Earnings Release Highlights

GAAP Net Income of $0.47 per share and Adjusted (non-GAAP) Operating Earnings of $0.44 per share for the second quarter of 2022
Reaffirming range for full year 2022 Adjusted (non-GAAP) Operating Earnings guidance of $2.18-$2.32 per share
In line with previously announced plans, Exelon anticipates issuing up to $1.0 billion of registered shares of common stock through 2025. Exelon plans to establish a $1.0 billion at-the-market (ATM) program and anticipates issuing $500 million in 2022 through the ATM, a one-time common equity offering, or a combination of these methods.
Strong utility reliability performance – every utility achieved top quartile in outage duration with ComEd specifically delivering their best-on-record CAIDI performance
ComEd filed with the Illinois Commerce Commission (ICC) a proposed plan to promote beneficial electrification efforts in its service area
DPL filed its first multi-year plan with the Maryland Public Service Commission (MDPSC) in May seeking an increase in base rates to support significant investments in the local energy grid and other customer experience improvements during the years 2023 to 2025

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

"Exelon is the leading transmission and distribution utility company in the nation, consistently delivering reliable results, and the second quarter is no exception," said Chris Crane, Exelon President and CEO. "Our earnings and strong reliability from our energy companies were delivered despite challenging storms. At the same time, our ability to power a cleaner and brighter future for our customers and communities signifies how essential environmental, social and governance principles are to our company and our work leading the energy transformation."

"During the second quarter, we continued to invest capital for the benefit of our customers and communities and delivered on earnings expectations, generating Adjusted (non-GAAP) Operating Earnings of $0.44 per share," said Joe Nigro, Exelon's Chief Financial Officer. "These investments will improve reliability and resiliency, enhance service for our customers and prepare the grid for a clean energy future. We reaffirm our full-year Adjusted (non-GAAP) Operating Earnings guidance range of $2.18 to $2.32 per share. We also are working hard to support our jurisdictions' more vulnerable customers in making this transition to a cleaner future. Our industry-leading efforts to connect communities to financial assistance are a testament to those efforts."

Second Quarter 2022

Exelon's GAAP Net Income from Continuing Operations for the second quarter of 2022 increased to $0.47 per share from $0.33 GAAP Net Income from Continuing Operations per share in the second quarter of 2021. Adjusted (non-GAAP) Operating Earnings for the second quarter of 2022 increased to $0.44 per share from $0.36 per share in the second 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 second 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 and rate increases at PECO, BGE, and PHI, partially offset by the absence of favorable weather and volume at ACE as ACE became decoupled effective July 1, 2021, higher depreciation expense at BGE and PHI, and higher credit loss expense at 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 second 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 second quarter of 2022 GAAP Net Income increased to $227 million from $192 million in the second quarter of 2021. ComEd's Adjusted (non-GAAP) Operating Earnings for the second quarter of 2022 increased to $229 million from $195 million in the second 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 second quarter of 2022 GAAP Net Income increased to $133 million from $104 million in the second quarter of 2021. PECO's Adjusted (non-GAAP) Operating Earnings for the second quarter of 2022 increased to $134 million from $107 million in the second quarter of 2021, primarily due to distribution rate increases.

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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 second quarter of 2022 GAAP Net Income decreased to $37 million from $45 million in the second quarter of 2021. BGE's Adjusted (non-GAAP) Operating Earnings for the second quarter of 2022 decreased to $38 million from $48 million in the second quarter of 2021, primarily due to an increase in depreciation expense, 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 second quarter of 2022 GAAP Net Income decreased to $100 million from $141 million in the second quarter of 2021. PHI's Adjusted (non-GAAP) Operating Earnings for the second quarter of 2022 decreased to $101 million from $144 million in the second quarter of 2021, primarily due to the absence of favorable weather and volume at ACE as ACE became decoupled effective July 1, 2021, an increase in depreciation expense, credit loss expense, contracting costs partially due to timing of maintenance projects, and timing of excess deferred tax amortization, partially offset by distribution 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 Second Quarter Highlights

DPL Maryland Electric Base Rate Case: On May 19, 2022, DPL filed an application for a three-year cumulative multi-year plan for January 1, 2023 through Dec. 31, 2025 with the MDPSC to increase its electric distribution rates by $23 million effective Jan. 1, 2023, $8 million effective January 1, 2024, and $7 million effective January 1, 2025, to recover capital investments made in 2021 and planned capital investments through the end of 2025, reflecting an ROE of 10.25%. DPL is proposing the acceleration of refunds for certain tax benefits to partially offset the customer rate increases by $12 million and $8 million in 2023 and 2024, respectively. DPL currently expects a decision in the fourth quarter of 2022, but cannot predict if the MDPSC will approve the application as filed.
Financing Activities:
- On May 24, 2022, PECO issued $350 million aggregate principal amount of its First and Refunding Mortgage Bonds, 4.600% Series due May 15, 2052. PECO used the proceeds to repay existing indebtedness and for general corporate purposes.
- On June 6, 2022, BGE issued $500 million aggregate principal amount of its 4.550% notes due June 1, 2052. BGE used the proceeds to repay outstanding commercial paper obligations, repay existing indebtedness, and for general corporate purposes.
- Exelon anticipates issuing up to $1.0 billion of registered shares of common stock through 2025. Exelon plans to establish a $1.0 billion ATM program, under which Exelon can issue registered shares of common stock through designated broker-dealers at prevailing market prices. Exelon anticipates issuing $500 million in 2022 through the ATM, a one-time common equity offering, or a combination of these methods.

GAAP/Adjusted (non-GAAP) Operating Earnings Reconciliation

Adjusted (non-GAAP) Operating Earnings for the second 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	$	0.47		$	465		$	227	$	133	$	37	$	100
Separation Costs (net of taxes of $3, $1, $0, $0, and $1, respectively)		0.01			10			2		1		1		2
Income Tax-Related Adjustments (entire amount represents tax expense)		(0.04	)		(43	)		—		—		—		—
2022 Adjusted (non-GAAP) Operating Earnings	$	0.44		$	433		$	229	$	134	$	38	$	101

Adjusted (non-GAAP) Operating Earnings for the second 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	$	0.33	$	326	$	192	$	104	$	45	$	141
Mark-to-Market Impact of Economic Hedging Activities (net of taxes of $1)		—		3		—		—		—		—
Cost Management Program (net of taxes of $0)		—		1		—		—		—		—
COVID-19 Direct Costs (net of taxes of $1, $0, $0, and $1, respectively)		—		4		—		1		1		2
Acquisition Related Costs (net of taxes of $1)		—		2		—		—		—		—
ERP System Implementation Costs (net of taxes of $1)		—		2		—		—		—		—
Separation Costs (net of taxes of $6, $1, $1, $1, and $1, respectively)		0.01		10		2		1		1		2
2021 Adjusted (non-GAAP) Operating Earnings	$	0.36	$	348	$	195	$	107	$	48	$	144

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 second 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 Aug. 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," 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' Second Quarter 2022 Quarterly Report on Form 10-Q (to be filed on Aug. 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 12, 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.

Earnings Release Attachments Table of Contents


Consolidating Statement of Operations	1

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	10
PECO	11
BGE	13
Pepco	16
DPL	17
ACE	19

Consolidating Statements of Operations (unaudited) (in millions)


	ComEd			PECO		BGE		PHI		Other (a)			Exelon
Three Months Ended June 30, 2022
Operating revenues	$	1,425		$	816	$	786	$	1,221	$	(9	)	$	4,239
Operating expenses
Purchased power and fuel		283			283		289		420		(1	)		1,274
Operating and maintenance		338			215		205		292		59			1,109
Depreciation and amortization		328			93		152		240		17			830
Taxes other than income taxes		90			48		71		114		7			330
Total operating expenses		1,039			639		717		1,066		82			3,543
Loss on sales of assets and businesses		(2	)		—		—		—		—			(2	)
Operating income (loss)