Earnings Release Highlights
CHICAGO — Exelon Corporation (Nasdaq: EXC) today reported its financial results for the fourth quarter and full year 2023.
“Exelon had another strong year in 2023, both financially and operationally,” said President and CEO Calvin Butler. “We delivered in the top half of our guidance range, achieved best-on-record operational performance at multiple utilities, and advocated for a more affordable and equitable energy transformation for our customers. We successfully competed for nearly $200 million in project grants benefiting our customers, supported by the Infrastructure and Investment Jobs Act. In 2024, we will continue to innovate and partner with regulators and stakeholders across Exelon’s jurisdictions to support our shared energy and environmental goals, while demonstrating the power of impact for our customers and communities.”
“We delivered strong financial results for the second year in a row, despite the historically mild weather impacting our non-decoupled jurisdictions,” said Exelon Chief Financial Officer Jeanne Jones. “For the full year 2023, we earned $2.34 per share on a GAAP basis and $2.38 per share on a non-GAAP basis, results that are at the top end of our narrowed guidance range. Over the next four years, Exelon will invest $35 billion to serve our customers, resulting in 7.5% rate base growth and an expected annualized earnings growth rate of 5% to 7% through 2027, off the midpoint of our 2023 guidance, with an expectation of being at midpoint or better in that range. We expect adjusted (non-GAAP) earnings for 2024 of $2.40 to $2.50 per share, driven by continued investment in our jurisdictions’ energy transformations and doing so as affordably and efficiently as possible.”
Exelon's GAAP Net Income from Continuing Operations for the fourth quarter of 2023 increased to $0.62 per share from $0.43 per share in the fourth quarter of 2022. Adjusted (non-GAAP) Operating Earnings for the fourth quarter of 2023 increased to $0.60 per share from $0.43 per share in the fourth quarter of 2022. For the reconciliations of GAAP Net Income from Continuing Operations to Adjusted (non-GAAP) Operating Earnings, refer to the tables beginning on page 4.
GAAP Net Income from Continuing Operations and Adjusted (non-GAAP) Operating Earnings in the fourth quarter of 2023 primarily reflect:
Exelon's GAAP Net Income from Continuing Operations for 2023 increased to $2.34 per share from $2.08 per share in 2022. Adjusted (non-GAAP) Operating Earnings for 2023 increased to $2.38 per share from $2.27 per share in 2022.
GAAP Net Income from Continuing Operations and Adjusted (non-GAAP) Operating Earnings for the full year 2023 primarily reflect:
ComEd
ComEd's fourth quarter of 2023 GAAP Net Income increased to $268 million from $211 million in the fourth quarter of 2022. ComEd's Adjusted (non-GAAP) Operating Earnings for the fourth quarter of 2023 increased to $269 million from $211 million in the fourth quarter of 2022, primarily due to increases in electric distribution formula rate earnings (reflecting higher allowed electric distribution ROE due to an increase in treasury rates). Due to revenue decoupling, ComEd's distribution earnings are not affected by actual weather or customer usage patterns.
PECO
PECO’s fourth quarter of 2023 GAAP Net Income increased to $153 million from $102 million in the fourth quarter of 2022. PECO's Adjusted (non-GAAP) Operating Earnings for the fourth quarter of 2023 increased to $154 million from $102 million in the fourth quarter of 2022, primarily due to distribution rate increases and favorable impacts from lower storm costs.
BGE
BGE’s fourth quarter of 2023 GAAP Net Income increased to $199 million from $113 million in the fourth quarter of 2022. BGE's Adjusted (non-GAAP) Operating Earnings for the fourth quarter of 2023 increased to $199 million from $114 million in the fourth quarter of 2022, primarily due to favorable impacts of the multi-year plans including the recognition of the reconciliation in 2023. Due to revenue decoupling, BGE's distribution earnings are not affected by actual weather or customer usage patterns.
PHI
PHI’s fourth quarter of 2023 GAAP Net Income increased to $101 million from $90 million in the fourth quarter of 2022. PHI’s Adjusted (non-GAAP) Operating Earnings for the fourth quarter of 2023 increased to $102 million from $90 million in the fourth quarter of 2022, primarily due to distribution and transmission rate increases and timing of excess deferred tax amortization, partially offset by increases in contracting costs and interest expense. Due to revenue decoupling, PHI's distribution earnings related to Pepco Maryland, DPL Maryland, Pepco District of Columbia, and ACE are not affected by actual weather or customer usage patterns.
1Exelon’s four business units include ComEd, which consists of electricity transmission and distribution operations in northern Illinois; PECO, which consists of electricity transmission and distribution operations and retail natural gas distribution operations in southeastern Pennsylvania; BGE, which consists of electricity transmission and distribution operations and retail natural gas distribution operations in central Maryland; and PHI, which consists of electricity transmission and distribution operations in the District of Columbia and portions of Maryland, Delaware, and New Jersey and retail natural gas distribution operations in northern Delaware.
Exelon introduced a guidance range for 2024 Adjusted (non-GAAP) Operating Earnings of $2.40-$2.50 per share. There are no adjustments between 2024 projected GAAP Earnings and Adjusted (non-GAAP) Operating Earnings currently.
Adjusted (non-GAAP) Operating Earnings for the fourth quarter of 2023 do not include the following items (after tax) that were included in reported GAAP Net Income from Continuing Operations:
(in millions, except per share amounts) | Exelon Earnings per
Diluted
Share
| Exelon | ComEd | PECO | BGE | PHI |
2023 GAAP Net Income from Continuing Operations | $0.62 | $617 | $268 | $153 | $199 | $101 |
Mark-to-Market Impact of Economic Hedging Activities (net of taxes of $6) | (0.02) | (17) | — | — | — | — |
Separation Costs (net of taxes of $1, $1, $0, $0, and $0, respectively) | — | 3 | 1 | 1 | 1 | 1 |
2023 Adjusted (non-GAAP) Operating Earnings | $0.60 | $603 | $269 | $154 | $199 | $102 |
Adjusted (non-GAAP) Operating Earnings for the fourth quarter of 2022 do not include the following items (after tax) that were included in reported GAAP Net Income from Continuing Operations:
(in millions, except per share amounts) | Exelon Earnings per
Diluted
Share
| Exelon | ComEd | PECO | BGE | PHI |
2022 GAAP Net Income from Continuing Operations | $0.43 | $432 | $211 | $102 | $113 | $90 |
Mark-to-Market Impact of Economic Hedging Activities (net of taxes of $1) | — | 4 | — | — | — | — |
Asset Impairments (net of taxes of $0) | — | 1 | — | — | 1 | — |
Separation Costs (net of taxes of $0) | — | (1) | — | — | — | — |
Income Tax-Related Adjustments (entire amount represents tax expense) | (0.01) | (8) | — | — | — | — |
2022 Adjusted (non-GAAP) Operating Earnings | $0.43 | $428 | $211 | $102 | $114 | $90 |
Adjusted (non-GAAP) Operating Earnings for the full year of 2023 do not include the following items (after tax) that were included in reported GAAP Net Income from Continuing Operations:
(in millions, except per share amounts) | Exelon Earnings per
Diluted
Share
| Exelon | ComEd | PECO | BGE | PHI |
2023 GAAP Net Income from Continuing Operations | $2.34 | $2,328 | $1,090 | $563 | $485 | $590 |
Mark-to-Market Impact of Economic Hedging Activities (net of taxes of $1) | — | (4) | — | — | — | — |
Change in Environmental Liabilities (net of taxes of $8) | 0.03 | 29 | — | — | — | 29 |
Asset Retirement Obligations (net of taxes of $1) | — | (1) | — | — | — | (1) |
SEC Matter Loss Contingency (net of taxes of $0) | 0.05 | 46 | — | — | — | — |
Separation Costs (net of taxes of $7, $3, $1, $1, and $2, respectively) | 0.02 | 22 | 8 | 4 | 4 | 6 |
Change in FERC Audit Liability (net of taxes of $4) | 0.01 | 11 | 11 | — | — | — |
Income Tax-Related Adjustments (entire amount represents tax expense) | (0.05) | (54) | — | — | — | — |
2023 Adjusted (non-GAAP) Operating Earnings | $2.38 | $2,377 | $1,108 | $566 | $489 | $624 |
Adjusted (non-GAAP) Operating Earnings for the full year of 2022 do not include the following items (after tax) that were included in reported GAAP Net Income from Continuing Operations:
(in millions, except per share amounts) | Exelon Earnings per
Diluted
Share
| Exelon | ComEd | PECO | BGE | PHI |
2022 GAAP Net Income from Continuing Operations | $2.08 | $2,054 | $917 | $576 | $380 | $608 |
Mark-to-Market Impact of Economic Hedging Activities (net of taxes of $1) | — | 4 | — | — | — | — |
ERP System Implementation Costs (net of taxes of $0) | — | 1 | — | — | — | — |
Asset Retirement Obligations (net of taxes of $2) | — | (4) | — | — | — | (4) |
Asset Impairments (net of taxes of $10) | 0.04 | 38 | — | — | 38 | — |
Separation Costs (net of taxes of $10, $4, $2, $2, and $3, respectively) | 0.02 | 24 | 9 | 4 | 4 | 7 |
Income Tax-Related Adjustments (entire amount represents tax expense) | 0.12 | 122 | — | 38 | — | 3 |
2022 Adjusted (non-GAAP) Operating Earnings | $2.27 | $2,239 | $926 | $619 | $423 | $614 |
Note:
Amounts may not sum due to rounding.
Unless otherwise noted, the income tax impact of each reconciling item between GAAP Net Income from Continuing Operations and Adjusted (non-GAAP) Operating Earnings is based on the marginal statutory federal and state income tax rates for each Registrant, taking into account whether the income or expense item is taxable or deductible, respectively, in whole or in part. For all items, the marginal statutory income tax rates for 2023 and 2022 ranged from 24.0% to 29.0%.
Webcast Information
Exelon will discuss fourth quarter 2023 earnings in a conference call scheduled for today at 9 a.m. Central Time (10 a.m. Eastern Time). The webcast and associated materials can be accessed at https://investors.exeloncorp.com
About Exelon
Exelon (Nasdaq: EXC) is a Fortune 250 company and the nation’s largest utility company, serving more than 10.5 million customers through six fully regulated transmission and distribution utilities — Atlantic City Electric (ACE), Baltimore Gas and Electric (BGE), Commonwealth Edison (ComEd), Delmarva Power & Light (DPL), PECO Energy Company (PECO), and Potomac Electric Power Company (Pepco). More than 19,500 Exelon employees dedicate their time and expertise to supporting our communities through reliable, affordable and efficient energy delivery, workforce development, equity, economic development and volunteerism. Follow @Exelon on Twitter | X.
Non-GAAP Financial Measures
In addition to net income as determined under generally accepted accounting principles in the United States (GAAP), Exelon evaluates its operating performance using the measure of Adjusted (non-GAAP) Operating Earnings because management believes it represents earnings directly related to the ongoing operations of the business. Adjusted (non-GAAP) Operating Earnings exclude certain costs, expenses, gains and losses, and other specified items. This measure is intended to enhance an investor’s overall understanding of period over period operating results and provide an indication of Exelon’s baseline operating performance excluding items that are considered by management to be not directly related to the ongoing operations of the business. In addition, this measure is among the primary indicators management uses as a basis for evaluating performance, allocating resources, setting incentive compensation targets, and planning and forecasting of future periods. Adjusted (non-GAAP) Operating Earnings is not a presentation defined under GAAP and may not be comparable to other companies’ presentation. Exelon has provided the non-GAAP financial measure as supplemental information and in addition to the financial measures that are calculated and presented in accordance with GAAP. Adjusted (non-GAAP) Operating Earnings should not be deemed more useful than, a substitute for, or an alternative to the most comparable GAAP Net Income measures provided in this earnings release and attachments. This press release and earnings release attachments provide reconciliations of Adjusted (non-GAAP) Operating Earnings to the most directly comparable financial measures calculated and presented in accordance with GAAP, are posted on Exelon’s website: https://investors.exeloncorp.com, and have been furnished to the Securities and Exchange Commission on Form 8-K on Feb. 21, 2024.
Cautionary Statements Regarding Forward-Looking Information
This press release contains certain forward-looking statements within the meaning of federal securities laws that are subject to risks and uncertainties. Words such as “could,” “may,” “expects,” “anticipates,” “will,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “predicts,” “should,” and variations on such words, and similar expressions that reflect our current views with respect to future events and operational, economic, and financial performance, are intended to identify such forward-looking statements.
The factors that could cause actual results to differ materially from the forward-looking statements made by Exelon Corporation, Commonwealth Edison Company, PECO Energy Company, Baltimore Gas and Electric Company, Pepco Holdings LLC, Potomac Electric Power Company, Delmarva Power & Light Company, and Atlantic City Electric Company (Registrants) include those factors discussed herein, as well as the items discussed in (1) the Registrants' 2022 Annual Report on Form 10-K filed with the SEC in (a) Part I, ITEM 1A. Risk Factors, (b) Part II, ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and (c) Part II, ITEM 8. Financial Statements and Supplementary Data: Note 18, Commitments and Contingencies; (2) the Registrants' Third Quarter 2023 Quarterly Report on Form 10-Q (filed on Nov. 2, 2023) in (a) Part II, ITEM 1A. Risk Factors, (b) Part I, ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and, (c) Part I, ITEM 1. Financial Statements: Note 12, Commitments and Contingencies; and (3) other factors discussed in filings with the SEC by the Registrants.
Investors are cautioned not to place undue reliance on these forward-looking statements, whether written or oral, which apply only as of the date of this press release. None of the Registrants undertakes any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this press release.
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