Exelon Corporation · NASDAQ:EXC
Exelon — Q2 2013 Earnings Presentation
26 slides from Exelon's earnings presentation, Jul 31, 2013
Slide 1: Earnings Conference Call 2nd Quarter 2013
Exhibit 99.2 Earnings Conference Call 2 nd Quarter 2013 July31st , 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: 2Q13 In Review
2Q13 In Review • 2Q13 nuclear capacity factor of 92.8% • Delivered 2Q earnings within our and YTD 2013 capacity factor of 94.6% guidance range • Entered into agreement with EDF to • Canceled LaSalle and Limerick EPU operate the CENG plants projects • Dispatch match rate for fossil and hydro • On tra
Slide 4: RPM Results
RPM Results %of Unforced Capacity Procured by Type (1) RPM Clearing Trends 153 150 165 169 Total GW • Decrease in existing coal-fired 100% 95% 9% generation 12% 12% 12% 90% 1% • 6.3 GW of coal retirements in 2012 1% 5% 85% 9% alone 80% 90% 87% 84% 79% • 10 GW in the PJM deactivation queue 0% for 201
Slide 5: Hedging Activity and Market Fundamentals
Hedging Activity and Market Fundamentals Fundamental View vs.Market - 2015 %of Expected Generation Hedged (1) - Total Portfolio Fundamental View NiHub Fundamental View PJMW 2015-Actual Market NiHub Market PJMW 2015-Ratable 50% $60 2015-Actual (excl NG hedges) 45% $55 40% $50 35% $45 30% $40 25% $35
Slide 6: Exelon Generation: Gross Margin Update
Exelon Generation: Gross Margin Update June 30, 2013 Delta to March 31, 2013 Gross Margin Category ($M) (1) (2) 2013 2014 2015 2013 2014 2015 (3) Open Gross Margin 5,750 5,700 5,900 (250) (650) (500) (including South, West, Canada hedged gross margin) Mark-to-Marketof Hedges(3,4) 1,450 850 400 250 4
Slide 7: Key Financial Messages
Key Financial Messages (1) • Delivered non-GAAP operating earnings in 2Q of $0.53/share within guidance range 2013 2Q Results provided of $0.50 -$0.60/share $0.53 $0.03 2Q 2013 vs. Guidance $0.09 • Reduction of wholesale new business targets and unplanned nuclear outages $0.11 • Favorable impacts of
Slide 8: ExGen Operating EPS Contribution
ExGen Operating EPS Contribution Key Drivers – 2Q13 vs. 2Q12 (1) $0.47 Lower RNF, primarily due to lower realized energy prices, lower capacity pricing and decreased load volumes: $(0.15) $0.32 Increased depreciation expense related to ongoing capital expenditures: $(0.01) Lower O&M costs, primarily
Slide 9: Exelon Utilities Operating EPS Contribution
Exelon Utilities Operating EPS Contribution KeyDrivers– 2Q13 vs.2Q12 (1): BGE PECO ComEd BGE(+0.01): $0.22 Electric and gas distribution rates: $0.02 $0.03 PECO(-0.01): Higher O&M costs, primarily due to inflation: $(0.01) $0.16 $0.09 Preferred securities redemption: $(0.01) $0.02 Lower income tax,
Slide 10: 2013 Projected Sources and Uses of Cash
2013 Projected Sources and Uses of Cash (1) Exelon beginning cash balance as of 1/1/13. Excludes counterparty collateral activity. (2) Cash Flow from Operations primarily includes net cash flows provided by operating activities and net cash flows used in investing activities other than capital expen
Slide 11: Exelon Generation Disclosures
Exelon Generation Disclosures June 30, 2013 10 2013 2Q Earnings Release Slides
Slide 12: Portfolio Management Strategy
Portfolio Management Strategy Strategic Policy Alignment Three-Year Ratable Hedging Bull / Bear Program • Aligns hedging program with • Ensure stability in near-term cash • Ability to exercise fundamental financial policies and financial flows and earnings market views to create value within outlook
Slide 13: Components of Gross Margin Categories
Components of Gross Margin Categories Gross margin from Gross margin linked to power production and sales other business activities Open Gross MtM of “Power” New “Non Power” “Non Power” Margin Hedges(2) Business Executed New Business •Generation Gross •Mark to Market •Retail, Wholesale •Retail, Whol
Slide 14: ExGen Disclosures
ExGen Disclosures Gross Margin Category ($M) (1,2) 2013 2014 2015 (3) Open Gross Margin(including South, West & Canada hedged GM) $5,750 $5,700 $5,900 Mark to Market of Hedges(3,4) $1,450 $850 $400 Power New Business / To Go $200 $550 $750 Non-Power Margins Executed $350 $150 $50 (5) Non-Power New B
Slide 15: ExGen Disclosures
ExGen Disclosures Generation and Hedges 2013 2014 2015 (1) Exp. Gen (GWh) 215,500 214,400 207,600 Midwest 97,200 97,100 96,400 Mid-Atlantic(2) 74,200 72,600 69,900 ERCOT 14,600 17,800 18,500 New York(2) 14,100 12,100 9,300 New England 15,400 14,800 13,500 (3) % of Expected Generation Hedged 96-99% 7
Slide 16: ExGen Hedged Gross Margin Sensitivities
ExGen Hedged Gross Margin Sensitivities Gross Margin Sensitivities (With Existing Hedges) (1, 2) 2013 2014 2015 Henry Hub Natural Gas ($/Mmbtu) + $1/Mmbtu $35 $190 $430 - $1/Mmbtu $(20) $(130) $(370) NiHub ATC Energy Price + $5/MWh $10 $130 $355 - $5/MWh $(5) $(125) $(350) PJM-W ATC Energy Price + $
Slide 17: Exelon Generation Hedged Gross Margin Upside/Risk
Exelon Generation Hedged Gross Margin Upside/Risk $10,000 $9,500 $9,000 $8,700 $8,500 $8,150 $8,150 $8,000 $7,850 $7,500 $7,250 $7,000 $6,750 $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 perce
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 $5.70 billion (B) Expected Generation (TWh) 97.1 72.6 17.8 12.1 14.8 (C) Hedge % (assuming mid-point of rang
Slide 19: Additional Disclosures
Additional Disclosures 18 2013 2Q Earnings Release Slides
Slide 20: Exelon Utilities Weather-Normalized Load
Exelon Utilities Weather-Normalized Load All Customers Residential Small C&I Large C&I ComEd PECO BGE 1.7% 0.8% 0.9% 0.5% 0.4% 0.4% 0.4% 0.2% 0.2% -0.1% -0.3% -0.2% -0.6% -0.6% -1.0% -1.7% -1.5% -2.1% -2.2% -2.3% -2.3% -2.5% -2.7% -2.8% 2012 2013E 2012 2013E 2012 2013E Chicago GMP 1.7% Philadelphia
Slide 21: Exelon Utilities Rate Base and ROE Targets
Exelon Utilities Rate Base and ROE Targets ($ in billions) Transmission Gas Delivery Gas Delivery Distribution Electric Transmission Electric Transmission $10.3 $9.4 Electric Distribution Electric Distribution $8.5 $8.7 $2.7 $2.3 $2.1 $2.1 $5.7 $5.9 $5.3 $5.1 $5.3 $5.1 $4.7 $1.2 $1.3 $4.4 $1.1 $1.2
Slide 22: ComEd May 2013 Distribution Formula Rate Updated Filing
ComEd May 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 c
Slide 23: BGE Rate Case
BGE Rate Case Rate Case Request Electric Gas Docket # 9326 Test Year August 2012 –July 2013 Common Equity Ratio 49.8% Requested Returns ROE: 10.5%; ROR: 7.75% ROE: 10.35%; ROR: 7.67% Rate Base (adjusted) $2.8B $1.1B Revenue Requirement Increase $101.5M $29.7M Proposed Distribution Increase as 3% 4%
Slide 24: 2Q GAAP EPS Reconciliation
2Q GAAP EPS Reconciliation Three Months Ended June 30, 2012 ExGen ComEd PECO BGE Other Exelon 2012 Adjusted (non-GAAP) Operating Earnings (Loss) Per Share $0.47 $0.05 $0.10 $0.02 $(0.02) $0.61 Mark-to-market impact of economic hedging activities 0.14 - - - 0.00 0.15 Unrealized losses related to NDT
Slide 25: 2Q YTD GAAP EPS Reconciliation
2Q YTD GAAP EPS Reconciliation Six Months Ended June 30, 2012 ExGen ComEd PECO BGE Other Exelon 2012 Adjusted (non-GAAP) Operating Earnings (Loss) Per Share $1.03 $0.17 $0.23 $0.04 $(0.03) $1.44 Mark-to-market impact of economic hedging activities 0.20 - - - 0.01 0.21 Unrealized gains related to NDT
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