Exelon Corporation · NASDAQ:EXC
Exelon — Q3 2013 Earnings Presentation
26 slides from Exelon's earnings presentation, Oct 30, 2013
Slide 1: Earnings Conference Call 3rd Quarter 2013
Exhibit 99.2 * * * * Earnings Conference Call 3 rd Quarter 2013 October 30th , 2013
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: 3Q13 In Review
3Q13 In Review 3Q Highlights Narrowing 2013 Full-Year Guidance • Strong quarter with results higher $2.35 - $2.65 (1) $2.40 - $2.60 (1) than expected 3Q earnings of BGE $0.15 - $0.25 $0.20 - $0.25 BGE $0.78/share • Strong fleet operations PECO $0.35 - $0.45 $0.40 - $0.45 PECO 94.8% nuclear capacity
Slide 4: Exelon Generation: Gross Margin Update
Exelon Generation: Gross Margin Update September 30, 2013 Change from June 30, 2013 Gross Margin Category ($M)(1) (2) 2013 2014 2015 2013 2014 2015 (3) Open Gross Margin 5,600 5,650 5,800 (150) (50) (100) (including South, West, Canada hedged gross margin) Mark-to-Market of Hedges(3,4) 1,700 900 450
Slide 5: Natural Gas Basis Impact on Portfolio Management
Natural Gas Basis Impact on Portfolio Management Structural Change That Has Developed Over Years; Should Stabilize Over the Coming Years • Increases in Mid-Atlantic natural gas production and Realized and Forward Basis Prices (M3) weak spot prices pressuring forward Mid-Atlantic 1.0 $/Mmbtu basis pr
Slide 6: Key Financial Messages
Key Financial Messages • Delivered non-GAAP operating earningsin 3Q (1) 2013 3Q Results of $0.78/share; higher than guidance range $0.78 provided of $0.60 -$0.70/share $0.06 $0.11 3Q 2013 vs. Guidance • Higher earnings at utilities primarily driven by $0.15 lower storm costs • Higher ExGen earnings
Slide 7: ExGen Operating EPS Contribution
ExGen Operating EPS Contribution Key Drivers –3Q13 vs. 3Q12(1) $0.53 $0.48 • Lower RNF, primarily due to lower realized energy prices, partially offset by higher capacity pricing and increased nuclear volumes: $(0.18) • Increased depreciation expense: $(0.02) • Higher Nuclear Decommissioning Trust (
Slide 8: Exelon Utilities Operating EPS Contribution
Exelon Utilities Operating EPS Contribution Key Drivers –3Q13 vs. 3Q12(1): BGE PECO ComEd BGE(+$0.06): $0.32 • Electric and gas distribution rates: $0.02 • Decreased storm costs: $0.03 $0.06 $0.24 PECO(-$0.03): $0.00 • Weather: $(0.02) $0.11 • Higher income tax, primarily due to gas distribution tax
Slide 9: 2013 Cash Flow Summary and Key Drivers
2013 Cash Flow Summary and Key Drivers 1 Projected Sources and Uses Summary Cash from operations of $5,775M As of ($ in millions) BGE ComEd PECO ExGen Exelon (2) Delta 2Q13 Beginning Year Cash Balance: 1,575 1,575 – • $225M higher than 2Q13 Update Cash Flow from 575 1,075 650 3,550 5,775 5,550 225 O
Slide 10: Continental Wind Financing
Continental Wind Financing • Issued $613M of 20-year project Financing backed by 667 MW wind portfolio across six states finance debt with coupon of 6% Non-recourse to parent ID 4 projects MI 4 projects 128.1 MW 283.8 MW Financing based on long-term OR 1 project contracted cash flows of wind 20.0 MW
Slide 11: Exelon Generation Disclosures
Exelon Generation Disclosures September 30, 2013 10 2013 3Q Earnings Release Slides
Slide 12: Portfolio Management Strategy
Portfolio Management Strategy Protect Balance Sheet Ensure Earnings Stability Create Value 11 2013 3Q Earnings Release Slides
Slide 13: Components of Gross Margin Categories
Components of Gross Margin Categories Gross margin from Gross margin linked to power production and sales other business activities Margins move from new business to MtM of hedges over Margins move from “Non power new business” to the course of the year as sales are executed “Non power executed”over
Slide 14: ExGen Disclosures
ExGen Disclosures Gross Margin Category ($M)(1,2) 2013 2014 2015 (3) Open Gross Margin(including South, West & Canada hedged GM) 5,600 5,650 5,800 Mark to Market of Hedges(3,4) 1,700 900 450 Power New Business / To Go 50 500 750 Non-Power Margins Executed 400 200 100 (5) Non-Power New Business / To
Slide 15: ExGen Disclosures
ExGen Disclosures Generation and Hedges 2013 2014 2015 Exp. Gen (GWh) (1) 214,700 215,500 209,400 Midwest 97,200 96,900 96,400 Mid-Atlantic(2) 74,500 73,600 70,100 ERCOT 13,200 17,800 19,600 New York(2) 14,000 12,500 9,300 New England 15,800 14,700 14,000 (3) % of Expected Generation Hedged 97-100%
Slide 16: ExGen Hedged Gross Margin Sensitivities
ExGen Hedged Gross Margin Sensitivities Gross Margin Sensitivities (With Existing Hedges) (1, 2) 2013 2014 2015 Henry Hub Natural Gas ($/Mmbtu) + $1/Mmbtu $10 $110 $370 - $1/Mmbtu $0 $(45) $(305) NiHub ATC Energy Price + $5/MWh $0 $65 $325 - $5/MWh $0 $(60) $(325) PJM-W ATC Energy Price + $5/MWh $0
Slide 17: Exelon Generation Hedged Gross Margin Upside/Risk
Exelon Generation Hedged Gross Margin Upside/Risk $9,000 $8,500 $8,400 $8,000 $7,950 $8,000 $7,900 $7,500 $7,300 $7,000 $6,900 $6,500 $6,000 2013 2014 2015 (1) Represents an approximate range of expected gross margin, taking into account hedges in place, between the 5th and 95th percent confidence l
Slide 18: Illustrative Example of Modeling Exelon Generation 2014 Gross Margin
Illustrative Example of Modeling Exelon Generation 2014 Gross Margin South, Mid- New Row Item Midwest ERCOT New York West & Atlantic England Canada (A) Start with fleet-wide open gross margin $5.65 billion (B) Expected Generation (TWh) 96.9 73.6 17.8 12.5 14.7 (C) Hedge % (assuming mid-point of rang
Slide 19: Additional Disclosures
Additional Disclosures 18 2013 3Q Earnings Release Slides
Slide 20: Exelon Utilities Weather-Normalized Load
Exelon Utilities Weather-Normalized Load Notes: Data is not adjusted for leap year. Source of 2013 economic outlook data is Global Insight (August 2013). Assumes 2013 GDP of 1.5% and U.S unemployment of 7.3%. ComEd has the ROE collar as part of the distribution formula rate and BGE is decoupled whic
Slide 21: ComEd April 2013 Distribution Formula Rate Updated Filing
ComEd April 2013 Distribution Formula Rate Updated Filing The 2013 distribution formula rate filing establishes the net revenue requirement used to set the rates that will take effect in January 2014 after the ICC’s review. The filing was updated to reflect the impact of Senate Bill 9. There are two
Slide 22: BGE Rate Case
BGE Rate Case Rate Case Request Electric Gas Docket # 9326 Test Year August 2012 –July 2013 Common Equity Ratio 51.1% Requested Returns ROE: 10.5%; ROR: 7.87% ROE: 10.35%; ROR: 7.79% Rate Base $2.8B $1.0B Revenue Requirement Increase $82.6M $24.4M Proposed Distribution Price 2% 3% Increase as % of o
Slide 23: 2013 Projected Sources and Uses of Cash
2013 Projected Sources and Uses of Cash ($ in millions) BGE ComEd PECO ExGen Exelon(6) As of 2Q13 Delta (1) 1,575 1,575 -- Beginning Cash Balance (2) 575 1,075 650 3,550 5,775 5,550 225 Cash Flow from Operations CapEx (excluding other items (500) (1,300) (375) (1,000) (3,275) (3,300) 25 below): Nucl
Slide 24: 3Q GAAP EPS Reconciliation
3Q GAAP EPS Reconciliation Three Months Ended September 30, 2012 ExGen ComEd PECO BGE Other Exelon 2012 Adjusted (non-GAAP) Operating Earnings (Loss) Per Share $0.54 $0.11 $0.14 $0.00 $(0.01) $0.77 Mark-to-market impact of economic hedging activities 0.01 - - - 0.01 0.02 Unrealized losses related to
Slide 25: 3Q YTD GAAP EPS Reconciliation
3Q YTD GAAP EPS Reconciliation Nine Months Ended September 30, 2012 ExGen ComEd PECO BGE Other Exelon 2012 Adjusted (non-GAAP) Operating Earnings (Loss) Per Share $1.57 $0.27 $0.38 $0.03 $(0.05) $2.21 Mark-to-market impact of economic hedging activities 0.21 - - - 0.02 0.23 Unrealized gains related
Slide 26: GAAP to Operating Adjustments
GAAP to Operating Adjustments • Exelon’s 2013 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 contractual accounting as