10-QPeriod: Q3 FY2023

EXELON CORP Quarterly Report for Q3 Ended Sep 30, 2023

Filed November 2, 2023For Securities:EXC

Summary

Exelon Corporation reported improved financial results for the nine months ended September 30, 2023, compared to the same period in the prior year, with net income attributable to common shareholders from continuing operations increasing by $89 million to $1.711 billion, or $1.72 per diluted share. This growth was driven by higher electric distribution formula rate earnings across its utility segments, particularly ComEd, attributed to increased allowed rates of return on equity (ROE) due to rising U.S. Treasury rates and higher rate bases. Favorable impacts from rate increases at PECO, BGE, and PHI, along with carrying costs for ComEd's Carbon Mitigation Credit (CMC) regulatory assets, also contributed positively. Despite these improvements, some subsidiaries, like PECO, BGE, and PHI, experienced increased operating expenses due to higher storm costs, depreciation, and interest expenses, partially offsetting the overall gains. Liquidity remains strong, supported by substantial capital expenditure programs focused on infrastructure improvements and grid resilience, funded through a combination of operating cash flows and access to capital markets. Exelon continues to manage its market risks through established policies and the use of derivative instruments, primarily for commodity price and interest rate risk mitigation. The company is actively engaged in various regulatory proceedings, including base rate case filings and transmission formula rate updates, which are critical for future revenue and earnings. The company also highlighted progress in securing federal funding for grid modernization and resilience initiatives under the Infrastructure Investment and Jobs Act.

Financial Highlights

46 data points
Beta

Revenue

$5.98B

Net Income

$700.00M

11.7% Net Margin

EPS (Diluted)

$0.70

Total Assets

$99.26B

Cash & Equivalents

$300.00M

Free Cash Flow

-$324.00M

Financial Statements
Beta
Revenue$5.98B
Operating Expenses$4.86B
Operating Income$1.12B
Net Income$700.00M
EPS (Basic)$0.70
EPS (Diluted)$0.70
Shares Outstanding (Basic)996.00M
Shares Outstanding (Diluted)997.00M

Key Highlights

  • 1Exelon reported a 5.5% increase in net income attributable to common shareholders from continuing operations for the nine months ended September 30, 2023, reaching $1.711 billion ($1.72/share), up from $1.622 billion ($1.65/share) in the prior year.
  • 2Key drivers for the improved performance include higher electric distribution formula rate earnings due to increased allowed ROE from higher U.S. Treasury rates and expanded rate bases at subsidiaries like ComEd.
  • 3Favorable impacts from rate increases at PECO, BGE, and PHI, along with carrying costs for ComEd's CMC regulatory assets, also boosted results.
  • 4Operating expenses increased across several subsidiaries due to higher storm costs, depreciation, and interest expenses, partially offsetting the revenue growth.
  • 5Exelon's liquidity remains strong, with significant capital expenditure plans focused on infrastructure investment and grid resilience, supported by operating cash flows and access to capital markets.
  • 6The company is actively participating in regulatory proceedings, including base rate cases and transmission formula rate updates, which are crucial for future revenue recovery and earnings.
  • 7Exelon is pursuing and has secured significant funding opportunities under the Infrastructure Investment and Jobs Act for grid modernization, resilience, and clean energy initiatives.

Frequently Asked Questions

Exelon's net income attributable to common shareholders from continuing operations increased by $89 million to $1.711 billion for the nine months ended September 30, 2023. This improvement was primarily driven by higher electric distribution formula rate earnings due to increased allowed rates of return on equity (ROE) resulting from higher U.S. Treasury rates and expanded rate bases at its utility subsidiaries, particularly ComEd. Favorable impacts from rate increases at PECO, BGE, and PHI, along with carrying costs for ComEd's Carbon Mitigation Credit (CMC) regulatory assets, also contributed to the growth.

Several subsidiaries, including PECO, BGE, and PHI, experienced increases in operating expenses. These increases were mainly due to higher storm-related costs, higher depreciation expenses resulting from ongoing capital expenditures, and increased interest expenses driven by higher interest rates and debt issuance. While these factors partially offset revenue growth, the company's regulatory structures allow for the recovery of many of these costs over time.

Exelon maintains strong liquidity through a combination of internally generated cash flows from operations and access to capital markets and credit facilities. The company has significant capital expenditure plans focused on infrastructure investment and grid resilience across its utility operations. These investments are funded through operating cash flows and debt issuances, with management continuously evaluating financing plans to maintain investment-grade ratings while meeting capital needs.

Exelon is actively involved in various regulatory proceedings, including completed and pending base rate case filings across its subsidiaries and transmission formula rate updates. These proceedings are crucial for determining future revenue recovery and allowed returns. Additionally, the company is pursuing and has secured significant funding opportunities under the Infrastructure Investment and Jobs Act for grid modernization, resilience, and clean energy projects, which will play a key role in its future capital deployment.