Earnings call transcript Q4 2022

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Operator

Hello and welcome to Exelon's Fourth Quarter Earnings Call. My name is Gigi and I'll be your event specialist today. All lines have been placed on mute to prevent any background noise. Please note that today's webcast is being recorded.

During the presentation, we'll have a question-and-answer session. Instructions] [Operator

my President today's floor of now Andy over is to Vice Plenge, Investor pleasure is program turn to yours. It Relations. The

Andy Plenge

for remarks. Officer; XXXX joined Gigi. our your management Calvin the Officer. presentation, Butler, senior be you, Good They're who issued and everyone questions by Jones, are thank Thank Chief Exelon's this following President release Executive team, prepared can all be the answer Exelon's Financial morning of found Investor call available today morning our website. Exelon's members fourth in will Jeanne conference earnings of you We quarter Exelon's call. which with and Leading other earnings and our the joining to along Chief section Relations of

will differ and for may appendix today's today's and of factors and our for presentation today’s includes and on forward-looking are the of cause during between differ other equivalent to subject our projections, measures. XX non-GAAP to reconciliations factors Please SEC X-K release release other during GAAP and comments refer forecasts forward-looking the the minutes non-GAAP We've other discussions and call. factors uncertainties. nearest we and filings that scheduled and to adjusted management's this and information from measures. the expectations. in in contained assumptions from also presentation measures could earnings risks made call. Today's results references discussed operating refer which and earnings to and matters, Actual estimates Please discuss statements other earnings results Exelon's risk our for to that today's contain material call, based The statements various

Butler, over I'll to and Exelon's turn CEO. now call President the Calvin

Calvin Butler

PICO very it of as one had for recognized my umbrella. Andy, and a the way. utilities business platform as that earnings management of in one XXXX, along take to in call joined When building first advantage power of for our be under known I'm you, you was that the the Exelon to was year meaningful operations concludes I good Exelon first known successful for ComEd and CEO Thank world-class Exelon with us. excited we generation with everyone. morning the already company a commonly We model. of The an opportunity in two

Over guiding the of line business. safety, customer privileged practice fortunate to as XXXX same value. of part Utilities merger delivery I of satisfaction principles was XX BGE sharing the crossed Constellation measurement we accountability lead performance of course be deliver ensure a building through the next excellence of and reliability, in the were in of Exelon. applied of COO best and and and to the as standard role my our finish improvements as to years, energy Exelon CEO in this to and eventually then evolution CEO first the We

and of proposition. is what lies to our excited the what we the In expanded those We positions, take satisfaction, excellence, enhanced to our teams and to we've what were employees am from industry. T&D and balanced investors. our a execute, team Exelon what value I has for I'm about as and ROEs to chance us our XX% at X% PHI. more first target to supports digits layout are then mid want earned and outcome level. challenge showcase operational improved talented premier our an achieve I team as gave a BGE built, next the improvement, able you'll single continuous leadership utilities as our improved sustained proud diversity to push ability who I about the our company and XXXX ahead today, And to customer and built, But customers and vision our in hear at to

our can fundamentals Our the This is positions in and equity a utility. the multi-decade starting. stable What operationally transition energy shareholders, hallmark supports an us jurisdictions We affordability type scope, performance growth driving top while manner our platform it that we platform tier is extremely financially. through just investment a with that both to plan is of of stable sound makes do support platform Well, location. unique? diversified and in consistent a size, and that for have our

have generation. We no

excellence operational jurisdictions our to team strong in with and leading ready creating have shareholders. predictable to and our very energy communities of compelling three transformation, X% a has platform, powering our return meet forward-looking brighter challenge to are built total rate and revenues our provide investors for risk for our customers the proven operate worked jurisdictions communities. under unmatched mechanisms with an almost on Exelon quarters its and results to This future our adjusted We of that value of XX% nation a partnerships cleaner for and while our decoupled. foundation of leads customers the for the and The our value its

I about XXXX represents with strong by will by right the will performance guidance $X.XX growth in expectations, reporting of our of turn operating off Slide $X.XX now exceeded the midpoint X of talk recapping guidance key call. XXXX. for That in the messages and I start per and line share. this earnings X.X% midpoint. to executed results our We

performance operating of best four at our record utilities. We on also had three

electric case including several rate we cases with look rate progress to outcomes, had this XXXX gas year. two As and continue this two our four constructive distribution important in for cases. case cases We'll activity, rate

plan under XX stakeholder XX stakeholder Equitable and and In January, Climate established X,XXX as attendees The framework as Commerce well filed Commission the by Act. filing ComEd the follows plans Jobs multiyear workshops, Illinois than reaching more with presentations. the first its grid rate

ComEd an Illinois As its is position progresses decarbonization goals, strength. towards of industry-leading from starting

of Resiliency XX the XXXX, in average recognized while was XX by bill U.S. lower ComEd states. than maintaining for In also the with Consulting System fact, utilities is PA in Outstanding Award those an that

city non-profit franchise related energy of City this businesses a with for rate to announced month, D.C. in proposed and the century-long and agreements and within our will franchise Maryland providing later alignment case, sustainability and Chicago And we and key the new and by Together, electric Board, approval be and continue a electric later agreement. half prior equity-related using the around city equity right demonstrates the energy and partnership ComEd gas its year. plan continues following with second have BGE the agreements multiyear the first Exelon and Chicago Beyond operate its energy the in and under agreement. These had grant the entity ComEd utility city services goals. upon to the a build Pepco these projects. Pending agreement of public Pepco advance Chicago creates to filing ComEd waste energy the

multiyear Like in priority is well has and which Illinois, and and aggressive for Now more the a decarbonization and suited. frameworks will climate environment cases Act are Climate Solutions investment set targets, detail particularly shortly. key creating other Jeanne Maryland's regulatory utility action activity where planned an rate cover

As adding our have forward projected we guidance to to outlook, after our rolled our a window. disclosures year

compounded X% XXXX the reach X% or earnings target of will annual We that growth that growth expectation of XXXX annualized to midpoint rate. we are with better reaffirming our to

four-year XXXX of X% will where to reach XXXX. that are expect horizon identical growth the through or for target better we annual that also we annualized expectation rate deliver X% We with an midpoint to over earnings XXXX compounded initiating same the by growth

the underpinned than This X% to XXXX prior growth base XXXX, more $XX $X XXXX. capital four-year the from That's by is of driven over almost billion billion rate deploying period. through by XXXX over

to As ourselves the energy customer challenge progress continue transition value to the we deliver maximum we at lowest balance possible. the customer required affordability, cost on with

to but maintained the third continue we variability quarter transparency We to our to our our growth our calendar, regulatory provided CAGR in in have some from around year-to-year, path expect commitment. achieving rates due the

quarter at operating $X.XX earnings that are the range of initiating share, off $X.XX our annualized Being X% XXXX, the guidance. to with projected slightly implies is For midpoint below our midpoint the growth per All above we the guidance growth are other XXXX the earnings grow our expect the X% line we to years provided XXXX direction expected be exception. range on but not if we X%, in with to do to third it. of call, within

of the business. in confident power our remain We earnings

We in expect XXXX, our of will reflecting in financial outlook. our $X.XX per Jeanne share of the dividend off approximately XXXX. of dividend growth per share X% $X.XX an cover specifics annualized more of

X, to predictable spend stable, Moving I Slide a last that performance shareholders year's expect want moment and type the deliver. recognizing to accomplishments. customers of us to our Demonstrating

in while ever, highest and testament and by and XXXX. a We measure the decision for didn't the communities any And of Constellation, success a a than the ROE in a market, invested it the difficult purpose-driven We and lose of engaged more was customers our a our First, we're investments our the to we this beat them. a labor through capital Board's year we of operationally, in benefit miss execute did despite making not were supporting after We attract workforce to less than which than proceed. sight since separation separation. retain talented our more of employees. completed from to importance able just culture diverse achieving

more to of increase from than XXXX. $XXX XXX,XXX volunteered million over almost of and connected customers our hours an energy Our assistance, employees million $XXX

XX needed and We energy build students the the the group City to succeed in month in first industry. Infrastructure upon the workforce Academy skills graduating launching of development, Atlantic fall history our continued of in with this to our careers

future markets. energy billion our basics with our million Exelon to to progress cleaner create school in replacement schools fleet field. to We and our We electrified. middle miles achieved of part ever, girls high XX% the XX% our include clean inspires or pipe in for learning path in with good a our Academy These are our and schools gave pursue that total on energy highest diverse spend XXX to and STEM we customers, of of and programs our now support And suppliers. percentage Foundation doing spend $XX gas brighter students main careers vehicle making $X.X

the well. the delivered a the being establishing proposition XX that on the prove Exelon years led beginning just to offers for our These Ultimately, has for our value earnings us commitment was Dow new Sustainability to XXXX year. Jones to out are executed of Last, the work and type we Index of do about we examples running. team and few named

operating quartile frequency our and utilities, which decile top Jeanne, X, and Before all in review performance our like performance to as three focus I'll began. for this across will We four we at across sustained I were effort I it it performance outage our business. were with for outage requires ended reliability. duration of Slide on turn strongly start XXXX Achieving as top utilities. over

XX/X, team foremost, the up it our or time no showing requires First conditions. matter the and

to power out struck For instance, Elliott territory on our December taking customers. Storm service XXX,XXX Winter BGE XX,

repair to Our dedicated with X,XXX bring and one injuries. temperatures to And restore or just completely any wasn't of platform in two The teams restoration over our at completed up online efforts. times and in jobs just the it BGE power supporting force without team. power PECO, PHI back sub-zero ComEd, the showed customers

the want leadership of our all employees front team, their behalf storm for entire lines the of we dedication. On thank on duty to of

track of have not smart investment requires also shared goals this our jurisdictions fairly, will compensated We excellence and without excellence around priorities. that's Operational and record alignment prudent with built their on commitment.

earning perform to key that of our aligned while On continues day to top this investment ComEd get need that Last our jurisdictions billion safety, a capital, mentioned. we quartile of element X.X% standards. our year, performance other work success. maintain to The utilities that to to up ability confidence with we We $X.X every to trust. is maintain three level I we're our ROE the of with on execute invested

under XXXX. to practices incidents efforts serious successful, we driven are safety OSHA focused have at reduce also our in to implementing avoid that have Our best injuries utilities but been on other performance

reliability the record create utilities, including transition. the BGE, This our quartile be on our the finally, sustained ComEd customer performance. and satisfaction decile better top year, And investment top reflects in commitment BGE across response PECO odor with and technology completing all our quartile affordable continued an performance. a For best its to experience, year with energy three top to continues gas to in customer

gas with the communities continue with We of customers our work live while and and the to enhancements safely working accelerate modernization safety gas. and to system

our Jeanne? Jeanne ask to financial now review update. will I

Jeanne Jones

my you, Thank sharing closing and the by our own start as I'll good out year Exelon. about excitement Calvin, first everyone. morning, new

am about I of in XXXX, as our excited accomplished I'm As proud what more future. we even

customers, Our more XX families, serve homes utilities our the businesses. and employees, include of than hospitals, schools, customers million our that

arriving take weather taking house to keep equity and returns for That that a responsibility to customers the on lightly. time. during the the over capital driver to it’s us me their we energy steady plug and confidence prioritizing whether will their getting count continue vehicle lights in at delivering not increasingly affordability, for the we on, customers on, electric is is Exelon. holidays But These while winter first as or while investors on value the gives our maximize trust ready

today’s case focus and financial the of expect. you As activity updates, forward on that results, will I our upcoming our execution the cover disclosures, and drives results customers that shareholders rate XXXX find roll

on Starting year strong as company. financial new Slide delivered first we results our X, a in

For earned $X.XX quarter, non-GAAP Exelon’s fourth the a and per operations on GAAP basis. continuing share

and we per XXXX, per share year $X.XX non-GAAP on full the For $X.XX GAAP a on basis a basis. earned share

$X.XX range represent share our guidance treasury from storm for range narrowed of and rates the Results X.X% we of Day mid-point are ROE the Analyst as distribution benefited well our that year, rising of half the XXXX. as per impacting conditions. ComEd’s weather in guidance favorable growth upper and Throughout

along in voluntary benefits, with one-time discontinued These the in helped items and to refund and with customer operations, interest strong Illinois. expense offset corporate along of at cost businesses, the our the core higher operations control

net future XX financial appendix our provided year-to-date and to detailed are flexibility relative the Quarter-to-date back exceeding de-risk the slides commitments. drivers favorability reinvest year in and meeting while XX. were in we ensuring That prior and business to and years

X. Moving to Slide

This focused well, ensure XX% is our a a ComEd’s with our to Looking targeted supporting inflationary we since earned we on allowed as ROE. improved XXXX. ROE been mitigating distribution as at XXXX rates pressures X% basis, aligned highest X.X% returns for on our has XX-year delivered utility the with treasury range, consolidated to ROE our within costs revenue.

Looking our period, throughout and transition. Exelon which keep pace returns the earning annually keep forward, the XX% we investing we expect planning earned utilities, range of energy will the remain the with to X% to focused allowed ROE while reliability in maintain on jurisdictions

to our outlook for Turning XXXX.

initiating share, the earnings consistent is are in third mid-point to per directional quarter. operating adjusted that We of guidance $X.XX $X.XX a reflecting guide provided the with

increase earnings with midpoint deploy range, X% the benefit our we Relative for completed revenues our rate estimated the guidance as as customers to the base is continued in well driven XXXX of by by capital of primarily growth the associated cases. rate year-over-year as increased

enters to year below distribution year-over-year range second electric expected with and X% returning XXXX its reminder, storm a is weather in As to growth anticipates rates current slightly the X% PECO and as the normal activity.

we cost at XXXX in East also increases their await particularly the DC. our requires the as multi-year managing Pepco against at provision and reconciliations, out stay-out of BGE first plans end

With treasury, within well our $X.XX including projected programs as to in and to the $X.XX Exelon’s both de-risking XXXX, for that for XXXX. confident in as are long XX-year per range undertook we the of hedging initiating short-term we debt be will share exposure efforts earnings our the

is provided activity reflective on to date sensitivities on hedging in the of appendix. detail Slide our our Additional earnings XX

remind approximately utilities earnings that, think of have historically, first about year full the cases. seasonal shaping and with cadence XX% the rate of patterns of XXXX consistent will the at we completed realized quarter, I you you the earnings, quarterly As weather general in

over billion the Slide XX, our planning disclosures of to to rate period. years, XXXX $X.X for Since next of to updated our an investments provide $XXX the XXXX period, the plan XXXX. we invest of XXXX billion increase a $XX.X CapEx planned for identified through prior the On million covering and additional $X.X an Day customers. from we have four-year total XXXX serve Analyst billion outlook and in utility base, four We

of our of rate on This $XX.X the to growth X.X% $XX.X adds The rate that integrated the filed base the billion plans from roughly a Updates multi-year distributional through to to compound expected was billion. ComEd’s developed is years, increase ComEd’s amount result XXXX, plan, four which size as January. over XXXX grid base next annual current basis this include part to approximately equal growth capital base. refinements is rate to an

reflects capital balance also goals rate maintaining recovery forecast progress disciplined that to reflects a projects I’d With prioritization our plan while four this recover through and you we affordability. mechanisms. investments remind our customers to interest, reliable providing only year, multi-year filings our our potential The to identified service plan on constructive jurisdictions for planned of expect energy

Our plan speculative any projects. remains free of large

spend In fact, only our represents BGE. capital to our plan. This largest the And in only largest Erdman $XXX the of plan companies Transmission project totals $XX XXXX projects Expansion distribution at of each to from X% million four projected total and transmission our the and distribution transmission Summerfield at X.X% the remains collective project the XXXX. of project operating on billion spend multi-year

Turning possible to focus $XX years the rates our from on for would at average costs. would’ve resolute approximately through ability our over adjusted with annual grown $X amidst affordable managing without persistent billion to Slide costs inflation X.X% of inflationary in billion. deploy four customers XX, by pressures they line O&M next our XXXX capital XXXX, of At be a increased not

are human leveraging and drive acquired drone technology a also we the best reducing includes same intentional cut would’ve recent practices drones, crew on driving deployment. job work for XX occurred also This such platform of X.X% It to over with the a to increases pilot scale. specialized efficiencies. XX%. of focus that eliminating our projecting investing to a management material of economies customer conduct as by over $XXX period, and processes million without in innovative minutes two-day a help vegetation for the companies of share Instead, operating four rate CAGR includes of It our

I’m separation. to for costs that utilities From that. see key contracts of IT design wide of they after the increased not to reoptimizing because and renegotiating achieved O&M proud to committed growth say our We organizational the our customers continually the separation, need. we would keeping proud particularly are We enterprise the services low

kept commitment delivering discipline we half levels while earnings of culture our that top-notch executing Our that guidance ensured cost and range. in the operationally at upper

is O&M In rate building XXXX, representing XXXX from efforts X% $X.X rate projected a efficiency in inflation and or our a below X% billion, our in of expected well XXXX. at adjusted million to utilities the increase on $XX be XXXX,

ensure will delivery efficiently that designed distribution business to services deliver continue is a as company. transmission only to We and appropriately energy our

the positioned below has In cost around XX States. electric bottom in you average discipline are cities study top metropolitan the the can Exelon’s us rates XX% very well. This see United chart,

and Beyond for Illinois’s cost factors which projected these Based carbon energy other to I’d ComEd to Jobs are XX, like unique customers CEJA. to or energy bills Act mitigation contracts XXXX XXXX. of benefit from management, lower XXXX Climate contribute as of discussed. $X from Equitable of resulting credits forwards Calvin customers, on billion additional and our the over some highlight January But between charges of the protect

That Illinois grid in decarbonization, wanted multi-year CEJA a to multi-year also the a filed a its affordable, highlight grid most possible. In brings where I XXX% rate help efficient, plan integrated ComEd plan to It a XXXX. of investments with the and and state equitable first energy economy, the to to by and to Illinois ComEd Commission. manner for covering on Commerce commitment and me meeting Illinois transformation. steps support decarbonized of the path the challenge XXXX to through a Slide to communities beneficial make decarbonizing take XXXX framework one support its the moment provides clean in put energy electrification, the necessary to XX, ComEd’s sector energy

to order rate An December has to the from the rate XXXX. electric increase To transition defer support is reconfigurations, kVconversions, plan initiatives to the ICC X until for XXXX investment filed XX vehicles by expected X multi-year XXXX. repairs proposed and and the collection includes plan, from of such an smooth formula than the as kV The customers of XX% later anticipated for million ComEd no XX, overhead bus underground XXXX.

plan the Proposed of XX, later Service second the climate Slide as multi-year multi-year Maryland mentioned, first in to Solutions and month. Act. investments Turning goals with Now the BGE expected reconciliation and this filing anticipates Maryland’s Commission Calvin plan decarbonization support filing its Climate Public

of example electric key with partnering an school As we program. in how are bus consider stakeholders the Maryland

in resilient access law incremental and fleets minority electric we electric new low able serve buses created technology. statewide program purchasing be a to vehicle-to-grid of million on BGE those cost bus grid $XX school BGE through communities, to electric a The also for able will be districts focus through incentives new to the with support offer on will to help plus school income call which to provide cover

drive rates slide, cover the XXXX BGE’s rate are the local over original inclusive gas Those on impact filing. plan jobs. the types from initiatives its a reconciliation highlighted XXXX including and will economic and through customer plan of support what electric of XXXX on cost XX,XXX multi-year XXXX of from

filings, makes a details Pepco these Delmarva available be on plan further earnings and with distribution Additional on will BGE calls. order anticipated With multi-year you final electric expected by its filing rate expect case, later future cases D.C. once Power and this second Maryland’s ongoing discussion can Delaware’s Pepco month, December XXXX.

XX. Slide annual growth projected guidance XX, earnings to we are with growth projecting third XXXX focus commitment provided have transparency expected to billion XX%, spend, midpoint on year-over-year to rate through contributing from quarter compounded earnings ROEs in X% continued $X.XX Maintaining through XXXX XXXX earnings of capital of to and our our base on from $XX share. drivers growth to earning of Slide annual per the with X.X% X% our X% Turning driving call, of we the

While in the time transparency X% growth variability into four-year through over of XXXX. X% period, provide drivers is business the to there our commitment the year-over-year

to we XXXX, X% above. can within range, the year deliver you the expect on to after not As if X% each see slide

targeted with be the X% the the year X% XXXX or better. XXXX Similarly, range. growth expect will four of at of our to reaffirmed have for expectation to at better guidance our midpoint being X% of from We we through midpoint CAGR to or XXXX X% XXXX

ratio the earnings long-term a XX% with an X.X% our line We operating with also than annualized XXXX per an pay-out dividend. which dividend approximate dividend in XXXX, higher in project earnings. anticipate growing share $X.XX dividend of to of We is continue

conclude recovery with will and jurisdictions transmission discussion mechanisms, decoupled sheet of Slide rates, diversified going investment XX. on fully majority risk our distribution and continue provide will including to attributes platform, regulated I our on flexibility our thresholds Over a balance metrics The demonstrating forward. basis our forward-looking on project basis guidance Poor’s we Standard period, balance of XXX XXX downgrade cushion for average sheet. consolidated of credit a points XX%, and strong points our corporate Moody’s above to & commitment to de-concentrated maintaining

While Department case fully Inflation in rate the assets reflecting the Treasury implementing filings at of Act bases, utilities minimum incorporates the our results towards corporate Reduction U.S. recent the in and tax, Power. the legislation, with works each deferred including consistent ComEd tax plan rate the Delmarva the of impact alternative

to certain cushion talked and deductions, certain the expect have to how about the we the basis include credit our deductions XXX impact. on We mitigate basis the ability tax inclusion previously of alternative minimum Without lower XXX to the in metrics regulations range. the points be of points would substantially corporate end average

step to metrics able over to would average if we into processes. as Consistent earnings the reconciliation metrics guidance new we strengthen multiyear over finalize closer those deductions. are plans to the and with expected of profile, include Our range higher time our credit were the period end our the

appropriate discipline maintain maintain business, we above XX%. the downgrade and of across the cushion cash areas ensuring to our As alternative we tax, threshold the continue to await cost of approach clarity all we on management corporate minimum

I holding the by will our plans reaffirming close financing company. with

million We billion of continue commitment. our $X the to remaining affirm $XXX equity

XXXX We XXXX. expect equity to issue between this and sometime

ensure jurisdictions the with opportunities As strong reflects balance company. capital work a investment premium, funding and we’ll of a balanced and the our for at distribution expectations continue a utilities, to with further our structure consistent transmission find strategy we and that sheet

now back his call you. Calvin for to closing turn Thank I’ll the remarks.

Calvin Butler

Jeanne. Thank you,

our while needs make over I continue and ahead will for reliability reliability meet foundational. with deploy customers, We’ll end of XXXX. safety questions, Maintaining to operating necessary tomorrow’s be Operations safely ensuring progress Before the of is of we for technology the and $X.X for what’s focus to billion turning it capital, the non-negotiable. grid.

week, of government it had is Indeed, appreciate of the of our physical key announced on District the of between the and FBI as and FBI saw it greater. been the for to greatly attorney defences you the a industry protecting by customers our cybersecurity has a enhance power need employees to and infrastructure. The plot The priority. grid to damage in we The many made last has grid. never and and behalf Maryland’s partnership Thank nation’s our the our and industry you. U.S. critical vigilance dedication Maryland the interrupted the

the investing earning returns making urgency, we jurisdictions, allowed on those are line the in capital our will ensure Despite with X% ROEs efficiently range. in by investments our to XX%

on this a As on and a sheet future. the in result, execute sustain rate cases we year number financial expect to deliver a on performance of strong balance focus our maintain and our earnings guidance operational for to XXXX,

know and we in accomplish efficiencies to successful X% also focus because continuing we a to customers with of top business focused but customers. to our and own As to and growth But will resulting of ROEs And the customers we This premier, XX%. our what what from that’s and X% that’s distribution providing priority, our that includes only expect to Like utility. we XXXX, we rate-based expect and you plan, to capital growth for continuing billion want to we as company distribution find shareholder policies transmission return again, that’s deliver X% to keep do. dividend evaluate $XX deploying have we are earnings as XXXX. on for continue on the this the in one transmission be only a a we total value lot not more advocate

your and As we’ll And your now you time always, thank take support. for questions.

Operator

question from Suisse. Credit first [Operator line you. the comes from Campanella Nick Instructions] Thank Our of

Nick Campanella

Thanks. team. Hey

Calvin Butler

Good morning, Nick.

Nick Campanella

taking for morning. my Thanks morning. here. Good Good question

on I said is you just metrics. sounds you And your included color in the can deferred think And CMAT us a what’s just in CMAT the separately, position give your prepared remarks, regulatory more then FFO debt asset. like to it treatment here? the to on tax not include – you’re going as informing

You’re shake did out to where at the XXXX? bottom XX%, of the Thanks. in you XX% kind but of

Calvin Butler

you. the cash But allow taxes. then treasury in and leading the with that Thank as this assume turn I’ll implemented because does way CMAT Nick. is Sure, in team her with as we treatment, incremental continue efforts Rob that resulting start, to EEI. is to always, not through I repairs for a effort of Jeanne

on sheet incorporated balance fully As into taxable Jeanne have implied around base its will change. rate about, income book talked and utility and we guidance, as each and part its our move as CMAT the of income including impact recording

That we’re those work the customers. with that doesn’t get best thing to we believe not repairs is our continuing language mean that treasury that because to for –

to is addition pushed within clarify, we about, information. Nick, additional already move we have into and the as earnings, provide the But Jeanne any offset and it earned have taken In down that talked challenge we’ve that, will let I’ll income our utilities where but around. it

Jeanne Jones

think well that’s I said. No, Yes.

rate you tax operating higher the having the we’re language companies, said, still deduction assume in repairs Calvin do specific do on we working base. to in regulations, tax the earn the burden, deferred on cash that asset by but at you without tax As – the and continue

over base So builds. a bit of rate of little offset that provides that sort as time

to metric included and the perspective. the both on an that forward-looking XX%. also, X% to at And we all And our from credit we balance sheet, relates it be the in X% continue a taxes cash are reaffirm expecting as of still side. then EPS to the to to guidance We XX% are EPS so

deduction, able with the taxes tax the that be are or to said higher so we closer inclusion repairs expect way, without And XX%. end we be to that repairs the deduction, another include to the at XX%. to of XX% If higher the cash we’d of

we’ll to and with we’ll to on So, on to to continue management that, management increase cost continue cushion. focus that cash and work treasury continue our

Nick Campanella

did I XXXX? sorry you it. Got year if credit on out your where end for kind the missed then, the of And disclosure, but

Jeanne Jones

Yes.

year years. give publish above don’t typically ended The We threshold. downgrade our we agencies So specific will that. the rating

credit a it because the a agencies the cash the metrics, period is three-year, four-year look moves of regulatory way different about perspective. think I think, you from and we way as the in time over do at

cash give of earnings come we from can ROEs higher [ph] that reconciliation. that the the a we’ve examples. you benefited on recognize I’ll collections the What couple side, through the that on So, ComEd

So had for we right, ROEs, XXXX. in that collect we example, earned until XXXX, the higher won’t

look So timing at so on an it basis to that you differences. it’s those for important capture us average

XXXX. I my to The of other in defer I’ll remarks, elected XXXX increase to is, some in talked mention aspect as rate the ComEd prepared about

the it So because time again, you’re it, period on timing. And basis. average that look over why missing is some cash it important that looking of we at without on that’s

Nick Campanella

to guess higher, then, CapEx not changing you And Thanks a of for nice needs that. a you’re and program it’s just, your here. I kind lot see equity in the bumped that five-year total window

[ph] Just block remaining equity, first a for you X.XX% guys did of that the piece.

or ATM here the remaining to is otherwise, that? of your kind it via dribble Just an out comments any on intention

Jeanne Jones

the flexibility it in needed as leverage so retain to want conditions, $X still we we suggest. can that to our just market as dribble you do but ATM, have varying we given Yes,

Nick Campanella

Really Thank appreciate you. it.

Calvin Butler

Thank Nick. you,

Operator

Our from Thank Instructions] the line Wolfe you. [Operator Research. comes Fleishman Steven of next from question

Steven Fleishman

for all morning. Thanks good Yes, the…

Calvin Butler

morning. Good

Steven Fleishman

morning, midpoint Good have median this ask the questions clarifications for time. all all sorts other Jeanne, type on guidance’s. Don’t Calvin. to or thanks of or

Calvin Butler

back. to Had go

Steven Fleishman

yellow I second it’s XXXX, Slide a it year, just of in the XXXX the interesting thing XX, kind pretty like PECO, year weather it, a this XXXX, it’s down – and an that’s versus return and much otherwise year one guess or second just storms of kind but would arrow. XXXX is kind to a normal of for stuff that XXXX on that’s issue PECO rate that had normal in is versus and just of be was flattish but other Is the that So course. more

Calvin Butler

the on you’re right for. reasoning That’s point, Steve. Yes, exactly

Steven Fleishman

Okay.

of get topic information And just process, the on sense kind of on you timing? of year – stuff some on multiply other Illinois, on on Okay. the when and going to could us then maybe recommendations the the we’re the give

Calvin Butler

Yes, to of really me CEO with and process. Quiniones, through Gil I do that walk have ComEd you

are the Gil? So to walk to things Gil kind unfold. to of you of going going timing turn how I’m to through

Gil Quiniones

Steve. Hi,

submitted And regulators before way May, all will be – tentative hearings is their there the ICCR of determination this year. the the in make August, a set. to in schedule interveners So after again, to the we that the the is expect final And evidentiary schedule required of testimony for XX commence. to December

Steven Fleishman

Okay.

Calvin Butler

So that capital calendar, Steve, any additional questions on that?

Steven Fleishman

be litigated Well, opportunities there we or that time, should first would to cases? settle this a it these process just, think likely is this is might go because there, fully is through

Calvin Butler

we in would comments, Steve, that for we I fully no it’s I the to a for on I No, in be a will comprehensive California. litigated and this. have heard anticipate This the as because about, other talked be the this, legislation being outcome if we And wouldn’t very very form in stakeholder state utility everyone the I a a this except sure make path as about is talked decarbonize commission state. on aggressive Illinois been maybe and And like to my final the largest rush process. it’s would on put approach to would and ComEd engaged was in because,

I stakeholders think throughout. and that are make the voices need heard they engaged all to are sure

Steven Fleishman

you. Thank Great.

Calvin Butler

Thank you.

Jeanne Jones

Thanks, Steve.

Operator

next moment our you. Thank question. One for

the David – in line question next Our comes or Stanley. Morgan Arcaro from of

Your line is now open.

David Arcaro

good Hi, morning.

Calvin Butler

David. morning, Good

David Arcaro

my follow-up Good quick morning. a taking for Thanks just the… question. on Maybe

Jeanne Jones

Good morning.

David Arcaro

the through the in was wondering low lumpier six was really back look business related in PECO forward? I X% is manageable thereafter. … the within now you I one And to got annual XXXX eight the more question. or growth some year-to-year, the of broadly level just rate cases as end, above maybe so just like you’ve or year X% even structurally that to but wondering, below

Calvin Butler

have David, level. deemed understands, a No, utility for the And year they the the process although the of it teams continue PECO one and if years mechanism, with And operating our test best and your value we And we is also the three I more customers. over point, has this work it and option well course. on one at understand high rate the the forward-looking option where question, process, it’s at on we’ve regulatory balance to have with company that. alternative that a to very run is three-year agency the the the course are the to earnings file how linear taken stuck an looking can is they because additional

We at continue to look are where have at time. course of to the the but present other stay chosen options, we

And of that? have you right add Mike with with Innocenzo, Mike, the now. would anything PECO is us here to CEO

Mike Innocenzo

do balance for that. just been In the would this that review the we three-year for shareholders our the it’s course best and for believe between I would I We’ve [ph] echo have rates and – the Pennsylvania, structure. ability Again, fair continued to rate customers. annually has current

Jeanne Jones

the that. I off tapping to look think – XX. of I you Slide PECO, would David, so On

the is point, to be the beyond XXXX. there XXXX, expect we range. above within of But So in your second to year PECO or

unique just a you other a And that three-year PECO couple things XXXX impacting highlight. to that on PECO that continues so, cycle. carry factors have are in There’s XXXX, while forward. this rate assumption our couple there’s other that don’t Unlike, case I’ll XXXX

through yet alignment first we rate-based reconciliation processes Maryland One the about, Once through strengthened. that, and and in growth for is is, plans. D.C. multi-year and the get growth not as earnings we’ve talked between we’re the

one. number that’s So

The out provision. second is the in XXXX, stay D.C. we have

on rates. So still XXXX they’re

of new Starting there. multi-year XXXX, new that And plans XXXX. for cases, towards that strengthen get so as starts we in move power again to XXXX, you’re and rate so out the going XXXX, have to earnings XXXX,

of ComEd And moving then plan. that, is multiyear to on its top

reconciliations, as Calvin with And PECO alignment XXXX four you that got you've that rate Mike go base see operating companies to of between touched strengthening with plans on. growth on and earnings And and you through that again start so three our multiyear then growth. variability

than is forward, bit really I if lay why, you little Slide that's XXXX, different and XXXX, that think out. XXXX So XXXX, XX a look helps

David Arcaro

Thanks that. for

Calvin Butler

Did question, answer it David? your

David Arcaro

Yes, the approved a into the on – agreement. on when get wondering that financial place? quick put other franchise absolutely. And to could you've And just could on that and speak just topic I prospects the Thanks. the was you forth? the proposal if of was go your I wondering implications maybe thoughts just to that Chicago

Calvin Butler

things. of couple A Absolutely.

company. our understanding the of we've highlighting in call, goals As I what that to Mayor with and the they and previous would course decarbonization, we dollars they've as proposal been which was in outlines understood the over place, Chicago you this equity And years ComEd the putting has the what for. ComEd of we in have and presented striving understood a the earnings do workforce last of of think clear partnership that commit City development. and of Within this would as negotiating couple been a in to the

and effort alike and the value ComEd because to this commitment Exelon, partnership. shareholder we

do those the committee Mayor what of aspirations of overall. the So from I to meet begin an with what city jurisdiction. the has of have is to outlined been goals achieve that we Gil, go all as is will to it this of there, it of the terms. And Rules here some the and is that, they as Committee from confident essence to mentioned, but will goes talk that we're really And this process out the city. in a of month we're analysis details, what about laid proposing,

kind going that to to financials, Gil turn through I'm on is. to over So it what you walk the of

Gil Quiniones

Yes.

So equity Climate as Plan those align Chicago two franchise and we to energy for There's Equitable agreement. the goals. the state's there Jobs to are the proposal mentioned, actually was the Chicago's Act, our agreement, franchise agreements. our Calvin And and and Climate agreement and Action goal achieved

if to shareholder million. to is first years, in for commit the $XXX In terms financials, million we XX-year XX with and an – another a option of have committed extend $XX dollars five years extended, another and the it proposed agreement

Jeanne Jones

And that we've into provided. of that's baked guidance all the

Gil Quiniones

Correct.

David Arcaro

Okay. Understood. Thanks Great. so much.

Calvin Butler

Thank you, David.

Operator

Guggenheim of from you. Kennedy Partners. [Operator comes the Thank James Our question from Instructions] line next

James Kennedy

guys. Hey Good the quarter. Congrats outstanding morning. on

Calvin Butler

morning. Good James. you, Thank

James Kennedy

terms kind year, of how for some the topic other on the several of there and moment? just keeping transition a expired vacancy, at Illinois, backdrop this some thinking commission at overhangs the on guess given about I there's the So are you

Calvin Butler

exactly happens that have and stakeholders, When customers, Yes. anticipate why with I'll process stakeholders, real industrial. our but the And the our we proposing, be conversations with interactions commercial we our regulatory is – with bodies, at our turnover. we about and although question, regular James, we're engagement great what and residential, look honest engagement you.

think filing, As I ComEd different over these. people I outlined over presentations stakeholder were of meetings, attended there XX in even over and terms X,XXX

our at that turnover this So right, of the of aligning be that our commission we filings policy jurisdictions, something is stakeholders each and if with level, the turnover all we're not are. those jurisdictions, engaging commission policies meeting big expectations should doing we I of think deal. grassroot our the deal We're of a although within the and

in we of how Illinois only jurisdictions. but each not it So that's in our approach

James Kennedy

XX side, the bit it you Got And on we came expense O&M like then than how Thanks. that? you. inflation cost I think embedded Got the on 'XX and future the, higher guys in there? about laid drivers look what just guess Slide the were assumptions And prior in adjusted the you. a the should out little plan. drivers

Jeanne Jones

Yes. Great question.

bit a $XXX to to addition XXXX due So did for O&M. XXXX, around to year-over-year a little at see right, million – for Day higher We be up Analyst you’re so was projected we had this or But couple a this in that, end other at that the of occurring items in investments, were there year. impacted infrastructure, to cybersecurity another IT year certain XXXX. that work

implementation the Equitable was of Jobs we ComEd. Climate with associated First have Act cost onetime some at the and

reflective there. that’s So

we in I year. mentioned In prepared some addition derisking this as the did that, to remarks,

related So to including and opportunity and some some the from assistance year, management, tailwinds done advantage get of but of the and some veg work support maintenance favorable conditions customer the ROE took we initiatives. community to ComEd this corrective also weather

forward. you all about think in it XXXX. gets of asked for then And the you going to O&M sort about to all how that, that higher So

as think the, possible. low goal O&M our as I keep to is

a has can since and XXXX You only X.X%. our about CAGR X% to XXXX increase see is long-term been XXXX

that as to possible. is keep low So as our goal

James Kennedy

appreciate I guys. it. Thanks Perfect.

Calvin Butler

you. Thank

Operator

One for Thank question. next moment you. our

ISI. comes Our from from next question Durgesh Evercore line of the Chopra

Durgesh Chopra

the Hey four good guess morning in CapEx a you - is Is the, XXXX $XXX or Thank sort prior team. million my just the clarification in $XXX in of all I Illinois? on years. Illinois that in Jeanne, questions. the million that quick for [ph] distribution? taking which Is

Jeanne Jones

transmission BGE at on there no, was the Yes, some also side.

multiyear was BGE while added think, its at updated investment some I well. ComEd as plan, So for also there

Durgesh Chopra

filing? most in it. in Illinois. of multiyear that included the rate it your, Got And is But is

Jeanne Jones

correct. That’s

Durgesh Chopra

Okay, to I be that back we then difficult, just, is is you, as this any great see, going is increase sizable share think to didn’t but I think pretty equity CapEx thanks. and but and Are CapEx XXXX plan Can for about, sort to going that, of future upwards debt update thinking equity of needs? your how your metrics? the thoughts and sort those of you about kind this be FFO to appreciate And beyond. in move. you when trending given years, to you’re in we I’m should think modest

Jeanne Jones

new the latest, continue financing into step waterfall Yes, cash I internal as to the plan, the you we strengthen plans. sort of our saw investment in as in flows multiyear of we of roll-off grows rate And the have back XXXX. we in that and But, balance depreciation, adjustment as it opening base collect business. the sheet and and reinvest onetime our the of think

our our we’ve energy, period, jurisdictions for is additional the so about, transformation. think that the their extent energy help you As to right with capital XXX required to reaffirmed

basis balance points. You it to a can commitment fund in way sheet cushion balanced a expect well that our the XXX a us to X% XXX as to with about on X% keen as talk focus to we

Durgesh Chopra

That’s helpful. Thank you very much.

Calvin Butler

Thank you.

Operator

CEO turn to like now remarks. the conference would and I back Calvin President closing you. for Butler, to Exelon’s Thank

Calvin Butler

you, Gigi. Thank

hard you demonstrated a really this XXXX. and look to each begin thank of the employees, It’s first We thank and over with all last to that all months. partnership And to I for in great several that Jeanne shown joining call demonstrated you’ve you and the Have concludes XXXX. work that, to of you by engaging throughout the saying our forward you appreciated. for and dedication been that the you And me day. with Let call.

Operator

This for presentation. our all our to participants joining us Thanks today. concludes

disconnect. Have now day. good You may a

Exelon (EXC) 14 Feb 232022 Q4 Earnings call transcript