Exelon Reports First Quarter 2020 Results
Earnings Release Highlights
- GAAP Net Income of $0.60 per share and Adjusted (non-GAAP) Operating Earnings of $0.87 per share for the first quarter of 2020
- Revising range for full year 2020 adjusted (non-GAAP) operating earnings guidance to $2.80-$3.10 per share from original guidance of $3.00-$3.30 per share
- Strong utility reliability performance — every utility achieved top quartile in outage frequency and outage duration
- Generations’ nuclear fleet capacity factor was 93.9% for the quarter, ahead of the industry average of 91% (based on full year 2019)
CHICAGO—( BUSINESS WIRE )—Exelon Corporation (Nasdaq: EXC) today reported its financial results for the first quarter of 2020.
“We had another strong quarter, with each of our utilities achieving high reliability performance and our nuclear fleet completing seven of eight refueling outages — nearly all shorter than planned,” said Christopher M. Crane, president and CEO of Exelon. “The consistent performance of our frontline employees in providing safe and reliable service has never been more evident as we all confront the global pandemic and the devastating disruption to our economy. In recognition of these extraordinary circumstances, we are supporting customers experiencing financial hardship by suspending disconnections, waiving new late charges and reconnecting customers on request. We remain on track to invest $26 billion across our utilities to further improve reliability and customer service, and we have contributed more than $5.9 million to national and local organizations to provide immediate relief to communities affected by COVID-19.”
“Despite experiencing one of the warmest winters on record and significant erosion of demand as a result of the pandemic, we reported solid adjusted (non-GAAP) earnings of 0.87 per share, coming in just below the midpoint of our guidance range,” said Joseph Nigro, senior executive vice president and CFO of Exelon. “We identified an additional $250 million in cost savings and lowered capital expenditures at Exelon Generation by $125 million. However, even with these and other actions, the unprecedented slowdown in economic activity and unpredictable nature of the recovery has led us to lower our full-year earnings guidance from $3.00-$3.30 per share to $2.80-$3.10 per share. We will continue to look for ways to improve our earnings and cash flow this year.”
First Quarter 2020
Exelon’s GAAP Net Income for the first quarter of 2020 decreased to $0.60 per share from $0.93 per share in the first quarter of 2019. Adjusted (non-GAAP) Operating Earnings remained consistent at $0.87 per share in both the first quarter of 2020 and 2019. 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 first quarter of 2020 primarily reflect:
- Lower utility earnings primarily due to unfavorable weather conditions at PECO and PHI and lower allowed electric distribution ROE due to a decrease in treasury rates at ComEd, partially offset by regulatory rate increases at BGE and PHI and distribution formula rate timing at ComEd; and
- Higher Generation earnings due to increased revenue from ZECs in New Jersey, lower operating and maintenance expense, and an income tax settlement, partially offset by lower realized energy prices, lower capacity revenues and increased nuclear outage days.
Operating Company Results 1
ComEd’s first quarter of 2020 GAAP Net Income and Adjusted (non-GAAP) Operating Earnings increased to $168 million from $157 million in the first quarter of 2019, primarily due to distribution formula rate timing partially offset by lower allowed electric distribution ROE due to a decrease in treasury rates. Due to revenue decoupling, ComEd’s distribution earnings are not affected by actual weather or customer usage patterns.
PECO’s first quarter of 2020 GAAP Net Income decreased to $140 million from $168 million in the first quarter of 2019. PECO’s Adjusted (non-GAAP) Operating Earnings for the first quarter of 2020 decreased to $140 million from $169 million in the first quarter of 2019, primarily due to unfavorable weather conditions.
BGE’s first quarter of 2020 GAAP Net Income increased to $181 million from $160 million in the first quarter of 2019. BGE’s Adjusted (non-GAAP) Operating Earnings for the first quarter of 2020 increased to $182 million from $161 million compared with the first quarter of 2019, primarily due to regulatory rate increases. Due to revenue decoupling, BGE’s distribution earnings are not affected by actual weather or customer usage patterns.
PHI’s first quarter of 2020 GAAP Net Income decreased to $108 million from $117 million in the first quarter of 2019. PHI’s Adjusted (non-GAAP) Operating Earnings for the first quarter of 2020 decreased to $110 million from $118 million in the first quarter of 2019, primarily due to unfavorable weather conditions in Delaware and New Jersey, partially offset by regulatory rate increases. 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.
1 Exelon’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.
Generation’s first quarter of 2020 GAAP Net Income decreased to $45 million from $363 million in the first quarter of 2019. Generation’s Adjusted (non-GAAP) Operating Earnings for the first quarter of 2020 increased to $312 million from $294 million in the first quarter of 2019, primarily due to increased revenue from ZECs in New Jersey, lower operating and maintenance expense and an income tax settlement, partially offset by lower realized energy prices, lower capacity revenues and increased nuclear outage days.
As of March 31, 2020, the percentage of expected Generation hedged is 89%-92% and 70%-73% for 2020 and 2021, respectively.
Recent Developments and First Quarter Highlights
- COVID-19: Exelon is closely monitoring developments related to the global outbreak (pandemic) of the 2019 novel coronavirus (COVID-19) pandemic and is taking proactive measures to protect the health and safety of employees, contractors and customers. As a provider of critical resources, Exelon has robust plans and contingencies in place to ensure business and operational continuity across a wide range of potentially disruptive events, including extensive preparedness for major public health crises. Exelon and its operating companies are working in close coordination with designated state and local emergency preparedness and health officials, and at the federal level through the Electric Subsector Coordinating Council. All Exelon employees have access to up-to-date information and resources and are following Centers for Disease Control guidelines to ensure safety. In addition, Exelon utilities have established incident command centers to address emergent customer and employee needs in real time.
While there was no material impact to Exelon’s financial statements for the first quarter of 2020 due to COVID-19, PECO, DPL Delaware, ACE and Generation expect a reduction in operating revenues for the nine months ending December 31, 2020 due to expected reduction in electric load. There remains significant uncertainty in the economic forecast for the remainder of the year and its impact on Exelon’s operating revenues. However, Exelon identified and is pursuing approximately $250 million in cost savings across its operating companies to offset part of the expected unfavorable impacts on operating revenues.
- ComEd Distribution Formula Rate: On April 16, 2020, ComEd filed its annual distribution formula rate update with the Illinois Commerce Commission (ICC). The ICC approval is due by December 2020 and the rates will take effect in January 2021. The filing request includes a total decrease to the revenue requirement of $11 million, reflecting an increase of $51 million for the initial revenue requirement for 2020 and a decrease of $62 million related to the annual reconciliation for 2019. The revenue requirement for 2020 and annual reconciliation for 2019 provide for a weighted average debt and equity return on distribution rate base of 6.28% inclusive of a requested ROE of 8.38%.
- DPL Delaware Gas Base Rate Case: On Feb. 21, 2020, DPL Delaware filed an application with the Delaware Public Service Commission (DPSC) to increase its annual gas distribution rates by $9 million, reflecting an ROE of 10.3%. DPL currently expects a decision in the first quarter of 2021 but cannot predict if the DPSC will approve the application as filed.
- DPL Delaware Electric Base Rate Case: On March 6, 2020, DPL Delaware filed an application with the DPSC to increase its annual electric distribution rates by $24 million, reflecting an ROE of 10.3%. DPL currently expects a decision in the first quarter of 2021 but cannot predict if the DPSC will approve the application as filed.
- Nuclear Operations: Generation’s nuclear fleet, including its owned output from the Salem Generating Station and 100% of the CENG units, produced 42,555 gigawatt-hours (GWhs) in the first quarter of 2020, compared with 45,715 GWhs in the first quarter of 2019. Excluding Salem, the Exelon-operated nuclear plants at ownership achieved a 93.9% capacity factor for the first quarter of 2020, compared with 97.1% for the first quarter of 2019. The number of planned refueling outage days in the first quarter of 2020 totaled 94, compared with 74 in the first quarter of 2019. There were 11 non-refueling outage days in the first quarter of 2020 and none in the first quarter of 2019.
- Fossil and Renewables Operations: The Dispatch Match rate for Generation’s fossil and hydro fleet was 98.2% in the first quarter of 2020, compared with 97.8% in the first quarter of 2019. Energy Capture for the wind and solar fleet was 94.7% in the first quarter of 2020, compared with 96.5% in the first quarter of 2019.
- Financing Activities:
- On April 1, 2020, Exelon Corporate issued notes for $1.25 billion at 4.05%, which are due in 2030 and notes for $750 million at 4.70%, which are due in 2050. A portion of the net proceeds from the sale of these notes, together with available cash balances, will be used to repay Exelon Corporate notes maturing in June of 2020. The remainder of the net proceeds will be used for general corporate purposes.
- On Feb. 25, 2020, ComEd issued $350 million of its First Mortgage Bonds, 2.20% Series due March 1, 2030 and $650 million of its First Mortgage Bonds, 3.00% Series due March 1, 2050. ComEd used the proceeds to repay a portion of outstanding commercial paper obligations and for general corporate purposes.
- On Feb. 25, 2020, Pepco issued $150 million of its First Mortgage Bonds, 2.53% Series due Feb. 25, 2030. Pepco used the proceeds to repay existing indebtedness and for general corporate purposes.
- On March 19, 2020, Generation entered into a term loan agreement for $200 million. The loan agreement has an expiration of March 18, 2021. Pursuant to the loan agreement, loans made thereunder bear interest at a variable rate equal to LIBOR plus 0.50% and all indebtedness thereunder is unsecured.
- On March 31, 2020, Generation entered into a term loan agreement for $300 million. The loan agreement has an expiration of March 30, 2021. Pursuant to the loan agreement, loans made thereunder bear interest at a variable rate equal to LIBOR plus 0.75% and all indebtedness thereunder is unsecured.
- On April 8, 2020, NewEnergy Receivables LLC, a bankruptcy remote, special purpose entity, which is wholly owned by Generation, entered into an accounts receivable financing facility with a number of financial institutions and a commercial paper conduit to sell certain customer accounts receivables. Generation received approximately $500 million of cash in accordance with the initial sale of approximately $1.2 billion receivables.
GAAP/Adjusted (non-GAAP) Operating Earnings Reconciliation
Adjusted (non-GAAP) Operating Earnings for the first quarter of 2020 do not include the following items (after tax) that were included in reported GAAP Net Income:
Table of contents
- Authorisation details
- Product information
- Assessment history
This is a summary of the European public assessment report (EPAR) for Exelon. It explains how the Committee for Medicinal Products for Human Use (CHMP) assessed the medicine to reach its opinion in favour of granting a marketing authorisation and its recommendations on the conditions of use for Exelon.
Exelon is a medicine containing the active substance rivastigmine. It is available as capsules (1.5, 3, 4.5 and 6 mg), as an oral solution (2 mg/ml), and as transdermal patches, which release either 4.6, 9.5 or 13.3 mg rivastigmine across the skin over 24 hours.
Exelon is used for the treatment of patients with mild to moderately severe Alzheimer’s dementia, a progressive brain disorder that gradually affects memory, intellectual ability and behaviour.
The capsules and oral solution can also be used to treat mild to moderately severe dementia in patients with Parkinson’s disease.
The medicine can only be obtained with a prescription.
Treatment with Exelon should be initiated and supervised by a doctor who has experience in the diagnosis and treatment of Alzheimer’s disease or dementia in patients with Parkinson’s disease. Treatment should only be started if a caregiver is available who will regularly give and monitor the use of Exelon by the patient. Treatment should continue as long as the medicine has a benefit, but the dose can be reduced or treatment interrupted if the patient has side effects.
Exelon capsules or oral solution should be given twice a day, with morning and evening meals. The capsules should be swallowed whole. The starting dose is 1.5 mg twice a day. In patients who tolerate this dose, it can be increased in 1.5-mg steps no more frequently than every two weeks, to a regular dose of 3 to 6 mg twice a day. The highest tolerated dose should be used to get the maximum benefit, but the dose should not exceed 6 mg twice a day.
If the transdermal patches are used, the 4.6-mg-per-24-hours patch should be used first, with the dose increased to the 9.5-mg/24-h patch after at least four weeks if the lower dose is well tolerated. The 9.5-mg/24-h patch should be used for as long as the patient benefits from it. After six months of treatment with 9.5 mg/24 hours, the doctor may increase the dose to 13.3 mg/24 hours if the patient’s condition has worsened. The patches are applied to clean, dry, hairless, intact skin on the back, upper arm or chest, and are replaced every 24 hours. They should not be placed on irritated or red skin, on the thigh or abdomen (tummy), or in places where they will be rubbed by tight clothing. The patches can be worn during bathing and hot weather. The patches should not be cut into pieces. Patients can be switched from the capsules or oral solution to the patches. See the summary of product characteristics (also part of the EPAR) for detailed information.
The active substance in Exelon, rivastigmine, is an antidementia medicine. In patients with Alzheimer’s dementia or dementia due to Parkinson’s disease, certain nerve cells die in the brain, resulting in low levels of the neurotransmitter acetylcholine (a substance that allows nerve cells to communicate with each other).
Rivastigmine works by blocking the enzymes that break down acetylcholine: acetylcholinesterase and butyrylcholinesterase. By blocking these enzymes, Exelon allows levels of acetylcholine to be increased in the brain, helping to reduce the symptoms of Alzheimer’s dementia and dementia associated with Parkinson’s disease.
Exelon has been studied in mild to moderately severe Alzheimer’s disease. The capsules have been studied in 2,126 patients in three main studies, and the transdermal patches in one main study involving 1,195 patients. Exelon capsules have also been studied in 541 patients with dementia due to Parkinson’s disease. All of the studies lasted six months and compared the effects of Exelon with those of placebo (a dummy treatment). The main measures of effectiveness were the change in symptoms in two main areas: cognitive (the ability to think, learn and remember) and global (a combination of several areas including general function, cognitive symptoms, behaviour and the ability to carry out everyday activities).
An additional study in 27 patients was used to show that Exelon capsules and oral solution produced similar levels of the active substance in the blood.
Exelon was more effective than placebo at controlling symptoms. In the three studies of Exelon capsules in patients with Alzheimer’s dementia, patients taking doses of Exelon between 6 and 9 mg per day had an average increase in cognitive symptoms of 0.2 points from a baseline of 22.9 points at the start of the study, where a lower score indicates better performance. This was compared with an increase of 2.6 points from 22.5 in the patients taking placebo. For the global score, patients taking Exelon capsules had in increase in symptoms of 4.1 points, compared with 4.4 in those taking placebo. The Exelon transdermal patches were also more effective than placebo in preventing dementia from getting worse.
The patients with dementia due to Parkinson’s disease taking Exelon capsules showed an improvement in cognitive symptoms of 2.1 points, compared with a worsening of 0.7 points in those taking placebo, from a baseline of around 24 points. The global symptom score also improved more in the patients taking Exelon.
The types of side effects seen with Exelon depend on the type of dementia it is being used to treat and whether the capsules, oral solution or transdermal patches are used. Overall, the most common side effects (seen in more than 1 patient in 10) include nausea (feeling sick) and vomiting, particularly during the phase when the dose of Exelon is being increased. For the transdermal patch, application site reactions are the most commonly seen side effects. For the full list of all side effects reported with Exelon, see the package leaflet.
Exelon must not be used in people who are hypersensitive (allergic) to rivastigmine, other carbamate derivatives or any of the other ingredients. Exelon must also not be used in patients who are suspected to have had a severe allergic reaction called ‘allergic contact dermatitis’ to the Exelon patch in the past.
The CHMP concluded that Exelon has a modest effectiveness in treating the symptoms of Alzheimer’s dementia, although this does reflect an important benefit in some patients. The Committee initially concluded that for the treatment of dementia due to Parkinson’s disease, Exelon’s benefits did not outweigh its risks. However, following a re-examination of this opinion, the Committee concluded that the medicine’s modest effectiveness could also be of benefit to some of these patients. Therefore, the Committee decided that Exelon’s benefits are greater than its risks and recommended that it be given marketing authorisation.
The company that makes Exelon must ensure that all doctors who intend to prescribe Exelon transdermal patch receive an information pack containing instructions to be given to patients and caregivers on how to use the patch safely as well as a reminder card for patients and caregivers that contains key information on how to use the patch and allows them to record the application and removal of patches.
The European Commission granted a marketing authorisation valid throughout the European Union for Exelon on 12 May 1998.
For more information about treatment with Exelon, read the package leaflet (also part of the EPAR) or contact your doctor or pharmacist.
Exelon Corp. работает как холдинг коммунальных услуг, который занимается производством энергии, маркетингом и поставкой энергии. Компания работает в следующих сегментах: Средняя Атлантика, Средний Запад, Новая Англия, Нью-Йорк, Совет по надежности электроснабжения Техаса (ERCOT) и другие энергетические регионы. Среднеатлантический сегмент представляет операции в восточной части PJM, в которую входят Нью-Джерси, Мэриленд, Вирджиния, Западная Вирджиния, Делавэр, округ Колумбия и части Пенсильвании и Северной Каролины. Сегмент Среднего Запада представляет операции в западной части PJM, которая включает в себя части Иллинойса, Пенсильвании, Индианы, Огайо, Мичигана, Кентукки и Теннесси, а также зону обслуживания MISO в Соединенных Штатах, за исключением Южного региона MISO, который охватывает весь или большую часть Севера. Дакота, Южная Дакота, Небраска, Миннесота, Айова, Висконсин, остальные части Иллинойса, Индианы, Мичигана и Огайо, не охваченные PJM, и части Монтаны, Миссури и Кентукки. Сегмент Новой Англии (NE) представляет деятельность в рамках (Международной организации по стандартизации) ISO-NE, охватывающую штаты Коннектикут, Мэн, Массачусетс, Нью-Гемпшир, Род-Айленд и Вермонт. Сегмент Нью-Йорк (Нью-Йорк) представляет деятельность в рамках ISO-NY, который полностью охватывает штат Нью-Йорк. Сегмент ERCOT представляет деятельность в рамках Совета по надежности электроснабжения Техаса, охватывающего большую часть штата Техас. Exelon была основана в феврале 1999 года и имеет штаб-квартиру в Чикаго, штат Иллинойс.