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Exelon Reports First Quarter 2022 Results

EXC

Earnings Release Highlights

  • Exelon completed the separation of Constellation Energy Corporation (Constellation), Exelon’s former power generation and competitive energy business, becoming the nation’s premier transmission and distribution utility company
  • GAAP Net Income from Continuing Operations of $0.49 per share and Adjusted (non-GAAP) Operating Earnings of $0.64 per share for the first quarter of 2022; Constellation’s results have been reclassified to discontinued operations
  • Reaffirming range for full year 2022 Adjusted (non-GAAP) Operating Earnings guidance of $2.18-$2.32 per share
  • Continued strong utility operational performance, including ComEd delivering the most reliable service for customers in the first three months of the year for any year on record
  • A settlement was approved by the Maryland Public Service Commission (MDPSC) in Delmarva Power Maryland’s electric distribution rate case in March
  • PECO filed a gas distribution rate case with the Pennsylvania Public Utility Commission (PAPUC) in March, seeking an increase in base rates to support significant investments in infrastructure to provide safe and reliable natural gas service and reduce methane emissions
  • ComEd filed its last annual distribution formula rate update with the Illinois Commerce Commission (ICC) in April seeking an increase in base rates for 2023 to support investments needed to sustain record-level reliability performance and increase the integration of renewable energy into the system

Exelon Corporation (Nasdaq: EXC) today reported its financial results for the first quarter of 2022.

“The first quarter was a milestone for Exelon as we successfully completed our separation of the generation business and embarked on our path as the nation’s premier transmission and distribution utility company,” said Exelon’s President and CEO Chris Crane. “At the same time, our focus on the fundamentals of operational and financial execution continued. Beyond delivering reliable and safe energy to our over 10 million customers, we also continued to live our core values. We awarded $2.4 million in scholarships to 24 students attending Historically Black Colleges and Universities, and opened applications for our $36 million Racial Equity Capital Fund to increase access to funding for small, minority-owned businesses in under-served communities.”

“Adjusted (non-GAAP) Operating Earnings of $0.64 per share in the first quarter was driven in part by the recovery of costs associated with ongoing infrastructure investments to improve reliability and resiliency, enhance service for our customers and prepare the grid for a clean energy future,” said Exelon CFO Joe Nigro. “Our grid modernization investments, enabled by constructive regulatory relationships, continue to drive solid operational results and stable earnings across our utilities. For the remainder of the year, we will continue to deliver on our financial commitments and reaffirm our full-year Adjusted (non-GAAP) Operating Earnings guidance range of $2.18 to $2.32 per share.”

First Quarter 2022

Exelon's GAAP Net Income from Continuing Operations for the first quarter of 2022 decreased to $0.49 per share from $0.53 GAAP Net Income from Continuing Operations per share in the first quarter of 2021. Adjusted (non-GAAP) Operating Earnings for the first quarter of 2022 increased to $0.64 per share from $0.55 per share in the first quarter of 2021. For the reconciliations of GAAP Net Income from Continuing Operations to Adjusted (non-GAAP) Operating Earnings, refer to the tables beginning on page 4.

Adjusted (non-GAAP) Operating Earnings in the first quarter of 2022 primarily reflect:

  • Higher utility earnings primarily due to higher electric distribution earnings at ComEd from higher rate base and higher allowed electric distribution ROE due to an increase in treasury rates and rate increases at PECO, BGE, and PHI, partially offset by higher depreciation expense at BGE and PHI.
  • Higher earnings at the Exelon holding company due to certain BSC costs that were historically allocated to Constellation Energy Generation, LLC (Generation) but are presented as part of continuing operations in Exelon’s results as these costs do not qualify as expenses of the discontinued operations per the accounting rules; one month of costs included in the first quarter of 2022 for the period prior to separation compared to three months of costs included in the first quarter of 2021.

Operating Company Results1

ComEd

ComEd's first quarter of 2022 GAAP Net Income decreased to $188 million from $197 million in the first quarter of 2021. ComEd's Adjusted (non-GAAP) Operating Earnings for the first quarter of 2022 decreased to $193 million from $198 million in the first quarter of 2021, primarily due to the voluntary customer refund related to the ICC investigation of matters identified in the Deferred Prosecution Agreement, partially offset by increases in electric distribution formula rate earnings (reflecting the impacts of higher rate base and higher allowed electric distribution ROE due to an increase in treasury rates). Due to revenue decoupling, ComEd's distribution earnings are not affected by actual weather or customer usage patterns.

PECO

PECO’s first quarter of 2022 GAAP Net Income increased to $206 million from $167 million in the first quarter of 2021. PECO's Adjusted (non-GAAP) Operating Earnings for the first quarter of 2022 increased to $208 million from $170 million in the first quarter of 2021, primarily due to distribution rate increases.

___________

1Exelon’s four business units include ComEd, which consists of electricity transmission and distribution operations in northern Illinois; PECO, which consists of electricity transmission and distribution operations and retail natural gas distribution operations in southeastern Pennsylvania; BGE, which consists of electricity transmission and distribution operations and retail natural gas distribution operations in central Maryland; and PHI, which consists of electricity transmission and distribution operations in the District of Columbia and portions of Maryland, Delaware, and New Jersey and retail natural gas distribution operations in northern Delaware.

BGE

BGE’s first quarter of 2022 GAAP Net Income decreased to $198 million from $209 million in the first quarter of 2021. BGE's Adjusted (non-GAAP) Operating Earnings for the first quarter of 2022 decreased to $200 million from $211 million in the first quarter of 2021, primarily due an increase in depreciation and various expenses, partially offset by favorable impacts of the multi-year plans. Due to revenue decoupling, BGE's distribution earnings are not affected by actual weather or customer usage patterns.

PHI

PHI’s first quarter of 2022 GAAP Net Income increased to $130 million from $128 million in the first quarter of 2021. PHI’s Adjusted (non-GAAP) Operating Earnings for the first quarter of 2022 increased to $136 million from $130 million in the first quarter of 2021, primarily due to distribution and transmission rate increases, partially offset by an increase in storm costs and depreciation expense. Due to revenue decoupling, PHI's distribution earnings related to Pepco Maryland, DPL Maryland, Pepco District of Columbia, and ACE are not affected by actual weather or customer usage patterns.

Recent Developments and First Quarter Highlights

  • ComEd Distribution Formula Rate: On April 15, 2022, ComEd filed its annual distribution formula rate update with the ICC. The ICC approval is due by December 2022 and the rates will take effect in January 2023. The filing request includes an increase of $144 million for the initial year revenue requirement for 2023 and an increase of $55 million related to the annual reconciliation for 2021. The revenue requirement for 2023 provides for a weighted average debt and equity return on distribution rate base of 5.94%, inclusive of an allowed ROE of 7.85%, reflecting the average monthly yields for 30-year treasury bonds plus 580 basis points. The reconciliation revenue requirement for 2021 provides for a weighted average debt and equity return on distribution rate base of 5.91%, inclusive of an allowed ROE of 7.78%, reflecting the average monthly yields for 30-year treasury bonds plus 580 basis points less a performance metrics penalty of 7 basis points. This is ComEd's last performance-based electric distribution formula rate update filing, which sunsets at the end of 2022.
  • PECO Pennsylvania Natural Gas Distribution Rate Case: On March 31, 2022, PECO filed an application with the PAPUC to increase its annual natural gas rates by $82 million, reflecting an ROE of 10.95%. PECO currently expects a decision in the fourth quarter of 2022 but cannot predict if the PAPUC will approve the application as filed.
  • DPL Maryland Electric Base Rate Case: On March 2, 2022, the MDPSC issued an order approving a $13 million increase in DPL's annual electric distribution revenues, reflecting an ROE of 9.60%. The rates were effective on March 2, 2022.
  • Financing Activities:
    • On March 7, 2022, Exelon Corporate issued $2,000 million of notes, consisting of $650 million of its 2.75% notes due March 15, 2027, $650 million of its 3.35% notes due March 15, 2032, and $700 million of its 4.10% notes due March 15, 2052. Exelon used the proceeds to repay existing indebtedness and for general corporate purposes.
    • On March 15, 2022, ComEd issued $750 million of First Mortgage Bonds, consisting of $300 million of its First Mortgage 3.15% Bonds, Series 132, due March 15, 2032 and $450 million of its First Mortgage 3.85% Bonds, Series 133, due March 15, 2052. ComEd used the proceeds to repay a portion of outstanding commercial paper obligations and to fund other general corporate purposes.
    • On March 24, 2022, Pepco issued $400 million of its First Mortgage Bonds, 3.97% Series due March 24, 2052. Pepco used the proceeds to repay existing indebtedness and for general corporate purposes.

GAAP/Adjusted (non-GAAP) Operating Earnings Reconciliation

Adjusted (non-GAAP) Operating Earnings for the first quarter of 2022 do not include the following items (after tax) that were included in reported GAAP Net Income from Continuing Operations:

(in millions, except per share amounts)

Exelon

Earnings per

Diluted

Share

Exelon

ComEd

PECO

BGE

PHI

2022 GAAP Net Income (Loss) from Continuing Operations

$

0.49

$

481

$

188

$

206

$

198

$

130

ERP System Implementation Costs (net of taxes of $0)

1

Separation Costs (net of taxes of $7, $2, $1, $1, and $1, respectively)

0.02

17

5

2

2

4

Income Tax-Related Adjustments (entire amount represents tax expense)

0.14

134

3

2022 Adjusted (non-GAAP) Operating Earnings

$

0.64

$

634

$

193

$

208

$

200

$

136

Adjusted (non-GAAP) Operating Earnings for the first quarter of 2021 do not include the following items (after tax) that were included in reported GAAP Net Income from Continuing Operations:

(in millions, except per share amounts)

Exelon

Earnings per

Diluted

Share

Exelon

ComEd

PECO

BGE

PHI

2021 GAAP Net Income (Loss) from Continuing Operations

$

0.53

$

525

$

197

$

167

$

209

$

128

Mark-to-Market Impact of Economic Hedging Activities (net of taxes of $1)

(1

)

COVID-19 Direct Costs (net of taxes of $1, $0, and $1, respectively)

2

1

1

Acquisition Related Costs (net of taxes of $2)

0.01

6

ERP System Implementation Costs (net of taxes of $2, $0, $0, and $0, respectively)

0.01

5

1

1

1

Separation Costs (net of taxes of $1, $0, $0, and $0, respectively)

0.01

5

1

1

1

2021 Adjusted (non-GAAP) Operating Earnings

$

0.55

$

542

$

198

$

170

$

211

$

130

Note:
Amounts may not sum due to rounding.
Unless otherwise noted, the income tax impact of each reconciling item between GAAP Net Income (Loss) from Continuing Operations and Adjusted (non-GAAP) Operating Earnings is based on the marginal statutory federal and state income tax rates for each Registrant, taking into account whether the income or expense item is taxable or deductible, respectively, in whole or in part. For all items, the marginal statutory income tax rates for 2022 and 2021 ranged from 24.0% to 29.0%.

Webcast Information

Exelon will discuss first quarter 2022 earnings in a conference call scheduled for today at 9 a.m. Central Time (10 a.m. Eastern Time). The webcast and associated materials can be accessed at www.exeloncorp.com/investor-relations.

About Exelon

Exelon is a Fortune 200 company and the nation’s largest utility company, serving more than 10 million customers through six fully regulated transmission and distribution utilities — Atlantic City Electric (ACE), Baltimore Gas and Electric (BGE), Commonwealth Edison (ComEd), Delmarva Power & Light (DPL), PECO Energy Company (PECO), and Potomac Electric Power Company (Pepco). More than 18,000 Exelon employees dedicate their time and expertise to supporting our communities through reliable, affordable and efficient energy delivery, workforce development, equity, economic development and volunteerism. Follow Exelon on Twitter @Exelon.

Non-GAAP Financial Measures

In addition to net income as determined under generally accepted accounting principles in the United States (GAAP), Exelon evaluates its operating performance using the measure of Adjusted (non-GAAP) Operating Earnings because management believes it represents earnings directly related to the ongoing operations of the business. Adjusted (non-GAAP) Operating Earnings exclude certain costs, expenses, gains and losses, and other specified items. This measure is intended to enhance an investor’s overall understanding of period over period operating results and provide an indication of Exelon’s baseline operating performance excluding items that are considered by management to be not directly related to the ongoing operations of the business. In addition, this measure is among the primary indicators management uses as a basis for evaluating performance, allocating resources, setting incentive compensation targets, and planning and forecasting of future periods. Adjusted (non-GAAP) Operating Earnings is not a presentation defined under GAAP and may not be comparable to other companies’ presentation. Exelon has provided the non-GAAP financial measure as supplemental information and in addition to the financial measures that are calculated and presented in accordance with GAAP. Adjusted (non-GAAP) Operating Earnings should not be deemed more useful than, a substitute for, or an alternative to the most comparable GAAP Net Income measures provided in this earnings release and attachments. This press release and earnings release attachments provide reconciliations of Adjusted (non-GAAP) Operating Earnings to the most directly comparable financial measures calculated and presented in accordance with GAAP, are posted on Exelon’s website: www.exeloncorp.com, and have been furnished to the Securities and Exchange Commission on Form 8-K on May 9, 2022.

Cautionary Statements Regarding Forward-Looking Information

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. Words such as “could,” “may,” “expects,” “anticipates,” “will,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “predicts,” and variations on such words, and similar expressions that reflect our current views with respect to future events and operational, economic, and financial performance, are intended to identify such forward-looking statements.

The factors that could cause actual results to differ materially from the forward-looking statements made by Exelon Corporation, Commonwealth Edison Company, PECO Energy Company, Baltimore Gas and Electric Company, Pepco Holdings LLC, Potomac Electric Power Company, Delmarva Power & Light Company, and Atlantic City Electric Company (Registrants) include those factors discussed herein, as well as the items discussed in (1) the Registrants' 2021 Annual Report on Form 10-K in (a) Part I, ITEM 1A. Risk Factors, (b) Part II, ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and (c) Part II, ITEM 8. Financial Statements and Supplementary Data: Note 19, Commitments and Contingencies; (2) the Registrants' First Quarter 2022 Quarterly Report on Form 10-Q (to be filed on May 9, 2022) in (a) Part II, ITEM 1A. Risk Factors, (b) Part I, ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and (c) Part I, ITEM 1. Financial Statements: Note 12, Commitments and Contingencies; and (3) other factors discussed in filings with the SEC by the Registrants.

Investors are cautioned not to place undue reliance on these forward-looking statements, whether written or oral, which apply only as of the date of this press release. None of the Registrants undertakes any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this press release.

Earnings Release Attachments

Table of Contents

Consolidating Statement of Operations

2

Consolidated Balance Sheets

3

Consolidated Statements of Cash Flows

5

Reconciliation of GAAP Net Income from Continuing Operations to Adjusted (non-GAAP) Operating Earnings and Analysis of Earnings

6

Statistics

ComEd

8

PECO

9

BGE

10

Pepco

11

DPL

12

ACE

13

Consolidating Statements of Operations

(unaudited)

(in millions)

ComEd

PECO

BGE

PHI

Other (a)

Exelon

Three Months Ended March 31, 2022

Operating revenues

$

1,734

$

1,047

$

1,154

$

1,404

$

(12

)

$

5,327

Operating expenses

Purchased power and fuel

638

407

454

579

2,078

Operating and maintenance

351

247

218

299

63

1,178

Depreciation and amortization

321

92

171

218

15

817

Taxes other than income taxes

96

47

76

119

16

354

Total operating expenses

1,406

793

919

1,215

94

4,427

Operating income (loss)

328

254

235

189

(106

)

900

Other income and (deductions)

Interest expense, net

(100

)

(41

)

(35

)

(69

)

(93

)

(338

)

Other, net

12

7

7

17

94

137

Total other income and (deductions)

(88

)

(34

)

(28

)

(52

)

1

(201

)

Income from continuing operations before income taxes

240

220

207

137

(105

)

699

Income taxes

52

14

9

7

136

218

Net income from continuing operations after income taxes

188

206

198

130

(241

)

481

Net income (loss) from discontinued operations after income taxes

117

117

Net income (loss)

188

206

198

130

(124

)

598

Net income attributable to noncontrolling interests

1

1

Net income (loss) attributable to common shareholders

$

188

$

206

$

198

$

130

$

(125

)

$

597

Three Months Ended March 31, 2021

Operating revenues

$

1,535

$

889

$

974

$

1,244

$

(10

)

$

4,632

Operating expenses

Purchased power and fuel

527

316

331

479

(2

)

1,651

Operating and maintenance

316

234

197

256

80

1,083

Depreciation and amortization

292

86

152

210

17

757

Taxes other than income taxes

75

43

72

113

14

317

Total operating expenses

1,210

679

752

1,058

109

3,808

Operating income (loss)

325

210

222

186

(119

)

824

Other income and (deductions)

Interest expense, net

(96

)

(38

)

(34

)

(67

)

(83

)

(318

)

Other, net

7

5

8

17

21

58

Total other income and (deductions)

(89

)

(33

)

(26

)

(50

)

(62

)

(260

)

Income from continuing operations before income taxes

236

177

196

136

(181

)

564

Income taxes

39

10

(13

)

8

(5

)

39

Net income from continuing operations after income taxes

197

167

209

128

(176

)

525

Net income (loss) from discontinued operations after income taxes

(789

)

(789

)

Net income (loss)

197

167

209

128

(965

)

(264

)

Net income attributable to noncontrolling interests

25

25

Net income (loss) attributable to common shareholders

$

197

$

167

$

209

$

128

$

(990

)

$

(289

)

Change in Net income from continuing operations 2021 to 2022

$

(9

)

$

39

$

(11

)

$

2

$

(65

)

$

(44

)

__________

(a)

Other primarily includes eliminating and consolidating adjustments, Exelon’s corporate operations, shared service entities, and other financing and investment activities.

Exelon

Consolidated Balance Sheets

(unaudited)

(in millions)

March 31, 2022

December 31, 2021

Assets

Current assets

Cash and cash equivalents

$

2,476

$

672

Restricted cash and cash equivalents

430

321

Accounts receivable

Customer accounts receivable

2,365

2,189

Customer allowance for credit losses

(389

)

(320

)

Customer accounts receivable, net

1,976

1,869

Other accounts receivable

1,148

1,068

Other allowance for credit losses

(81

)

(72

)

Other accounts receivable, net

1,067

996

Inventories, net

Fossil fuel and emission allowances

39

105

Materials and supplies

473

476

Regulatory assets

1,221

1,296

Other

463

387

Current assets of discontinued operations

7,835

Total current assets

8,145

13,957

Property, plant, and equipment, net

65,465

64,558

Deferred debits and other assets

Regulatory assets

8,200

8,224

Investments

244

250

Goodwill

6,630

6,630

Receivable related to Regulatory Agreement Units

2,969

Other

1,045

885

Property, plant, and equipment, deferred debits, and other assets of discontinued operations

38,509

Total deferred debits and other assets

19,088

54,498

Total assets

$

92,698

$

133,013

Liabilities and shareholders’ equity

Current liabilities

Short-term borrowings

$

1,900

$

1,248

Long-term debt due within one year

2,154

2,153

Accounts payable

2,175

2,379

Accrued expenses

1,029

1,137

Payables to affiliates

6

5

Regulatory liabilities

394

376

Mark-to-market derivative liabilities

18

Unamortized energy contract liabilities

13

89

Other

964

766

Current liabilities of discontinued operations

7,940

Total current liabilities

8,635

16,111

Long-term debt

35,008

30,749

Long-term debt to financing trusts

390

390

Deferred credits and other liabilities

Deferred income taxes and unamortized investment tax credits

11,089

10,611

Asset retirement obligations

273

271

Pension obligations

1,447

2,051

Non-pension postretirement benefit obligations

800

811

Regulatory liabilities

9,192

9,628

Mark-to-market derivative liabilities

144

201

Unamortized energy contract liabilities

42

146

Other

2,187

1,573

Long-term debt, deferred credits, and other liabilities of discontinued operations

25,676

Total deferred credits and other liabilities

25,174

50,968

Total liabilities

69,207

98,218

Commitments and contingencies

Shareholders’ equity

Common stock

20,299

20,324

Treasury stock, at cost

(123

)

(123

)

Retained earnings

4,028

16,942

Accumulated other comprehensive loss, net

(713

)

(2,750

)

Total shareholders’ equity

23,491

34,393

Noncontrolling interests

402

Total equity

23,491

34,795

Total liabilities and shareholders’ equity

$

92,698

$

133,013

Exelon

Consolidated Statements of Cash Flows

(unaudited)

(in millions)

Three Months Ended March 31,

2022

2021

Cash flows from operating activities

Net income

$

598

$

(264

)

Adjustments to reconcile net income to net cash flows provided by operating activities:

Depreciation, amortization, and accretion, including nuclear fuel and energy contract amortization

1,024

2,104

Asset impairments

1

Gain on sales of assets and businesses

(10

)

(71

)

Deferred income taxes and amortization of investment tax credits

110

(142

)

Net fair value changes related to derivatives

(59

)

(178

)

Net realized and unrealized losses (gains) on NDT funds

205

(118

)

Net unrealized losses on equity investments

16

23

Other non-cash operating activities

232

(170

)

Changes in assets and liabilities:

Accounts receivable

(711

)

(372

)

Inventories

125

77

Accounts payable and accrued expenses

291

(176

)

Option premiums (paid) received, net

(39

)

16

Collateral received, net

1,142

273

Income taxes

77

113

Pension and non-pension postretirement benefit contributions

(574

)

(537

)

Other assets and liabilities

(645

)

(1,840

)

Net cash flows provided by (used in) operating activities

1,782

(1,261

)

Cash flows from investing activities

Capital expenditures

(1,922

)

(2,140

)

Proceeds from NDT fund sales

488

2,908

Investment in NDT funds

(516

)

(2,939

)

Collection of DPP

169

1,574

Proceeds from sales of assets and businesses

16

680

Other investing activities

(54

)

12

Net cash flows (used in) provided by investing activities

(1,819

)

95

Cash flows from financing activities

Changes in short-term borrowings

(700

)

597

Proceeds from short-term borrowings with maturities greater than 90 days

1,150

500

Repayments on short-term borrowings with maturities greater than 90 days

(350

)

Issuance of long-term debt

4,301

1,705

Retirement of long-term debt

(6

)

(79

)

Dividends paid on common stock

(332

)

(374

)

Proceeds from employee stock plans

9

31

Transfer of cash, restricted cash, and cash equivalents to Constellation

(2,594

)

Other financing activities

(62

)

(46

)

Net cash flows provided by financing activities

1,416

2,334

Increase in cash, restricted cash, and cash equivalents

1,379

1,168

Cash, restricted cash, and cash equivalents at beginning of period

1,619

1,166

Cash, restricted cash, and cash equivalents at end of period

$

2,998

$

2,334

Exelon Reconciliation of GAAP Net Income (Loss) from Continuing Operations to Adjusted (non-GAAP) Operating Earnings and Analysis of Earnings

Three Months Ended March 31, 2022 and 2021

(unaudited)

(in millions, except per share data)

Exelon

Earnings

per Diluted

Share

ComEd

PECO

BGE

PHI

Other (a)

Exelon

2021 GAAP Net Income (Loss) from Continuing Operations

$

0.53

$

197

$

167

$

209

$

128

$

(176

)

$

525

Mark-to-Market Impact of Economic Hedging Activities (net of taxes of $1)

(1

)

(1

)

COVID-19 Direct Costs (net of taxes of $1, $0, and $1, respectively) (1)

1

1

2

Acquisition Related Costs (net of taxes of $2) (2)

0.01

6

6

ERP System Implementation Costs (net of taxes of $0, $0, $0, $1, and $2, respectively) (3)

0.01

1

1

1

2

5

Separation Costs (net of taxes of $0, $0, $0, $1, and $1, respectively) (4)

0.01

1

1

1

2

5

2021 Adjusted (non-GAAP) Operating Earnings (Loss)

$

0.55

$

198

$

170

$

211

$

130

$

(167

)

$

542

Year Over Year Effects on Adjusted (non-GAAP) Operating Earnings:

Weather

$

(0.01

)

$

(b)

$

(6

)

$

(b)

$

1

(b)

$

$

(5

)

Load

0.02

(b)

10

(b)

5

(b)

15

Distribution and Transmission Rates (6)

0.09

13

(c)

36

(c)

6

(c)

30

(c)

85

Other Energy Delivery (7)

0.08

50

(c)

8

(c)

20

(c)

5

(c)

83

Operating and Maintenance Expense (8)

(0.08

)

(25

)

(11

)

(17

)

(30

)

(83

)

Pension and Non-Pension Postretirement Benefits

0.01

5

1

2

1

3

12

Depreciation and Amortization Expense (9)

(0.04

)

(21

)

(4

)

(14

)

(6

)

2

(43

)

Other (10)

0.02

(27

)

4

(8

)

59

28

Total Year Over Year Effects on Adjusted (non-GAAP) Operating Earnings

$

0.09

$

(5

)

$

38

$

(11

)

$

6

$

64

$

92

2022 GAAP Net Income (Loss) from Continuing Operations

$

0.49

$

188

$

206

$

198

$

130

$

(241

)

$

481

ERP System Implementation Costs (net of taxes of $0) (3)

1

1

Separation Costs (net of taxes of $2, $1, $1, $1, $1, and $7, respectively) (4)

0.02

5

2

2

4

4

17

Income Tax-Related Adjustments (entire amount represents tax expense) (5)

0.14

3

131

134

2022 Adjusted (non-GAAP) Operating Earnings (Loss)

$

0.64

$

193

$

208

$

200

$

136

$

(103

)

$

634

Note:

Amounts may not sum due to rounding.

Unless otherwise noted, the income tax impact of each reconciling item between GAAP Net Income from Continuing Operations and Adjusted (non-GAAP) Operating Earnings is based on the marginal statutory federal and state income tax rates for each Registrant, taking into account whether the income or expense item is taxable or deductible, respectively, in whole or in part. For all items, the marginal statutory income tax rates for 2022 and 2021 ranged from 24.0% to 29.0%.

(a)

Other primarily includes eliminating and consolidating adjustments, Exelon’s corporate operations, shared service entities, and other financing and investment activities.

(b)

For ComEd, BGE, Pepco, DPL Maryland, and ACE customer rates are adjusted to eliminate the impacts of weather and customer usage on distribution volumes.

(c)

For regulatory recovery mechanisms, including ComEd’s distribution formula rate and energy efficiency formula, ComEd, PECO, BGE, and PHI utilities transmission formula rates, and riders across all utilities, revenues increase and decrease i) as fully recoverable costs fluctuate (with no impact on net earnings), and ii) pursuant to changes in rate base, capital structure and ROE (which impact net earnings).

(1)

Represents direct costs related to COVID-19 consisting primarily of costs to acquire personal protective equipment, costs for cleaning supplies and services, and costs to hire healthcare professionals to monitor the health of employees, which are recorded in Operating and maintenance expense.

(2)

Reflects certain BSC costs related to the acquisition of Electricite de France SA's (EDF's) interest in CENG, which was completed in the third quarter of 2021, that were historically allocated to Constellation Energy Generation, LLC (Generation) but are presented as part of continuing operations in Exelon’s results as these costs do not qualify as expenses of the discontinued operations per the accounting rules.

(3)

Reflects costs related to a multi-year Enterprise Resource Program (ERP) system implementation, which are recorded in Operating and maintenance expense.

(4)

Represents costs related to the separation primarily comprised of system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the separation, and employee-related severance costs, which are recorded in Operating and maintenance expense.

(5)

In connection with the separation, Exelon recorded an income tax expense primarily due to the long-term marginal state income tax rate change, the recognition of valuation allowances against the net deferred tax assets positions for certain standalone state filing jurisdictions, and nondeductible transaction costs.

(6)

For ComEd, reflects increased electric distribution revenues due to higher rate base and higher allowed electric distribution ROE driven by an increase in treasury rates. For PECO, reflects increased revenue primarily due to distribution rate increases. For BGE, reflects increased revenue due to distribution and transmission rate increases. For PHI, reflects increased revenue primarily due to distribution and transmission rate increases.

(7)

For ComEd, reflects increased electric distribution, transmission, and energy efficiency revenues due to higher fully recoverable costs.

(8)

Represents Operating and maintenance expense, excluding pension and non-pension postretirement benefits. For ComEd, primarily reflects the voluntary customer refund related to the ICC investigation of matters identified in the Deferred Prosecution Agreement. For BGE, reflects higher credit loss expense. For PHI, includes increased storm costs. For Corporate, primarily reflects two offsetting items: 1) lower BSC costs that were historically allocated to Generation but are presented as part of continuing operations in Exelon’s results as these costs do not qualify as expenses of the discontinued operations per the accounting rules (Q1 2022 includes one month of costs for the period prior to the separation compared to three months of costs included in Q1 2021) and 2) an increase in Operating and maintenance expense with an offsetting increase in other income for costs billed to Constellation for services provided by Exelon through the Transition Services Agreement (TSA).

(9)

Reflects ongoing capital expenditures across all utilities. For ComEd, also reflects increased amortization of deferred energy efficiency costs.

(10)

For Corporate, primarily reflects an increase in other income for costs billed to Constellation for services provided by Exelon through the TSA with an offsetting increase in Operating and maintenance expense.

ComEd Statistics

Three Months Ended March 31, 2022 and 2021

Electric Deliveries (in GWhs)

Revenue (in millions)

2022

2021

% Change

Weather -
Normal %
Change

2022

2021

% Change

Rate-Regulated Deliveries and Revenues(a)

Residential

6,751

6,685

1.0

%

(1.2

) %

$

857

$

741

15.7

%

Small commercial & industrial

7,504

7,266

3.3

%

2.3

%

423

367

15.3

%

Large commercial & industrial

6,746

6,479

4.1

%

3.6

%

153

134

14.2

%

Public authorities & electric railroads

257

267

(3.7

) %

(3.8

) %

14

11

27.3

%

Other(b)

n/a

n/a

239

220

8.6

%

Total rate-regulated electric revenues(c)

21,258

20,697

2.7

%

1.5

%

1,686

1,473

14.5

%

Other Rate-Regulated Revenues(d)

48

62

(22.6

) %

Total Electric Revenues

$

1,734

$

1,535

13.0

%

Purchased Power

$

638

$

527

21.1

%

% Change

Heating and Cooling Degree-Days

2022

2021

Normal

From 2021

From Normal

Heating Degree-Days

3,165

2,989

3,085

5.9

%

2.6

%

Number of Electric Customers

2022

2021

Residential

3,713,397

3,696,208

Small commercial & industrial

390,994

388,483

Large commercial & industrial

1,882

1,863

Public authorities & electric railroads

4,838

4,876

Total

4,111,111

4,091,430

__________

(a)

Reflects revenues from customers purchasing electricity directly from ComEd and customers purchasing electricity from a competitive electric generation supplier, as all customers are assessed delivery charges. For customers purchasing electricity from ComEd, revenues also reflect the cost of energy and transmission.

(b)

Includes transmission revenue from PJM, wholesale electric revenue, and mutual assistance revenue.

(c)

Includes operating revenues from affiliates totaling $6 million for both the three months ended March 31, 2022 and 2021.

(d)

Includes alternative revenue programs and late payment charges.

PECO Statistics

Three Months Ended March 31, 2022 and 2021

Electric and Natural Gas Deliveries

Revenue (in millions)

2022

2021

% Change

Weather-

Normal

% Change

2022

2021

% Change

Electric (in GWhs)

Rate-Regulated Electric Deliveries and Revenues(a)

Residential

3,758

3,767

(0.2

) %

1.1

%

$

487

$

433

12.5

%

Small commercial & industrial

1,937

1,881

3.0

%

3.4

%

111

100

11.0

%

Large commercial & industrial

3,332

3,272

1.8

%

1.9

%

64

57

12.3

%

Public authorities & electric railroads

182

149

22.1

%

22.4

%

8

9

(11.1

) %

Other(b)

n/a

n/a

62

52

19.2

%

Total rate-regulated electric revenues(c)

9,209

9,069

1.5

%

2.2

%

732

651

12.4

%

Other Rate-Regulated Revenues(d)

9

10

(10.0

) %

Total Electric Revenues

741

661

12.1

%

Natural Gas (in mmcfs)

Rate-Regulated Natural Gas Deliveries and Revenues(e)

Residential

20,837

20,674

0.8

%

4.3

%

218

160

36.3

%

Small commercial & industrial

10,546

10,170

3.7

%

5.8

%

76

59

28.8

%

Large commercial & industrial

10

7

42.9

%

10.2

%

N/A

Transportation

7,639

7,650

(0.1

) %

0.7

%

8

7

14.3

%

Other(f)

n/a

n/a

3

2

50.0

%

Total rate-regulated natural gas revenues(g)

39,032

38,501

1.4

%

4.0

%

305

228

33.8

%

Other Rate-Regulated Revenues(d)

1

100.0

%

Total Natural Gas Revenues

306

228

34.2

%

Total Electric and Natural Gas Revenues

$

1,047

$

889

17.8

%

Purchased Power and Fuel

$

407

$

316

28.8

%

% Change

Heating and Cooling Degree-Days

2022

2021

Normal

From 2021

From Normal

Heating Degree-Days

2,228

2,302

2,416

(3.2

) %

(7.8

) %

Cooling Degree-Days

1

5

1

(80.0

) %

%

Number of Electric Customers

2022

2021

Number of Natural Gas Customers

2022

2021

Residential

1,521,255

1,512,255

Residential

499,188

493,857

Small commercial & industrial

155,485

154,637

Small commercial & industrial

44,959

44,604

Large commercial & industrial

3,102

3,109

Large commercial & industrial

5

5

Public authorities & electric railroads

10,342

10,237

Transportation

664

685

Total

1,690,184

1,680,238

Total

544,816

539,151

__________

(a)

Reflects delivery volumes and revenues from customers purchasing electricity directly from PECO and customers purchasing electricity from a competitive electric generation supplier as all customers are assessed distribution charges. For customers purchasing electricity from PECO, revenues also reflect the cost of energy and transmission.

(b)

Includes transmission revenue from PJM, wholesale electric revenue, and mutual assistance revenue.

(c)

Includes operating revenues from affiliates totaling $1 million for both the three months ended March 31, 2022 and 2021

(d)

Includes alternative revenue programs and late payment charges.

(e)

Reflects delivery volumes and revenues from customers purchasing natural gas directly from PECO and customers purchasing natural gas from a competitive natural gas supplier as all customers are assessed distribution charges. For customers purchasing natural gas from PECO, revenue also reflects the cost of natural gas.

(f)

Includes revenues primarily from off-system sales.

(g)

Includes operating revenues from affiliates totaling less than $1 million for both the three months ended March 31, 2022 and 2021.

BGE Statistics

Three Months Ended March 31, 2022 and 2021

Electric and Natural Gas Deliveries

Revenue (in millions)

2022

2021

% Change

Weather-

Normal

% Change

2022

2021

% Change

Electric (in GWhs)

Rate-Regulated Electric Deliveries and Revenues(a)

Residential

3,569

3,538

0.9

%

(1.3

) %

$

417

$

362

15.2

%

Small commercial & industrial

736

723

1.8

%

0.9

%

81

69

17.4

%

Large commercial & industrial

3,173

3,109

2.1

%

2.0

%

131

105

24.8

%

Public authorities & electric railroads

53

48

10.4

%

7.4

%

7

7

%

Other(b)

n/a

n/a

97

77

26.0

%

Total rate-regulated electric revenues(c)

7,531

7,418

1.5

%

0.3

%

733

620

18.2

%

Other Rate-Regulated Revenues(d)

3

12

(75.0

) %

Total Electric Revenues

736

632

16.5

%

Natural Gas (in mmcfs)

Rate-Regulated Natural Gas Deliveries and Revenues(e)

Residential

21,118

18,451

14.5

%

10.6

%

282

216

30.6

%

Small commercial & industrial

4,662

4,019

16.0

%

10.3

%

45

35

28.6

%

Large commercial & industrial

14,743

14,039

5.0

%

4.0

%

65

54

20.4

%

Other(f)

4,460

7,610

(41.4

) %

n/a

35

31

12.9

%

Total rate-regulated natural gas revenues(g)

44,983

44,119

2.0

%

8.1

%

427

336

27.1

%

Other Rate-Regulated Revenues(d)

(9

)

6

(250.0

) %

Total Natural Gas Revenues

418

342

22.2

%

Total Electric and Natural Gas Revenues

$

1,154

$

974

18.5

%

Purchased Power and Fuel

$

454

$

331

37.2

%

% Change

Heating and Cooling Degree-Days

2022

2021

Normal

From 2021

From Normal

Heating Degree-Days

2,241

2,197

2,388

2.0

%

(6.2

) %

Number of Electric Customers

2022

2021

Number of Natural Gas Customers

2022

2021

Residential

1,199,272

1,192,470

Residential

653,397

648,824

Small commercial & industrial

115,363

114,819

Small commercial & industrial

38,356

38,318

Large commercial & industrial

12,674

12,505

Large commercial & industrial

6,193

6,120

Public authorities & electric railroads

268

266

Total

697,946

693,262

Total

1,327,577

1,320,060

__________

(a)

Reflects revenues from customers purchasing electricity directly from BGE and customers purchasing electricity from a competitive electric generation supplier as all customers are assessed distribution charges. For customers purchasing electricity from BGE, revenues also reflect the cost of energy and transmission.

(b)

Includes transmission revenue from PJM, wholesale electric revenue, and mutual assistance revenue.

(c)

Includes operating revenues from affiliates totaling $2 million for the three months ended March 31, 2022 and 2021.

(d)

Includes alternative revenue programs and late payment charges.

(e)

Reflects delivery volumes and revenues from customers purchasing natural gas directly from BGE and customers purchasing natural gas from a competitive natural gas supplier as all customers are assessed distribution charges. For customers purchasing natural gas from BGE, revenue also reflects the cost of natural gas.

(f)

Includes revenues primarily from off-system sales.

(g)

Includes operating revenues from affiliates totaling $5 million and $4 million for the three months ended March 31, 2022 and 2021, respectively.

Pepco Statistics

Three Months Ended March 31, 2022 and 2021

Electric Deliveries (in GWhs)

Revenue (in millions)

2022

2021

% Change

Weather-

Normal

% Change

2022

2021

% Change

Rate-Regulated Deliveries and Revenues(a)

Residential

2,287

2,219

3.1

%

2.9

%

$

275

$

253

8.7

%

Small commercial & industrial

299

298

0.3

%

(0.4

) %

38

33

15.2

%

Large commercial & industrial

3,249

3,054

6.4

%

5.6

%

253

184

37.5

%

Public authorities & electric railroads

150

124

21.0

%

21.7

%

8

6

33.3

%

Other(b)

n/a

n/a

46

51

(9.8

) %

Total rate-regulated electric revenues(c)

5,985

5,695

5.1

%

4.6

%

620

527

17.6

%

Other Rate-Regulated Revenues(d)

(6

)

26

(123.1

) %

Total Electric Revenues

$

614

$

553

11.0

%

Purchased Power

$

213

$

166

28.3

%

% Change

Heating and Cooling Degree-Days

2022

2021

Normal

From 2021

From Normal

Heating Degree-Days

2,013

2,012

2,113

%

(4.7

) %

Cooling Degree-Days

6

7

3

(14.3

) %

100.0

%

Number of Electric Customers

2022

2021

Residential

846,258

835,415

Small commercial & industrial

54,509

53,738

Large commercial & industrial

22,620

22,492

Public authorities & electric railroads

184

174

Total

923,571

911,819

__________

(a)

Reflects revenues from customers purchasing electricity directly from Pepco and customers purchasing electricity from a competitive electric generation supplier as all customers are assessed distribution charges. For customers purchasing electricity from Pepco, revenues also reflect the cost of energy and transmission.

(b)

Includes transmission revenue from PJM, wholesale electric revenue, and mutual assistance revenue.

(c)

Includes operating revenues from affiliates totaling $1 million for both the three months ended March 31, 2022 and 2021.

(d)

Includes alternative revenue programs and late payment charge revenues.

DPL Statistics

Three Months Ended March 31, 2022 and 2021

Electric and Natural Gas Deliveries

Revenue (in millions)

2022

2021

% Change

Weather -

Normal

% Change

2022

2021

% Change

Electric (in GWhs)

Rate-Regulated Electric Deliveries and Revenues(a)

Residential

1,577

1,520

3.8

%

2.6

%

$

207

$

190

8.9

%

Small commercial & industrial

606

559

8.4

%

7.9

%

56

46

21.7

%

Large commercial & industrial

1,015

919

10.4

%

10.2

%

26

21

23.8

%

Public authorities & electric railroads

12

12

%

5.2

%

4

4

%

Other(b)

n/a

n/a

56

41

36.6

%

Total rate-regulated electric revenues(c)

3,210

3,010

6.6

%

5.9

%

349

302

15.6

%

Other Rate-Regulated Revenues(d)

(1

)

9

(111.1

) %

Total Electric Revenues

348

311

11.9

%

Natural Gas (in mmcfs)

Rate-Regulated Gas Deliveries and Revenues(e)

Residential

4,453

4,394

1.3

%

0.3

%

51

46

10.9

%

Small commercial & industrial

1,983

1,868

6.2

%

6.0

%

21

18

16.7

%

Large commercial & industrial

457

457

%

0.1

%

3

2

50.0

%

Transportation

2,207

2,224

(0.8

) %

(0.7

) %

4

4

%

Other(g)

n/a

n/a

4

1

300.0

%

Total rate-regulated natural gas revenues

9,100

8,943

1.8

%

1.3

%

83

71

16.9

%

Other Rate-Regulated Revenues(f)

n/a

Total Natural Gas Revenues

83

71

16.9

%

Total Electric and Natural Gas Revenues

$

431

$

382

12.8

%

Purchased Power and Fuel

$

189

$

156

21.2

%

Electric Service Territory

% Change

Heating and Cooling Degree-Days

2022

2021

Normal

From 2021

From Normal

Heating Degree-Days

2,264

2,269

2,402

(0.2

) %

(5.7

) %

Cooling Degree-Days

4

5

1

(20.0

) %

300.0

%

Natural Gas Service Territory

% Change

Heating Degree-Days

2022

2021

Normal

From 2021

From Normal

Heating Degree-Days

2,355

2,358

2,500

(0.1

) %

(5.8

) %

Number of Electric Customers

2022

2021

Number of Natural Gas Customers

2022

2021

Residential

478,009

473,917

Residential

128,695

127,522

Small commercial & industrial

63,296

62,647

Small commercial & industrial

10,097

10,043

Large commercial & industrial

1,221

1,208

Large commercial & industrial

17

19

Public authorities & electric railroads

603

608

Transportation

159

160

Total

543,129

538,380

Total

138,968

137,744

__________

(a)

Reflects delivery volumes and revenues from customers purchasing electricity directly from DPL and customers purchasing electricity from a competitive electric generation supplier as all customers are assessed distribution charges. For customers purchasing electricity from DPL, revenues also reflect the cost of energy and transmission.

(b)

Includes transmission revenue from PJM, wholesale electric revenue, and mutual assistance revenue.

(c)

Includes operating revenues from affiliates totaling $2 million for both the three months ended March 31, 2022 and 2021.

(d)

Includes alternative revenue programs and late payment charges.

(e)

Reflects delivery volumes and revenues from customers purchasing natural gas directly from DPL and customers purchasing natural gas from a competitive natural gas supplier as all customers are assessed distribution charges. For customers purchasing natural gas from DPL, revenue also reflects the cost of natural gas.

(f)

Includes revenues primarily from off-system sales.

ACE Statistics

Three Months Ended March 31, 2022 and 2021

Electric Deliveries (in GWhs)

Revenue (in millions)

2022

2021

% Change

Weather -

Normal

% Change

2022

2021

% Change

Rate-Regulated Deliveries and Revenues(a)

Residential

918

928

(1.1

) %

(2.3

) %

$

170

$

162

4.9

%

Small commercial & industrial

339

305

11.1

%

9.7

%

47

39

20.5

%

Large commercial & industrial

703

716

(1.8

) %

(2.4

) %

44

43

2.3

%

Public authorities & electric railroads

14

13

7.7

%

6.2

%

4

3

33.3

%

Other(b)

n/a

n/a

81

52

55.8

%

Total rate-regulated electric revenues(c)

1,974

1,962

0.6

%

(0.4

) %

346

299

15.7

%

Other Rate-Regulated Revenues(d)

3

11

(72.7

) %

Total Electric Revenues

$

349

$

310

12.6

%

Purchased Power

$

178

$

157

13.4

%

% Change

Heating and Cooling Degree-Days

2022

2021

Normal

From 2021

From Normal

Heating Degree-Days

2,436

2,348

2,454

3.7

%

(0.7

) %

Cooling Degree-Days

2

4

1

(50.0

) %

100.0

%

Number of Electric Customers

2022

2021

Residential

500,511

498,396

Small commercial & industrial

62,124

61,771

Large commercial & industrial

3,124

3,267

Public authorities & electric railroads

724

704

Total

566,483

564,138

__________

(a)

Reflects delivery volumes and revenues from customers purchasing electricity directly from ACE and customers purchasing electricity from a competitive electric generation supplier as all customers are assessed distribution charges. For customers purchasing electricity from ACE, revenues also reflect the cost of energy and transmission.

(b)

Includes transmission revenue from PJM, wholesale electric revenue, and mutual assistance revenue.

(c)

Includes operating revenues from affiliates totaling $1 million for both the three months ended March 31, 2022 and 2021.

(d)

Includes alternative revenue programs.