Earnings Release Highlights
CHICAGO — Exelon Corporation (Nasdaq: EXC) today reported its financial results for the first quarter of 2021.
“Our utility businesses performed at a high level both financially and operationally during the first quarter, and we continue to invest in customer service and grid modernization across our six utilities,” said Christopher M. Crane, president and CEO of Exelon. “The generation business overall was strong, and we are implementing cost savings to offset losses from the unprecedented Texas storms. Looking ahead, we remain on track with the planned separation of our generation and utility businesses and are encouraged by growing momentum for federal and state clean energy policies that, if approved, will leave both standalone companies uniquely positioned to aid our nation’s transition to a carbon-free future.”
“Utility adjusted (non-GAAP) operating earnings was 11 cents per share higher than a year ago and ahead of plan, and excluding the storm impact, Exelon Generation would have earned adjusted (non-GAAP) operating earnings of 32 cents per share, which was in keeping with expectations," said Joseph Nigro, senior executive vice president and CFO of Exelon. “The Texas storms and subsequent generation outages resulted in a 90 cents per share impact to operating earnings, though we expect to narrow some of that loss over the course of the year. The strong utility results and continued cost-savings measures at Generation reduced our adjusted (non-GAAP) operating loss for the quarter to $0.06 cents per share and we are affirming our full-year adjusted (non-GAAP) operating earnings guidance of $2.60 to $3.00 per share.”
Exelon's GAAP Net Loss for the first quarter of 2021 decreased to $(0.30) per share from $0.60 GAAP Net Income per share in the first quarter of 2020. Adjusted (non-GAAP) Operating Loss for the first quarter of 2021 decreased to $(0.06) per share from $0.87 Adjusted (non-GAAP) Operating Earnings per share in the first quarter of 2020. For the reconciliations of GAAP Net Loss to Adjusted (non-GAAP) Operating Loss, refer to the tables below.
Adjusted (non-GAAP) Operating Loss in the first quarter of 2021 primarily reflect:
ComEd
ComEd's first quarter of 2021 GAAP Net Income increased to $197 million from $168 million in the first quarter of 2020. ComEd's Adjusted (non-GAAP) Operating Earnings for the first quarter of 2021 increased to $198 million from $168 million in the first quarter of 2020, primarily due to higher electric distribution earnings from higher rate base and higher allowed 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 first quarter of 2021 GAAP Net Income increased to $167 million from $140 million in the first quarter of 2020. PECO's Adjusted (non-GAAP) Operating Earnings for the first quarter of 2021 increased to $170 million from $140 million in the first quarter of 2020, primarily due to favorable weather conditions and favorable volume.
BGE
BGE’s first quarter of 2021 GAAP Net Income increased to $209 million from $181 million in the first quarter of 2020. BGE's Adjusted (non-GAAP) Operating Earnings increased to $211 million from $182 million in the first quarter of 2020, primarily due to the favorable impacts of the multi-year plan. Due to revenue decoupling, BGE's distribution earnings are not affected by actual weather or customer usage patterns.
PHI
PHI’s first quarter of 2021 GAAP Net Income increased to $128 million from $108 million in the first quarter of 2020. PHI’s Adjusted (non-GAAP) Operating Earnings for the first quarter of 2021 increased to $130 million from $110 million in the first quarter of 2020, primarily due to regulatory rate increases and favorable weather conditions 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.
Generation
Generation had a GAAP Net Loss of $(793) million in the first quarter of 2021 compared with GAAP Net Income of $45 million in the first quarter of 2020. Generation had an Adjusted (non-GAAP) Operating Loss of $(571) million in the first quarter of 2021 compared with Adjusted (non-GAAP) Operating Earnings of $312 million in the first quarter of 2020, primarily due to the impacts of the February 2021 extreme cold weather event.
As of March 31, 2021, the percentage of expected generation hedged is 94%-97% for 2021.
1Exelon’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.
Adjusted (non-GAAP) Operating Earnings (Loss) for the first quarter of 2021 do not include the following items (after tax) that were included in reported GAAP Net Income (Loss):
(in millions) | Exelon
Earnings per
Diluted
Share
| Exelon | ComEd | PECO | BGE | PHI | Generation |
2021 GAAP Net Income (Loss) | ($0.30) | ($289) | $197 | $167 | $209 | $128 | ($793) |
Mark-to-Market Impact of Economic Hedging Activities (net of taxes of $46 and $45, respectively) | (0.14) | (135) | — | — | — | — | (134) |
Unrealized Losses Related to Nuclear Decommissioning Trust (NDT) Fund Investments (net of taxes of $40) | 0.04 | 43 | — | — | — | — | 43 |
Plant Retirements and Divestitures (net of taxes of $103) | 0.32 | 310 | — | — | — | — | 310 |
Cost Management Program (net of taxes of $0) | — | 1 | — | — | — | — | 1 |
Change in Environmental Liabilities (net of taxes of $1) | — | 2 | — | — | — | — | 2 |
COVID-19 Direct Costs (net of taxes of $4, $1, $0, and $3, respectively) | 0.01 | 10 | — | 1 | 1 | — | 8 |
Acquisition Related Costs (net of taxes of $2) | 0.01 | 6 | — | — | — | — | 6 |
ERP System Implementation Costs (net of taxes of $1, $0, $0, $0, and $1, respectively) | 0.01 | 5 | — | 1 | 1 | 1 | 2 |
Planned Separation Costs (net of taxes of $2,$0, $0, $0, and $1, respectively) | 0.01 | 7 | 1 | 1 | — | 1 | 2 |
Income Tax-Related Adjustments (entire amount represents tax expense) | — | (2) | — | — | — | — | — |
Noncontrolling Interests (net of taxes of $6) | (0.02) | (17) | — | — | — | — | (17) |
2021 Adjusted (non-GAAP) Operating Earnings (Loss) | ($0.06) | ($60) | $198 | $170 | $211 | $130 | ($571) |
Adjusted (non-GAAP) Operating Earnings for the first quarter of 2020 do not include the following items (after tax) that were included in reported GAAP Net Income:
(in millions) | Exelon
Earnings per
Diluted
Share
| Exelon | ComEd | PECO | BGE | PHI | Generation |
2020 GAAP Net Income | $0.60 | $582 | $168 | $140 | $181 | $108 | $45 |
Mark-to-Market Impact of Economic Hedging Activities (net of taxes of $32 and $33, respectively) | (0.10) | (94) | — | — | — | — | (97) |
Unrealized Losses Related to NDT Fund Investments (net of taxes of $405) | 0.50 | 485 | — | — | — | — | 485 |
Asset Impairments (net of taxes of $1) | — | 2 | — | — | — | — | 2 |
Plant Retirements and Divestitures (net of taxes of $4) | 0.01 | 13 | — | — | — | — | 13 |
Cost Management Program (net of taxes of $3, $0, $1, and $3, respectively) | 0.01 | 9 | — | — | 1 | 2 | 8 |
Income Tax-Related Adjustments (entire amount represents tax expense) | — | (2) | — | — | — | — | — |
Noncontrolling Interests (net of taxes of $30) | (0.15) | (144) | — | — | — | — | (144) |
2020 Adjusted (non-GAAP) Operating Earnings | $0.87 | $851 | $168 | $140 | $182 | $110 | $312 |
Note:
Amounts may not sum due to rounding.
Unless otherwise noted, the income tax impact of each reconciling item between GAAP Net Income (Loss) and Adjusted (non-GAAP) Operating Earnings (Loss) 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 losses related to NDT fund investments, the marginal statutory income tax rates for 2021 and 2020 ranged from 25.0% to 29.0%. 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 losses related to NDT fund investments were 48.0% and 45.5% for the three months ended March 31, 2021 and 2020, respectively.
Webcast Information
Exelon will discuss first quarter 2021 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 www.exeloncorp.com/investor-relations.
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. 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 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: www.exeloncorp.com, and have been furnished to the Securities and Exchange Commission on Form 8-K on May 5, 2021.
Cautionary Statements Regarding Forward-Looking Information
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 including, among others, those related to the timing, manner, tax-free nature, and expected benefits associated with the potential separation of Exelon’s competitive power generation and customer-facing energy business from its six regulated electric and gas utilities. Words such as “could,” “may,” “expects,” “anticipates,” “will,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “predicts,” 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, Exelon Generation Company, LLC, 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' 2020 Annual Report on Form 10-K 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 19, Commitments and Contingencies; (2) the Registrants' First Quarter 2021 Quarterly Report on Form 10-Q (to be filed on May 5, 2021) 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 14, 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.
Get Instant updates when Exelon has news