Earnings Release Highlights

• GAAP Net Income of $0.68 per share and Adjusted (non-GAAP) Operating Earnings of $0.75 per share for the third quarter of 2022
• Narrowing guidance range for full year 2022 Adjusted (non-GAAP) Operating Earnings from $2.18-$2.32 per share to $2.21-$2.29 per share
• Strong utility reliability performance – every utility achieved top quartile in outage duration with ComEd continuing to deliver best-on-record CAIDI performance for the third straight quarter
• ComEd announces intent to file its first multi-year plan with the Illinois Commerce Commission (ICC) in January 2023 in accordance with the Climate and Equitable Jobs Act (CEJA)
• Settlements were approved by the Delaware Public Service Commission (DEPSC) and the Pennsylvania Public Utility Commission (PAPUC) in Delmarva Power’s and PECO's gas distribution rate cases in October

CHICAGO--(BUSINESS WIRE)-- Exelon Corporation (Nasdaq: EXC) today reported its financial results for the third quarter of 2022.

“As Exelon leads the energy transformation, our commitment to affordability, energy equity and a cleaner future is unwavering, as is our responsibility to our investors,” said Exelon CEO Chris Crane. “Exelon continues its strong operational performance, with ComEd and PECO achieving best on record SAIFI performance. We are on track to invest more than $6.9 billion at our electric and gas companies by year end to enhance reliability and resiliency. This ongoing infrastructure investment in our electric and gas companies is delivering solid financial and customer satisfaction results. Our consistent operational excellence, strategic and equitable investments in our communities, and significant regulatory milestones achieved this quarter will help ensure we deliver on our promise to provide safe, reliable, resilient and affordable service to our more than 10 million customers and value to our investors.”

“Our third-quarter performance remained strong, with adjusted (non-GAAP) earnings of $0.75 per share which, after adjusting for discontinued operations, is $0.14 ahead of the same period last year driven in part by rate adjustments resulting from our continued investments at the utilities to improve reliability and service for customers,” said Jeanne Jones, Exelon executive vice president and chief financial officer. “Our excellent operational performance and progress on the regulatory front through the third quarter – with more on the horizon – is continued evidence that we are on the right path to achieve our long-term goals. To that end, we have narrowed our 2022 EPS guidance range to $2.21 to $2.29 per share, and reaffirmed our 6-8% earnings per share growth from 2021-2025.”

Third Quarter 2022

Exelon's GAAP Net Income from Continuing Operations for the third quarter of 2022 increased to $0.68 per share from $0.47 GAAP Net Income from Continuing Operations per share in the third quarter of 2021. Adjusted (non-GAAP) Operating Earnings for the third quarter of 2022 increased to $0.75 per share from $0.53 per share in the third 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 third quarter of 2022 primarily reflect:

• Higher utility earnings primarily due to higher electric distribution earnings at ComEd from higher allowed electric distribution ROE due to an increase in treasury rates and higher rate base, rate increases at PECO, BGE, and PHI, and decreases in storm costs at PECO and BGE, partially offset by higher depreciation expense at PECO 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 in the third quarter of 2021 as these costs do not qualify as expenses of the discontinued operations per the accounting rules, partially offset by higher interest expense.

Operating Company Results1

ComEd

ComEd's third quarter of 2022 GAAP Net Income increased to $291 million from $220 million in the third quarter of 2021. ComEd's Adjusted (non-GAAP) Operating Earnings for the third quarter of 2022 increased to $293 million from $224 million in the third quarter of 2021, primarily due to increases in electric distribution formula rate earnings (reflecting higher allowed electric distribution ROE due to an increase in treasury rates and the impacts of higher rate base). Due to revenue decoupling, ComEd's distribution earnings are not affected by actual weather or customer usage patterns.

PECO

PECO’s third quarter of 2022 GAAP Net Income increased to $135 million from $111 million in the third quarter of 2021. PECO's Adjusted (non-GAAP) Operating Earnings for the third quarter of 2022 increased to $174 million from $114 million in the third quarter of 2021, primarily due to distribution rate increases and decreases in storm costs, partially offset by an increase in depreciation expense.

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BGE

BGE’s third quarter of 2022 GAAP Net Income decreased to $33 million from $36 million in the third quarter of 2021. BGE's Adjusted (non-GAAP) Operating Earnings for the third quarter of 2022 increased to $70 million from $40 million in the third quarter of 2021, primarily due to favorable impacts of the multi-year plans and decreases in storm costs. Due to revenue decoupling, BGE's distribution earnings are not affected by actual weather or customer usage patterns.

PHI

PHI’s third quarter of 2022 GAAP Net Income increased to $289 million from $266 million in the third quarter of 2021. PHI’s Adjusted (non-GAAP) Operating Earnings for the third quarter of 2022 increased to $286 million from $272 million in the third quarter of 2021, primarily due to distribution rate increases, partially offset by an increase in 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 Third Quarter Highlights

• PECO Pennsylvania Natural Gas Distribution Rate Case: On October 27, 2022, the PAPUC issued an order approving a $55 million increase in PECO's annual natural gas distribution revenues. The rate increase was resolved through a settlement agreement, which did not specify an approved ROE. The rates are effective on January 1, 2023.
• DPL Delaware Natural Gas Base Rate Case: On October 12, 2022, the DEPSC approved an increase in DPL’s annual natural gas distribution rates of $8 million, reflecting an ROE of 9.60%. Interim rates went into effect on August 14, 2022, subject to refund. Rates associated with the approved order are effective on November 1, 2022.
• Financing Activities:
  • On August 4, 2022, Exelon entered into an agreement with certain underwriters in connection with an underwritten public offering of 12.995 million shares of its common stock, no par value. The net proceeds were $563 million before expenses paid. Exelon used the proceeds, together with available cash balances, to repay $575 million in borrowings under a $1.15 billion term loan credit facility.
  • On August 23, 2022, PECO issued $425 million of its First and Refunding Mortgage Bonds, 4.375% Series, due August 15, 2052. PECO used the proceeds to repay outstanding commercial paper obligations and for general corporate purposes.
  • On September 15, 2022, Pepco issued $225 million of its First Mortgage bonds, 3.35% Series, due September 15, 2032. 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 third quarter of 2022 do not include the following items (after tax) that were included in reported GAAP Net Income from Continuing Operations:

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

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 third 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 (Nasdaq: EXC) is a Fortune 200 company and the nation’s largest energy delivery 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 powering a cleaner and brighter future for our customers and 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 Nov. 3, 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,” “should,” 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 filed with the SEC on February 25, 2022 in Part I, ITEM 1A. Risk Factors; (2) the Registrants' Current Report on Form 8-K filed with the SEC on June 30, 2022 to recast Exelon's consolidated financial statements and certain other financial information originally included in the 2021 Form 10-K in (a) Part II, ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (b) Part II, ITEM 8. Financial Statements and Supplementary Data: Note 17, Commitments and Contingencies; (3) the Registrants' Third Quarter 2022 Quarterly Report on Form 10-Q (to be filed on Nov. 3, 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 13, Commitments and Contingencies; and (4) 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.

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