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Exelon is the number one competitive energy provider, with one of the cleanest and lowest-cost power generation fleets and one of the largest retail customer bases in the United States. Exelon has a solid platform to pursue continued commitment to sustainable growth and competitive markets, helping drive customer choice, innovation and efficiency.

 

 

 

 

Exelon Reports Third Quarter 2018 ResultsExelon Reports Third Quarter 2018 Results<div> <strong>Earnings Release Highlights</strong><br></div><div><ul><li>GAAP Net Income of $0.76 per share and Adjusted (non-GAAP) Operating Earnings of $0.88 per share for the third quarter of 2018<br></li><li>Raising the lower end of our guidance range for full year 2018 Adjusted (non-GAAP) Operating Earnings from $2.90 - $3.20 per share to $3.05 - $3.20 per share <br></li><li>Announcing additional annual cost savings of $200 million gross, and $150 million net, reflecting ongoing initiatives leveraging process efficiency and technology; full run-rate savings to be achieved in 2021 <br></li><li>All Exelon Utilities achieved top quartile reliability performance in outage frequency and outage duration<br></li><li>PECO, along with interested parties, filed a partial settlement agreement for its distribution rate case on Aug. 28, 2018 <br></li></ul></div><div><div> <strong>CHICAGO</strong> — Exelon Corporation (NYSE: EXC) today reported its financial results for the third quarter of 2018.</div><div> <br> </div><div>“Exelon had a strong third quarter as our utility and power businesses reported earnings at the upper end of our guidance range.  Our strategy to invest in advanced technology and infrastructure continues to drive improved customer satisfaction across our utilities, and has allowed ComEd to complete its $920 million smart meter installation program three years ahead of its original schedule,” said Christopher M. Crane, Exelon’s President and CEO. “At the utilities, we continue to make progress with solid earned ROEs and strong key customer satisfaction and operating metrics. On the generation front, the Federal Circuit Courts in Illinois and New York strongly affirmed the legality of the ZEC programs, which will help preserve these states’ emissions-free nuclear power plants and the economic and environmental benefits they provide. Coupled with our pledge to join the Human Rights Campaign’s Business Coalition in support of passing the Equality Act and the successful completion of our first round of HeForShe STEM Innovation Leadership Academies, we are delivering on our commitment to be a positive force in our communities.”</div><div> <br> </div><div>“In the third quarter of 2018, Exelon also delivered financially with Adjusted (non-GAAP) operating earnings of $0.88 per share, which is near the top of our guidance range,” said Joseph Nigro, Exelon’s Senior Executive Vice President and CFO. “Exelon is raising the lower end of the full-year 2018 guidance from $2.90 - $3.20 to $3.05 - $3.20 per share as a result of the operational results across our family of businesses. As part of our ongoing efforts to improve operations, we are announcing another $200 million of annual cost savings by 2021. Together with previously announced cost savings, Exelon has identified total savings of over $900 million since 2015.”</div><div> <br> <h3>Third Quarter 2018</h3><div> <br> </div><div>Exelon's GAAP Net Income for the third quarter of 2018 decreased to $0.76 per share from $0.85 per share in the third quarter of 2017. Adjusted (non-GAAP) Operating Earnings increased to $0.88 per share in the third quarter of 2018 from $0.85 per share in the third quarter of 2017. For the reconciliations of GAAP Net Income to Adjusted (non-GAAP) Operating Earnings, refer to the tables beginning on page 6.</div><div> <br> </div><div>Adjusted (non-GAAP) Operating Earnings in the third quarter of 2018 primarily reflect higher electric distribution and energy efficiency earnings at ComEd, regulatory rate increases at PHI, favorable weather conditions at PECO and PHI, increased capacity prices, the favorable impacts of the Illinois Zero Emission Standard (ZES) and tax savings related to the Tax Cuts & Jobs Act (TCJA) at Generation, partially offset by the absence of ExGen Texas Power, LLC (EGTP) earnings resulting from its deconsolidation in the fourth quarter of 2017, lower realized energy prices and increased nuclear outage days at Generation.</div><div><h3> <br> </h3><h3>Operating Company Results<sup class="ms-rteFontSize-3">1</sup><br></h3><div> <br> </div><div> <strong> <em>ComEd</em></strong><br></div><div> <br> </div><div>ComEd's third quarter of 2018 GAAP Net Income increased to $193 million from $189 million in the third quarter of 2017. ComEd’s Adjusted (non-GAAP) Operating Earnings increased to $193 million for the third quarter of 2018 from $186 million in the third quarter of 2017, primarily reflecting higher electric distribution and energy efficiency earnings. Due to revenue decoupling, ComEd's distribution earnings are not affected by actual weather or customer usage patterns.</div><div> <br> </div><div> <strong> <em>PECO</em></strong></div><div> <br> </div><div>PECO’s third quarter of 2018 GAAP Net Income increased to $126 million from $112 million in the third quarter of 2017. PECO’s Adjusted (non-GAAP) Operating Earnings for the third quarter of 2018 increased to $127 million from $114 million in the third quarter of 2017, primarily due to favorable weather conditions and volumes.</div><div> <br> </div><div>Cooling degree days were up 13.7 percent relative to the same period in 2017 and were 12.5 percent above normal. Total retail electric deliveries were up 7.8 percent compared with the third quarter of 2017. Natural gas deliveries (including both retail and transportation segments) in the third quarter of 2018 were down 1.0 percent compared with the same period in 2017.</div><div> <br> <div> <em> <strong>BGE</strong></em></div><div> <br> </div><div>BGE’s third quarter of 2018 GAAP Net Income increased to $63 million from $62 million in the third quarter of 2017. BGE’s Adjusted (non-GAAP) Operating Earnings for the third quarter of 2018 remained consistent at $64 million compared with the third quarter of 2017. Due to revenue decoupling, BGE's distribution earnings are not affected by actual weather or customer usage patterns.<br></div><div><br></div><div> <span style="font-size:12px;line-height:0px;"><sup>1</sup>Exelon’s five 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; 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; and Generation, which consists of owned and contracted electric generating facilities and wholesale and retail customer supply of electric and natural gas products and services, including renewable energy products and risk management services.</span><br> </div><div><span style="font-size:12px;line-height:0px;"><br></span></div><div> <em> <strong>PHI</strong></em></div><div> <br> </div><div>PHI’s third quarter of 2018 GAAP Net Income increased to $187 million from $153 million in the third quarter of 2017. PHI’s Adjusted (non-GAAP) Operating Earnings for the third quarter of 2018 increased to $195 million from $146 million in the third quarter of 2017, primarily reflecting regulatory rate increases and favorable weather conditions and volumes in Delaware and New Jersey. Due to revenue decoupling, PHI's distribution earnings related to Pepco Maryland, DPL Maryland and Pepco District of Columbia are not affected by actual weather or customer usage patterns.</div><div> <br> </div><div> <em> <strong>Generation</strong></em></div><div> <br> </div><div>Generation's third quarter of 2018 GAAP Net Income decreased to $234 million from $304 million in the third quarter of 2017. Generation’s Adjusted (non-GAAP) Operating Earnings for the third quarter of 2018 decreased to $318 million from $346 million in the third quarter of 2017, primarily reflecting the absence of EGTP earnings resulting from its deconsolidation in the fourth quarter 2017, lower realized energy prices and increased nuclear outage days, partially offset by, the favorable impacts of the Illinois ZES, increased capacity prices and tax savings related to the TCJA.</div><div> <br> </div><div>The proportion of expected generation hedged as of Sept. 30, 2018, was 98 percent to 101 percent for 2018, 82 percent to 85 percent for 2019 and 48 percent to 51 percent for 2020.<br></div><p> <br> </p><h3>Third Quarter and Recent Highlights</h3><div> <br> </div><div> <div><ul><li><strong>Cost Management Program:</strong> In Nov. 2018, Exelon announced the elimination of approximately $200 million in annual ongoing costs, through initiatives primarily at Generation and BSC, by 2021. Approximately $150 million is expected to be related to Generation, with the remaining amount related to the Utility Registrants. This announcement is a result of Exelon’s continuous focus on improving its cost profile through enhanced efficiency and productivity. The targeted cost savings are incremental to the expected savings from previous cost management initiatives.<br><br></li><li><strong>Illinois and New York ZEC Programs:</strong> In Sept. 2018, the U.S. Court of Appeals for the Seventh Circuit and the Second Circuit affirmed dismissal of the complaints against Illinois’ and New York’s Zero Emissions Credit (ZEC) programs, respectively, which will allow them to continue supporting the clean, resilient electricity that nuclear power provides to each state’s residents. On Sept. 27, 2018, the plaintiffs filed a request for a panel rehearing with the U.S. Circuit Court of Appeals for the Seventh Circuit. On Oct. 9, 2018, the U.S. Circuit Court of Appeals for the Seventh Circuit panel denied the request for rehearing.<br><br></li><li><strong>PECO Electric Distribution Base Rate Case:</strong> On Aug. 28, 2018, PECO and interested parties filed with the Pennsylvania Public Utility Commission (PAPUC) a petition for partial settlement for an increase of $25 million in annual electric distribution service revenues, which includes annual ongoing TCJA tax savings. No overall ROE was specified in the partial settlement. The requested ROE was 10.95 percent in the filing with the PAPUC on March 29, 2018. On Oct. 18, 2018, the Administrative Law Judges issued a Recommended Decision to the PAPUC that the partial settlement be approved without modification. A final ruling from the PAPUC is expected before Dec. 31, 2018, and if approved, the new electric distribution base rates will become effective on Jan. 1, 2019.<br><br></li><li><strong>Pepco District of Columbia Electric Distribution Base Rate Case:</strong> On Aug. 9, 2018, the District of Columbia Public Service Commission approved a settlement agreement with an effective date of Aug. 13, 2018 that provides for a net decrease to Pepco's annual electric distribution rates of $24 million, which includes annual ongoing TCJA tax savings, and reflects a ROE of 9.525 percent. On Sept. 7, 2018, Pepco submitted an updated filing for a one-time bill credit to customers of approximately $20 million, and an increase of $4 million to the customer base rate credit established in connection with the merger between Exelon and PHI for residential customers, representing the TCJA benefits for the period Jan. 1, 2018 through Aug. 12, 2018. Following the expiration of the comment period with no objections filed, Pepco issued the $20 million to customers in Sept. 2018.<br><br></li><li><strong>DPL Delaware Electric Distribution Base Rate Case: </strong>On Aug. 21, 2018, the Delaware Public Service Commission (DPSC) approved the settlement agreement, which provides for a net decrease to annual electric distribution base rates of $7 million, which includes annual ongoing TCJA tax savings, and reflects a ROE of 9.7 percent. In addition, the settlement agreement separately provides for a one-time bill credit to customers of approximately $3 million representing the TCJA benefits for the period Feb. 1, 2018 through March 17, 2018, when full interim rates were put into effect. DPL expects to issue the $3 million to customers in the fourth quarter of 2018.<br><br></li><li><strong>DPL Delaware Gas Distribution Base Rate Case:</strong> On Sept. 7, 2018 (as amended and restated on Oct. 2, 2018), DPL entered into a partial settlement agreement with several parties in its pending gas distribution base rate case proceeding that provides for a net decrease to annual gas distribution base rates of $4 million, which includes annual ongoing TCJA tax savings, and reflects a ROE of 9.7 percent. In addition, the settlement agreement separately provides a one-time bill credit to customers of approximately $1 million representing the TCJA tax savings for the period Feb. 1, 2018 through March 17, 2018, when full interim rates were put into effect. DPL expects a decision on the settlement agreement in the fourth quarter of 2018 but cannot predict if the DPSC will approve the settlement agreement as filed.<br><br></li><li><strong>ACE New Jersey Electric Distribution Base Rate Case:</strong> On Aug. 21, 2018, ACE refiled its application with the New Jersey Board of Public Utilities (NJBPU), requesting an increase to its electric distribution rates of $109 million (before New Jersey sales and use tax), reflecting a requested ROE of 10.1 percent. Included in the $109 million request is $40 million of higher depreciation expense related to ACE's updated depreciation study. ACE currently expects a decision in this matter in the third quarter of 2019 but cannot predict if the NJBPU will approve the application as filed.<br><br></li><li><strong>Acquisition of Distrigas Liquefied Natural Gas Terminal:</strong> On Oct. 1, 2018, Generation acquired the Distrigas liquefied natural gas import terminal to ensure the continued reliable supply of fuel to Mystic Units 8 and 9 while they remain operating.<br><br></li><li><strong>Nuclear Operations</strong>: Generation’s nuclear fleet, including its owned output from the Salem Generating Station and 100 percent of the CENG units, produced 46,549 gigawatt-hours (GWhs) in the third quarter of 2018, compared with 47,747 GWhs in the third quarter of 2017. Excluding Salem, the Exelon-operated nuclear plants at ownership achieved a 93.6 percent capacity factor for the third quarter of 2018, compared with 96.1 percent for the third quarter of 2017. The number of planned refueling outage days in the third quarter of 2018 totaled 36, compared with 13 in the third quarter of 2017. There were 12 non-refueling outage days in the third quarter of 2018, compared with 15 in the third quarter of 2017.<br><br></li><li><strong>Fossil and Renewables Operations:</strong> The Dispatch Match rate for Generation’s gas and hydro fleet was 95.8 percent in the third quarter of 2018, compared with 98.4 percent in the third quarter of 2017. The lower performance was primarily due to outages at combined cycle gas units in Alabama and Texas.<br><br>Energy Capture for the wind and solar fleet was 95.7 percent in the third quarter of 2018, compared with 95.9 percent in the third quarter of 2017.<br><br></li><li><strong>Financing Activities:</strong></li><ul><li dir="ltr" style="text-align:left;">On Aug. 14, 2018, ComEd issued $550 million aggregate principal amount of its First Mortgage Bonds, 3.70 percent Series 125, due Aug. 15, 2028. ComEd used the proceeds to repay a portion of its outstanding commercial paper obligations and for general corporate purposes.<br><br></li><li dir="ltr" style="text-align:left;">On Sept. 11, 2018, PECO issued $325 million aggregate principal amount of its First and Refunding Mortgage Bonds, 3.90 percent due March 1, 2048. PECO used the proceeds to satisfy short-term borrowings from the Exelon intercompany money pool and for general corporate purposes.<br><br></li><li dir="ltr" style="text-align:left;">On Sept. 20, 2018, BGE issued $300 million aggregate principal amount of its 4.25 percent senior notes due Sept. 15, 2048. BGE used the proceeds to repay commercial paper obligations and for general corporate purposes.<br><br></li><li dir="ltr" style="text-align:left;">On Oct. 16, 2018, ACE issued $350 million aggregate principal amount of its First Mortgage Bonds, 4.00 percent due Oct. 15, 2028. ACE will use the proceeds to refinance its maturing 7.75 percent First Mortgage Bonds, repay outstanding commercial paper and for general corporate purposes.</li></ul></ul></div><div><h3><br></h3><h3>GAAP/Adjusted (non-GAAP) Operating Earnings Reconciliation</h3><div><br></div><div>Adjusted (non-GAAP) Operating Earnings for the third quarter of 2018 do not include the following items (after tax) that were included in reported GAAP Net Income:</div><div><br><table cellspacing="0" width="100%" class="ms-rteTable-3"><tbody><tr class="ms-rteTableEvenRow-3"><td class="ms-rteTableEvenCol-3" style="width:12.5%;"><strong></strong><strong>(in millions)</strong><br></td><td class="ms-rteTableOddCol-3" style="width:12.5%;"><strong>Exelon Earnings per Diluted Share</strong><br></td><td class="ms-rteTableEvenCol-3" style="width:12.5%;"><strong>Exelon</strong><br></td><td class="ms-rteTableOddCol-3" style="width:12.5%;"><strong>ComEd</strong><br></td><td class="ms-rteTableEvenCol-3" style="width:12.5%;"><strong>PECO</strong><br></td><td class="ms-rteTableOddCol-3" style="width:12.5%;"><strong>BGE</strong><br></td><td class="ms-rteTableEvenCol-3" style="width:12.5%;"><strong>PHI</strong><br></td><td class="ms-rteTableOddCol-3" style="width:12.5%;"><strong>Generation</strong><br></td></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3" rowspan="1" style="width:12.5%;"><strong>2018 GAAP Net Income</strong><br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="width:12.5%;text-align:center;"><strong>$0.76</strong><br></td><td class="ms-rteTableEvenCol-3" rowspan="1" style="width:12.5%;text-align:center;"><strong>$733</strong><br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="width:12.5%;text-align:center;"><strong>$193</strong><br></td><td class="ms-rteTableEvenCol-3" rowspan="1" style="width:12.5%;text-align:center;"><strong>$126</strong><br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="width:12.5%;text-align:center;"><strong>$63</strong><br></td><td class="ms-rteTableEvenCol-3" rowspan="1" style="width:12.5%;text-align:center;"><strong>$187</strong><br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="width:12.5%;text-align:center;"><strong>$234</strong><br></td></tr><tr class="ms-rteTableEvenRow-3"><td class="ms-rteTableEvenCol-3" rowspan="1" style="width:12.5%;">Mark-to-Market Impact of Economic Hedging Activities (net of taxes of $20 and $22)<br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="width:12.5%;text-align:center;">(0.06)<br></td><td class="ms-rteTableEvenCol-3" rowspan="1" style="width:12.5%;text-align:center;">(55)<br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="width:12.5%;text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" rowspan="1" style="width:12.5%;text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="width:12.5%;text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" rowspan="1" style="width:12.5%;text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="width:12.5%;text-align:center;">(65)<br></td></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3">Unrealized Gains Related to Nuclear Decommissioning Trust (NDT) Fund Investments (net of taxes of $4)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">(0.06)<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">(53)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">(53)<br></td></tr><tr class="ms-rteTableEvenRow-3"><td class="ms-rteTableEvenCol-3">Long-Lived Asset Impairments (net of taxes of $2)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">0.01<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">6<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">6<br></td></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3">Plant Retirements and Divestitures (net of taxes of $70 and $68)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">0.21<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">202<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">204<br></td></tr><tr class="ms-rteTableEvenRow-3"><td class="ms-rteTableEvenCol-3">Cost Management Program (net of taxes of $4, $0, $0, $1 and $3, respectively)<br></td><td class="ms-rteTableOddCol-3">0.01<br></td><td class="ms-rteTableEvenCol-3">13<br></td><td class="ms-rteTableOddCol-3">—<br></td><td class="ms-rteTableEvenCol-3">1<br></td><td class="ms-rteTableOddCol-3">1<br></td><td class="ms-rteTableEvenCol-3">1<br></td><td class="ms-rteTableOddCol-3">10<br></td></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3">Asset Retirement Obligation (net of taxes of $6)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">0.02<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">16<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">16<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td></tr><tr class="ms-rteTableEvenRow-3"><td class="ms-rteTableEvenCol-3">Change in Environmental Liabilities (net of taxes of $3)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">(0.01)<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">(9)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">(9)<br></td></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3">Reassessment of Deferred Income Taxes (entire amount represents tax expense)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">(0.02)<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">(18)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">(9)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">(30)<br></td></tr><tr class="ms-rteTableEvenRow-3"><td class="ms-rteTableEvenCol-3">Noncontrolling Interests (net of taxes of $4)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">0.02<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">21<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">21<br></td></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3"><strong>2018 Adjusted (non-GAAP) Operating Earnings</strong><br></td><td class="ms-rteTableOddCol-3" style="text-align:center;"><strong>$0.88</strong><br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;"><strong>$856</strong><br></td><td class="ms-rteTableOddCol-3" style="text-align:center;"><strong>$193</strong><span class="Apple-tab-span" style="white-space:pre;"> </span><br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;"><strong>$127</strong><br></td><td class="ms-rteTableOddCol-3" style="text-align:center;"><strong>$64</strong><br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;"><strong>$195</strong><br></td><td class="ms-rteTableOddCol-3" style="text-align:center;"><strong>$318</strong><br></td></tr></tbody></table><br></div>Adjusted (non-GAAP) Operating Earnings for the third quarter of 2017 do not include the following items (after tax) that were included in reported GAAP Net Income:<br></div><div><br></div><div><table cellspacing="0" width="100%" class="ms-rteTable-3"><tbody><tr class="ms-rteTableEvenRow-3"><td class="ms-rteTableEvenCol-3" style="width:12.5%;"><strong>(in millions)</strong><br></td><td class="ms-rteTableOddCol-3" style="width:12.5%;"><strong>Exelon Earnings per Diluted Share</strong></td><td class="ms-rteTableEvenCol-3" style="width:12.5%;"><strong>Exelon</strong><br></td><td class="ms-rteTableOddCol-3" style="width:12.5%;"><strong>ComEd</strong><br></td><td class="ms-rteTableEvenCol-3" style="width:12.5%;"><strong>PECO</strong><br></td><td class="ms-rteTableOddCol-3" style="width:12.5%;"><strong>BGE</strong><br></td><td class="ms-rteTableEvenCol-3" style="width:12.5%;"><strong>PHI</strong><br></td><td class="ms-rteTableOddCol-3" style="width:12.5%;"><strong>Generation</strong><br></td></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3" rowspan="1" style="width:12.5%;"><strong>2017 GAAP Net Income</strong><sup><strong>1</strong></sup><br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="width:12.5%;text-align:center;"><strong>$0.85</strong><br></td><td class="ms-rteTableEvenCol-3" rowspan="1" style="width:12.5%;text-align:center;"><strong>$823</strong><br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="width:12.5%;text-align:center;"><strong>$189</strong><br></td><td class="ms-rteTableEvenCol-3" rowspan="1" style="width:12.5%;text-align:center;"><strong>$112</strong><br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="width:12.5%;text-align:center;"><strong>$62</strong><br></td><td class="ms-rteTableEvenCol-3" rowspan="1" style="width:12.5%;text-align:center;"><strong>$153</strong><br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="width:12.5%;text-align:center;"><strong>$304</strong><br></td></tr><tr class="ms-rteTableEvenRow-3"><td class="ms-rteTableEvenCol-3" rowspan="1" style="width:12.5%;">Mark-to-Market Impact of Economic Hedging Activities (net of taxes of $29)<br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="width:12.5%;text-align:center;">(0.05)<br></td><td class="ms-rteTableEvenCol-3" rowspan="1" style="width:12.5%;text-align:center;">(45)<br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="width:12.5%;text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" rowspan="1" style="width:12.5%;text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="width:12.5%;text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" rowspan="1" style="width:12.5%;text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="width:12.5%;text-align:center;">(46)<br></td></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3">Unrealized Gains Related to NDT Fund Investments (net of taxes of $51)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">(0.07)<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">(67)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">(67)<br></td></tr><tr class="ms-rteTableEvenRow-3"><td class="ms-rteTableEvenCol-3">Amortization of Commodity Contract Intangibles (net of taxes of $8)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">0.01<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">12<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">12<br></td></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3">Merger and Integrations Costs (net of taxes of $1, $6 and $5, respectively)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">(1)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">(9)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">7<br></td></tr><tr class="ms-rteTableEvenRow-3"><td class="ms-rteTableEvenCol-3">Long-Lived Asset Impairments (net of taxes of $16)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">0.03<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">24<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">25<br></td></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3">Plant Retirements and Divestitures (net of taxes of $47 and $46, respectively)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">0.08<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">71<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">72<br></td></tr><tr class="ms-rteTableEvenRow-3"><td class="ms-rteTableEvenCol-3" rowspan="1">Cost Management Program (net of taxes of $8, $1, $1 and $6, respectively)<br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="text-align:center;">0.01<br></td><td class="ms-rteTableEvenCol-3" rowspan="1" style="text-align:center;">13<br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" rowspan="1" style="text-align:center;">2<br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="text-align:center;">2<br></td><td class="ms-rteTableEvenCol-3" rowspan="1" style="text-align:center;"><span></span><span>—</span><br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="text-align:center;">10<br></td></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3" rowspan="1">Bargain Purchase Gain (net of taxes of $0)<br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="text-align:center;">(0.01)<br></td><td class="ms-rteTableEvenCol-3" rowspan="1" style="text-align:center;">(7)<br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" rowspan="1" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" rowspan="1" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" rowspan="1" style="text-align:center;">(7)<br></td></tr><tr class="ms-rteTableEvenRow-3"><td class="ms-rteTableEvenCol-3">Asset Retirement Obligation (net of taxes of $1)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">(2)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">(2)<br></td></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3">Reassessment of Deferred Income Taxes (entire amount represents tax expense)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">(0.02)<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">(21)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">(3)<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">2<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">18<br></td></tr><tr class="ms-rteTableEvenRow-3"><td class="ms-rteTableEvenCol-3">Noncontrolling Interests (net of taxes of $4)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">0.02<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">20<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">20<br></td></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3"><strong>2017 Adjusted (non-GAAP) Operating Earnings</strong><br></td><td class="ms-rteTableOddCol-3" style="text-align:center;"><strong>$0.85</strong><br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;"><strong>$820</strong><br></td><td class="ms-rteTableOddCol-3" style="text-align:center;"><strong>$186</strong><br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;"><strong>$114</strong><br></td><td class="ms-rteTableOddCol-3" style="text-align:center;"><strong>$64</strong><br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;"><strong>$146</strong><br></td><td class="ms-rteTableOddCol-3" style="text-align:center;"><strong>$346</strong><br></td></tr></tbody></table><br></div> </div><div><sub>(1) Certain immaterial prior year amounts in the Registrants' Consolidated Statements of Operations and Comprehensive Income have been recasted to reflect new accounting standards issued by the FASB and adopted as of Jan. 1, 2018.</sub><br> </div><div><sub><br></sub></div><div><div>Note:</div><div>Unless otherwise noted, the income tax impact of each reconciling item between GAAP Net Income 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 except the unrealized gains and losses related to NDT fund investments, the marginal statutory income tax rates for 2018 and 2017 ranged from 26.0 percent to 29.0 percent and 39.0 percent to 41.0 percent, respectively. Under IRS regulations, NDT fund investment returns are taxed at different rates for investments if they are in qualified or non-qualified funds. The effective tax rates for the unrealized gains and losses related to NDT fund investments were 7.7 percent and 43.2 percent for the three months ended Sept. 30, 2018 and 2017, respectively.<br></div><div><br><div><strong>Webcast Information</strong></div><div><br></div><div>Exelon will discuss third quarter 2018 earnings in a one-hour 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 <a href="/_layouts/15/FIXUPREDIRECT.ASPX?WebId=e1dbc700-c490-4aa9-8536-68e764373f3e&TermSetId=4127a9d8-83b4-4034-bcf3-c5e379afb3ec&TermId=f05215c6-5cd1-428d-b352-a4fc8f4f407c" target="_blank">www.exeloncorp.com/investor-relations</a>.</div><div><br></div><div><div><strong>Non-GAAP Financial Measures</strong></div><div><br></div><div>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. The Company 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 <a href="/company/Documents/Press%20Release-Earnings%20Tables/Q3%202018%20Press%20Release%20and%20Earnings%20Release%20Attachments.pdf" target="_blank">earnings release and attachments</a>. 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: <a href="/" target="_blank">www.exeloncorp.com</a>, and have been furnished to the Securities and Exchange Commission on Form 8-K on Nov. 1, 2018.</div><div><br></div><div><strong>Cautionary Statements Regarding Forward-Looking Information</strong></div><div><br></div><div>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. The factors that could cause actual results to differ materially from the forward-looking statements made by the Registrants include those factors discussed herein, as well as the items discussed in (1) the Registrants' 2017 Annual Report on Form 10-K in (a) ITEM 1A. Risk Factors, (b) ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) ITEM 8. Financial Statements and Supplementary Data: Note 23, Commitments and Contingencies; (2) the Registrants' Third Quarter 2018 Quarterly Report on Form 10-Q (to be filed on Nov. 1, 2018) in (a) Part II, Other Information, ITEM 1A. Risk Factors; (b) Part 1, Financial Information, ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) Part I, Financial Information, ITEM 1. Financial Statements: Note 17, Commitments and Contingencies; and (3) other factors discussed in filings with the SEC by the Registrants. Readers are cautioned not to place undue reliance on these forward-looking statements, 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.<br></div></div><div><br></div><br><br></div></div><p> <br> </p></div></div></div></div>http://www.exeloncorp.com/newsroom/exelon-reports-third-quarter-2018-results11/1/2018 10:00:00 AM
Exelon Announces New Appointments in Finance and Investor RelationsExelon Announces New Appointments in Finance and Investor Relations<div><ul><li>Dan Eggers, senior vice president of Investor Relations, takes on expanded role as senior vice president of Corporate Finance<br></li><li>Emily Duncan, vice president of Federal Affairs and Public Policy, returns to Finance as vice president of Investor Relations<br></li><li>Lisa Graham, director and assistant treasurer, is promoted to vice president and Treasurer<br></li></ul></div><div><br></div><div><strong>CHICAGO</strong> — Exelon today announced key leadership changes that will streamline its Corporate Finance operations, improve efficiency and continue to leverage its bench of leaders who bring a range of diverse experience to their roles.</div><div><br></div><div>“As we position ourselves to compete in a rapidly evolving industry, we must continuously look for opportunities to strengthen the company by drawing on the strength of our talent pipeline,” said Joe Nigro, senior executive vice president and chief financial officer of Exelon. “These leadership changes clearly demonstrate the depth of our leadership pipeline and our commitment to developing internal talent.”</div><div><br></div><div><strong>Dan Eggers promoted to senior vice president of Corporate Finance</strong></div><div><br></div><div>Dan Eggers, currently senior vice president of investor relations, has been promoted to senior vice president of Corporate Finance. In his expanded role, Eggers will assume responsibility for the Treasury, Corporate Planning, Finance, Insurance and Continuous Improvement functions, while continuing his oversight of Investor Relations.</div><div><br></div><div>“Dan’s more than 20 years of experience in energy-related finance will give him unique perspective as he takes on this expanded role,” Nigro said. “As a member of Exelon’s Executive Committee and head of Investor Relations, he has helped set direction for the company and lead efforts to communicate our financial, strategic, operational and regulatory goals to investors and other key stakeholders.”</div><div><br></div><div>Prior to joining Exelon in 2016, Eggers was a managing director at Credit Suisse in its Investment Banking division. He served as a member of the bank’s Equity Research department, where he covered regulated utility, integrated power and independent power producer stocks, including Exelon. Eggers’ new role is effective Sept. 17, 2018.</div><div><br></div><div><strong>Emily Duncan named vice president of Investor Relations</strong></div><div><br></div><div>Emily Duncan has been named vice president of Investor Relations, returning to a role she held prior to taking her current position as vice president of Federal Affairs and Public Policy in 2017. She replaces Kevin Garrido, who recently assumed the role of vice president of Finance for Exelon Nuclear.</div><div><br></div><div>Duncan has developed a deep understanding of Exelon’s business during her 11-year career with the company, serving as assistant chief of staff to the chairman and CEO, director of Public Policy and director of Investor Relations prior to being named vice president of Investor Relations in 2016. She will report directly to Eggers.</div><div><br></div><div><strong>Lisa Graham named vice president and treasurer</strong></div><div><br></div><div>Lisa Graham, currently director and assistant treasurer, has been promoted to vice president and treasurer. In her eight years with Exelon’s Finance division, Graham has served in a variety of roles of increasing responsibility. Prior to her current role, she served as manager of Financial Planning and director of Corporate Planning. She also will report directly to Eggers.</div><div><br></div>http://www.exeloncorp.com/newsroom/exelon-announces-new-appointments-in-finance-and-investor-relations9/7/2018 5:00:00 PM
Exelon Reports Second Quarter 2018 ResultsExelon Reports Second Quarter 2018 Results<div> <strong>​Earnings Release Highlights</strong></div><div> <br> </div><div><ul><li>GAAP Net Income of $0.56 per share and Adjusted (non-GAAP) Operating Earnings of $0.71 per share for the second quarter of 2018<br></li><li>Reaffirming full year 2018 Adjusted Operating Earnings guidance of $2.90 to $3.20 per share<br></li><li>Strong utility operations with every utility achieving top decile CAIDI performance<br></li><li>Legislation passed in Pennsylvania and Delaware will support investment in the Utility of the Future<br></li><li>Customer savings from the Tax Cuts & Jobs Act (TCJA) are now projected to exceed $675 million annually across Exelon's electric and gas distribution and transmission customers<br></li><li>New Jersey zero emissions certificate (ZEC) legislation signed by Gov. Phil Murphy on May 23, 2018<br></li></ul></div><div> <br> </div><div> <strong>CHICAGO </strong>— Exelon Corporation (NYSE: EXC) today reported its financial results for the second quarter of 2018.</div><div> <br> </div><div>“Exelon’s utility and power businesses performed well operationally and financially in the second quarter. Our strategy to accelerate investment in advanced technology and infrastructure to improve customer service gained momentum as lawmakers in Pennsylvania and Delaware passed legislation that will support our initiatives to create the utility of the future,” said Christopher M. Crane, Exelon’s President and CEO. “In May, New Jersey Gov. Phil Murphy signed legislation creating a zero emissions certificate program that will preserve the state’s emissions-free nuclear power plants and the economic and environmental benefits they provide. Our commitment to the communities we serve remains a core value, with our employees setting a new company record by volunteering more than 18,000 hours in 104 cities across the U.S. as part of National Volunteer Month.”</div><div> <br> </div><div>“Exelon again delivered solid financial results with non-GAAP operating earnings of $0.71 per share, which is above our guidance range of $0.55-$0.65 per share,” said Joseph Nigro, Exelon’s Senior Executive Vice President and CFO. “As we look ahead to the rest of the year, we are on solid footing and will continue to focus on delivering strong operational and financial results for our stakeholders.  Exelon remains on track to meet our full-year guidance of $2.90-$3.20 per share and expects to earn $0.80-$0.90 per share in the third quarter.” </div><div> <br> </div><h3>Second Quarter 2018</h3><div> <br> </div><div>Exelon's GAAP Net Income for the second quarter of 2018 increased to $0.56 per share from $0.10 per share in the second quarter of 2017; Adjusted (non-GAAP) Operating Earnings increased to $0.71 per share in the second quarter of 2018 from $0.56 per share in the second quarter of 2017. For the reconciliations of GAAP Net Income to Adjusted (non-GAAP) Operating Earnings, refer to the tables beginning on page 7.</div><div> <br> </div><div>Adjusted (non-GAAP) Operating Earnings in the second quarter of 2018 primarily reflect higher electric distribution earnings at ComEd, regulatory rate increases at PHI, decreased nuclear outage days, increased capacity prices, the favorable impacts of the Illinois Zero Emission Standard (ZES), realized gains on nuclear decommissioning trust fund investments and tax savings related to the TCJA at Generation, partially offset by lower realized energy prices at Generation.</div><div> <br> </div><div><h3>Operating Company Results<sup>1</sup></h3><div> <br> </div><div> <strong>ComEd</strong></div><div> <br> </div><div>ComEd's second quarter of 2018 GAAP Net Income increased to $164 million from $118 million in the second quarter of 2017. ComEd’s Adjusted (non-GAAP) Operating Earnings increased to $164 million for the second quarter of 2018 from $141 million in the second quarter of 2017, primarily reflecting higher electric distribution earnings. Due to revenue decoupling, ComEd's distribution earnings are not affected by actual weather or customer usage patterns.</div><div> <br> </div><div> <strong>PECO</strong></div><div> <br> </div><div>PECO’s second quarter of 2018 GAAP Net Income increased to $96 million from $88 million in the second quarter of 2017. PECO’s Adjusted (non-GAAP) Operating Earnings for the second quarter of 2018 increased to $97 million from $89 million in the second quarter of 2017, primarily due to favorable weather conditions and volumes.</div><div> <br> </div><div>Heating degree days were up 46.5 percent relative to the same period in 2017 and were 9.3 percent above normal. Total retail electric deliveries were up 1.4 percent compared with the second quarter of 2017. Natural gas deliveries (including both retail and transportation segments) in the second quarter of 2018 were up 15.7 percent compared with the same period in 2017.</div><div> <br> </div><div> <strong>BGE</strong></div><div> <br> </div><div>BGE’s second quarter of 2018 GAAP Net Income increased to $51 million from $45 million in the second quarter of 2017. BGE’s Adjusted (non-GAAP) Operating Earnings for the second quarter of 2018 increased to $52 million from $46 million in the second quarter of 2017, primarily reflecting transmission rate increases. Due to revenue decoupling, BGE's distribution earnings are not affected by actual weather or customer usage patterns.</div><div> <br> </div> <sub>1 Exelon’s five 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; 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; and Generation, which consists of owned and contracted electric generating facilities and wholesale and retail customer supply of electric and natural gas products and services, including renewable energy products and risk management services. </sub><br></div><div> <sub> <br></sub></div><div> <br> </div><div><div> <strong>PHI</strong></div><div> <br> </div><div>PHI’s second quarter of 2018 GAAP Net Income increased to $84 million from $66 million in the second quarter of 2017. PHI’s Adjusted (non-GAAP) Operating Earnings for the second quarter of 2018 increased to $86 million from $63 million in the second quarter of 2017, primarily reflecting regulatory rate increases. Due to revenue decoupling, PHI's distribution earnings related to Pepco and DPL Maryland are not affected by actual weather or customer usage patterns.</div><div> <br> </div><div> <strong>Generation</strong></div><div> <br> </div><div>Generation's second quarter of 2018 GAAP Net Income increased to $178 million from a Net loss of $235 million in the second quarter of 2017. Generation’s Adjusted (non-GAAP) Operating Earnings for the second quarter of 2018 increased to $331 million from $217 million in the second quarter of 2017, primarily reflecting decreased nuclear outage days, increased capacity prices, the favorable impacts of the Illinois ZES, realized gains on nuclear decommissioning trust fund investments and tax savings related to the TCJA, partially offset by lower realized energy prices.</div><div> <br> </div><div>The proportion of expected generation hedged as of June 30, 2018, was 97 percent to 100 percent for 2018, 71 percent to 74 percent for 2019 and 41 percent to 44 percent for 2020.</div><div> <br> </div><div><h3>Second Quarter and Recent Highlights</h3><div> <br> </div><div><ul><li>Tax Cuts and Jobs Act Tax Savings: The Utility Registrants have made filings with their respective regulators to begin passing back to customers the ongoing annual tax savings resulting from the TCJA. In total, the Utility Registrants project total annual savings of over $675 million across their electric and gas distribution customers and electric transmission customers. There were the following developments related to these filings in the second quarter of 2018:<br><br></li><ul><li dir="ltr" style="text-align:left;">Pursuant to a Pennsylvania Public Utility Commission (PAPUC) order issued on May 17, 2018, to all Pennsylvania utilities without an existing base rate case, PECO began passing back annual tax savings of $4 million to its natural gas distribution customers through a negative surcharge mechanism beginning July 1, 2018.<br><br></li><li>On May 31, 2018, Pepco received an order from the Maryland Public Service Commission (MDPSC) approving a settlement agreement for its 2018 electric distribution rate case, which included the annual ongoing TCJA tax savings and provides a one-time bill credit to customers of approximately $10 million representing the TCJA tax savings from January 1, 2018, through the effective date of June 1, 2018.<br><br></li><li>On June 27, 2018, DPL entered into a settlement agreement with parties in Delaware for its pending electric distribution rate case, which includes the annual ongoing TCJA tax savings and provides a one-time bill credit to customers of approximately $3 million representing the TCJA tax savings from February 1, 2018, through March 17, 2018, when full interim rates were put into effect.<br><br></li><li>ComEd’s, PECO’s, BGE’s, Pepco’s, DPL’s and ACE’s electric transmission formula rate updates effective June 1, 2018, reflect the annual benefit of lower income tax rates from TCJA of $69 million, $20 million, $18 million, $13 million, $12 million and $11 million, respectively.</li></ul></ul></div><div><ul><li> <strong>New Jersey Clean Energy Legislation</strong>: On May 23, 2018, Governor Murphy of New Jersey signed new legislation, which became effective immediately, that will establish a ZEC program providing compensation for nuclear plants that demonstrate to the NJBPU that they meet certain requirements, including that they make a significant contribution to air quality in the state and that their revenues are insufficient to cover their costs and risks. Under the new legislation, the NJBPU will issue ZECs to qualifying nuclear power plants, and the electric distribution utilities in New Jersey, including ACE, will be required to purchase those ZECs and will be allowed to recover the associated costs from their retail distribution customers. The NJBPU has 180 days from the effective date to establish procedures for implementation of the ZEC program and 330 days from the effective date to determine which nuclear power plants are selected to receive ZECs under the program. The quantity of ZECs issued will be determined based on the greater of 40 percent of the total number of MWh of electricity distributed by the public electric distribution utilities in New Jersey in the prior year, or the total number of MWh of electricity generated in the prior year by the selected nuclear power plants. The ZEC price is approximately $10 per MWh during the first 3-year eligibility period. For eligibility periods following the first 3-year eligibility period, the NJBPU has discretion to reduce the ZEC price. Assuming the successful implementation of the New Jersey ZEC program and the selection of Salem as one of the qualifying facilities, the New Jersey ZEC program has the potential to mitigate the heightened risk of earlier retirement for Salem. On the same day, the Governor of New Jersey signed new legislation, which also became effective immediately, that establishes and modifies New Jersey’s clean energy and energy efficiency programs and solar and renewable energy portfolio standards.</li></ul></div><div><ul><li> <strong>DPL Delaware Electric Distribution Base Rates:</strong> On June 27, 2018, DPL entered into a non- unanimous settlement agreement with the majority of the parties in the proceeding related to its pending electric distribution base rate case. The settlement agreement provides for a net decrease to annual electric distribution base rates of $7 million, which includes annual ongoing TCJA tax savings, and reflects a ROE of 9.7 percent. A decision is expected on the matter in the third quarter of 2018, with a rate refund expected to be issued in the fourth quarter of 2018 if the Delaware Public Service Commission (DPSC) approves the settlement agreement as filed.<br></li></ul></div><div><ul><li> <strong>BGE Maryland Natural Gas Distribution Base Rates:</strong> On June 8, 2018, BGE filed an application with the MDPSC to increase its annual natural gas distribution base rates by $63 million, reflecting a requested ROE of 10.5 percent. BGE expects a decision in the first quarter of  2019 but cannot predict what increase the MDPSC will approve.<br><br></li><li> <strong>Delaware Distribution System Investment Charge Legislation:</strong> On June 14, 2018, Governor Carney of Delaware signed new Distribution System Investment Charge (DSIC) legislation, which establishes a system improvement charge that provides a mechanism to recover infrastructure investments, allowing for gradual rate increases and limiting frequency of distribution base rate cases. DPL expects to make its first filing in Delaware in the fourth quarter of 2018, with the new charge effective in the first quarter of 2019. While this legislation is expected to support needed infrastructure investment and allow for more timely recovery of those investments, Exelon, PHI and DPL cannot predict the potential financial impact on Exelon, PHI or DPL.<br><br></li><li> <strong>Pennsylvania  Alternative  Ratemaking  Legislation:</strong> On  June  28,  2018,  Governor  Wolf  of Pennsylvania signed new legislation, which authorized the PAPUC to review and approve utility- proposed alternative rate designs, including options such as decoupling mechanisms, formula rates, multi-year rate plans, and performance based rates. Exelon and PECO cannot predict the outcome or the potential financial impact, if any, on Exelon or PECO.<br></li></ul></div><div><ul><li> <strong>PJM Transmission Order:</strong> On June 15, 2016, a number of parties, including the Utility Registrants, filed a proposed settlement with FERC to resolve outstanding issues related to cost responsibility for charges to transmission customers for certain transmission facilities that operate at or above 500 kV. The settlement included provisions for monthly credits or charges related to the periods prior to January 1, 2016, that are expected to be refunded or recovered through PJM wholesale transmission rates through June 2025. On May 31, 2018, FERC issued an order approving the settlement. Pursuant to the order, similar charges for the period January 1, 2016, through June 30, 2018, will also be refunded or recovered through PJM wholesale transmission rates over the subsequent 12-month period. PJM will commence billing the refunds and charges associated with this settlement in August 2018.<br><br>Pursuant to the FERC approval of the settlement in the second quarter of 2018, the Utility Registrants recorded gross payables to and receivables from PJM of $135 million and $197 million, respectively, which were offset by regulatory assets and liabilities, resulting in no earnings impact. In addition, Generation recorded a pre-tax charge and payable to PJM of $23 million in the second quarter of 2018.</li></ul></div><div><ul><li> <strong>FirstEnergy  Solutions:</strong>  On  July 9,  2018,  Generation  entered  into  an  agreement  to  purchase FirstEnergy Solutions Corporation's retail electricity and wholesale load serving contracts and certain other related commodity contracts for an all cash purchase price of $140 million. The transaction is expected to close in the fourth quarter of 2018. The closing of the transaction is subject to certain conditions, including Generation being the winning bidder after a court-supervised Section 363 bankruptcy auction, the approval of the Purchase Agreement by the United States Bankruptcy Court for the Northern District of Ohio following the auction, and the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Either party may terminate the Purchase Agreement if the transaction has not been consummated by December 31, 2018.<br></li></ul></div><div><ul><li> <strong>Agreement for Sale and Decommissioning of Oyster Creek:</strong> On July 31, 2018, Generation entered into an agreement with Holtec International (Holtec) and its indirect wholly owned subsidiary, Oyster Creek Environmental Protection, LLC (OCEP), for the sale and decommissioning of Oyster Creek. Generation will transfer to OCEP substantially all the assets associated with Oyster Creek, including assets held in nuclear decommissioning trust (NDT) funds valued at approximately $980 million as of June 30, 2018, along with the assumption of liability for all responsibility for the site, including full decommissioning and ongoing management of spent fuel until the spent fuel is moved offsite. In addition to the assumption of liability for the full decommissioning and ongoing management of spent fuel, other consideration to be received in the transaction is contingent on several factors, including a requirement that Generation deliver a minimum NDT fund balance at closing, subject to adjustment for specific terms that include income taxes that would be imposed on any net unrealized built-in gains and certain decommissioning activities to be performed during the pre-close period after the unit shuts down in the fall of 2018 and prior to the anticipated close of the transaction. Completion of the transaction contemplated by the sale agreement is subject to the satisfaction of several closing conditions, including approval of the license transfer from the NRC and other regulatory approvals, and the receipt of a private letter ruling from the IRS. Generation currently anticipates satisfaction of the closing conditions to occur in the second half of 2019.<br></li></ul></div><div><ul><li> <strong>Mystic Generating Station Early Retirement:</strong> On March 29, 2018, Generation announced it had formally notified grid operator ISO-NE of its plans to early retire its Mystic Generating Station assets on June 1, 2022, absent any interim and long-term solutions for reliability and regional fuel security. On May 1, 2018, ISO-NE made a filing with FERC requesting waiver of certain tariff provisions to allow it to retain Mystic units 8 and 9 for fuel security for the 2022 - 2024 planning years. On May 16, 2018, Generation made a filing with FERC to establish cost-of-service compensation and terms and conditions of service for Mystic units 8 and 9 for the period between June 1, 2022 - May 31, 2024. On July 2, 2018, FERC issued an order denying ISO-NE's May 1, 2018, waiver request on procedural grounds but accepting ISO-NE's conclusions that retirement of Mystic units 8 and 9 could cause a violation of mandatory reliability standards as soon as 2022. Accordingly, FERC ordered ISO-NE to (i) make a filing within 60 days providing for the filing of a short-term cost-of-service agreement to address demonstrated fuel security concerns and (ii) make a filing by July 1, 2019, proposing permanent tariff revisions that would improve its market design to better address regional fuel security concerns. FERC also extended the deadline by which Generation must make a retirement decision for Mystic units 8 and 9 to January 4, 2019. On July 13, 2018, FERC issued an order accepting the cost-of-service agreement for filing, making findings on certain issues and establishing hearing procedures on an expedited schedule. Exelon and Generation cannot predict the final outcome of these proceedings or the potential financial impact, if any, on Exelon or Generation.</li></ul></div><div><ul><li> <strong>Nuclear Operations: </strong> Generation’s  nuclear  fleet,  including  its  owned  output  from  the  Salem Generating Station and 100 percent of the CENG units, produced 45,723 gigawatt-hours (GWhs) in the second quarter of 2018, compared with 44,065 GWhs in the second quarter of 2017. Excluding Salem, the Exelon-operated nuclear plants at ownership achieved a 93.2 percent capacity factor for the second quarter of 2018, compared with 90.9 percent for the second quarter of 2017. The number of planned refueling outage days in the second quarter of 2018 totaled 94, compared with 125 in the second quarter of 2017. There were 2 non-refueling outage days in the second quarter of 2018, compared with 12 in the second quarter of 2017.<br></li></ul></div><div><ul><li> <strong>Fossil and Renewables Operations: </strong>The Dispatch Match rate for Generation’s gas and hydro fleet was 97.8 percent in the second quarter of 2018, compared with 99.0 percent in the second quarter of 2017. The lower performance in the quarter was primarily due to outages at gas cycle units in Massachusetts and Texas.<br><br>Energy Capture for the wind and solar fleet was 95.1 percent in the second quarter of 2018, compared with 95.5 percent in the second quarter of 2017. The lower performance in the quarter was driven by equipment issues at wind farms in Texas.<br><br></li><li> <strong>Financing Activities:<br><br></strong></li><ul><li>On May 23, 2018, ACE entered into two term loan agreements in the aggregate amount of $125 million, which expire on May 22, 2019. Pursuant to the term loan agreements, loans made thereunder bear interest at a variable rate equal to LIBOR plus 0.55 percent and all indebtedness thereunder is unsecured.<br><br></li><li>On June 21, 2018, Pepco issued $100 million aggregate principal amount of its First Mortgage Bonds, 4.27 percent due June 15, 2048. Pepco used the proceeds to repay existing indebtedness and for general corporate purposes.<br><br></li><li>On June 21, 2018, DPL issued $200 million in aggregate principal amount of its First Mortgage Bonds, 4.27 percent due June 15, 2048. DPL used the proceeds to repay indebtedness and for general corporate purposes. </li></ul></ul></div><div><div> <br> </div><h3>GAAP/Adjusted (non-GAAP) Operating Earnings Reconciliation</h3><div> <br> </div><div>Adjusted (non-GAAP) Operating Earnings for the second quarter of 2018 do not include the following items (after tax) that were included in reported GAAP Net Income:</div><div> <br> </div><table cellspacing="0" width="100%" class="ms-rteTable-3"><tbody><tr class="ms-rteTableHeaderRow-3"><th class="ms-rteTableHeaderEvenCol-3" rowspan="1" colspan="1" style="width:12.5%;"> <strong>(in millions)</strong></th><th class="ms-rteTableHeaderOddCol-3" rowspan="1" colspan="1" style="width:12.5%;"> <strong>Exelon </strong> <strong>Earnings per Diluted Share</strong> <div> <br> </div></th><th class="ms-rteTableHeaderEvenCol-3" rowspan="1" colspan="1" style="width:12.5%;"> <strong>Exelon</strong></th><th class="ms-rteTableHeaderOddCol-3" rowspan="1" colspan="1" style="width:12.5%;"> <strong>ComEd</strong></th><th class="ms-rteTableHeaderEvenCol-3" rowspan="1" colspan="1" style="width:12.5%;"> <strong>PECO</strong></th><th class="ms-rteTableHeaderOddCol-3" rowspan="1" colspan="1" style="width:12.5%;"> <strong>BGE</strong></th><th class="ms-rteTableHeaderEvenCol-3" rowspan="1" colspan="1" style="width:12.5%;"> <strong>PHI</strong></th><th class="ms-rteTableHeaderOddCol-3" rowspan="1" colspan="1" style="width:12.5%;"> <strong>Generation</strong></th></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3"> <strong>2018 GAAP Net Income</strong></td><td class="ms-rteTableOddCol-3" style="text-align:center;"> <strong>$0.56  </strong></td><td class="ms-rteTableEvenCol-3" style="text-align:center;"> <strong>$539 </strong></td><td class="ms-rteTableOddCol-3" style="text-align:center;"> <strong>$164</strong></td><td class="ms-rteTableEvenCol-3" style="text-align:center;"> <strong>$96</strong></td><td class="ms-rteTableOddCol-3" style="text-align:center;"> <strong>$51</strong></td><td class="ms-rteTableEvenCol-3" style="text-align:center;"> <strong>$84</strong></td><td class="ms-rteTableOddCol-3" style="text-align:center;"> <strong>$</strong><strong>178</strong></td></tr><tr class="ms-rteTableEvenRow-3"><td class="ms-rteTableEvenCol-3">Mark-to-Market Impact of Economic <div>Hedging Activities (net of taxes of $23)</div></td><td class="ms-rteTableOddCol-3" style="text-align:center;">(0.07)</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">(67)</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">(67)</td></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3">Unrealized Losses Related to Nuclear Decommissioning Trust (NDT) Fund Investments (net of taxes of $77)</td><td class="ms-rteTableOddCol-3" style="text-align:center;">0.08</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">81</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">81</td></tr><tr class="ms-rteTableEvenRow-3"><td class="ms-rteTableEvenCol-3">Merger and Integration Costs (net of taxes of $0)</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">1</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">1</td></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3">Long-Lived Asset Impairments (net of taxes of $11)</td><td class="ms-rteTableOddCol-3" style="text-align:center;">0.03</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">30</td><td class="ms-rteTableOddCol-3" style="text-align:center;"><div>—<br></div></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">30</td></tr><tr class="ms-rteTableEvenRow-3"><td class="ms-rteTableEvenCol-3">Plant Retirements and Divestitures (net of taxes of $47)</td><td class="ms-rteTableOddCol-3" style="text-align:center;">0.14</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">127</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">127</td></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3"><div>Cost Management Program (net of taxes of $4, $0, $0, $0 and $4, respectively)</div></td><td class="ms-rteTableOddCol-3" style="text-align:center;">0.01</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">12</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">1</td><td class="ms-rteTableOddCol-3" style="text-align:center;">1</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">1</td><td class="ms-rteTableOddCol-3" style="text-align:center;">9</td></tr><tr class="ms-rteTableEvenRow-3"><td class="ms-rteTableEvenCol-3">Change in Environmental Liabilities (net of taxes of $2)</td><td class="ms-rteTableOddCol-3" style="text-align:center;">0.01</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">5</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">5</td></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3">Reassessment of Deferred Income Taxes (entire amount represents tax expense)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">(0.01)</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">(8)</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">1</td><td class="ms-rteTableOddCol-3" style="text-align:center;">1</td></tr><tr class="ms-rteTableEvenRow-3"><td class="ms-rteTableEvenCol-3" rowspan="1">Noncontrolling Interests (net of taxes of $7)</td><td class="ms-rteTableOddCol-3" rowspan="1" style="text-align:center;">(0.04)</td><td class="ms-rteTableEvenCol-3" rowspan="1" style="text-align:center;">(34)</td><td class="ms-rteTableOddCol-3" rowspan="1" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" rowspan="1" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" rowspan="1" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" rowspan="1" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" rowspan="1"><div style="text-align:center;">(34)</div><div> <br> </div></td></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3" rowspan="1"><strong>2018 Adjusted (non-GAAP) Operating Earnings                                                    </strong></td><td class="ms-rteTableOddCol-3" rowspan="1" style="text-align:center;"> <strong>$0.71</strong></td><td class="ms-rteTableEvenCol-3" rowspan="1" style="text-align:center;"> <strong>$686</strong></td><td class="ms-rteTableOddCol-3" rowspan="1" style="text-align:center;"> <strong>$164</strong></td><td class="ms-rteTableEvenCol-3" rowspan="1" style="text-align:center;"> <strong>$97</strong></td><td class="ms-rteTableOddCol-3" rowspan="1" style="text-align:center;"> <strong>$52</strong></td><td class="ms-rteTableEvenCol-3" rowspan="1" style="text-align:center;"> <strong>$86</strong></td><td class="ms-rteTableOddCol-3" rowspan="1" style="text-align:center;"><strong>$331</strong></td></tr></tbody></table> <br> </div>Adjusted (non-GAAP) Operating Earnings for the second quarter of 2017 do not include the following items (after tax) that were included in reported GAAP Net Income:<br></div><div> <br> </div><div><table cellspacing="0" width="100%" class="ms-rteTable-3"><tbody><tr class="ms-rteTableHeaderRow-3"><th class="ms-rteTableHeaderEvenCol-3" rowspan="1" colspan="1" style="width:177px;"> <span style="font-family:benton-sans-medium;">(in millions)</span></th><th class="ms-rteTableHeaderOddCol-3" rowspan="1" colspan="1" style="width:87px;"> <span style="font-family:benton-sans-medium;">Exelon </span><span style="font-family:benton-sans-medium;">Earnings per Diluted Share</span> <div> <br> </div></th><th class="ms-rteTableHeaderEvenCol-3" rowspan="1" colspan="1" style="width:69px;"> <span style="font-family:benton-sans-medium;">Exelon</span></th><th class="ms-rteTableHeaderOddCol-3" rowspan="1" colspan="1" style="width:74px;"> <span style="font-family:benton-sans-medium;">ComEd</span></th><th class="ms-rteTableHeaderEvenCol-3" rowspan="1" colspan="1" style="width:61px;"> <span style="font-family:benton-sans-medium;">PECO</span></th><th class="ms-rteTableHeaderOddCol-3" rowspan="1" colspan="1" style="width:49px;"> <span style="font-family:benton-sans-medium;">BGE</span></th><th class="ms-rteTableHeaderEvenCol-3" rowspan="1" colspan="1" style="width:46px;"> <span style="font-family:benton-sans-medium;">PHI</span></th><th class="ms-rteTableHeaderOddCol-3" rowspan="1" colspan="1" style="width:107px;"> <span style="font-family:benton-sans-medium;">Generation</span></th></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3"> <span style="font-family:benton-sans-medium;">2017 GAAP Net Income<sup>1</sup></span></td><td class="ms-rteTableOddCol-3" style="text-align:center;"> <span style="font-family:benton-sans-medium;">$0.10  </span></td><td class="ms-rteTableEvenCol-3" style="text-align:center;"> <span style="font-family:benton-sans-medium;">$95 </span></td><td class="ms-rteTableOddCol-3" style="text-align:center;"> <span style="font-family:benton-sans-medium;">$118</span></td><td class="ms-rteTableEvenCol-3" style="text-align:center;"> <span style="font-family:benton-sans-medium;">$88</span></td><td class="ms-rteTableOddCol-3" style="text-align:center;"> <span style="font-family:benton-sans-medium;">$45</span></td><td class="ms-rteTableEvenCol-3" style="text-align:center;"> <span style="font-family:benton-sans-medium;">$66</span></td><td class="ms-rteTableOddCol-3" style="text-align:center;"> <span style="font-family:benton-sans-medium;">$</span><span style="font-family:benton-sans-medium;">(235)</span></td></tr><tr class="ms-rteTableEvenRow-3"><td class="ms-rteTableEvenCol-3"><div>Mark-to-Market Impact of Economic Hedging Activities (net of taxes of $72 and $71, respectively)</div></td><td class="ms-rteTableOddCol-3" style="text-align:center;">0.12<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;"><div>113<br></div></td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">114</td></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3"><div>Unrealized Gains Related to NDT Fund Investments (net of taxes of $20)</div></td><td class="ms-rteTableOddCol-3" style="text-align:center;">(0.05)</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">(45)</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">(45)</td></tr><tr class="ms-rteTableEvenRow-3"><td class="ms-rteTableEvenCol-3"><div>Amortization of Commodity Contract Intangibles (net of taxes of $8)</div></td><td class="ms-rteTableOddCol-3" style="text-align:center;">0.01</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">12</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">12</td></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3">Merger and Integrations Costs (net of taxes of $9, $1 and $7, respectively)</td><td class="ms-rteTableOddCol-3" style="text-align:center;">0.02</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">15</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">1</td><td class="ms-rteTableOddCol-3" style="text-align:center;">12</td></tr><tr class="ms-rteTableEvenRow-3"><td class="ms-rteTableEvenCol-3"><div>Merger Commitments (net of taxes of $3)</div></td><td class="ms-rteTableOddCol-3" style="text-align:center;"><div>—<br></div></td><td class="ms-rteTableEvenCol-3" style="text-align:center;"><div>—<br></div> <br> </td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">(4)</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3">Long-Lived Asset Impairments (net of taxes of $172 and $171, respectively)</td><td class="ms-rteTableOddCol-3" style="text-align:center;">0.29</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">268</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">269</td></tr><tr class="ms-rteTableEvenRow-3"><td class="ms-rteTableEvenCol-3">Plant Retirements and Divestitures (net of taxes of $42)</td><td class="ms-rteTableOddCol-3" style="text-align:center;">0.07</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">66</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">66</td></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3">Cost Management Program (net of taxes of $4, $1, $1 and $3, respectively)<br></td><td class="ms-rteTableOddCol-3" style="text-align:center;">0.01<br></td><td class="ms-rteTableEvenCol-3" style="text-align:center;">6</td><td class="ms-rteTableOddCol-3" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">1</td><td class="ms-rteTableOddCol-3" style="text-align:center;">1</td><td class="ms-rteTableEvenCol-3" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" style="text-align:center;">4</td></tr><tr class="ms-rteTableEvenRow-3"><td class="ms-rteTableEvenCol-3" rowspan="1">Like-Kind Exchange Tax Position (net of taxes of $66 and $9, respectively)</td><td class="ms-rteTableOddCol-3" rowspan="1" style="text-align:center;">(0.03)<br></td><td class="ms-rteTableEvenCol-3" rowspan="1" style="text-align:center;">(26)</td><td class="ms-rteTableOddCol-3" rowspan="1" style="text-align:center;">23</td><td class="ms-rteTableEvenCol-3" rowspan="1" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" rowspan="1" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" rowspan="1" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" rowspan="1"><div style="text-align:center;">—</div><div> <br> </div></td></tr><tr class="ms-rteTableOddRow-3"><td class="ms-rteTableEvenCol-3" rowspan="1"> <strong></strong>Noncontrolling Interests (net of taxes of $5)<strong>            </strong></td><td class="ms-rteTableOddCol-3" rowspan="1" style="text-align:center;">0.02</td><td class="ms-rteTableEvenCol-3" rowspan="1" style="text-align:center;"> 20</td><td class="ms-rteTableOddCol-3" rowspan="1" style="text-align:center;"><div>—<br></div></td><td class="ms-rteTableEvenCol-3" rowspan="1" style="text-align:center;"><div>—<br></div></td><td class="ms-rteTableOddCol-3" rowspan="1" style="text-align:center;">—</td><td class="ms-rteTableEvenCol-3" rowspan="1" style="text-align:center;">—</td><td class="ms-rteTableOddCol-3" rowspan="1" style="text-align:center;"> 20</td></tr><tr class="ms-rteTableFooterRow-3"><td class="ms-rteTableFooterEvenCol-3" rowspan="1"><strong>2017 Adjusted (non-GAAP) Operating Earnings</strong></td><td class="ms-rteTableFooterOddCol-3" rowspan="1" style="text-align:center;"><strong>$0.56</strong></td><td class="ms-rteTableFooterEvenCol-3" rowspan="1" style="text-align:center;"><strong>$524</strong></td><td class="ms-rteTableFooterOddCol-3" rowspan="1" style="text-align:center;"><strong>$141</strong></td><td class="ms-rteTableFooterEvenCol-3" rowspan="1" style="text-align:center;"><strong>$89</strong></td><td class="ms-rteTableFooterOddCol-3" rowspan="1" style="text-align:center;"><strong>$46</strong></td><td class="ms-rteTableFooterEvenCol-3" rowspan="1" style="text-align:center;"><div><strong>$63</strong><br></div></td><td class="ms-rteTableFooterOddCol-3" rowspan="1" style="text-align:center;"><strong>$</strong><strong>217</strong></td></tr></tbody></table> <sub>(1) Certain immaterial prior year amounts in the Registrants' Consolidated Statements of Operations and Comprehensive  Income have been recasted to reflect new accounting standards issued by the FASB and adopted as of January 1, 2018.</sub><br> </div><div><sub><br></sub></div><div><div><strong>Note:</strong></div><div><br></div><div>Unless otherwise noted, the income tax impact of each reconciling item between GAAP Net Income 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 except the unrealized gains and losses related to NDT fund investments, the marginal statutory income tax rates for 2018 and 2017 ranged from 26.0 percent to 29.0 percent and 39.0 percent to 41.0 percent, respectively. Under IRS regulations, NDT fund investment returns are taxed at different rates for investments if they are in qualified or non-qualified funds. The effective tax rates for the unrealized gains and losses related to NDT fund investments were 48.9 percent and 31.4 percent for the three months ended June 30, 2018 and 2017, respectively. </div><div><br></div><div><strong>Webcast Information<br><br></strong></div><div>Exelon will discuss second quarter 2018 earnings in a one-hour 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 <a href="/_layouts/15/FIXUPREDIRECT.ASPX?WebId=e1dbc700-c490-4aa9-8536-68e764373f3e&TermSetId=4127a9d8-83b4-4034-bcf3-c5e379afb3ec&TermId=e99fdb3f-b84c-49a9-ac8a-ad701497ef8e" target="_blank">www.exeloncorp.com/investor-relations</a>.<br></div><div><br></div><div><div><strong>Non-GAAP Financial Measures</strong></div><div><br></div><div>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. The Company 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<a href="/company/Documents/Press%20Release-Earnings%20Tables/Q2%202018%20Press%20Release%20and%20Earnings%20Attachments%20-%20FINAL.pdf" target="_blank"> release and attachments</a>. 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: <a href="/" target="_blank">www.exeloncorp.com</a>, and have been furnished to the Securities and Exchange Commission on Form 8-K on August 2, 2018.<br></div><div><br></div><div><div><strong>Cautionary Statements Regarding Forward-Looking Information</strong></div><div><br></div><div>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. The factors that could cause actual results to differ materially from the forward-looking statements made by the Registrants include those factors discussed herein, as well as the items discussed in (1) the Registrants' 2017 Annual Report on Form 10-K in (a) ITEM 1A. Risk Factors, (b) ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) ITEM 8. Financial Statements and Supplementary Data: Note 23, Commitments and Contingencies; (2) the Registrants' Second Quarter 2018 Quarterly Report on Form 10-Q (to be filed on August 2, 2018) in (a) Part II, Other Information, ITEM 1A. Risk Factors; (b) Part 1, Financial Information, ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) Part I, Financial Information, ITEM 1. Financial Statements: Note 17, Commitments and Contingencies; and (3) other factors discussed in filings with the SEC by the Registrants. Readers are cautioned not to place undue reliance on these forward-looking statements, 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.</div></div></div><sub><br></sub></div><div> <br> </div> <br> </div>http://www.exeloncorp.com/newsroom/exelon-reports-second-quarter-2018-results8/2/2018 9:00:00 AM