CHICAGO–(BUSINESS WIRE)–Exelon Corporation (Nasdaq: EXC) today reported its financial results for the third quarter of 2023.
“In the third quarter we continued to see strong execution of our financial plan and our strategy to lead the energy transformation, achieving top-quartile service reliability and key milestones in our six active rate reviews,” said Exelon President and CEO Calvin Butler. “As power generation decarbonizes and demand increases from development of major data center hubs, we are embarking on interstate transmission projects selected to meet reliability requirements, including PJM’s most recent recommendation to include our proposal to build needed transmission in Maryland and Pennsylvania. We also will be key partners in facilitating two of the recently announced national hydrogen hubs located in Exelon’s service areas, and three of our operating companies were also selected for federal grants through the landmark Infrastructure Investment and Jobs Act to improve reliability and connectivity in the communities we serve and expand benefits for our customers. We continue to be excited by the progress toward the aggressive goals we’ve set to build a sustainable energy future for our customers and communities.”
“Despite an active summer storm season, Exelon’s third quarter performance remained in line with expectations, as we recorded Adjusted (non-GAAP) Operating Earnings of $0.67 per share,” said Exelon Executive Vice President and CFO Jeanne Jones. “We’re also continuing to execute on the $7.2 billion capital investment planned for 2023, designed to address the needs of tomorrow’s grid. We are narrowing our 2023 EPS guidance range to $2.32 to $2.40 per share. We look forward to ending the year strong and further establishing our position as the nation’s leading transmission and delivery company.”
Third Quarter 2023
Exelon’s GAAP Net Income from Continuing Operations for the third quarter of 2023 increased to $0.70 per share from $0.68 GAAP Net Income from Continuing Operations per share in the third quarter of 2022. Adjusted (non-GAAP) Operating Earnings for the third quarter of 2023 decreased to $0.67 per share from $0.75 per share in the third quarter of 2022. For the reconciliations of GAAP Net Income from Continuing Operations to Adjusted (non-GAAP) Operating Earnings, refer to the tables beginning on page 3.
Adjusted (non-GAAP) Operating Earnings in the third quarter of 2023 primarily reflect:
- Lower utility earnings primarily due to increased operating expense as a result of higher storm costs at PECO, BGE and PHI, unfavorable weather at PECO, increased depreciation expense at BGE and PHI, and increased interest expense at BGE. This was partially offset by higher electric distribution formula rate earnings at ComEd from higher allowed ROE due to an increase in U.S. treasury rates and the impacts of higher rate base, rate increases at PECO, BGE, and PHI, and carrying costs related to the carbon mitigation credit (CMC) regulatory asset at ComEd.
- Higher costs at the Exelon holding company primarily due to higher interest expense.
Operating Company Results1
ComEd
ComEd’s third quarter of 2023 GAAP Net Income increased to $333 million from $291 million in the third quarter of 2022. ComEd’s Adjusted (non-GAAP) Operating Earnings for the third quarter of 2023 increased to $338 million from $293 million in the third quarter of 2022, primarily due to increases in electric distribution formula rate earnings (reflecting higher allowed ROE due to an increase in U.S. Treasury rates and the impacts of higher rate base) and carrying costs related to the CMC regulatory asset. Due to revenue decoupling, ComEd’s distribution earnings are not affected by actual weather or customer usage patterns.
PECO
PECO’s third quarter of 2023 GAAP Net Income increased to $146 million from $135 million in the third quarter of 2022. PECO’s Adjusted (non-GAAP) Operating Earnings for the third quarter of 2023 decreased to $149 million from $174 million in the third quarter of 2022, primarily due to unfavorable weather and an increase in storm costs, partially offset by gas distribution rate increases.
___________
|
1 Exelon’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 third quarter of 2023 GAAP Net Income increased to $45 million from $33 million in the third quarter of 2022. BGE’s Adjusted (non-GAAP) Operating Earnings for the third quarter of 2023 decreased to $47 million from $70 million in the third quarter of 2022, primarily due to an increase in depreciation expense, interest expense, and storm costs, 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 third quarter of 2023 GAAP Net Income decreased to $232 million from $289 million in the third quarter of 2022. PHI’s Adjusted (non-GAAP) Operating Earnings for the third quarter of 2023 decreased to $234 million from $286 million in the third quarter of 2022, primarily due to an increase in depreciation expense and storm costs. This is partially offset by distribution and transmission rate increases. 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
- Dividend: On November 1, 2023, Exelon’s Board of Directors declared a regular quarterly dividend of $0.36 per share on Exelon’s common stock for the fourth quarter of 2023. The dividend is payable on Friday, December 8, 2023, to shareholders of record of Exelon as of 5 p.m. Eastern time on Wednesday, November 15, 2023.
- Financing Activities:
- On September 13, 2023, Pepco issued $100 million of First Mortgage Bonds, 5.35% Series, due September 13, 2033. 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 2023 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 |
||||||||||||
|
2023 GAAP Net Income from Continuing Operations |
$ |
0.70 |
|
$ |
700 |
|
$ |
333 |
$ |
146 |
$ |
45 |
$ |
232 |
|
|||
|
Mark-to-Market Impact of Economic Hedging Activities (net of taxes of $4) |
|
0.01 |
|
|
12 |
|
|
— |
|
— |
|
— |
|
— |
|
|||
|
Asset Retirement Obligation (net of taxes of $1) |
|
— |
|
|
(1 |
) |
|
— |
|
— |
|
— |
|
(1 |
) |
|||
|
Separation Costs (net of taxes of $5, $2, $1, $1, and $1, respectively) |
|
0.01 |
|
|
14 |
|
|
5 |
|
3 |
|
2 |
|
4 |
|
|||
|
Income Tax-Related Adjustments (entire amount represents tax expense) |
|
(0.05 |
) |
|
(54 |
) |
|
— |
|
— |
|
— |
|
— |
|
|||
|
2023 Adjusted (non-GAAP) Operating Earnings |
$ |
0.67 |
|
$ |
671 |
|
$ |
338 |
$ |
149 |
$ |
47 |
$ |
234 |
|
|||
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:
|
(in millions, except per share amounts) |
Exelon Earnings per Diluted Share |
Exelon |
ComEd |
PECO |
BGE |
PHI |
||||||||||||
|
2022 GAAP Net Income from Continuing Operations |
$ |
0.68 |
$ |
676 |
|
$ |
291 |
$ |
135 |
$ |
33 |
$ |
289 |
|
||||
|
Asset Retirement Obligation (net of taxes of $2) |
|
— |
|
(4 |
) |
|
— |
|
— |
|
— |
|
(4 |
) |
||||
|
Asset Impairments (net of taxes of $10) |
|
0.04 |
|
37 |
|
|
— |
|
— |
|
37 |
|
— |
|
||||
|
Separation Costs (net of taxes of $1, $1, $0, $0, and $0, respectively) |
|
— |
|
(3 |
) |
|
2 |
|
1 |
|
1 |
|
1 |
|
||||
|
Income Tax-Related Adjustments (entire amount represents tax expense) |
|
0.04 |
|
38 |
|
|
— |
|
38 |
|
— |
|
— |
|
||||
|
2022 Adjusted (non-GAAP) Operating Earnings |
$ |
0.75 |
$ |
745 |
|
$ |
293 |
$ |
174 |
$ |
70 |
$ |
286 |
|
||||
__________
|
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 2023 and 2022 ranged from 24.0% to 29.0%. |
About Exelon
Exelon (Nasdaq: EXC) is a Fortune 250 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 19,000 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 X, formerly known as Twitter @Exelon.
