Business Wire | Aug 4, 2021 06:51AM EDT

Exelon Reports Second Quarter 2021 Results

Aug. 04, 2021

CHICAGO--(BUSINESS WIRE)--Aug. 04, 2021--Exelon Corporation (Nasdaq: EXC) today reported its financial results for the second quarter of 2021.

"Ongoing investments in technology and infrastructure continue to drive high reliability and customer satisfaction across our six utilities, and today we announced a new 'path to clean' goal that will put Exelon utilities on course to achieve net-zero emissions from operations by 2050," said Christopher Crane, president and CEO of Exelon. "We also are encouraged to see growing support at the federal level for policies that would value the clean energy from our nuclear fleet, but passage of legislation remains uncertain and, regardless, will come too late to save our Byron and Dresden plants from early retirement this fall. While we remain hopeful that a state solution will pass in time to save the plants, clean energy legislation in Illinois remains caught in negotiations over unrelated policy matters, leaving us no choice but to continue down the path of closing the plants. Looking ahead, we continue to execute our plan to separate our utility and generation businesses into two financially strong, independent companies, and we remain on track to close in the first quarter of 2022."

"Adjusted (non-GAAP) Operating Earnings of $0.89 per share in the second quarter was $0.34 ahead of the same period last year, driven in part by the absence of storm costs at Exelon utilities and the recovery of costs associated with ongoing investments to improve reliability and service for customers," said Joseph Nigro, senior executive vice president and CFO of Exelon. "Exelon Generation also had a strong quarter, with year-over-year earnings up $0.14 per share due to unrealized and realized gains on Constellation's Technology Venture investments, fewer planned nuclear outage days and realized gains in our nuclear decommissioning trust funds. As a result of these and other factors, we are reaffirming our full-year Adjusted (non-GAAP) Operating Earnings guidance range of $2.60-$3.00 per share."

Second Quarter 2021

Exelon's GAAP Net Income for the second quarter of 2021 decreased to $0.41 per share from $0.53 GAAP Net Income per share in the second quarter of 2020. Adjusted (non-GAAP) Operating Earnings for the second quarter of 2021 increased to $0.89 per share from $0.55 per share in the second quarter of 2020. For the reconciliations of GAAP Net Income to Adjusted (non-GAAP) Operating Earnings, refer to the tables beginning on page 5.

Adjusted (non-GAAP) Operating Earnings in the second quarter of 2021 primarily reflect:

* Higher utility earnings primarily due to higher electric distribution earnings at ComEd from higher rate base and higher allowed ROE due to an increase in treasury rates; the favorable impacts of the multi-year plan at BGE; regulatory rate increases at PHI; favorable volume at PECO and PHI; and lower storm costs at PECO due to the absence of the June 2020 storms. * Higher Generation earnings primarily due to higher net unrealized and realized gains on equity investments; higher realized gains on nuclear decommissioning trust (NDT) funds; and decreased nuclear outage days.

Operating Company Results1

ComEd

ComEd's second quarter of 2021 GAAP Net Income increased to $192 million from a GAAP Net Loss of $(61) million in the second quarter of 2020. ComEd's Adjusted (non-GAAP) Operating Earnings for the second quarter of 2021 increased to $195 million from $150 million in the second 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 second quarter of 2021 GAAP Net Income increased to $104 million from $39 million in the second quarter of 2020. PECO's Adjusted (non-GAAP) Operating Earnings for the second quarter of 2021 increased to $107 million from $44 million in the second quarter of 2020, primarily due to lower storm costs due to the absence of the June 2020 storms and favorable volume.

__________

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.

BGE

BGE's second quarter of 2021 GAAP Net Income increased to $45 million from $39 million in the second quarter of 2020. BGE's Adjusted (non-GAAP) Operating Earnings for the second quarter of 2021 increased to $48 million from $43 million in the second 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 second quarter of 2021 GAAP Net Income increased to $141 million from $94 million in the second quarter of 2020. PHI's Adjusted (non-GAAP) Operating Earnings for the second quarter of 2021 increased to $144 million from $98 million in the second quarter of 2020, primarily due to distribution and transmission rate increases at DPL and ACE, favorable volume at ACE, and lower credit loss expense in 2021 due to an increase in 2020 as a result of COVID-19. 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 $(61) million in the second quarter of 2021 compared with GAAP Net Income of $476 million in the second quarter of 2020. Generation's Adjusted (non-GAAP) Operating Earnings for the second quarter of 2021 increased to $393 million from $252 million in the second quarter of 2020, primarily due to net unrealized and realized gains on equity investments, higher realized gains on NDT funds, and decreased nuclear outage days.

As of June 30, 2021, the percentage of expected generation hedged is 98%-101% for 2021.

Recent Developments and Second Quarter Highlights

* Exelon Utilities "Path to Clean": Today, the Exelon utilities announced a "path to clean" goal to collectively reduce their operations-driven emissions 50% by 2030 against a 2015 baseline and to reach net zero operations-driven emissions by 2050. This goal builds upon Exelon's long-standing commitment to reducing our greenhouse gas emissions. The Exelon utilities "path to clean" will include efficiency and clean electricity for operations, vehicle fleet electrification, equipment and processes to reduce sulfur hexafluoride (SF6) leakage, modern natural gas infrastructure to minimize methane leaks and increase safety and reliability, and investment and collaboration to develop new technologies. * PECO Pennsylvania Natural Gas Distribution Base Rate Case: On June 22, 2021, the Pennsylvania Public Utility Commission (PAPUC) issued an order approving a $29 million increase in PECO's annual natural gas distribution revenues, reflecting a ROE of 10.24%. The rates were effective on July 1, 2021. * Pepco District of Columbia Electric Distribution Base Rate Case: On June 8, 2021, the Public Service Commission of the District of Columbia (DCPSC) approved Pepco's multi-year plan for the 18-months remaining in 2021 through 2022. The order approved an incremental increase in Pepco's electric distribution rates of $42 million and $67 million, before offsets, for the remainder of 2021 and 2022, respectively, reflecting an ROE of 9.275%. However, the DCPSC utilized the acceleration of refunds for certain tax benefits along with other rate relief to partially offset the customer rate increases by $22 million and $40 million for the remainder of 2021 and 2022, respectively. These rates were effective on July 1, 2021. * Pepco Maryland Electric Distribution Base Rate Case: On June 28, 2021, the Maryland Public Service Commission (MDPSC) approved Pepco's three-year multi-year plan for April 1, 2021 through March 31, 2024. The order approved an incremental increase in Pepco's electric distribution rates of $21 million, $16 million, and $15 million, before offsets, for the 12-month periods ending March 31, 2022, 2023, and 2024, respectively, reflecting an ROE of 9.55%. However, the MDPSC utilized the acceleration of refunds for certain tax benefits to fully offset the increases such that customer rates remain unchanged through March 31, 2022. The MDPSC has deferred a decision on whether to use additional tax benefits to offset the customer rate increases for periods after March 31, 2022. These rates were effective on June 28, 2021. * ACE New Jersey Electric Distribution Base Rate Case: On July 14, 2021, the New Jersey Board of Public Utilities (NJBPU) approved an increase in ACE's annual electric distribution base rates of $41 million (before New Jersey sales and use tax), reflecting an ROE of 9.6%. The order allows ACE to retain approximately $11 million of certain tax benefits which will result in a decrease to income tax expense in the third quarter of 2021. These rates are effective on Jan. 1, 2022. * Nuclear Operations: Generation's nuclear fleet, including its owned output from the Salem Generating Station and 100% of the CENG units, produced 43,575 gigawatt-hours (GWhs) in the second quarter of 2021, compared with 43,416 GWhs in the second quarter of 2020. Excluding Salem, the Exelon-operated nuclear plants at ownership achieved a 93.7% capacity factor for the second quarter of 2021, compared with 95.4% for the second quarter of 2020. The number of planned refueling outage days in the second quarter of 2021 totaled 66, compared with 92 in the second quarter of 2020. There were seven non-refueling outage days in the second quarter of 2021 and none in the second quarter of 2020. * Fossil and Renewables Operations: The Dispatch Match rate for Generation's gas and hydro fleet was 99.5% in the second quarter of 2021, compared with 97.4% in the second quarter of 2020. Energy Capture for the wind and solar fleet was 96.0% in the second quarter of 2021, compared with 92.7% in the second quarter of 2020. * Financing Activities: On June 10, 2021, BGE issued $600 million of its 2.25% notes due June 15, 2031. BGE used the proceeds to repay a portion of outstanding commercial paper obligations, repay existing indebtedness, and to fund other general corporate purposes. On May 13, 2021, West Medway II, LLC (West Medway II), an indirect subsidiary of Generation, entered into a financing agreement for a $150 million nonrecourse senior secured term loan credit facility scheduled to mature on March 31, 2026. The term loan bears interest at an average blended interest rate of LIBOR plus 3%. Generation used the proceeds for general corporate purposes. In addition to the financing, West Medway II entered into interest rate swaps with an initial notional amount of $113 million at an interest rate of 0.61% to manage a portion of the interest rate exposure in connection with financing.

GAAP/Adjusted (non-GAAP) Operating Earnings Reconciliation

Adjusted (non-GAAP) Operating Earnings for the second quarter of 2021 do not include the following items (after tax) that were included in reported GAAP Net Income:

Exelon Earnings(in millions) per Exelon ComEd PECO BGE PHI Generation Diluted Share

2021 GAAP Net Income $ 0.41 $ 401 $ 192 $ 104 $ 45 $ 141 $ (61 ) (Loss)

Mark-to-MarketImpact of Economic ) )Hedging Activities (0.24 (231 - - - - (234 ) (net of taxes of$79)

Unrealized GainsRelated to NDT Fund (0.13 ) (130 ) - - - - (130 ) Investments (net of taxes of $134)

Asset Impairments(net of taxes of 0.38 368 - - - - 368 $124)

Plant Retirementsand Divestitures 0.35 344 - - - - 344 (net of taxes of$116)

Cost ManagementProgram (net of - 2 - - - - 2 taxes of $1)

COVID-19 DirectCosts (net of taxesof $3, $0, $0, $1, 0.01 9 - 1 1 2 5 and $2,respectively)

Acquisition RelatedCosts (net of taxes - 2 - - - - 2 of $1)

ERP SystemImplementation Costs - 2 - - - - 2 (net of taxes of $1)

Planned SeparationCosts (net of taxesof $7, $1, $1, $1, 0.01 13 2 1 1 2 5 $1, and $2,respectively)

Costs Related toSuspension ofContractual Offset 0.04 41 - - - - 41 (net of taxes of$12)

Income Tax-RelatedAdjustments (entire - (2 ) - - - - - amount representstax expense)

NoncontrollingInterests (net of 0.05 50 - - - - 50 taxes of $8)

2021 Adjusted(non-GAAP) Operating $ 0.89 $ 869 $ 195 $ 107 $ 48 $ 144 $ 393 Earnings

Adjusted (non-GAAP) Operating Earnings for the second quarter of 2020 do not include the following items (after tax) that were included in reported GAAP Net Income:

Exelon Earnings(in millions) per Exelon ComEd PECO BGE PHI Generation Diluted Share

2020 GAAP Net Income $ 0.53 $ 521 $ (61 ) $ 39 $ 39 $ 94 $ 476 (Loss)

Mark-to-Market Impactof Economic Hedging ) )Activities (net of (0.05 (51 - - - - (60 ) taxes of $18 and $20,respectively)

Unrealized GainsRelated to NDT Fund (0.31 ) (305 ) - - - - (305 ) Investments (net of taxes of $275)

Asset Impairments (netof taxes of $7, $4, 0.02 19 11 - - - 8 and $3, respectively)

Plant Retirements andDivestitures (net of 0.01 7 - - - - 7 taxes of $2)

Cost ManagementProgram (net of taxes 0.01 6 - - - 1 5 of $3, $1, and $2,respectively)

Change inEnvironmental - 1 - - - - 1 Liabilities (net oftaxes of $0)

COVID-19 Direct Costs(net of taxes of $10, 0.03 27 - 5 4 3 16 $2, $1, $1, and $6,respectively)

Deferred ProsecutionAgreement Payments 0.20 200 200 - - - - (net of taxes of $0)

Income Tax-RelatedAdjustments (entire 0.01 5 - - - - - amount represents taxexpense)

NoncontrollingInterests (net of 0.11 104 - - - - 104 taxes of $20)

2020 Adjusted(non-GAAP) Operating $ 0.55 $ 536 $ 150 $ 44 $ 43 $ 98 $ 252 Earnings

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 is based on the marginal statutory federal and state income tax rates for each Registrant, taking into account whether the income or expense item is taxable or deductible, respectively, in whole or in part. For all items except the unrealized gains and losses related to NDT fund investments, the marginal statutory income tax rates for 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 50.6% and 47.4% for the three months ended June 30, 2021 and 2020, respectively.

Webcast Information

Exelon will discuss second 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.

About Exelon

Exelon Corporation (Nasdaq: EXC) is a Fortune 100 energy company with the largest number of electricity and natural gas customers in the U.S. Exelon does business in 48 states, the District of Columbia, and Canada and had 2020 revenue of $33 billion. Exelon serves approximately 10 million customers in Delaware, the District of Columbia, Illinois, Maryland, New Jersey, and Pennsylvania through its Atlantic City Electric, BGE, ComEd, Delmarva Power, PECO, and Pepco subsidiaries. Exelon is one of the largest competitive U.S. power generators, with more than 31,000 megawatts of nuclear, gas, wind, solar and hydroelectric generating capacity comprising one of the nation's cleanest and lowest-cost power generation fleets. The company's Constellation business unit provides energy products and services to approximately 2 million residential, public sector, and business customers, including three fourths of the Fortune 100. Follow Exelon on Twitter @Exelon.

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 Aug. 4, 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' Second Quarter 2021 Quarterly Report on Form 10-Q (to be filed on Aug. 4, 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 15, 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.

Exelon

GAAP Consolidated Statements of Operations and

Adjusted (non-GAAP) Operating Earnings Reconciling Adjustments

(unaudited)

(in millions, except per share data)

Three Months Ended Three Months Ended June 30, 2021 June 30, 2020

GAAP (a) Non-GAAP GAAP (a) Non-GAAP Adjustments Adjustments

Operating $ 7,915 $ 240 (b) $ 7,322 $ (21 ) (b)revenues

Operating expenses

Purchased 3,016 500 (b), 2,924 64 (b),power and fuel (c) (d)

(c), (b), (d), (d), (e), (e),Operating and 2,447 (364 ) (f), 2,433 (280 ) (f),maintenance (g), (h), (m), (i), (n) (j)

Depreciation (c),and 1,666 (633 ) (j) 1,001 (4 ) (c)amortization

Taxes otherthan income 432 - 411 - taxes

Totaloperating 7,561 6,769 expenses

Gain on sales (b),of assets and 12 (1 ) (c) 12 (4 ) (c)businesses

Operating 366 565 income

Other incomeand (deductions)

Interest (396 ) - (427 ) 23 (b),expense, net (o)

(b), (b),Other, net 581 (267 ) (j), 656 (569 ) (k) (k)

Total otherincome and 185 229 (deductions)

Income before 551 794 income taxes

(b), (c), (d), (b), (e), (c), (f), (d),Income taxes 74 51 (g), 219 (262 ) (e), (h), (f), (i), (k), (o) (j), (k)

Equity inlosses of (1 ) - (1 ) - unconsolidated affiliates

Net income 476 574

Net incomeattributableto 75 (50 ) (l) 53 (103 ) (l)noncontrollinginterests

Net incomeattributable $ 401 $ 521 to common shareholders

Effective tax 13.4 % 27.6 % rate^(p)

Earnings peraverage common share

Basic $ 0.41 $ 0.53

Diluted $ 0.41 $ 0.53

Average commonshares outstanding

Basic 978 976

Diluted 979 976

__________

(a)

Results reported in accordance with accounting principles generally accepted in the United States (GAAP).

(b)

Adjustment to exclude the mark-to-market impact of Exelon's economic hedging activities, net of intercompany eliminations.

(c)

In 2021, adjustment to exclude costs associated with Generation's decision in the third quarter of 2020 to early retire Byron and Dresden nuclear facilities in 2021 and Mystic Units 8 and 9 in 2024. In 2020, adjustment to exclude accelerated depreciation and amortization expenses associated with the early retirement of certain fossil sites.

(d)

Adjustment to exclude reorganization costs related to cost management programs.

(e)

In 2021, adjustment to exclude an impairment in the New England asset group and an impairment recorded as a result of the agreement to sell the Albany Green Energy biomass facility. In 2020, adjustment to exclude an impairment at ComEd related to the acquisition of transmission assets and the impairment of certain wind assets at Generation.

(f)

Adjustment to exclude direct costs related to COVID-19 consisting primarily of costs to acquire personal protective equipment, costs for cleaning supplies and services, and costs to hire healthcare professionals to monitor the health of employees.

(g)

Adjustment to exclude costs related to the acquisition of Electricite de France SA's (EDF's) interest in CENG.

(h)

Adjustment to exclude costs related to a multi-year Enterprise Resource Program (ERP) system implementation.

(i)

Adjustment to exclude costs related to the planned separation primarily comprised of system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the planned separation, and employee-related severance costs.

(j)

Adjustment to exclude the impact of suspension of contractual offset for the Byron units in the second quarter of 2021.

(k)

Adjustment to exclude the impact of net unrealized gains on Generation's NDT fund investments for Non-Regulatory Agreement Units.

(l)

Adjustment to exclude elimination from Generation's results of the noncontrolling interests related to certain exclusion items, primarily related to unrealized gains and losses on NDT fund investments for CENG units.

(m)

Adjustment to exclude changes in environmental liabilities.

(n)

Adjustment to exclude the payments made by ComEd under the Deferred Prosecution Agreement, which ComEd entered in July 2020 with the U.S. Attorney's Office for the Northern District of Illinois.

(o)

Adjustment to exclude income tax related adjustments.

(p)

The effective tax rate related to Adjusted (non-GAAP) Operating Earnings is 12.3% and (9.7)% for the three months ended June 30, 2021 and 2020, respectively.

__________

(a) Results reported in accordance with accounting principles generally accepted in the United States (GAAP).

(b) Adjustment to exclude the mark-to-market impact of Exelon's economic hedging activities, net of intercompany eliminations.

In 2021, adjustment to exclude costs associated with Generation's decision in the third quarter of 2020 to early retire Byron and Dresden nuclear(c) facilities in 2021 and Mystic Units 8 and 9 in 2024. In 2020, adjustment to exclude accelerated depreciation and amortization expenses associated with the early retirement of certain fossil sites.

(d) Adjustment to exclude reorganization costs related to cost management programs.

In 2021, adjustment to exclude an impairment in the New England asset group and an impairment recorded as a result of the agreement to sell the Albany(e) Green Energy biomass facility. In 2020, adjustment to exclude an impairment at ComEd related to the acquisition of transmission assets and the impairment of certain wind assets at Generation.

Adjustment to exclude direct costs related to COVID-19 consisting primarily(f) of costs to acquire personal protective equipment, costs for cleaning supplies and services, and costs to hire healthcare professionals to monitor the health of employees.

(g) Adjustment to exclude costs related to the acquisition of Electricite de France SA's (EDF's) interest in CENG.

(h) Adjustment to exclude costs related to a multi-year Enterprise Resource Program (ERP) system implementation.

Adjustment to exclude costs related to the planned separation primarily(i) comprised of system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the planned separation, and employee-related severance costs.

(j) Adjustment to exclude the impact of suspension of contractual offset for the Byron units in the second quarter of 2021.

(k) Adjustment to exclude the impact of net unrealized gains on Generation's NDT fund investments for Non-Regulatory Agreement Units.

Adjustment to exclude elimination from Generation's results of the(l) noncontrolling interests related to certain exclusion items, primarily related to unrealized gains and losses on NDT fund investments for CENG units.

(m) Adjustment to exclude changes in environmental liabilities.

Adjustment to exclude the payments made by ComEd under the Deferred(n) Prosecution Agreement, which ComEd entered in July 2020 with the U.S. Attorney's Office for the Northern District of Illinois.

(o) Adjustment to exclude income tax related adjustments.

The effective tax rate related to Adjusted (non-GAAP) Operating Earnings is(p) 12.3% and (9.7)% for the three months ended June 30, 2021 and 2020, respectively.

Exelon

GAAP Consolidated Statements of Operations and

Adjusted (non-GAAP) Operating Earnings Reconciling Adjustments

(unaudited)

(in millions, except per share data)

Six Months Ended June 30, 2021

Six Months Ended June 30, 2020

GAAP (a)

Non-GAAP Adjustments

GAAP (a)

Non-GAAP Adjustments

Operating revenues

$

17,805

$

323

(b)

$

16,069

$

(201

)

(b)

Operating expenses

Purchased power and fuel

8,984

705

(b),(c)

6,791

16

(b)

Operating and maintenance

4,426

(192

)

(c),(d),(e),(f), (g),(h),(i),(j), (k)

4,637

(304

)

(c),(d),(e),(f), (k),(n)

Depreciation and amortization

3,363

(1,275

)

(c),(j)

2,023

(14

)

(c)

Taxes other than income taxes

870

-

847

-

Total operating expenses

17,643

14,298

Gain on sales of assets and businesses

83

(69

)

(c)

13

(4

)

(b),(c)

Operating income

245

1,784

Other income and (deductions)

Interest expense, net

(783

)

(4

)

(b)

(837

)

39

(b),(o)

Other, net

806

(184

)

(b),(j),(l)

(68

)

310

(l)

Total other income and (deductions)

23

(905

)

Income before income taxes

268

879

Income taxes

55

162

(b),(c),(d),(e), (f),(g),(h),(i),(j),(k),(l)

(75

)

119

(b),(c),(d),(e), (f),(l),(o)

Equity in losses of unconsolidated affiliates

(2

)

-

(4

)

-

Net income

211

950

Net income (loss) attributable to noncontrolling interests

99

(32

)

(m)

(153

)

42

(m)

Net income attributable to common shareholders

$

112

$

1,103

Effective tax rate(p)

20.5

%(8.5

)%

Earnings per average common share

Basic

$

0.11

$

1.13

Diluted

$

0.11

$

1.13

Average common shares outstanding

Basic

978

975

Diluted

979

976

Exelon

GAAP Consolidated Statements of Operations and

Adjusted (non-GAAP) Operating Earnings Reconciling Adjustments

(unaudited)

(in millions, except per share data)

Six Months Ended Six Months Ended June 30, 2021 June 30, 2020

GAAP (a) Non-GAAP GAAP (a) Non-GAAP Adjustments Adjustments

Operating $ 17,805 $ 323 (b) $ 16,069 $ (201 ) (b)revenues

Operating expenses

Purchased 8,984 705 (b), 6,791 16 (b)power and fuel (c)

(c), (d), (c), (e), (d),Operating and (f), (e),maintenance 4,426 (192 ) (g), 4,637 (304 ) (f), (h), (k), (i), (n) (j), (k)

Depreciation (c),and 3,363 (1,275 ) (j) 2,023 (14 ) (c)amortization

Taxes otherthan income 870 - 847 - taxes

Totaloperating 17,643 14,298 expenses

Gain on sales (b),of assets and 83 (69 ) (c) 13 (4 ) (c)businesses

Operating 245 1,784 income

Other incomeand (deductions)

Interest (783 ) (4 ) (b) (837 ) 39 (b),expense, net (o)

(b),Other, net 806 (184 ) (j), (68 ) 310 (l) (l)

Total otherincome and 23 (905 ) (deductions)

Income before 268 879 income taxes

(b), (c), (d), (b), (e), (c), (f), (d),Income taxes 55 162 (g), (75 ) 119 (e), (h), (f), (i), (l), (j), (o) (k), (l)

Equity inlosses of (2 ) - (4 ) - unconsolidated affiliates

Net income 211 950

Net income(loss)attributable 99 (32 ) (m) (153 ) 42 (m)to noncontrollinginterests

Net incomeattributable $ 112 $ 1,103 to common shareholders

Effective tax 20.5 (8.5 ) rate^(p) % %

Earnings peraverage common share

Basic $ 0.11 $ 1.13

Diluted $ 0.11 $ 1.13

Average commonshares outstanding

Basic 978 975

Diluted 979 976

__________

(a)

Results reported in accordance with accounting principles generally accepted in the United States (GAAP).

(b)

Adjustment to exclude the mark-to-market impact of Exelon's economic hedging activities, net of intercompany eliminations.

(c)

In 2021, adjustment to exclude costs associated with Generation's decision in the third quarter of 2020 to early retire Byron and Dresden nuclear facilities in 2021 and Mystic Units 8 and 9 in 2024, partially offset by a gain on sale of Generation's solar business. In 2020, adjustment to exclude accelerated depreciation and amortization expenses associated with the early retirement of certain fossil sites.

(d)

Adjustment to exclude reorganization costs related to cost management programs.

(e)

In 2021, adjustment to exclude an impairment in the New England asset group and an impairment recorded as a result of the agreement to sell the Albany Green Energy biomass facility. In 2020, adjustment to exclude an impairment at ComEd related to the acquisition of transmission assets and the impairment of certain wind assets at Generation.

(f)

Adjustment to exclude direct costs related to COVID-19 consisting primarily of costs to acquire personal protective equipment, costs for cleaning supplies and services, and costs to hire healthcare professionals to monitor the health of employees.

(g)

Adjustment to exclude costs related to the acquisition of Electricite de France SA's (EDF's) interest in CENG.

(h)

Adjustment to exclude costs related to a multi-year Enterprise Resource Program (ERP) system implementation.

(i)

Adjustment to exclude costs related to the planned separation primarily comprised of system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the planned separation, and employee-related severance costs.

(j)

Adjustment to exclude the impact of suspension of contractual offset for the Byron units in the second quarter of 2021.

(k)

Adjustment to exclude changes in environmental liabilities.

(l)

Adjustment to exclude the impact of net unrealized gains and losses on Generation's NDT fund investments for Non-Regulatory Agreement Units.

(m)

Adjustment to exclude elimination from Generation's results of the noncontrolling interests related to certain exclusion items, primarily related to unrealized gains and losses on NDT fund investments for CENG units.

(n)

Adjustment to exclude the payments made by ComEd under the Deferred Prosecution Agreement, which ComEd entered in July 2020 with the U.S. Attorney's Office for the Northern District of Illinois.

(o)

Adjustment to exclude income tax related adjustments.

(p)

The effective tax rate related to Adjusted (non-GAAP) Operating Earnings is 19.8% and 3.3% for the six months ended June 30, 2021 and 2020, respectively.

__________

(a) Results reported in accordance with accounting principles generally accepted in the United States (GAAP).

(b) Adjustment to exclude the mark-to-market impact of Exelon's economic hedging activities, net of intercompany eliminations.

In 2021, adjustment to exclude costs associated with Generation's decision in the third quarter of 2020 to early retire Byron and Dresden nuclear(c) facilities in 2021 and Mystic Units 8 and 9 in 2024, partially offset by a gain on sale of Generation's solar business. In 2020, adjustment to exclude accelerated depreciation and amortization expenses associated with the early retirement of certain fossil sites.

(d) Adjustment to exclude reorganization costs related to cost management programs.

In 2021, adjustment to exclude an impairment in the New England asset group and an impairment recorded as a result of the agreement to sell the Albany(e) Green Energy biomass facility. In 2020, adjustment to exclude an impairment at ComEd related to the acquisition of transmission assets and the impairment of certain wind assets at Generation.

Adjustment to exclude direct costs related to COVID-19 consisting primarily(f) of costs to acquire personal protective equipment, costs for cleaning supplies and services, and costs to hire healthcare professionals to monitor the health of employees.

(g) Adjustment to exclude costs related to the acquisition of Electricite de France SA's (EDF's) interest in CENG.

(h) Adjustment to exclude costs related to a multi-year Enterprise Resource Program (ERP) system implementation.

Adjustment to exclude costs related to the planned separation primarily(i) comprised of system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the planned separation, and employee-related severance costs.

(j) Adjustment to exclude the impact of suspension of contractual offset for the Byron units in the second quarter of 2021.

(k) Adjustment to exclude changes in environmental liabilities.

(l) Adjustment to exclude the impact of net unrealized gains and losses on Generation's NDT fund investments for Non-Regulatory Agreement Units.

Adjustment to exclude elimination from Generation's results of the(m) noncontrolling interests related to certain exclusion items, primarily related to unrealized gains and losses on NDT fund investments for CENG units.

Adjustment to exclude the payments made by ComEd under the Deferred(n) Prosecution Agreement, which ComEd entered in July 2020 with the U.S. Attorney's Office for the Northern District of Illinois.

(o) Adjustment to exclude income tax related adjustments.

The effective tax rate related to Adjusted (non-GAAP) Operating Earnings is(p) 19.8% and 3.3% for the six months ended June 30, 2021 and 2020, respectively.

ComEd

GAAP Consolidated Statements of Operations and

Adjusted (non-GAAP) Operating Earnings Reconciling Adjustments

(unaudited)

(in millions)

Three Months Ended June 30, 2021

Three Months Ended June 30, 2020

GAAP (a)

Non-GAAP Adjustments

GAAP (a)

Non-GAAP Adjustments

Operating revenues

$

1,517

$

-

$

1,417

$

-

Operating expenses

Purchased power and fuel

500

-

464

-

Operating and maintenance

323

(3

)

(d)

536

(215

)

(b), (c)

Depreciation and amortization

296

-

274

-

Taxes other than income taxes

77

-

71

-

Total operating expenses

1,196

1,345

Operating income

321

72

Other income and (deductions)

Interest expense, net

(98

)

-

(98

)

-

Other, net

15

-

11

-

Total other income and (deductions)

(83

)

(87

)

Income before income taxes

238

(15

)

Income taxes

46

1

(d)

46

4

(b)

Net income

$

192

$

(61

)

Six Months Ended June 30, 2021

Six Months Ended June 30, 2020

GAAP (a)

Non-GAAP Adjustments

GAAP (a)

Non-GAAPAjustments

Operating revenues

$

3,052

$

-

$

2,856

$

-

Operating expenses

Purchased power and fuel

1,025

-

951

-

Operating and maintenance

639

(4

)

(d)

853

(215

)

(b), (c)

Depreciation and amortization

589

-

547

-

Taxes other than income taxes

153

-

146

-

Total operating expenses

2,406

2,497

Operating income

646

359

Other income and (deductions)

Interest expense, net

(193

)

-

(192

)

-

Other, net

22

-

22

-

Total other income and (deductions)

(171

)

(170

)

Income before income taxes

475

189

Income taxes

85

1

(d)

82

4

(b)

Net income

$

390

$

107

ComEd

GAAP Consolidated Statements of Operations and

Adjusted (non-GAAP) Operating Earnings Reconciling Adjustments

(unaudited)

(in millions)

Three Months Ended Three Months Ended June 30, 2021 June 30, 2020

GAAP (a) Non-GAAP GAAP (a) Non-GAAP Adjustments Adjustments

Operating revenues $ 1,517 $ - $ 1,417 $ -

Operating expenses

Purchased power and 500 - 464 - fuel

Operating and 323 (3 ) (d) 536 (215 ) (b),maintenance (c)

Depreciation and 296 - 274 - amortization

Taxes other than 77 - 71 - income taxes

Total operating 1,196 1,345 expenses

Operating income 321 72

Other income and (deductions)

Interest expense, (98 ) - (98 ) - net

Other, net 15 - 11 -

Total other income (83 ) (87 ) and (deductions)

Income before income 238 (15 ) taxes

Income taxes 46 1 (d) 46 4 (b)

Net income $ 192 $ (61 )



Six Months Ended Six Months Ended June 30, 2021 June 30, 2020

GAAP (a) Non-GAAP GAAP (a) Non-GAAP Adjustments Ajustments

Operating revenues $ 3,052 $ - $ 2,856 $ -

Operating expenses

Purchased power and 1,025 - 951 - fuel

Operating and 639 (4 ) (d) 853 (215 ) (b),maintenance (c)

Depreciation and 589 - 547 - amortization

Taxes other than 153 - 146 - income taxes

Total operating 2,406 2,497 expenses

Operating income 646 359

Other income and (deductions)

Interest expense, (193 ) - (192 ) - net

Other, net 22 - 22 -

Total other income (171 ) (170 ) and (deductions)

Income before income 475 189 taxes

Income taxes 85 1 (d) 82 4 (b)

Net income $ 390 $ 107

__________

(a)

Results reported in accordance with accounting principles generally accepted in the United States (GAAP).

(b)

Adjustment to exclude an impairment related to the acquisition of transmission assets.

(c)

Adjustment to exclude the payments made by ComEd under the Deferred Prosecution Agreement, which ComEd entered in July 2020 with the U.S. Attorney's Office for the Northern District of Illinois.

(d)

Represents costs related to the planned separation primarily comprised of system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the planned separation, and employee-related severance costs.

__________

(a) Results reported in accordance with accounting principles generally accepted in the United States (GAAP).

(b) Adjustment to exclude an impairment related to the acquisition of transmission assets.

Adjustment to exclude the payments made by ComEd under the Deferred(c) Prosecution Agreement, which ComEd entered in July 2020 with the U.S. Attorney's Office for the Northern District of Illinois.

Represents costs related to the planned separation primarily comprised of(d) system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the planned separation, and employee-related severance costs.

PECO

GAAP Consolidated Statements of Operations and

Adjusted (non-GAAP) Operating Earnings Reconciling Adjustments

(unaudited)

(in millions)

Three Months Ended June 30, 2021

Three Months Ended June 30, 2020

GAAP (a)

Non-GAAP Adjustments

GAAP (a)

Non-GAAP Adjustments

Operating revenues

$

693

$

-

$

681

$

-

Operating expenses

Purchased power and fuel

207

-

216

-

Operating and maintenance

209

(3

)

(b),(c)

275

(7

)

(b),(e)

Depreciation and amortization

87

-

88

-

Taxes other than income taxes

49

-

39

-

Total operating expenses

552

618

Operating income

141

63

Other income and (deductions)

Interest expense, net

(42

)

-

(36

)

-

Other, net

7

-

5

-

Total other income and (deductions)

(35

)

(31

)

Income before income taxes

106

32

Income taxes

2

1

(b),(c)

(7

)

2

(b),(e)

Net income

$

104

$

39

Six Months Ended June 30, 2021

Six Months Ended June 30, 2020

GAAP (a)

Non-GAAP Adjustments

GAAP (a)

Non-GAAP Adjustments

Operating revenues

$

1,582

$

-

$

1,493

$

-

Operating expenses

Purchased power and fuel

523

-

499

-

Operating and maintenance

443

(7

)

(b),(c),(d)

492

(10

)

(b),(e)

Depreciation and amortization

173

-

173

-

Taxes other than income taxes

92

-

78

-

Total operating expenses

1,231

1,242

Operating income

351

251

Other income and (deductions)

Interest expense, net

(80

)

-

(71

)

-

Other, net

12

-

7

-

Total other income and (deductions)

(68

)

(64

)

Income before income taxes

283

187

Income taxes

12

2

(b),(c),(d)

9

3

(b),(e)

Net income

$

271

$

178

PECO

GAAP Consolidated Statements of Operations and

Adjusted (non-GAAP) Operating Earnings Reconciling Adjustments

(unaudited)

(in millions)

Three Months Ended Three Months Ended June 30, 2021 June 30, 2020

GAAP (a) Non-GAAP GAAP (a) Non-GAAP Adjustments Adjustments

Operating $ 693 $ - $ 681 $ - revenues

Operating expenses

Purchased power 207 - 216 - and fuel

Operating and 209 (3 ) (b), 275 (7 ) (b),maintenance (c) (e)

Depreciation and 87 - 88 - amortization

Taxes other than 49 - 39 - income taxes

Total operating 552 618 expenses

Operating income 141 63

Other income and (deductions)

Interest expense, (42 ) - (36 ) - net

Other, net 7 - 5 -

Total otherincome and (35 ) (31 ) (deductions)

Income before 106 32 income taxes

Income taxes 2 1 (b), (7 ) 2 (b), (c) (e)

Net income $ 104 $ 39



Six Months Ended Six Months Ended June 30, 2021 June 30, 2020

GAAP (a) Non-GAAP GAAP (a) Non-GAAP Adjustments Adjustments

Operating $ 1,582 $ - $ 1,493 $ - revenues

Operating expenses

Purchased power 523 - 499 - and fuel

Operating and (b), (b),maintenance 443 (7 ) (c), 492 (10 ) (e) (d)

Depreciation and 173 - 173 - amortization

Taxes other than 92 - 78 - income taxes

Total operating 1,231 1,242 expenses

Operating income 351 251

Other income and (deductions)

Interest expense, (80 ) - (71 ) - net

Other, net 12 - 7 -

Total otherincome and (68 ) (64 ) (deductions)

Income before 283 187 income taxes

(b), (b),Income taxes 12 2 (c), 9 3 (e) (d)

Net income $ 271 $ 178

__________

(a)

Results reported in accordance with accounting principles generally accepted in the United States (GAAP).

(b)

Adjustment to exclude direct costs related to COVID-19 consisting primarily of costs to acquire personal protective equipment, costs for cleaning supplies and services, and costs to hire healthcare professionals to monitor the health of employees.

(c)

Represents costs related to the planned separation primarily comprised of system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the planned separation, and employee-related severance costs.

(d)

Adjustment to exclude costs related to a multi-year Enterprise Resource Program (ERP) system implementation.

(e)

Adjustment to exclude reorganization costs related to cost management programs.

__________

(a) Results reported in accordance with accounting principles generally accepted in the United States (GAAP).

Adjustment to exclude direct costs related to COVID-19 consisting primarily(b) of costs to acquire personal protective equipment, costs for cleaning supplies and services, and costs to hire healthcare professionals to monitor the health of employees.

Represents costs related to the planned separation primarily comprised of(c) system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the planned separation, and employee-related severance costs.

(d) Adjustment to exclude costs related to a multi-year Enterprise Resource Program (ERP) system implementation.

(e) Adjustment to exclude reorganization costs related to cost management programs.

BGE

GAAP Consolidated Statements of Operations and

Adjusted (non-GAAP) Operating Earnings Reconciling Adjustments

(unaudited)

(in millions)

Three Months Ended June 30, 2021

Three Months Ended June 30, 2020

GAAP (a)

Non-GAAP Adjustments

GAAP (a)

Non-GAAP Adjustments

Operating revenues

$

682

$

-

$

616

$

-

Operating expenses

Purchased power and fuel

219

-

194

-

Operating and maintenance

193

(3

)

(b),(c)

187

(6

)

(b),(e)

Depreciation and amortization

141

-

129

-

Taxes other than income taxes

67

-

63

-

Total operating expenses

620

573

Operating income

62

43

Other income and (deductions)

Interest expense, net

(34

)

-

(32

)

-

Other, net

9

-

6

-

Total other income and (deductions)

(25

)

(26

)

Income before income taxes

37

17

Income taxes

(8

)

1

(b),(c)

(22

)

2

(b),(e)

Net income

$

45

$

39

Six Months Ended

June 30, 2021

Six Months Ended

June 30, 2020

GAAP (a)

Non-GAAP Adjustments

GAAP (a)

Non-GAAP Adjustments

Operating revenues

$

1,656

$

-

$

1,554

$

-

Operating expenses

Purchased power and fuel

550

-

483

-

Operating and maintenance

390

(6

)

(b),(c),(d)

376

(7

)

(b),(e)

Depreciation and amortization

293

-

272

-

Taxes other than income taxes

139

-

132

-

Total operating expenses

1,372

1,263

Operating income

284

291

Other income and (deductions)

Interest expense, net

(67

)

-

(64

)

-

Other, net

16

-

10

-

Total other income and (deductions)

(51

)

(54

)

Income before income taxes

233

237

Income taxes

(21

)

2

(b),(c),(d)

18

1

(b),(e)

Net income

$

254

$

219

BGE

GAAP Consolidated Statements of Operations and

Adjusted (non-GAAP) Operating Earnings Reconciling Adjustments

(unaudited)

(in millions)

Three Months Ended Three Months Ended June 30, 2021 June 30, 2020

GAAP (a) Non-GAAP GAAP (a) Non-GAAP Adjustments Adjustments

Operating revenues $ 682 $ - $ 616 $ -

Operating expenses

Purchased power 219 - 194 - and fuel

Operating and 193 (3 ) (b), 187 (6 ) (b),maintenance (c) (e)

Depreciation and 141 - 129 - amortization

Taxes other than 67 - 63 - income taxes

Total operating 620 573 expenses

Operating income 62 43

Other income and (deductions)

Interest expense, (34 ) - (32 ) - net

Other, net 9 - 6 -

Total other income (25 ) (26 ) and (deductions)

Income before 37 17 income taxes

Income taxes (8 ) 1 (b), (22 ) 2 (b), (c) (e)

Net income $ 45 $ 39



Six Months Ended Six Months Ended June 30, 2021 June 30, 2020

GAAP (a) Non-GAAP GAAP (a) Non-GAAP Adjustments Adjustments

Operating revenues $ 1,656 $ - $ 1,554 $ -

Operating expenses

Purchased power 550 - 483 - and fuel

Operating and (b), (b),maintenance 390 (6 ) (c), 376 (7 ) (e) (d)

Depreciation and 293 - 272 - amortization

Taxes other than 139 - 132 - income taxes

Total operating 1,372 1,263 expenses

Operating income 284 291

Other income and (deductions)

Interest expense, (67 ) - (64 ) - net

Other, net 16 - 10 -

Total other income (51 ) (54 ) and (deductions)

Income before 233 237 income taxes

(b), (b),Income taxes (21 ) 2 (c), 18 1 (e) (d)

Net income $ 254 $ 219

__________

(a)

Results reported in accordance with accounting principles generally accepted in the United States (GAAP).

(b)

Adjustment to exclude direct costs related to COVID-19 consisting primarily of costs to acquire personal protective equipment, costs for cleaning supplies and services, and costs to hire healthcare professionals to monitor the health of employees.

(c)

Adjustment to exclude costs related to the planned separation primarily comprised of system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the planned separation, and employee-related severance costs.

(d)

Adjustment to exclude costs related to a multi-year Enterprise Resource Program (ERP) system implementation.

(e)

Adjustment to exclude reorganization costs related to cost management programs.

__________

(a) Results reported in accordance with accounting principles generally accepted in the United States (GAAP).

Adjustment to exclude direct costs related to COVID-19 consisting primarily(b) of costs to acquire personal protective equipment, costs for cleaning supplies and services, and costs to hire healthcare professionals to monitor the health of employees.

Adjustment to exclude costs related to the planned separation primarily(c) comprised of system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the planned separation, and employee-related severance costs.

(d) Adjustment to exclude costs related to a multi-year Enterprise Resource Program (ERP) system implementation.

(e) Adjustment to exclude reorganization costs related to cost management programs.

PHI

GAAP Consolidated Statements of Operations and

Adjusted (non-GAAP) Operating Earnings Reconciling Adjustments

(unaudited)

(in millions)

Three Months Ended June 30, 2021

Three Months Ended June 30, 2020

GAAP (a)

Non-GAAP Adjustments

GAAP (a)

Non-GAAP Adjustments

Operating revenues

$

1,140

$

-

$

1,016

$

-

Operating expenses

Purchased power and fuel

396

-

375

-

Operating and maintenance

256

(5

)

(b),(c),(d),(e)

281

(6

)

(d), (e)

Depreciation and amortization

194

-

191

-

Taxes other than income taxes

109

-

109

-

Total operating expenses

955

956

Operating income

185

60

Other income and (deductions)

Interest expense, net

(67

)

-

(67

)

-

Other, net

20

-

14

-

Total other income and (deductions)

(47

)

(53

)

Income before income taxes

138

7

Income taxes

(3

)

1

(b),(c),(d),(e)

(87

)

2

(d), (e)

Net income

$

141

$

94

Six Months Ended June 30, 2021

Six Months Ended June 30, 2020

GAAP (a)

Non-GAAP Adjustments

GAAP (a)

Non-GAAP Adjustments

Operating revenues

$

2,384

$

-

$

2,187

$

-

Operating expenses

Purchased power and fuel

874

-

810

-

Operating and maintenance

513

(8

)

(b),(c),(d),(e)

538

(8

)

(d), (e)

Depreciation and amortization

404

-

385

-

Taxes other than income taxes

222

-

222

-

Total operating expenses

2,013

1,955

Gain on sales of assets

-

-

2

-

Operating income

371

234

Other income and (deductions)

Interest expense, net

(134

)

-

(134

)

-

Other, net

36

-

26

-

Total other income and (deductions)

(98

)

(108

)

Income before income taxes

273

126

Income taxes

5

2

(b),(c),(d),(e)

(76

)

2

(d), (e)

Equity in earnings of unconsolidated affiliates

1

-

Net income

$

269

$

202

PHI

GAAP Consolidated Statements of Operations and

Adjusted (non-GAAP) Operating Earnings Reconciling Adjustments

(unaudited)

(in millions)

Three Months Ended Three Months Ended June 30, 2021 June 30, 2020

GAAP (a) Non-GAAP GAAP (a) Non-GAAP Adjustments Adjustments

Operating $ 1,140 $ - $ 1,016 $ - revenues

Operating expenses

Purchased power 396 - 375 - and fuel

(b),Operating and 256 (5 ) (c), 281 (6 ) (d),maintenance (d), (e) (e)

Depreciation and 194 - 191 - amortization

Taxes other than 109 - 109 - income taxes

Total operating 955 956 expenses

Operating income 185 60

Other income and (deductions)

Interest expense, (67 ) - (67 ) - net

Other, net 20 - 14 -

Total otherincome and (47 ) (53 ) (deductions)

Income before 138 7 income taxes

(b),Income taxes (3 ) 1 (c), (87 ) 2 (d), (d), (e) (e)

Net income $ 141 $ 94



Six Months Ended Six Months Ended June 30, 2021 June 30, 2020

GAAP (a) Non-GAAP GAAP (a) Non-GAAP Adjustments Adjustments

Operating $ 2,384 $ - $ 2,187 $ - revenues

Operating expenses

Purchased power 874 - 810 - and fuel

(b),Operating and 513 (8 ) (c), 538 (8 ) (d),maintenance (d), (e) (e)

Depreciation and 404 - 385 - amortization

Taxes other than 222 - 222 - income taxes

Total operating 2,013 1,955 expenses

Gain on sales of - - 2 - assets

Operating income 371 234

Other income and (deductions)

Interest expense, (134 ) - (134 ) - net

Other, net 36 - 26 -

Total otherincome and (98 ) (108 ) (deductions)

Income before 273 126 income taxes

(b),Income taxes 5 2 (c), (76 ) 2 (d), (d), (e) (e)

Equity inearnings of 1 - unconsolidatedaffiliates

Net income $ 269 $ 202

__________

(a)

Results reported in accordance with accounting principles generally accepted in the United States (GAAP).

(b)

Adjustment to exclude costs related to a multi-year Enterprise Resource Program (ERP) system implementation.

(c)

Adjustment to exclude costs related to the planned separation primarily comprised of system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the planned separation, and employee-related severance costs.

(d)

Adjustment to exclude reorganization costs related to cost management programs.

(e)

Adjustment to exclude direct costs related to COVID-19 consisting primarily of costs to acquire personal protective equipment, costs for cleaning supplies and services, and costs to hire healthcare professionals to monitor the health of employees.

__________

(a) Results reported in accordance with accounting principles generally accepted in the United States (GAAP).

(b) Adjustment to exclude costs related to a multi-year Enterprise Resource Program (ERP) system implementation.

Adjustment to exclude costs related to the planned separation primarily(c) comprised of system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the planned separation, and employee-related severance costs.

(d) Adjustment to exclude reorganization costs related to cost management programs.

Adjustment to exclude direct costs related to COVID-19 consisting primarily(e) of costs to acquire personal protective equipment, costs for cleaning supplies and services, and costs to hire healthcare professionals to monitor the health of employees.

Generation

GAAP Consolidated Statements of Operations and

Adjusted (non-GAAP) Operating Earnings Reconciling Adjustments

(unaudited)

(in millions)

Three Months Ended June 30, 2021

Three Months Ended June 30, 2020

GAAP (a)

Non-GAAP Adjustments

GAAP (a)

Non-GAAP Adjustments

Operating revenues

$

4,153

$

240

(b)

$

3,880

$

(21

)

(b)

Operating expenses

Purchased power and fuel

1,947

500

(b),(c)

1,942

64

(b)

Operating and maintenance

1,474

(347

)

(c),(d),(e),(f), (g),(h),(i),(j)

1,189

(46

)

(c),(d),(e),(f), (k)

Depreciation and amortization

930

(633

)

(c),(j)

300

(4

)

(c)

Taxes other than income taxes

118

-

116

-

Total operating expenses

4,469

3,547

Gain on sales of assets and businesses

8

(1

)

(c)

12

(4

)

(b),(c)

Operating (loss) income

(308

)

345

Other income and (deductions)

Interest expense, net

(76

)

-

(87

)

(1

)

(b)

Other, net

508

(270

)

(j),(l)

602

(569

)

(b),(l)

Total other income and (deductions)

432

515

Income before income taxes

124

860

Income taxes

110

44

(b),(c),(d),(e), (f),(g),(h),(i), (j),(l)

329

(282

)

(b),(c),(d),(e), (f),(l)

Equity in losses of unconsolidated affiliates

(1

)

-

(2

)

-

Net income

13

529

Net income attributable to noncontrolling interests

74

(50

)

(m)

53

(103

)

(m)

Net (loss) income attributable to membership interest

$

(61

)

$

476

Six Months Ended June 30, 2021

Six Months Ended June 30, 2020

GAAP (a)

Non-GAAP Adjustments

GAAP (a)

Non-GAAP Adjustments

Operating revenues

$

9,712

$

323

(b)

$

8,613

$

(201

)

(b)

Operating expenses

Purchased power and fuel

6,557

705

(b),(c)

4,646

16

(b)

Operating and maintenance

2,476

(161

)

(c),(d),(e),(f), (g),(h),(i),(j), (k)

2,451

(67

)

(c),(d),(e),(f), (k)

Depreciation and amortization

1,869

(1,275

)

(c),(j)

604

(14

)

(c)

Taxes other than income taxes

239

-

246

-

Total operating expenses

11,141

7,947

Gain on sales of assets and businesses

79

(69

)

(c)

12

(4

)

(b),(c)

Operating (loss) income

(1,350

)

678

Other income and (deductions)

Interest expense, net

(148

)

(4

)

(b)

(197

)

12

(b)

Other, net

675

(186

)

(j),(l)

(168

)

310

(l)

Total other income and (deductions)

527

(365

)

(Loss) income before income taxes

(823

)

313

Income taxes

(70

)

150

(b),(c),(d),(e), (f),(g),(h),(i), (j),(k),(l)

(59

)

97

(b),(c),(d),(e), (f),(l)

Equity in losses of unconsolidated affiliates

(3

)

-

(4

)

-

Net (loss) income

(756

)

368

Net income (loss) attributable to noncontrolling interests

98

(32

)

(m)

(153

)

42

(m)

Net (loss) income attributable to membership interest

$

(854

)

$

521

Generation

GAAP Consolidated Statements of Operations and

Adjusted (non-GAAP) Operating Earnings Reconciling Adjustments

(unaudited)

(in millions)

Three Months Ended Three Months Ended June 30, 2021 June 30, 2020

GAAP (a) Non-GAAP GAAP (a) Non-GAAP Adjustments Adjustments

Operating $ 4,153 $ 240 (b) $ 3,880 $ (21 ) (b)revenues

Operating expenses

Purchased 1,947 500 (b),(c) 1,942 64 (b)power and fuel

(c),(d), (c),Operating and (e),(f), (d),maintenance 1,474 (347 ) (g),(h), 1,189 (46 ) (e), (i),(j) (f), (k)

Depreciationand 930 (633 ) (c),(j) 300 (4 ) (c)amortization

Taxes otherthan income 118 - 116 - taxes

Totaloperating 4,469 3,547 expenses

Gain on sales (b),of assets and 8 (1 ) (c) 12 (4 ) (c)businesses

Operating (308 ) 345 (loss) income

Other incomeand (deductions)

Interest (76 ) - (87 ) (1 ) (b)expense, net

Other, net 508 (270 ) (j),(l) 602 (569 ) (b), (l)

Total otherincome and 432 515 (deductions)

Income before 124 860 income taxes

(b),(c), (b), (d),(e), (c),Income taxes 110 44 (f),(g), 329 (282 ) (d), (h),(i), (e), (j),(l) (f), (l)

Equity inlosses of (1 ) - (2 ) - unconsolidatedaffiliates

Net income 13 529

Net incomeattributableto 74 (50 ) (m) 53 (103 ) (m)noncontrollinginterests

Net (loss)incomeattributable $ (61 ) $ 476 to membershipinterest





Six Months Ended Six Months Ended June 30, 2021 June 30, 2020

GAAP (a) Non-GAAP GAAP (a) Non-GAAP Adjustments Adjustments

Operating $ 9,712 $ 323 (b) $ 8,613 $ (201 ) (b)revenues

Operating expenses

Purchased 6,557 705 (b),(c) 4,646 16 (b)power and fuel

(c),(d), (c),Operating and (e),(f), (d),maintenance 2,476 (161 ) (g),(h), 2,451 (67 ) (e), (i),(j), (f), (k) (k)

Depreciationand 1,869 (1,275 ) (c),(j) 604 (14 ) (c)amortization

Taxes otherthan income 239 - 246 - taxes

Totaloperating 11,141 7,947 expenses

Gain on sales (b),of assets and 79 (69 ) (c) 12 (4 ) (c)businesses

Operating (1,350 ) 678 (loss) income

Other incomeand (deductions)

Interest (148 ) (4 ) (b) (197 ) 12 (b)expense, net

Other, net 675 (186 ) (j),(l) (168 ) 310 (l)

Total otherincome and 527 (365 ) (deductions)

(Loss) incomebefore income (823 ) 313 taxes

(b),(c), (b), (d),(e), (c),Income taxes (70 ) 150 (f),(g), (59 ) 97 (d), (h),(i), (e), (j),(k), (f), (l) (l)

Equity inlosses of (3 ) - (4 ) - unconsolidatedaffiliates

Net (loss) (756 ) 368 income

Net income(loss)attributable 98 (32 ) (m) (153 ) 42 (m)tononcontrollinginterests

Net (loss)incomeattributable $ (854 ) $ 521 to membershipinterest

__________

(a)

Results reported in accordance with accounting principles generally accepted in the United States (GAAP).

(b)

Adjustment to exclude the mark-to-market impact of Exelon's economic hedging activities, net of intercompany eliminations.

(c)

In 2021, adjustment to exclude costs associated with Generation's decision in the third quarter of 2020 to early retire Byron and Dresden nuclear facilities in 2021 and Mystic Units 8 and 9 in 2024, partially offset by a gain on sale of Generation's solar business. In 2020, adjustment to exclude accelerated depreciation and amortization expenses associated with the early retirement of certain fossil sites.

(d)

Adjustment to exclude reorganization costs related to cost management programs.

(e)

In 2021, adjustment to exclude an impairment in the New England asset group and an impairment recorded as a result of the agreement to sell the Albany Green Energy biomass facility. In 2020, adjustment to exclude the impairment of certain wind assets at Generation.

(f)

Adjustment to exclude direct costs related to COVID-19 consisting primarily of costs to acquire personal protective equipment, costs for cleaning supplies and services, and costs to hire healthcare professionals to monitor the health of employees.

(g)

Adjustment to exclude costs related to the acquisition of Electricite de France SA's (EDF's) interest in CENG.

(h)

Adjustment to exclude costs related to a multi-year Enterprise Resource Program (ERP) system implementation.

(i)

Adjustment to exclude costs related to the planned separation primarily comprised of system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the planned separation, and employee-related severance costs.

(j)

Adjustment to exclude the impact of suspension of contractual offset for the Byron units in the second quarter of 2021.

(k)

Adjustment to exclude changes in environmental liabilities.

(l)

Adjustment to exclude the impact of net unrealized gains and losses on Generation's NDT fund investments for Non-Regulatory Agreement Units.

(m)

Adjustment to exclude elimination from Generation's results of the noncontrolling interests related to certain exclusion items, primarily related to unrealized gains and losses on NDT fund investments for CENG units.

__________

(a) Results reported in accordance with accounting principles generally accepted in the United States (GAAP).

(b) Adjustment to exclude the mark-to-market impact of Exelon's economic hedging activities, net of intercompany eliminations.

In 2021, adjustment to exclude costs associated with Generation's decision in the third quarter of 2020 to early retire Byron and Dresden nuclear(c) facilities in 2021 and Mystic Units 8 and 9 in 2024, partially offset by a gain on sale of Generation's solar business. In 2020, adjustment to exclude accelerated depreciation and amortization expenses associated with the early retirement of certain fossil sites.

(d) Adjustment to exclude reorganization costs related to cost management programs.

In 2021, adjustment to exclude an impairment in the New England asset group(e) and an impairment recorded as a result of the agreement to sell the Albany Green Energy biomass facility. In 2020, adjustment to exclude the impairment of certain wind assets at Generation.

Adjustment to exclude direct costs related to COVID-19 consisting primarily(f) of costs to acquire personal protective equipment, costs for cleaning supplies and services, and costs to hire healthcare professionals to monitor the health of employees.

(g) Adjustment to exclude costs related to the acquisition of Electricite de France SA's (EDF's) interest in CENG.

(h) Adjustment to exclude costs related to a multi-year Enterprise Resource Program (ERP) system implementation.

Adjustment to exclude costs related to the planned separation primarily(i) comprised of system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the planned separation, and employee-related severance costs.

(j) Adjustment to exclude the impact of suspension of contractual offset for the Byron units in the second quarter of 2021.

(k) Adjustment to exclude changes in environmental liabilities.

(l) Adjustment to exclude the impact of net unrealized gains and losses on Generation's NDT fund investments for Non-Regulatory Agreement Units.

Adjustment to exclude elimination from Generation's results of the(m) noncontrolling interests related to certain exclusion items, primarily related to unrealized gains and losses on NDT fund investments for CENG units.

Other (a)

GAAP Consolidated Statements of Operations and

Adjusted (non-GAAP) Operating Earnings Reconciling Adjustments

(unaudited)

(in millions)

Three Months Ended June 30, 2021

Three Months Ended June 30, 2020

GAAP (b)

Non-GAAP Adjustments

GAAP (b)

Non-GAAP Adjustments

Operating revenues

$

(270

)

$

-

$

(288

)

$

-

Operating expenses

Purchased power and fuel

(253

)

-

(267

)

-

Operating and maintenance

(8

)

(3

)

(c)

(35

)

-

Depreciation and amortization

18

-

19

-

Taxes other than income taxes

12

-

13

-

Total operating expenses

(231

)

(270

)

Gain on sales of assets and businesses

4

-

-

-

Operating loss

(35

)

(18

)

Other income and (deductions)

Interest expense, net

(79

)

-

(107

)

24

(d),(e)

Other, net

22

3

(d)

18

-

Total other income and (deductions)

(57

)

(89

)

Loss before income taxes

(92

)

(107

)

Income taxes

(73

)

3

(c),(d),(e)

(40

)

10

(d),(e)

Equity in earnings of unconsolidated affiliates

-

-

1

-

Net loss

(19

)

(66

)

Net income attributable to noncontrolling interests

1

-

Net loss attributable to common shareholders

$

(20

)

$

(66

)

Six Months Ended June 30, 2021

Six Months Ended June 30, 2020

GAAP (b)

Non-GAAP Adjustments

GAAP (b)

Non-GAAP Adjustments

Operating revenues

$

(581

)

$

-

$

(634

)

$

-

Operating expenses

Purchased power and fuel

(545

)

-

(598

)

-

Operating and maintenance

(35

)

(6

)

(c)

(73

)

3

(f)

Depreciation and amortization

35

-

42

-

Taxes other than income taxes

25

-

23

-

Total operating expenses

(520

)

(606

)

Gain on sales of assets

4

-

(1

)

-

Operating loss

(57

)

(29

)

Other income and (deductions)

Interest expense, net

(161

)

-

(179

)

27

(d),(e)

Other, net

45

2

(d)

35

-

Total other income and (deductions)

(116

)

(144

)

Loss before income taxes

(173

)

(173

)

Income taxes

44

5

(c),(d),(e)

(49

)

12

(d),(e),(f)

Net loss

(217

)

(124

)

Net income attributable to noncontrolling interests

1

-

Net loss attributable to common shareholders

$

(218

)

$

(124

)

Other (a)

GAAP Consolidated Statements of Operations and

Adjusted (non-GAAP) Operating Earnings Reconciling Adjustments

(unaudited)

(in millions)

Three Months Ended Three Months Ended June 30, 2021 June 30, 2020

GAAP (b) Non-GAAP GAAP (b) Non-GAAP Adjustments Adjustments

Operating revenues $ (270 ) $ - $ (288 ) $ -

Operating expenses

Purchased power and (253 ) - (267 ) - fuel

Operating and (8 ) (3 ) (c) (35 ) - maintenance

Depreciation and 18 - 19 - amortization

Taxes other than 12 - 13 - income taxes

Total operating (231 ) (270 ) expenses

Gain on sales ofassets and 4 - - - businesses

Operating loss (35 ) (18 )

Other income and (deductions)

Interest expense, (79 ) - (107 ) 24 (d),net (e)

Other, net 22 3 (d) 18 -

Total other income (57 ) (89 ) and (deductions)

Loss before income (92 ) (107 ) taxes

(c), (d),Income taxes (73 ) 3 (d), (40 ) 10 (e) (e)

Equity in earningsof unconsolidated - - 1 - affiliates

Net loss (19 ) (66 )

Net incomeattributable to 1 - noncontrolling interests

Net lossattributable to $ (20 ) $ (66 ) common shareholders



Six Months Ended Six Months Ended June 30, 2021 June 30, 2020

GAAP (b) Non-GAAP GAAP (b) Non-GAAP Adjustments Adjustments

Operating revenues $ (581 ) $ - $ (634 ) $ -

Operating expenses

Purchased power and (545 ) - (598 ) - fuel

Operating and (35 ) (6 ) (c) (73 ) 3 (f)maintenance

Depreciation and 35 - 42 - amortization

Taxes other than 25 - 23 - income taxes

Total operating (520 ) (606 ) expenses

Gain on sales of 4 - (1 ) - assets

Operating loss (57 ) (29 )

Other income and (deductions)

Interest expense, (161 ) - (179 ) 27 (d),net (e)

Other, net 45 2 (d) 35 -

Total other income (116 ) (144 ) and (deductions)

Loss before income (173 ) (173 ) taxes

(c), (d),Income taxes 44 5 (d), (49 ) 12 (e), (e) (f)

Net loss (217 ) (124 )

Net incomeattributable to 1 - noncontrolling interests

Net lossattributable to $ (218 ) $ (124 ) common shareholders

__________

(a)

Other primarily includes eliminating and consolidating adjustments, Exelon's corporate operations, shared service entities, and other financing and investment activities.

(b)

Results reported in accordance with accounting principles generally accepted in the United States (GAAP).

(c)

Adjustment to exclude costs related to the planned separation primarily comprised of system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the planned separation, and employee-related severance costs.

(d)

Adjustment to exclude the mark-to-market impact of Exelon's economic hedging activities, net of intercompany eliminations.

(e)

Adjustment to exclude income tax-related adjustments.

(f)

Adjustment to exclude reorganization costs related to cost management programs.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210804005410/en/

CONTACT: Paul Adams Corporate Communications 410-245-8717 paul.adams2@exeloncorp.com

CONTACT: Emily Duncan Investor Relations 312-394-2345