Exelon Corporation

Hello and welcome to Exelon's first quarter earnings call. My name is Gigi and I'll be your event specialist today. All lines have been placed on mute to prevent any background noise. Please note that today's webcast is being recorded. During the presentation, we'll have a question and answer session. You can ask questions by pressing star 1 1 on your telephone keypad. If you would like to view the presentation in a full screen view, click the Full Screen button by hovering your computer mouse cursor over the PowerPoint screen. Press the Escape key on your keyboard to return to your original view. And finally, should you need technical assistance, as a best practice, we suggest you first refresh your browser. If that does not resolve the issue, please click on the Help option in the upper right-hand corner of your screen for online troubleshooting. It is now my pleasure to turn today's program over to Andy Plenge. Vice President of Investor Relations. The floor is yours.

Thank you, Gigi. Good morning, everyone. We're pleased to have you with us for our 2023 first quarter earnings call. The leading call today are Calvin Butler, Exxon's President and Chief Executive Officer, and Gene Jones, Exxon's Chief Financial Officer. Other members of Exxon's senior management team are also with us today, and they will be available to answer your questions following our prepared remarks. presentation being used for today's call can be found in the investor relations section of Exelon's website. As a reminder, the earnings release and other matters that we will discuss during today's call contain forward-looking statements and estimates that are subject to various risks and uncertainties. As a result, actual results could differ from our forward-looking statements based on factors and assumptions discussed in today's material and comments made during this call. You can find in today's AK and Exelon's other SEC filings the discussion projections, forecasts, and expectations. In addition, today's presentation includes references to adjusted operating earnings and other down-the-gap measures. Both the appendix of our presentation and our earnings release contain information on reconciliations between the gap measures and the nearest equivalent gap measures. We've scheduled 45 minutes for today's call, and it is now my pleasure to turn the call over to Calvin Butler, Exxon's President and CEO. Thank you, Andy, and good morning, everyone.

We appreciate you joining us for our first quarter earnings call. Our team of 19,000 plus employees have entered this first full year of operations after the separation, excited to lead the energy transformation as a premier T&D utility. And it shows in our results. We are delivering our plan on course. I'll start on slide four, covering our key messages. We delivered strong year-over-year growth in the first quarter, earning $0.67 per share on a gap basis and $0.70 per share on a non-gap basis. These results keep us on track to deliver earnings within our guidance range of $2.30 to $2.42 per share for 2023. This is despite the impact of mild weather, which is a testament to the stability offered by the progressive, largely decoupled rate-making mechanism. jurisdictions operationally we had our best on record reliability performance at all four of our utilities with comment continuing to operate in the top decile as it pertains to our rate cases we are well underway in a number of jurisdictions with three new filings initiated since the fourth quarter earnings call building a stronger smarter resilient and cleaner grid requires investment We are engaging with our stakeholders to align on our shared goals and ensure this investment is compensated fairly as it is integral to our strategy. On February 15th, Atlantic City Electric filed a distribution base rate case with the New Jersey Board of Public Utilities to support investments in infrastructure to maintain safety, reliability, and customer service for our customers. It also includes initial recovery for ACES smart meter deployment, which brings a host of benefits that Jean will highlight shortly. VGE filed its second multi-year plan on February 17th, and PEPCO DC filed its second NYP on April 13th. Both NYP rate cases incorporate investments that enable the energy transformations guided by jurisdictional policy, whether it be the Climate Solutions Now Act in Maryland or DC's transformative energy policies like the DC Climate Action Plan. Finally, PEPCO expects to file its second MYP, our final anticipated base rate filing for the year, with the Maryland Public Service Commission later this month. Jean will take the time to highlight the next steps across our open rate cases and provide additional details on the regulatory calendar shortly. Now, in working through these rate cases, we have Maryland and Pennsylvania, and new appointees in Illinois and Maryland. We appreciate the service of the outgoing commissioners and are excited to begin working with the newest members on this next phase of the energy transformation. Given this transformation will be measured in decades, it reinforces the importance of building a shared, forward-looking understanding of priorities and needs across a variety of stakeholders which is accomplished through transparency and collaboration. This kind of approach supports continuity through the inevitable evolution in legislative and regulatory bodies over time. Lastly, we continue to reaffirm our existing expectations to be at the midpoint or better of our 2021 to 2025 and 2022 to 2026 6% to 8% annualized earnings growth ranges. with dividend growth to match, underpinned by the investments we are making on behalf of customers and earning an annual consolidated ROE in the 9% to 10% range during that time. Our diverse, deconcentrated capital expenditure plan and predictable investment recovery frameworks contribute to the compelling, risk-adjusted total shareholder return of 9% to 11% that we offer investors between our dividend and earnings growth through 2026. Next slide. Slide 5 reviews our operating performance for the start of 2023. Beginning first with reliability, you can see that our utilities continue to operate at industry-leading levels both in terms of outage frequency and outage duration. Both ComEd and PHI achieve best customer value we are now using total system outage time versus average customer outage duration as one of our reliability metrics this refined metric better ensures we are comprehensively capturing the customer experience on an equitable basis in each of our service territories this performance is a testament to the hard work that our employees put in each and every day It also speaks to the effectiveness of the investments in reliability and resiliency that our utilities have made, providing a great foundation as we discuss with our stakeholders the next phase of investments to support their energy transformations. As it pertains to safety, PHI is now operating at top up from the second quartile last year, while BGE improved the second quartile from third quartile. Now, while we are encouraged by the progress we have made on the safety front in the company, we have a safety-focused, zero-tolerance culture. We are using targeted training at each of our utilities, such as ergonomics awareness training at ComEd in light of its move down to second quartile to address the areas driving underperformance. Gas odor response continues its run of top decile performance with all three utilities performing at world-class levels in 2023. PHI responded to all gas orders in less than an hour, achieving a perfect rating. Lastly, I want to spend a moment talking about customer satisfaction. after three out of the four closed out 2022 in top quartile. While each operating company has unique areas to address, there are a few common trends. For instance, the bar for communicating with customers around outages and reliability continues to be raised. As our customers increasingly rely on the grid, whether it be working remotely or charging their cars, already have at their disposal, such as mobile apps, and we will continue to invest in enhancements focused on improving communications. Although another area of focus is new technology through upgrades to our customer care and billing software, these investments will allow us to provide more options to meet customer needs around billing and other services and enhance self-service options scores relative to the latest available benchmark as of 2021 is one that is not unique to Exelon. While the inflationary environment has shown signs of abating recently, particularly around energy supply costs that are a pass-through for us, customers have been impacted by increased costs in many aspects of their lives and businesses. That's why we will continue to focus on maintaining more than average rates and overall bill levels. Again, Rates in our cities are 23% below the average rate in the largest cities in the United States. And we have connected customers to increasing amounts of assistance as well, totaling over $1 billion the last two years. But we have to continue to articulate the value customers are receiving, and we will maintain focus on managing our own costs to deliver our products as efficiently as possible. We also address bill impacts in our approach to rate cases. Our proposed deferral of 35% of ComEd's 2024 rate increase to 2026 is just one example, as is PECOS DC proposed expansion of the residential aid and arrears management programs. In short, we are leading the industry for the first quarter. Jean?