Adjusted) $846M Requested Revenue Requirement Increase $62.8M(1) Residential To
Slide 81: DPL DE (Gas) Distribution Rate Case
DPL DE (Gas) Distribution Rate Case Docket # 16-0650 Test Year 2015 Calendar Year Test Period 12 months actual Requested Common Equity Ratio 49.4% Requested Rate of Return ROE: 10.60%; ROR: 7.19% Proposed Rate Base (Adjusted) $362M Requested Revenue Requirement Increase $21.5M(1) Residential Total B
Slide 82: Pepco DC Distribution Rate Case
Pepco DC Distribution Rate Case Formal Case No. 1139 Test Year April 1, 2015 – March 31, 2016 Test Period 12 months actual Requested Common Equity Ratio 49.14% Requested Rate of Return ROE: 10.60%; ROR: 8.00% Proposed Rate Base (Adjusted) $1.8B Requested Revenue Requirement Increase $85.5M Residenti
Slide 83: DPL MD Distribution Rate Case
DPL MD Distribution Rate Case Case No. 9424 Test Year April 1, 2015 – March 31, 2016 Test Period 12 months actual Requested Common Equity Ratio 49.1% Requested Rate of Return ROE: 10.60%; ROR: 7.24% Proposed Rate Base $744M Requested Revenue Requirement Increase $66.2M Residential Total Bill % Incre
Slide 84: Pepco Holdings Capital Expenditures
Pepco Holdings Capital Expenditures 850 800 800 225 700 675 175 250 150 175 400 375 350 50 350 325 325 50 50 625 625 275 275 175 250 150 550 550 150 150 225 150 25 50 500 125 100 75 50 75 175 175 175 200 175 175 175 175 150 150 2016E 2017E 2018E 2019E 2020E 2016E 2017E 2018E 2019E 2020E 2016E 2017E
Slide 85: Pepco Holdings Rate Base Outlook
Pepco Holdings Rate Base Outlook 5.6 Gas Delivery Electric Transmission Electric Distribution 5.0 4.7 1.3 4.6 0.9 4.1 0.9 0.9 0.8 3.0 2.9 2.8 0.4 2.5 2.6 0.4 0.3 2.3 0.3 0.3 2.2 0.9 2.1 0.9 2.0 0.8 1.8 0.7 4.2 0.9 0.7 4.1 0.9 3.7 3.8 0.7 0.8 0.6 3.3 1.5 1.6 1.6 1.7 1.5 1.2 1.2 1.2 1.3 1.4 2016E 2017
Slide 86: Exelon Utilities Load
Exelon Utilities Load All Customers Residential C&I ComEd PECO BGE 1.0% 1.0% 0.7% 0.5% 0.2% 0.3% 0.1% 0.0% -0.1% -0.1% -0.4% -0.4%-0.5% -0.3% (0.6%) (1.4%) (1.4%) (1.5%) 2015 2016E 2015 2016E 2015 2016E Chicago GMP 0.9% Philadelphia GMP 1.6% Baltimore GMP 1.1% Chicago Unemployment 6.2% Philadelphia
Slide 87: Exelon Utilities Load (cont'd)
Exelon Utilities Load (cont’d) All Customers Residential C&I ACE Delmarva Pepco 6.7% 2.2% 2.6% 2.1% 1.1% (2.5%) 0.0% 0.0% 0.2% (2.7%) (0.4%) (1.6%) (1.4%) (1.8%) (2.0%) (3.7%) (3.4%) (5.6%) 2015 2016E 2015 2016E 2015 2016E ACE GMP 1.5% DPL GMP 2.7% Pepco GMP 1.6% ACE Unemployment 7.9% DPL Unemployme
Slide 88: Utility Capital Spend Profile (2016–2020)
Utility Capital Spend Profile (2016–2020) Recovery Mechanism: Formulaic or Base Capital Spend 2016-2020 (in $B) Rate Case 10.1 PECO 9.7 BGE 0.7 PHI 2.8 0.8 0.3 ComEd 40% 2.8 5.4 0.3 1.0 60% 8.0 2.2 4.5 2.0 Tracker/Formula Rates Base Rate Case Tracker/Formula Transmission Base Rate Case Rates(1) Form
Slide 89: Exelon's Policy Priorities
Exelon’s Policy Priorities Bill Von Hoene Senior Executive Vice President & Chief Strategy Officer Kathleen Barrón Senior Vice President Federal Regulatory Affairs and Wholesale Market Policy
Slide 90: Exelon Policy Priorities
Exelon Policy Priorities Modernize Utility Ratemaking to Ensure Appropriate Recovery Invest in infrastructure that provides customer benefit through grid resiliency and efficiency Ensure fair rate structures to support new technologies Regulatory Secure Proper Policies to Enable Innovative and p
Slide 91: Our Carbon Policy Principles
Our Carbon Policy Principles • Exelon believes in our nation’s ability to transition the generation fleet to a zero-carbon future while maintaining affordable and reliable electric service for consumers • For the foreseeable future, the most cost-effective carbon solution for our customers will be t
Slide 92: Existing Nuclear is the Most Cost Effective Zero Carbon Choice
Existing Nuclear is the Most Cost Effective Zero Carbon Choice Estimated Carbon Price Needed to Preserve Existing Nuclear, Coal to Gas Redispatch and Renewable Entry at Near-Term Technology Costs $250 Market Federal Tax Subsidies $200 State Subsidies Unsubsidized Shortfall vs. Market $150 Social Cos
Slide 93: New York Zero Emission Credit Program Mechanics
New York Zero Emission Credit Program Mechanics • Pricing for each tranche to be administratively determined based on the USIWG Social Cost of Carbon (escalating over the term), less a fixed baseline for carbon pricing already captured through the RGGI program ($10.41/short ton) • Tranche 1 yields $
Slide 94: Zero Emission Credits (ZECs) are Like Renewable Energy Credits
Zero Emission Credits (ZECs) are Like Renewable Energy Credits (RECs) Both credits are for environmental attributes to meet a state environmental goal While legal challenges are likely, we believe that ZECs, like RECs, will withstand legal challenge: • No affiliate contracts (Ohio) • No attempt to a
Slide 95: Presidential Politics
Presidential Politics CLINTON TRUMP Policy Outlook: Key Issues Facing the Next President • Climate Change including Clean Power Plan Implementation • Budget & Entitlement Reform • Comprehensive Tax Reform • Appointees to Supreme Court, DOE, EPA, FERC and NRC • Federal Nuclear Waste Policy 95
Slide 96: Commitment to Diversity & Inclusion
Commitment to Diversity & Inclusion • Exelon is focused on attracting, retaining and Diversity Certified Supplier Spend ($M) advancing employees who will best serve and represent our customers, partners and communities +116% • In 2015, Exelon surpassed its goals for the inclusion of 1,360 diverse su
Slide 97: Exelon's Policies Priorities Appendix
Exelon’s Policies Priorities Appendix
Slide 98: Overview of New York Zero Emission Credit Program
Overview of New York Zero Emission Credit Program • On August 1, the New York Public Service Commission (NY PSC) approved the New York Clean Energy Standard which creates a Zero Emission Credit (ZEC) program • The objective of the program is to preserve the environmental attributes of zero-emissions
Slide 99: ZEC Price Determination
ZEC Price Determination Energy and US SCC Zone A Baseline RGGI Net CO2 Short Ton to Capacity Upstate ZEC Tranche Date "Central Adjusted SCC Reference Estimate Externality MWh Forecast Price Value" Price Adjustment Conversion $ /Short Ton $ /Short Ton $ /Short Ton $/MWh $/MWh $/MWh $/MWh Factor 4/1/2
Slide 100: Exelon Generation Overview
Exelon Generation Overview Ken Cornew President & Chief Executive Officer, Exelon Generation
Slide 101: Exelon Generation Overview
Exelon Generation Overview 101
Slide 102: Exelon Generation is an Industry Leader
Exelon Generation is an Industry Leader Total Generation Output (TWh)(1) 243.4 195.1 180.1 175.7 153.1 129.4 103.0 99.4 96.5 93.9 88.6 68.8 60.8 54.4 DUK EXC(3) SO NEE AEP ETR CPN NRG FE D PPL/TLN XEL DYN PEG Carbon Intensity (lb/MWh)(1) 1,686 1,752 1,878 1,390 1,507 1,552 1,126 1,194 594 779 815 55
Slide 103: Gen to Load Matching Model being Pursued Across the Sector
Gen to Load Matching Model being Pursued Across the Sector Exelon merged with Constellation to match Exelon’s long generation position with Constellation’s short customer book Competitors’ Retail Acquisitions: 2002: Constellation New Exelon Energy created from purchase of AES New NRG 2011: Energy Pl
Slide 104: The Cleanest Fleet in the Most Functional Markets
The Cleanest Fleet in the Most Functional Markets 2015 Generation Output by Fuel Type 2015 Generation Output by ISO 8% 3% 4% 2% 6% 5% 4% 80% 88% Nuclear Oil/Gas PJM ISO-NE NYISO Renewables ERCOT MISO Other ~90% of Exelon’s generation is carbon-free and 93% in RTOs with a capacity construct 104
Slide 105: Best in Class Operational Performance
Best in Class Operational Performance Nuclear Capacity Factor (1) Average Nuclear Refueling Days Industry Average Exelon Industry Average Exelon 93.3% 94.1% 94.3% 93.7% 92.7% 90.0% 51.7 89.3% 89.2% 46.6 42.1 41.3 37.7 85.3% 28.3 30.4 25.9 26.1 84.6% 22.3 2011 2012 2013 2014 2015 2011 2012 2013 2014
Slide 106: Driving Cost and Capital Out of the Business
Driving Cost and Capital Out of the Business ExGen Adjusted O&M Spend ($M)(1) Nuclear Fuel Spend ($M) Nuclear Fuel Capex as shown at 2015 EEI -1.3% Nuclear Fuel Capex as shown at 2014 EEI 4,525 4,550 4,350 4,300 4,300 1,200 -7.9% 1,075 1,000 850 800 725 725 775 600 950 925 975 400 825 200 0 2016E 20
Slide 107: Growth CapEx Slowing
Growth CapEx Slowing Exelon Generation Growth Capital Expenditures 2015-2020 ($B)(1) 1,175 1,100 In- Contracted Growth Project Service Asset Date 825 Blue Stem Wind 2016 Yes Albany Green 2017 Yes Energy Texas CCGTs 2017 No Michigan Wind 3 2017 Yes 100 100 100 West Medway(2) 2018 No 2015A 2016E 2017E
Slide 108: Disciplined Portfolio Management to Optimize Value
Disciplined Portfolio Management to Optimize Value Demonstrated ability to monetize assets to improve the value of Exelon Generation Opportunistically Sell •Sold 3,000 MWs at an average price of $600/kW – raised Assets $1.8B (pre-tax) in asset sales in 2014 Extract Value Through •Raised $3.3B in pro
Slide 109: ExGen's Strong Free Cash Flow Supports Utility Growth and Debt Reduction
ExGen’s Strong Free Cash Flow Supports Utility Growth and Debt Reduction 2016-2020 Exelon Generation Free Cash Flow(1,2,3) and Uses of Cash ($B) ~$8.2 (~$2.3) ($2.7 - $3.2) ($2.7 - $3.2) Cumulative ExGen Committed ExGen Growth CapEx Utility Investment ExGen Debt Reduction FCF 2016-2020(2) Redeployin
Slide 110: Diverging Paths for Economically Challenged Nuclear Plants
Diverging Paths for Economically Challenged Nuclear Plants Source: January 5, 2015 Response to the IL General Assembly Concerning House Resolution 1146 prepared by Illinois Commerce Commission, Illinois Power Agency, Illinois Environmental Protection Agency, and Illinois Department of Commerce and E
Slide 111: Investing in Our Future Employees through STEM Education
Investing in Our Future Employees through STEM Education Exelon is making significant investments in science, technology, engineering and math (STEM) education because it is key to the success of our businesses and communities • $8M to support STEM education programs in 2015 • Reaching more than 150
Slide 112: Constellation
Constellation Joe Nigro Chief Executive Officer, Constellation
Slide 113: Constellation Overview
Constellation Overview (1) As calculated based on the same generation supply mix used in EPA eGRID 2012 113
Slide 114: Constellation is an Industry Leader
Constellation is an Industry Leader Retail Electric Load Served (TWh)(1) 139 124 67 64 53 41 41 38 33 24 20 19 19 18 16 Constellation Direct NRG First GDF Suez TXU Noble Champion Just Dynegy EDF MidAm Gexa ConEd Talen Energy Solutions Energy Energy Solutions Energy Energy Energy Solutions Solutions
Slide 115: Load Serving Business Growing through Multiple Channels
Load Serving Business Growing through Multiple Channels Total Load Served Volume Growth from 2014 to 2016 at 16.4% CAGR +16.4% 210 195 155 2014 2015 2016 Residential Customers (in Retail Load (TWh)(1,2) Wholesale Load (TWh)(2) thousands) +21.6% +8.7% +20.4% 1,764 1,773 140-150 65 60-70 130 55 1,200
Slide 116: Retail Gas Complements our Electric Load Serving Business
DRAFT Retail Gas Complements our Electric Load Serving Business Retail Gas Volumes Projections (Bcf) +11.6% 750 775 725 700 500 2014A 2015A 2016E 2017E 2018E Constellation has grown its gas business through disciplined M&A and strong customer retention rates Note: Volumes rounded to nearest 25 Bcf 1
Slide 117: Loyalty of Constellation Customers
Loyalty of Constellation Customers Serve 2/3 of the Fortune Retail Power Retail Gas Solar Distributed Generation 100 More than 130 TWh More than 700 Bcf 275 MW 165 MW retail load under contract in natural gas under contract customer sited, completed or customer sited, completed or 2015 in 2015 under
Slide 118: Our Generation to Load Strategy Delivers Durable Earnings
Our Generation to Load Strategy Delivers Durable Earnings 31 46 2016 Generation Load Match (TWh)(1,2,3) 5 7 4 22 4 111 Expected Generation Expected Load Generation Capacity 4 98 95 5 35 22 13 66 2012 2011 2013 62 41 38 25 17 18 15 13 12 14 10 9 9 10 Midwest Mid- ERCOT New New South/West/Canada Atlan
Slide 119: Exelon Generation Appendix
Exelon Generation Appendix = <= Exelon.
Slide 120: Nuclear Output and Refueling Outages
Nuclear Output and Refueling Outages Nuclear Refueling Cycle 2017 Planned Refueling Cycle • All Exelon-owned units are on a 24 month cycle • 14 planned refueling outages, including 2 at except: Salem • For Braidwood U1/U2, Byron U1/U2, Ginna, • 8 spring refueling outages and 4 fall and Salem U1/U2,
Slide 121: Additional License Extension for Peach Bottom Station
Additional License Extension for Peach Bottom Station • On June 7, 2016, Exelon announced it is seeking an additional 20-year operating license for Peach Bottom from the Nuclear Regulatory Commission (NRC) • The current operating licenses will expire in 2033 and 2034 • If the license extensions are
Slide 122: Process for Decommissioning a Nuclear Plant
Process for Decommissioning a Nuclear Plant • Sites must be decommissioned within 60 years of plant ceasing operations • Exelon must submit a cost estimate for decommissioning the plants to the NRC within 2 years of permanent cessation of operations • Within 2 years of permanent cessation of operati
Slide 123: Clinton and Quad Cities Nuclear Decommissioning Trust Funds
Clinton and Quad Cities Nuclear Decommissioning Trust Funds It is currently estimated that Clinton will no longer meet the NRC minimum funding requirements due to the earlier commencement of decommissioning activities and a shorter time period over which the nuclear decommissioning trust fund (NDTF)
Slide 124: Constellation Energy Nuclear Group (CENG) Operating Service Agreement Terms
Constellation Energy Nuclear Group (CENG) Operating Service Agreement Terms • Nuclear Operating services agreement • Integrated CENG and its 3 plants into Exelon Nuclear with transfer of operating licenses • Loan to CENG and distributions to EDF/Exelon Generation • CENG $400M special distribution pa
Slide 125: Capacity Market: PJM
Capacity Market: PJM PJM Capacity Revenues(1,2,3) Calendar weighted avg. price ($/Mw-day) Revenues ($ Million) $190 $1,300 $180 $1,200 $170 $1,100 $160 $1,000 $150 $900 Capacity Price (MWd) $140 $800 $130 Revenues ($M) $700 $120 $1,293 $600 $110 $1,117 $1,093 $1,102 $500 $100 $400 $90 $300 $80 $70 $
Slide 126: Capacity Markets: ISO-NE, NYISO, MISO
Capacity Markets: ISO-NE, NYISO, MISO 2015/2016 2016/2017 2017/2018 2018/2019 2019/2020 ISO-NE(1) NEMA Capacity (MW)(3) 2,100 2,100 2,100 2,100 2,100 Price ($/MWd) $104 $222 $500 $318 $234 SEMA Capacity (MW)(3) 35 35 35 230 230 Price ($/MWd) $104 $105 $234 $557 $536 NYISO(2) Capacity (MW)(3) 1,100 1
Slide 127: Exelon Nuclear Fleet Overview
Exelon Nuclear Fleet Overview (including CENG and Salem) Spent Fuel Storage/ Type/ Net Generation License Extension Status / License Ownership Date to lose full core Plant Location Containment Capacity (MW)(1) Expiration(1) discharge capacity(3) Braidwood, IL PWR 2,389 Renewed / 2046, 2047 100% Dry
Slide 128: Exelon Oil & Gas Generation Fleet Overview
Exelon Oil & Gas Generation Fleet Overview Number of Primary Fuel Percent Net Generation Number of Primary Fuel Percent Net Generation Station Location Station Location Units Type Owned(1) Capacity (MW)(2) Units Type Owned(1) Capacity (MW)(2) Notch Cliff Baltimore, MD 8 Gas 118 Colorado Bend Wharton
Slide 129: Exelon Renewable Generation Fleet Overview
Exelon Renewable Generation Fleet Overview Number Primary Percent Net Generation Number Primary Percent Net Generation Station Location Station Location of Units Fuel Type Owned(1) Capacity (MW)(2) of Units Fuel Type Owned(1) Capacity (MW)(2) EXC Wind 1,2,3,4 Hansford Co., TX 62 Wind 110 AgriWind Bu
Slide 130: Exelon Generation Disclosures
Exelon Generation Disclosures June 30, 2016 130
Slide 131: Portfolio Management Strategy
Portfolio Management Strategy Strategic Policy Alignment Three-Year Ratable Hedging Bull / Bear Program •Aligns hedging program with •Ensure stability in near-term cash •Ability to exercise fundamental financial policies and financial flows and earnings market views to create value within outlook •D
Slide 132: Components of Gross Margin Categories
Components of Gross Margin Categories Gross margin from Gross margin linked to power production and sales other business activities Open Gross MtM of “Power” New “Non Power” “Non Power” Margin Hedges(2) Business Executed New Business •Generation Gross •Mark-to-Market •Retail, Wholesale •Retail, Whol
Slide 133: ExGen Disclosures
ExGen Disclosures Gross Margin Category ($M)(1) 2016 2017 2018 Open Gross Margin (including South, West & Canada hedged GM)(3) $4,750 $5,650 $5,900 Mark-to-Market of Hedges(3,4) $2,450 $800 $200 Power New Business / To Go $150 $700 $900 Non-Power Margins Executed $350 $150 $100 Non-Power New Busines
Slide 134: ExGen Disclosures
ExGen Disclosures Generation and Hedges 2016 2017 2018 Exp. Gen (GWh) (1) 196,300 199,300 190,700 Midwest(6) 97,800 91,000 80,900 Mid-Atlantic (2) 61,700 60,900 60,600 ERCOT 15,100 26,000 31,100 New York (2) 9,400 9,200 9,100 New England 12,300 12,200 9,000 % of Expected Generation Hedged (3) 97%-10
Slide 135: ExGen Hedged Gross Margin Sensitivities
ExGen Hedged Gross Margin Sensitivities (1) Gross Margin Sensitivities (With Existing Hedges) 2016 2017 2018 Henry Hub Natural Gas ($/Mmbtu) + $1/Mmbtu $(35) $120 $305 - $1/Mmbtu $55 $(115) $(295) NiHub ATC Energy Price + $5/MWh $10 $140 $265 - $5/MWh $(10) $(140) $(260) PJM-W ATC Energy Price + $5/
Slide 136: ExGen Hedged Gross Margin Upside/Risk
ExGen Hedged Gross Margin Upside/Risk 11,000 10,500 10,000 Approximate Gross Margin ($ million)(1,2,3,4) 9,500 9,000 $8,650 8,500 $8,100 $7,900 8,000 7,500 $7,700 7,000 $7,150 6,500 $6,600 6,000 5,500 5,000 2016 2017 2018 (1) Represents an approximate range of expected gross margin, taking into acco
Slide 137: Illustrative Example of Modeling Exelon Generation 2017 Gross Margin
Illustrative Example of Modeling Exelon Generation 2017 Gross Margin South, West & Row Item Midwest Mid-Atlantic ERCOT New York New England Canada (A) Start with fleet-wide open gross margin $5.65 billion (B) Expected Generation (TWh) 91 60.9 26 9.2 12.2 (C) Hedge % (assuming mid-point of range) 74.
Slide 138: Additional ExGen Modeling Data
Additional ExGen Modeling Data Total Gross Margin Reconciliation (in $M)(1) 2016 2017 2018 Revenue Net of Purchased Power and Fuel Expense(2)(3) $8,475 $8,325 $8,175 Other Revenues(4) $(325) $(325) $(325) Direct cost of sales incurred to generate revenues for certain $(350) $(400) $(350) Constellati
Slide 139: Financial Update
Financial Update Jack Thayer Senior Executive Vice President & Chief Financial Officer
Slide 140: Q2 2016 Financial Results
Q2 2016 Financial Results • Delivered adjusted (non-GAAP) operating Q2 2016 Adjusted Operating EPS Results (1,2) earnings in Q2 of $0.65/share, exceeding $0.65 our guidance range of $0.50-$0.60/share • Utilities ExGen $0.35 – BGE rate case write-offs – Higher distribution and transmission revenues –
Slide 141: The Exelon Value Proposition
The Exelon Value Proposition Regulated Utility Growth with utility EPS rising 7-9% annually from 2016- 2020 and rate base growth of 6.1%, representing an expanding majority of earnings ExGen’s strong free cash generation will support utility growth while also reducing debt by ~$3B over the next
Slide 142: Aggressively Managing Costs
Aggressively Managing Costs Expect Exelon Consolidated O&M ($M) CAGR of ~(1.1%) from 2016-2020(1,2,3) -1.1% 8,300 7,950 BGE 800 PECO 775 PHI 975 3,650 Utility ComEd 1,300 ExGen ExGen 4,525 4,300 -75 HoldCo 2016 2020 (1) All amounts rounded to the nearest $25M (2) Refer to slide 169 in the appendix f
Slide 143: Optimizing the Value of Our Generation Fleet
Optimizing the Value of Our Generation Fleet • Effectively managing O&M and capital expenses across fleet • Raised more than $5B of cash flow through project • Running plants at best in financing and asset sales class capacity factor since 2011 • Increasing value of plant Efficiently Opportunistical
Slide 144: ExGen's Strong Free Cash Flow Supports Utility Growth and Debt Reduction
ExGen’s Strong Free Cash Flow Supports Utility Growth and Debt Reduction 2016-2020 Exelon Generation Free Cash Flow(1,2,3) and Uses of Cash ($B) ~$8.2 (~$2.3) ($2.7 - $3.2) ($2.7 - $3.2) Cumulative ExGen Committed ExGen Growth CapEx Utility Investment ExGen Debt Reduction FCF 2016-2020(2) Redeployin
Slide 145: Maintaining Investment Grade Credit Ratings is a Top Financial Priority
Maintaining Investment Grade Credit Ratings is a Top Financial Priority Exelon S&P FFO/Debt %(1)(4) ExGen Debt/EBITDA Ratio(5) 18%-20% 20% 18% 4 3.4x 3.0x 15% 3 10% S&P Threshold 2 5% 1 0% 0 2016 Target 2016 Target Credit Ratings by Operating Company Current Ratings (2)(3) ExCorp ExGen ComEd PECO BG
Slide 146: Building Enduring Value
Building Enduring Value Projected Capital Spend 2016-2020(1) Rate Base Growth ($B)(2) Utility 14% +6.1% ExGen Growth 40.6 36.7 38.2 7% ExGen Base 34.7 32.0 79% 2016E 2017E 2018E 2019E 2020E Exelon Utilities Operating Net Income ($M)(3) +7-9% $2.00 $1.90 $1.80 $1.65 $1.70 $1.45 $1.60 $1.50 $1.35 $1.1
Slide 147: Theoretical Dividend Affordability from Utility less HoldCo
Theoretical Dividend Affordability from Utility less HoldCo(1) 115% Utility Earnings Payout Ratio (less HoldCo) 110% Midpoint of Payout Ratio Range 105% 100% 98% 95% 90% 87% 85% 82% 80% 79% 77% 75% 70% 65% 60% 2016(2) 2017 2018 2019(3) 2020(3) Utility less HoldCo payout ratio falling consistently ev
Slide 148: Delivering Value Through Capital Allocation Policy
Delivering Value Through Capital Allocation Policy Our strong balance sheet underpins our capital allocation policy and capital decisions are made to maximize value to our customers and shareholders We are returning capital to shareholders by growing our dividend, targeting 2.5% annual increases thr
Slide 149: Financial Appendix
Financial Appendix — «= Exelon.
Slide 150: Economic Impacts of Nuclear Plant Retirements and ZEC Program
Economic Impacts of Nuclear Plant Retirements and ZEC Program New York ZEC Program(1) Illinois Plant Retirements(3) 2019 Run-Rate Earnings Annual Earnings Impact $0.08 - $0.10 ~$0.07 Impact Cumulative Cash Impact 2019 Run-Rate Cash $350 after-tax $75M pre-tax through 2020 Flow Impact 2016 2017 2018
Slide 151: Capital Allocation Evolution
Capital Allocation Evolution Exelon Capital Expenditures 2012-2020 ($M) (1,2,3) 7,675 7,050 1,175 825 6,150 5,950 100 975 5,575 900 875 5,475 1,100 100 100 4,825 4,825 800 775 575 4,150 1,100 1,600 575 1,150 925 950 5,525 5,325 5,175 4,675 4,600 3,750 3,100 2,650 2,275 2012A 2013A 2014A 2015A 2016E
Slide 152: 2016 Projected Sources and Uses of Cash
2016 Projected Sources and Uses of Cash (1) All amounts rounded to the nearest $25M. (1) Total ( 8) Ex elon C ash Figures may not add due to rounding. ($ in millions) BGE C om Ed PEC O PHI Ex Gen C orp Utilities 2016E Balance (2) Excludes counterparty collateral activity. Beginning C ash Balance ( 2
Slide 153: Exelon Debt Maturity Profile
Exelon Debt Maturity Profile(1) As of 6/30/16 ($M) 500 81 900 465 1,700 190 1,050 2,262 700 500 600 910 500 175 1,594 312 889 1,430 1,367 1,200 900 800 833 807 750 833 788 700 623 185 763 675 700 650 741 750 523 300 295 350 258 10 16 53 78 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Slide 154: Pension and OPEB – Funded Status and Performance
Pension and OPEB – Funded Status and Performance OPEB Funded Status Pension Estimated July 31, 2016 Funded Status (PBO) Comparison ($B) December 31, 2015 ($B) 2.3 (1.6) 58% Funded (3.4) (0.6) (3.9) Assets Liabilities Deficit 81% Funded (2.2) (5.2) 1.4 (0.6) 78% Funded 0.2 December Interest, Discount
Slide 155: Exelon Pension Investment Approach
Exelon Pension Investment Approach • Investment Strategy – Exelon has developed and implemented an actively managed liability hedging based investment strategy that has reduced the volatility of the pension assets relative to pension liabilities – The overall objective is to achieve attractive risk
Slide 156: Pension and OPEB Contributions and Expense
Pension and OPEB Contributions and Expense 2016(1) 2017 (in $M) Pre-Tax Expense(2) Contributions Pre-Tax Expense(2) Contributions Qualified Pension $410 $310 $470 $310 (3)(4)(5) Non-Qualified 20 35 20 25 Pension • Discount rates changes of +/- 50 bps result in -/+ $65M - $85M change in pension and O
Slide 157: EPS Sensitivities
EPS Sensitivities 2016 2017 2018 2019 Fully Open Henry Hub Natural Gas +$1/MMBtu ($0.02) $0.08 $0.20 $0.33 $0.35 -$1/MMBtu $0.04 ($0.07) ($0.19) ($0.31) ($0.33) ExGen EPS Impact(1) NiHub ATC Energy Price +$5/MWh $0.01 $0.09 $0.17 $0.22 $0.24 -$5/MWh ($0.01) ($0.09) ($0.17) ($0.22) ($0.24) PJM-W ATC
Slide 158: Exelon Utilities Adjusted Operating EPS Contribution
Exelon Utilities Adjusted Operating EPS Contribution(1) Key Drivers – 2Q 2016(2) vs. 2Q 2015: BGE (-0.02): BGE ComEd • Impairment charges resulting from certain disallowances PECO PHI contained in the June and July rate case orders: ($0.03) $0.36 • Increased transmission and distribution revenue: $0
Slide 159: ExGen Adjusted Operating EPS Contribution
ExGen Adjusted Operating EPS Contribution(1) Key Drivers – 2Q 2016 vs. 2Q 2015 2015 2016 ExGen (-0.01): • Increased RNF primarily due to the approval of the Ginna $0.36 $0.35 Reliability Support Services Agreement for periods retroactive to April 1, 2015, partially offset by lower realized energy pr
Slide 160: Concluding Remarks
Concluding Remarks — «= Exelon.
Slide 161: The Exelon Value Proposition
The Exelon Value Proposition Regulated Utility Growth with Utility EPS rising 7-9% annually from 2016- 2020 and rate base growth of 6.1%, 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 162: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures
Slide 163: 2Q QTD GAAP EPS Reconciliation
2Q QTD GAAP EPS Reconciliation Three Months Ended June 30, 2015 ExGen ComEd PECO BGE Other Exelon 2Q 2015 GAAP Earnings Per Share $0.46 $0.12 $0.08 $0.05 $0.04 $0.74 Mark-to-market impact of economic hedging activities (0.16) - - - - (0.16) Unrealized losses related to NDT fund investments 0.06 - -
Slide 164: 2Q YTD GAAP EPS Reconciliation
2Q YTD GAAP EPS Reconciliation Six Months Ended June 30, 2015 ExGen ComEd PECO BGE Other Exelon 2Q 2015 GAAP Earnings (Loss) Per Share $0.97 $0.22 $0.24 $0.18 $(0.07) $1.54 Mark-to-market impact of economic hedging activities (0.27) - - - - (0.27) Unrealized losses related to NDT fund investments 0.
Slide 165: GAAP to Operating Adjustments
GAAP to Operating Adjustments • Exelon’s Q2 2016 and forecasted adjusted (non-GAAP) operating earnings excludes the earnings effects of the following: − Mark-to-market adjustments from economic hedging activities − Unrealized gains and losses from NDT fund investments to the extent not offset by con
Slide 166: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations (1,2) (1) YE 2016 Exelon FFO Calculation ($M) YE 2016 Exelon Adjusted Debt Calculation ($M) GAAP Operating Income $2,100 Long-Term Debt (including current maturities) $33,050 Depreciation & Amortization $3,650 Short-Term Debt $2,150 EBITDA $5,750 + PPA Imputed Debt(6
Slide 167: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations (1) YE 2016 ExGen Net Debt Calculation ($M) Long-Term Debt (including current maturities) $10,150 Short-Term Debt $950 - Surplus Cash Adjustment ($300) = Net Debt (a) $10,800 (1) YE 2016 ExGen Operating EBITDA Calculation ($M) GAAP Operating Income $375 Depreciation
Slide 168: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations ExGen Adjusted O&M Reconciliation ($M)(1) 2016 2017 2018 2019 2020 GAAP O&M $5,625 $5,225 $5,050 $5,100 $5,150 Decommissioning(2) 125 150 100 50 50 Costs associated with early nuclear plant retirements (125) - - - - Long-lived asset impairment costs (150) - - - - Dir
Slide 169: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations 2016 Adjusted O&M Reconciliation ($M)(1) ExGen ComEd PECO BGE PHI Other Exelon GAAP O&M $5,625 $1,550 $875 $825 $1,500 $100 $10,475 Regulatory O&M(2) - (225) (75) - (100) - (400) Decommissioning(2) 125 - - - - - 125 Costs associated with early nuclear plant retiremen
Slide 170: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations 2016 Adjusted Cash from Ops Calculation ($M)(1) ComEd PECO BGE PHI ExGen Other Exelon Net cash flows provided by operating activities (GAAP) $1,700 $750 $600 $800 $4,000 ($400) $7,425 Other cash from investing activities - - - ($25) ($125) - ($150) Intercompany recei
Slide 171: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations BGE Operating ROE Reconciliation 2011 2012 2013 2014 2015 Net Income (GAAP) $123 ($9) $197 $198 $275 (1) Operating exclusions $18 $96 ($2) $1 $3 Adjusted Operating Earnings $141 $87 $195 $199 $278 Average Equity $2,092 $2,139 $2,266 $2,464 $2,625 Operating ROE (Adjus