10-QPeriod: Q1 FY2020

EXELON CORP Quarterly Report for Q1 Ended Mar 31, 2020

Filed May 8, 2020For Securities:EXC

Summary

Exelon Corporation's Q1 2020 results show a notable decrease in net income attributable to common shareholders, falling to $582 million ($0.60 per diluted share) from $907 million ($0.93 per diluted share) in the prior year's first quarter. This decline was primarily driven by lower capacity revenues, reduced realized energy prices, increased nuclear outage days, and higher net unrealized and realized losses on Nuclear Decommissioning Trust (NDT) funds. Partially offsetting these decreases were higher mark-to-market gains, benefits from the New Jersey Zero Emission Certificate (ZEC) program, an income tax settlement at Generation, and regulatory rate increases at several utility subsidiaries. The company is actively managing the impacts of the COVID-19 pandemic, including implementing cost-saving measures and monitoring potential increases in credit loss expenses and reductions in energy demand. Despite market disruptions, Exelon's liquidity remains strong, supported by access to capital markets and credit facilities. The company is focused on operational efficiency and strategic investments, with significant capital expenditures planned across its utility and generation segments.

Financial Highlights

49 data points
Beta

Revenue

$8.75B

Net Income

$376.00M

4.3% Net Margin

EPS (Diluted)

$0.60

Total Assets

$124.68B

Cash & Equivalents

$1.46B

Free Cash Flow

-$936.00M

Financial Statements
Beta
Revenue$8.75B
Operating Expenses$7.53B
Operating Income$1.22B
Interest Expense$404.00M
Net Income$376.00M
EPS (Basic)$0.60
EPS (Diluted)$0.60
Shares Outstanding (Basic)975.00M
Shares Outstanding (Diluted)976.00M

Key Highlights

  • 1Net income attributable to common shareholders decreased by 35.7% to $582 million in Q1 2020 from $907 million in Q1 2019.
  • 2Diluted earnings per share decreased to $0.60 from $0.93 year-over-year.
  • 3Operating revenues decreased to $8.747 billion from $9.477 billion, largely due to lower competitive business revenues.
  • 4Exelon Generation reported a net loss of $161 million for the quarter, a significant drop from a net income of $422 million in the prior year's quarter, impacted by lower realized energy prices and higher nuclear outage days.
  • 5Utility operating companies generally saw modest increases in net income, driven by regulatory rate increases and capital investments, though PECO and DPL experienced decreases.
  • 6The company generated $1.08 billion in net cash from operating activities, an increase from $1.044 billion in the prior year.
  • 7Capital expenditures increased to $2.016 billion from $1.873 billion, reflecting ongoing investments in utility infrastructure and generation assets.

Frequently Asked Questions

The primary drivers of the decline in net income attributable to common shareholders were lower capacity revenues, reduced realized energy prices, increased nuclear outage days, and higher net unrealized and realized losses on Nuclear Decommissioning Trust (NDT) funds. These factors were partially offset by improved mark-to-market gains, the New Jersey ZEC program, an income tax settlement at Exelon Generation, and regulatory rate increases at several utility subsidiaries.

Exelon is actively managing the impact of COVID-19 by implementing measures to protect its employees and ensure uninterrupted service. This includes enhanced safety protocols, work-from-home policies where appropriate, and updated business continuity plans. The company is also closely monitoring potential increases in credit loss expenses and reductions in energy demand, and has identified cost-saving measures across its operations. Despite market disruptions, Exelon has maintained access to capital markets and credit facilities.

Exelon's utility subsidiaries generally showed stable or modest growth in net income. Regulatory matters, such as base rate case proceedings, are ongoing and are expected to impact future financial performance. Several subsidiaries have pending rate case filings or have recently received approvals for rate adjustments, which are designed to recover capital investments and ensure a fair return. The company is also engaged in discussions regarding transmission-related income tax regulatory assets and other regulatory matters that could affect future revenues.

Exelon Generation reported a net loss of $161 million for the quarter, a significant decrease compared to the prior year's net income of $422 million. This performance was impacted by lower capacity revenues, realized energy prices, increased nuclear outage days, and NDT fund losses. Key challenges for Generation include market price volatility, the need for regulatory reforms to ensure fair compensation for its nuclear plants' benefits, and potential impacts from expanded Minimum Offer Price Rules (MOPR) in capacity markets.