Exelon(US:EXC)2025-07-31 17:58PART I. FINANCIAL INFORMATION This section presents unaudited consolidated financial statements and notes for Exelon and its subsidiary registrants ITEM 1. FINANCIAL STATEMENTS This section presents unaudited consolidated financial statements for Exelon and its subsidiaries, including detailed statements and comprehensive notes Exelon Corporation Financial Statements This subsection provides Exelon Corporation's unaudited consolidated statements of operations, cash flows, and balance sheets Exelon Corporation - Consolidated Statement of Operations Highlights (Unaudited) | (In millions, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $5,427 | $5,361 | $12,141 | $11,403 | | Operating income | $927 | $913 | $2,463 | $2,026 | | Net income attributable to common shareholders | $391 | $448 | $1,300 | $1,106 | | Diluted Earnings per share | $0.39 | $0.45 | $1.29 | $1.10 | Exelon Corporation - Consolidated Cash Flow Highlights (Unaudited, Six Months Ended) | (In millions) | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Net cash flows provided by operating activities | $2,711 | $2,454 | | Net cash flows used in investing activities | $(3,962) | $(3,467) | | Net cash flows provided by financing activities | $1,563 | $1,447 | Exelon Corporation - Consolidated Balance Sheet Highlights (Unaudited) | (In millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $8,676 | $8,384 | | Total assets | $111,147 | $107,784 | | Total current liabilities | $9,156 | $9,611 | | Total liabilities | $83,527 | $80,863 | | Total shareholders' equity | $27,620 | $26,921 | Commonwealth Edison Company Financial Statements This subsection presents Commonwealth Edison Company's unaudited consolidated statements of operations and cash flows ComEd - Consolidated Statement of Operations Highlights (Unaudited) | (In millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $1,836 | $2,079 | $3,901 | $4,174 | | Operating income | $380 | $404 | $854 | $717 | | Net income | $228 | $270 | $530 | $463 | ComEd - Consolidated Cash Flow Highlights (Unaudited, Six Months Ended) | (In millions) | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Net cash flows provided by operating activities | $1,041 | $1,302 | | Net cash flows used in investing activities | $(1,188) | $(1,100) | | Net cash flows provided by (used in) financing activities | $362 | $(45) | PECO Energy Company Financial Statements This subsection details PECO Energy Company's unaudited consolidated statement of operations PECO - Consolidated Statement of Operations Highlights (Unaudited) | (In millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $1,000 | $891 | $2,333 | $1,945 | | Operating income | $190 | $141 | $525 | $346 | | Net income | $136 | $90 | $402 | $239 | Baltimore Gas and Electric Company Financial Statements This subsection provides Baltimore Gas and Electric Company's unaudited statement of operations BGE - Statement of Operations Highlights (Unaudited) | (In millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $1,029 | $928 | $2,583 | $2,225 | | Operating income | $120 | $93 | $500 | $423 | | Net income | $55 | $44 | $315 | $308 | Pepco Holdings LLC Financial Statements This subsection presents Pepco Holdings LLC's unaudited consolidated statement of operations PHI - Consolidated Statement of Operations Highlights (Unaudited) | (In millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $1,579 | $1,471 | $3,357 | $3,077 | | Operating income | $271 | $267 | $604 | $538 | | Net income | $143 | $158 | $337 | $326 | Potomac Electric Power Company Financial Statements This subsection details Potomac Electric Power Company's unaudited statement of operations Pepco - Statement of Operations Highlights (Unaudited) | (In millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $776 | $700 | $1,635 | $1,459 | | Operating income | $151 | $166 | $315 | $285 | | Net income | $84 | $108 | $181 | $183 | Delmarva Power & Light Company Financial Statements This subsection provides Delmarva Power & Light Company's unaudited statement of operations DPL - Statement of Operations Highlights (Unaudited) | (In millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $421 | $390 | $969 | $880 | | Operating income | $71 | $58 | $182 | $157 | | Net income | $39 | $34 | $108 | $101 | Atlantic City Electric Company Financial Statements This subsection presents Atlantic City Electric Company's unaudited consolidated statement of operations ACE - Consolidated Statement of Operations Highlights (Unaudited) | (In millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $384 | $383 | $757 | $740 | | Operating income | $51 | $45 | $111 | $99 | | Net income | $24 | $21 | $56 | $50 | Note 1. Significant Accounting Policies This note outlines significant accounting policies, company structure, and intercompany service arrangements - Exelon is a utility services holding company focused on energy transmission and distribution through its six main subsidiaries: ComEd, PECO, BGE, Pepco, DPL, and ACE127 - The financial statements are presented on a combined basis for all registrants, with intercompany transactions eliminated. Support services like legal, HR, and IT are provided to subsidiaries at cost by Exelon's business services subsidiary, BSC, and PHI's subsidiary, PHISCO129130 Note 2. Regulatory Matters This note details regulatory updates, including rate cases, transmission rates, and new energy legislation impacts Completed Distribution Base Rate Case Proceedings in 2025 | Registrant/Jurisdiction | Service | Requested Increase ($M) | Approved Increase ($M) | Approved ROE | | :--- | :--- | :--- | :--- | :--- | | ComEd - Illinois | Electric | $1,487 | $1,045 | 8.905% | | ComEd - Illinois | Electric | $624 | $623 | 9.89% | | PECO - Pennsylvania | Electric/Gas | $575 | $432 | N/A | | Pepco - Maryland | Electric | $111 | $45 | 9.50% | | DPL - Delaware | Electric | $39 | $28 | 9.60% | Pending Distribution Base Rate Case Proceedings | Registrant/Jurisdiction | Service | Requested Increase ($M) | Requested ROE | | :--- | :--- | :--- | :--- | | DPL - Delaware | Natural Gas | $40 | 10.65% | | ACE - New Jersey | Electric | $109 | 10.70% | 2025 Electric Transmission Formula Rate Updates (Effective June 1, 2025) | Registrant | Total Revenue Requirement Increase/(Decrease) ($M) | Allowed ROE | | :--- | :--- | :--- | | ComEd | $127 | 11.50% | | PECO | $22 | 10.35% | | BGE | $35 | 10.50% | | Pepco | $51 | 10.50% | | DPL | $23 | 10.50% | | ACE | $(57) | 10.50% | - On May 20, 2025, the Next Generation Energy Act was signed into law in Maryland, which prohibits utilities from filing for reconciliation of actual costs and revenues to amounts approved in multi-year plans after January 1, 2025. This led BGE and DPL to derecognize certain regulatory assets and liabilities162 - A FERC audit of ComEd related to overhead cost allocation was settled and approved on April 4, 2025. This resulted in a $70 million charge for the probable disallowance of certain capitalized construction costs, which are not expected to be recovered in future rates168 Note 3. Revenue from Contracts with Customers This note describes primary revenue sources and future revenues from unsatisfied performance obligations - The primary sources of revenue are regulated electric and gas tariff sales, distribution, and transmission services178 Future Revenues from Unsatisfied Performance Obligations as of June 30, 2025 | Year | Exelon ($M) | PHI ($M) | Pepco ($M) | DPL ($M) | ACE ($M) | | :--- | :--- | :--- | :--- | :--- | :--- | | 2025 | 4 | 4 | 3 | 0 | 1 | | 2026 | 5 | 5 | 5 | 0 | 0 | | 2027 | 6 | 6 | 5 | 1 | 0 | | 2028 | 6 | 6 | 5 | 0 | 1 | | 2029 and thereafter | 102 | 102 | 80 | 11 | 11 | | Total | $123 | $123 | $98 | $12 | $13 | Note 4. Segment Information This note provides financial information by reportable segment, including operating revenues and net income - Exelon has six reportable segments: ComEd, PECO, BGE, and PHI's three segments (Pepco, DPL, and ACE)191 Exelon Operating Revenues by Segment (Six Months Ended June 30, 2025) | (In millions) | ComEd | PECO | BGE | PHI | Other | Intersegment Eliminations | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $3,901 | $2,333 | $2,583 | $3,357 | $934 | $(967) | $12,141 | Exelon Net Income by Segment (Six Months Ended June 30, 2025) | (In millions) | ComEd | PECO | BGE | PHI | Other | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $530 | $402 | $315 | $337 | $(284) | $1,300 | Note 5. Accounts Receivable This note presents the allowance for credit losses on customer accounts receivable for Exelon and its subsidiaries Allowance for Credit Losses on Customer Accounts Receivable (Six Months Ended June 30, 2025) | (In millions) | Exelon | ComEd | PECO | BGE | PHI | | :--- | :--- | :--- | :--- | :--- | :--- | | Balance at Dec 31, 2024 | $406 | $109 | $133 | $56 | $108 | | Current period provision | $142 | $29 | $46 | $26 | $41 | | Write-offs, net | $(83) | $(16) | $(25) | $(16) | $(26) | | Balance at June 30, 2025 | $465 | $122 | $154 | $66 | $123 | Note 6. Income Taxes This note reconciles the effective income tax rate and discusses tax legislation and private letter rulings Effective Income Tax Rate Reconciliation (Six Months Ended June 30, 2025) | | Exelon | ComEd | PECO | BGE | PHI | | :--- | :--- | :--- | :--- | :--- | :--- | | U.S. Federal statutory rate | 21.0% | 21.0% | 21.0% | 21.0% | 21.0% | | State income taxes, net | 5.5% | 7.6% | (2.8)% | 6.2% | 6.7% | | Plant basis differences | (4.3)% | (0.9)% | (12.8)% | (1.5)% | (0.7)% | | Excess deferred tax amortization | (6.5)% | (9.0)% | (1.5)% | (4.1)% | (4.1)% | | Effective income tax rate | 15.6% | 18.1% | 4.1% | 21.3% | 22.7% | - The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, extends certain TCJA tax benefits and modifies IRA renewable energy credits, but is not expected to have a direct material impact on the Registrants' financial statements259 - Utility Registrants (except PECO) have filed for Private Letter Rulings (PLRs) from the IRS regarding the allocation of Net Operating Loss Carryforward (NOLC) benefits for ratemaking. This could materially reduce regulatory liabilities for Excess Deferred Income Taxes (EDITs) and accumulated deferred income taxes in the rate base263264 Note 7. Retirement Benefits This note details the net periodic benefit cost for pension and other post-employment benefits Exelon Net Periodic Benefit Cost (Six Months Ended June 30) | (In millions) | 2025 | 2024 | | :--- | :--- | :--- | | Pension Benefits | $121 | $104 | | OPEB | $15 | $16 | Note 8. Derivative Financial Instruments This note describes derivative instrument use for commodity and interest rate risk management, and recent swap terminations - The Registrants use derivative instruments to manage commodity price and interest rate risk, not for speculation. Utility hedging programs for energy procurement are designed to have no direct earnings impact as costs are recovered from customers through regulatory mechanisms279283 - In February 2025, Exelon terminated floating-to-fixed swaps with a notional value of $765 million, resulting in a cash receipt of $16 million. The accumulated AOCI gain of $13 million (net of tax) will be amortized into interest expense over 5 and 10 years291 Note 9. Debt and Credit Agreements This note details long-term debt issuances and amendments to syndicated revolving credit facilities Long-Term Debt Issued (Six Months Ended June 30, 2025) | Company | Amount ($M) | Type | Interest Rate | Maturity | | :--- | :--- | :--- | :--- | :--- | | Exelon | $1,000 | Jr. Sub. Notes | 6.50% | 2055 | | Exelon | $500 | Notes | 5.125% | 2031 | | Exelon | $500 | Notes | 5.875% | 2055 | | ComEd | $725 | First Mortgage Bonds | 5.95% | 2055 | | BGE | $650 | Notes | 5.45% | 2035 | | Pepco | $200 | First Mortgage Bonds | 5.48% | 2040 | | DPL | $125 | First Mortgage Bonds | 5.28% | 2035 | | ACE | $100 | First Mortgage Bonds | 5.28% | 2035 | - On August 29, 2024, Exelon and its Utility Registrants amended and restated their syndicated revolving credit facilities, extending the maturity to August 29, 2029302 Note 10. Fair Value of Financial Assets and Liabilities This note presents the fair value of long-term debt and financial instruments, categorized by hierarchy Fair Value of Long-Term Debt (including current portion) as of June 30, 2025 | (In millions) | Carrying Amount | Fair Value | | :--- | :--- | :--- | | Exelon | $47,345 | $42,715 | | ComEd | $12,750 | $11,157 | | PECO | $5,705 | $4,852 | | BGE | $6,040 | $5,435 | | PHI | $9,535 | $8,393 | - The report provides a detailed breakdown of assets and liabilities measured at fair value, categorized by the three-level hierarchy (Level 1, 2, and 3). Key items include cash equivalents, rabbi trust investments, and derivative instruments317318 Note 11. Commitments and Contingencies This note outlines PHI Merger obligations, environmental liabilities, and legal proceedings - As of June 30, 2025, Exelon and its subsidiaries had total remaining obligations of $513 million related to the PHI Merger commitments, extending through 2026336 - The company has accrued $382 million for environmental investigation and remediation liabilities as of June 30, 2025, with $317 million related to former Manufactured Gas Plant (MGP) sites348 - Pepco has entered into a consent decree to pay $47 million to resolve its liability for past and future costs related to the Anacostia River Interim Record of Decision (ROD). The first installment of $12 million was paid on April 9, 2025353 - The three-year term of ComEd's Deferred Prosecution Agreement (DPA) with the U.S. Attorney's Office ended on July 17, 2023, and the pending charge was dismissed. Related shareholder derivative lawsuits are in the process of a proposed settlement358360 Note 12. Shareholders' Equity This note discusses the ATM equity program, share issuances, and forward sale agreements - Exelon established a new At-the-Market (ATM) equity program on May 2, 2025, for up to $2.5 billion, replacing a previous $1 billion program367 - In Q1 2025, Exelon issued approximately 4.0 million shares for net proceeds of $173 million. It also entered into forward sale agreements for a total of 15.5 million shares during the first half of 2025368369372 - As of June 30, 2025, $2.1 billion of Common stock remained available for sale under the ATM program374 Note 13. Changes in Accumulated Other Comprehensive Income (Loss) This note details changes in accumulated other comprehensive income, net of tax, for hedges and benefit items Exelon Changes in AOCI, Net of Tax (Six Months Ended June 30, 2025) | (In millions) | Cash Flow Hedges | Pension/OPEB Items | Total | | :--- | :--- | :--- | :--- | | Balance at Dec 31, 2024 | $45 | $(765) | $(720) | | Net current-period OCI | $(14) | $16 | $2 | | Balance at June 30, 2025 | $31 | $(749) | $(718) | Note 14. Supplemental Financial Information This note provides supplemental financial information, including taxes other than income taxes Exelon - Taxes other than income taxes (Six Months Ended June 30) | (In millions) | 2025 | 2024 | | :--- | :--- | :--- | | Utility taxes | $496 | $447 | | Property | $222 | $212 | | Payroll | $67 | $67 | Note 15. Related Party Transactions This note details service company costs incurred by subsidiaries from affiliates Service Company Costs (Six Months Ended June 30, 2025) | (In millions) | Operating & Maintenance from Affiliates | Capitalized Costs | | :--- | :--- | :--- | | ComEd | $200 | $124 | | PECO | $120 | $54 | | BGE | $125 | $65 | | PHI | $100 | $133 | ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section analyzes Exelon's financial condition, operational results, key business drivers, and liquidity across segments Exelon Corporation This subsection analyzes Exelon Corporation's GAAP and adjusted operating earnings, highlighting net income and EPS drivers Exelon GAAP Results of Operations (Net Income) | (In millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Exelon | $391 | $448 | $1,300 | $1,106 | | ComEd | $228 | $270 | $530 | $463 | | PECO | $136 | $90 | $402 | $239 | | BGE | $55 | $44 | $315 | $308 | | PHI | $143 | $158 | $337 | $326 | - For the six months ended June 30, 2025, Net income increased by $194 million to $1.3 billion, and diluted EPS increased to $1.29 from $1.10, primarily driven by favorable rate increases across its utilities and timing of distribution earnings at ComEd405 Reconciliation of GAAP Net Income to Adjusted (non-GAAP) Operating Earnings | (In millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net income attributable to common shareholders (GAAP) | $1,300 | $1,106 | | Adjustments (FERC audit, regulatory matters, etc.) | $24 | $50 | | Adjusted (non-GAAP) operating earnings | $1,324 | $1,156 | Results of Operations By Registrant This subsection details the financial performance and net income drivers for each of Exelon's subsidiary registrants - ComEd: Net income for the six months ended June 30, 2025 increased by $67 million to $530 million, primarily due to the timing of distribution earnings under its Multi-Year Rate Plan (MRP), higher rate base, and higher returns on regulatory assets433 - PECO: Net income for the six months ended June 30, 2025 increased by $163 million to $402 million, driven by higher electric and gas distribution rates and less unfavorable weather compared to the prior year448 - BGE: Net income for the six months ended June 30, 2025 increased by $7 million to $315 million, mainly due to favorable electric and gas distribution rates, partially offset by the derecognition of certain regulatory assets/liabilities following the Next Generation Energy Act464 - PHI: Consolidated net income for the six months ended June 30, 2025 increased by $11 million to $337 million, reflecting mixed results across its subsidiaries. Favorable distribution rates at Pepco and higher DISC rates at DPL were partially offset by lower impacts from Maryland multi-year plan reconciliations and higher interest expense478 Liquidity and Capital Resources This subsection discusses Registrants' funding strategies, cash flow changes, capital expenditures, and dividend policy - The Registrants fund their capital-intensive businesses through a combination of internally generated cash, capital market offerings, and bank borrowings. As of June 30, 2025, they had access to credit facilities with aggregate commitments of $4.0 billion526 Change in Cash Flows from Operating Activities (Six Months Ended June 30, 2025 vs 2024) | (In millions) | Exelon | ComEd | PECO | BGE | PHI | | :--- | :--- | :--- | :--- | :--- | :--- | | Increase (decrease) | $257 | $(261) | $266 | $164 | $164 | Estimated Capital Expenditures for 2025 | (In millions) | Total | | :--- | :--- | | Exelon | $8,875 | | ComEd | $3,200 | | PECO | $1,875 | | BGE | $1,850 | | PHI | $2,150 | - Exelon's Board of Directors approved a quarterly dividend of $0.40 per share for 2025536 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK This section details Registrants' market risks, including commodity, credit, and interest rate risks, and their management - The company's primary market risks include commodity price fluctuations, counterparty credit risk, and interest rate risk. These are managed through comprehensive risk management policies and hedging strategies568569 - Due to operating under cost-based rate regulation, hedging programs for energy procurement have no direct earnings impact as costs are fully recovered from customers through approved regulatory mechanisms568 ITEM 4. CONTROLS AND PROCEDURES This section confirms effective disclosure controls and procedures, with no material changes to internal financial controls - As of June 30, 2025, the principal executive and financial officers of each Registrant concluded that their disclosure controls and procedures were effective577 - There were no changes in internal control over financial reporting during the second quarter of 2025 that materially affected, or are reasonably likely to materially affect, any of the Registrants' internal control over financial reporting577 PART II. OTHER INFORMATION This section provides additional information, including legal proceedings, risk factors, and exhibits ITEM 1. LEGAL PROCEEDINGS This section incorporates by reference material lawsuits and regulatory proceedings from the 2024 Form 10-K and Notes 2 and 11 - Information regarding material lawsuits and regulatory proceedings is incorporated by reference from the 2024 Form 10-K and Notes 2 (Regulatory Matters) and 11 (Commitments and Contingencies) of this report579 ITEM 1A. RISK FACTORS The Registrants' risk factors as of June 30, 2025, remain consistent with those described in the 2024 Form 10-K - As of June 30, 2025, the Registrants' risk factors were consistent with those described in the 2024 Form 10-K580 ITEM 5. OTHER INFORMATION No officers or directors adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements in Q2 2025 - No officers or directors adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the second quarter of 2025581 ITEM 6. EXHIBITS This section lists exhibits filed with Form 10-Q, including security holder instruments, officer certifications, and Inline XBRL data - The report includes exhibits such as supplemental indentures, officer certifications (Rule 13a-14(a) and Section 1350), and Inline XBRL data files583584585