8-KRegulation FDExhibits & Filings

EXELON CORP 8-K Report, Regulation FD Disclosure (Mar 2, 2022)

Filed March 2, 2022For Securities:EXC

Summary

This 8-K filing from Exelon Corporation (EXC) provides unaudited pro forma financial information related to the separation of its competitive generation and customer-facing energy businesses, collectively known as Constellation, which was completed on February 1, 2022. The separation involved a pro-rata distribution of Constellation's shares to Exelon shareholders. The filing also details Exelon's recent financing activities, including $2 billion in unsecured term loan credit facilities entered into in January 2022 to primarily fund a $1.75 billion cash payment to Constellation and for general corporate purposes. For the year ended December 31, 2021, pro forma consolidated operating revenues were $17,939 million and operating income was $2,612 million, reflecting adjustments for the separation. These adjustments include the elimination of Constellation's historical operating results, the continuation of certain intercompany transactions as third-party transactions, the exclusion of certain corporate overhead costs no longer recognized by Exelon, and incremental non-recurring transaction costs. Investors should note that this pro forma information is an estimate and not a substitute for full financial statements.

Key Highlights

  • 1Exelon Corporation completed the separation of its competitive generation and customer-facing energy businesses (Constellation) on February 1, 2022, through a pro-rata distribution of shares.
  • 2Exelon secured $2 billion in unsecured term loan credit facilities in January 2022.
  • 3Proceeds from the term loans were primarily used to fund a $1.75 billion cash payment to Constellation, with the remainder for general corporate purposes.
  • 4The term loans include a $1.15 billion facility with Barclays maturing January 23, 2023, and $850 million in 18-month term loans maturing in July 2023.
  • 5Interest rates on the term loans are variable, based on SOFR plus a spread (0.75% for Barclays, 0.65% for 18-month loans), with a potential increase for the Barclays loan.
  • 6Pro forma operating revenues for the year ended December 31, 2021, were $17,939 million, and pro forma operating income was $2,612 million, reflecting post-separation adjustments.
  • 7The pro forma information aims to show the financial impact of the separation and related transactions, with adjustments for discontinued operations and changes in intercompany transactions.

Frequently Asked Questions

The main purpose of this 8-K filing is to disclose unaudited pro forma financial information related to the separation of Constellation Energy Corporation from Exelon Corporation, which occurred on February 1, 2022. It also provides details on recent financing activities undertaken by Exelon.

The separation means Constellation's historical operating results will be accounted for as discontinued operations by Exelon. Pro forma adjustments are made to reflect the elimination of Constellation's business and changes in intercompany transactions, providing a view of Exelon's business as if the separation had occurred earlier.

Exelon entered into $2 billion in unsecured term loan credit facilities in January 2022. These loans were primarily used to fund a $1.75 billion cash payment to Constellation as part of the separation and for general corporate purposes. The loans have varying maturities in 2023 and carry variable interest rates tied to SOFR.

For the year ended December 31, 2021, Exelon reported pro forma consolidated operating revenues of $17,939 million and pro forma operating income of $2,612 million. These figures reflect adjustments to account for the separation of Constellation.