Hello, and welcome to Exelon's First Quarter Earnings Call. My name is Gigi, and I'll be your event specialist today. [Operator Instructions] Please note that today's webcast is being recorded. [Operator Instructions]. It is now my pleasure to turn today's program over to Andrew Plenge, Vice President of Investor Relations. The floor is yours.

Thank you, Gigi, and good morning, everyone. We're pleased to have you with us for our 2024 first quarter earnings call. Leading the call today are Calvin Butler, Exelon's President and Chief Executive Officer; and Jeanne Jones, Exelon's Chief Financial Officer. Other members of Exelon senior management team are also with us today and they will be available to answer your questions following our prepared remarks. Today's presentation, along with our earnings release and other financial information can be found in the Investor Relations section of Exelon's website. We'd also like to remind you that today's presentation and the associated earnings release materials contain forward-looking statements, which are subject to risks and uncertainties. You can find the cautionary statements on these risks on Slide 2 of today's presentation or in our SEC filings. In addition, today's presentation includes references to adjusted operating earnings and other non-GAAP measures. Reconciliations between these measures and the nearest equivalent GAAP measures can be found in the appendix of our presentation and in our earnings release. It is now my pleasure to turn the call over to Calvin Butler, Exelon's President and CEO.

Thank you, Andrew, and happy birthday. Good morning, everyone. We appreciate you joining us for our first quarter earnings call. We continue our focus on strong execution. We have started the year with solid operational performance and are on track to meet our financial expectations, and we are making good progress on the regulatory front having concluded ComEd's rehearing process almost 2 months ahead of schedule. But before I get into the details of today's call, I want to start by acknowledging all of the thoughtful outreach we received on the passing of my predecessor, Chris Crane. Exelon and really the energy industry wouldn't be what it is today without his leadership. All 20,000 of our employees are committed to furthering the legacy of the platform he established and the culture of operational excellence he promoted permeates all aspects of the performance you see today. Beginning with our key messages on Slide 4. We earned $0.66 per share on a GAAP basis and $0.68 per share on a non-GAAP basis. We again faced well-below-normal weather across our jurisdictions, along with significant storm activity, but having approximately 3/4 of our revenues decoupled from load, balanced cost recovery mechanisms and strong operating earnings guidance of $2.40 to $2.50 per share. We are on track to deliver that. We also continue to perform in the top quartile operationally across all of our operating company utilities. On the regulatory front, we have continued to make good progress. As laid out in our fourth quarter call, a key goal this year is to improve our regulatory outlook in Illinois. We took a large step forward on March 13 when we filed our updated grid plan with the Illinois Commerce Commission. Upon hearing from the Commission in December, the ComEd team got to work the day…

Thank you, Calvin, and good morning, everyone. Today, I will cover our first quarter financial update and progress on our 2024 rate case schedule, including key developments in Illinois. Starting on Slide 6, we show our quarter-over-quarter adjusted operating earnings [ log. ] As Calvin mentioned, Exelon earned $0.68 per share in the first quarter of 2024 versus $0.70 in the first quarter of 2023, reflecting lower results of $0.02 per share over the same period. Earnings are lower in the first quarter relative to last year driven primarily by $0.04 of higher interest expense due to the rise in interest rates and higher levels of debt at the holding company and at some of our utilities. $0.03 of higher restoration and damage repair costs associated with the challenging storm season across the Mid-Atlantic and $0.02 of lower return on ComEd's distribution investments, including no return on its pension asset resulting from the December rate order. This was partially offset by $0.07 of higher distribution rates at our other utilities associated with incremental investments net of other expenses. Results of $0.68 per share in the first quarter represents an approximate 28% contribution of the midpoint of our projected 2024 operating earnings guidance range, which is right in line with historical patterns, but slightly behind where we expected to be for Q1. This is a direct result of the continued warmer-than-normal temperatures in our non-decoupled jurisdictions, and the challenging storm activity experienced throughout the first 3 months of 2024. As we look ahead to the next quarter, the relative EPS contribution is expected to be approximately 15% of the midpoint of our projected full year earnings guidance range, which contemplates the update to ComEd's revenue requirement approved by the Illinois Commerce Commission to go into effect in May bills. In combination…

Thank you, Jeanne. I will close on Slide 10 by reminding you of your 2024 -- of our 2024 business priorities and commitments and the unique power of our platform. As always, we start with operational excellence, providing safe and reliable power to our customers as the demands on the grid continue to increase. We remain committed to achieving regulatory outflows and adequately balanced stakeholder interest, supporting the necessary progress on the energy transformation. This includes completing the ComEd grid plan process in a way that allows sufficient investment in the grid to support Illinois energy goals. We are focused on delivering on all of our financial commitments for the year, investing $7.4 billion of capital expenditures while earning a consolidated ROE of 9% to 10% and delivering operating earnings per share of $2.40 to $2.50 per share. And we expect to achieve this while executing on our financing plan to maintain a strong balance sheet. We continue our strong advocacy for equitable and balanced energy transition, taking advantage of the unprecedented federal support through IIJA for investment across the ecosystem while continuing our industry-leading efforts to strengthen our communities. As you may have seen, we are proud to partner with the Cal Ripken Sr. Foundation to open 81 STEM centers across various cities. We serve, including Atlantic City, Chicago, Philadelphia, Wilmington and Washington, D.C. We opened the very first of those in April in Lansdowne, Maryland, and we are excited give students an opportunity to gain hands-on knowledge, skills and confidence in areas like coding and engineering, which are indispensable in the energy industry. We also continue to focus on maintaining a long-term O&M trajectory that supports customer affordability while relentlessly pursuing opportunities to operate more efficiently as one Exelon. Executing against our established priorities and commitments year in and year out is what you would expect of a premier utility. In many ways, those priorities and commitments aren't new. The foundation of operational excellence and a commitment to values that support the diverse communities we have, the privilege and responsibility to serve was established long ago by Chris. He demanded continuous improvement from the businesses he ran while relentlessly advocating for sensible and long-sighted policies. And he was an equally strong champion of diversity and inclusion, including industry-leading efforts to advance equitable recruitment, retention and promotion of women along with award-winning programs in workforce development and supply diversity. Indeed, he laid the foundation for the STEM Academy initiative that I highlighted moments ago. We will all miss Chris, and we look forward to honoring his legacy by pushing Exelon to lead the energy transformation with the platform and culture that he helped establish. Gigi, that concludes our prepared remarks, and we welcome any questions from the audience.

[Operator Instructions] Our first question comes from the line of Jeremy Tonet from JPMorgan Securities, LLC.

This is actually Aidan Kelly on for Jeremy. Just looking at Pennsylvania, there appears to be an abundance of natural gas growth potential in the Marcellus and Utica if incremental demand materializes. Do you see this backdrop in ample reserve margin supporting data center development in the state?

The short answer is yes. And I would tell you that we continue to see significant activity around high-density load growth in general. As we discussed in our -- as recently as our Q4 2023 earnings call, we have high probability of load growth, not only in Illinois, but Pennsylvania. And I have with me Dave Velazquez and both Mike Innocenzo, who can provide you further color. But the short answer is yes, and I'll turn it over to them to see if they want to add anything.

This is Dave. Just to add that we have continued to see different businesses, including some interest from data centers in the PECO territory and we have the infrastructure to be able to support that both on the generation side and also have the transmission infrastructure, again, would have to be reinforced in certain places to be able to serve those loads.

Yes. And I would add, we've got -- we have a governor that's very aggressive around economic development. We're an energy exporter in Pennsylvania. So the ability to utilize that for all sorts of growth, I would say, in addition to data centers, we're seeing electrification, we're seeing development around the South Philadelphia area. So lots of opportunities for growth and all sorts of electrification.

And the key to your question for me is that the utilities in all of our jurisdictions, we will be a partner in economic development, identifying areas and opportunities to put the assets of our jurisdictions in play. Thank you for the question.

Yes, that's super helpful. And then maybe just one follow-up, shifting to the PECO rate cases. Could you just talk more about the prospects of receiving approval for both the storm mechanism and weather normalization adjustment. Just curious, like have these been used before? Are they a first-time ask in front of the PUC. And just like any points of contention you would highlight there?

Great question, and Dave is going to take that.

Now both those mechanisms have been used or are being used. So if you think of the weather normalization on the gas, 4 of the 6 gas utilities already have a weather normalization adjustment. And 1 of the 2 that doesn't, has applied as well for a weather normalization adjustment. And then on the storm reserve, 1 of the major electric companies in PA already has a storm reserve account similar to us and another of the major utilities for storms uses kind of a rider, which is kind of like an automatic add to the bill. So both are mechanisms that are known and have been approved in the past in PA.

Our last question comes from the line of Carly Davenport from Goldman Sachs.

Just wanted to ask on ComEd. Just as you think about getting the timing to getting clarity around the grid plan refiling? Obviously, the rehearing was resolved sooner than anticipated as you highlighted. Is there any potential for that refiling resolution to also come sooner? Or do you think it's really a December event?

I do, Carly, this is Calvin. I do believe it's a December event. We continue to work the process. And I would tell you, the fact that we did get the other ruling prior to the statutory deadline was very -- was a positive outcome, but we are -- continue to work with all the stakeholders to drive this process to conclusion. And if we get those rates into effect prior to the beginning of -- at the beginning of the next year, that lays the foundation for us to continue to work with the Illinois Commission and the government to achieve the results of the -- one out of the Climate Equitable and Jobs Act, but I do not see it any sooner than that, Gil, you have anything you'd like to add?

No. I think -- just a couple of important things to note. On its own accord, the ICC voted on an interim order to say that they will decide on this by December. And subsequent to that, the administrative law judge on April 11, set forth the procedural schedule to guide it for a decision in December of this year.

Great. And then I know that you've gotten a lot of the year's financing needs done during the first quarter. But just as you think about the rest of the year there, do you expect there to be any sort of impact relative to your base plan just given the move that we've seen in rates here year-to-date?

Carly. No, I think getting that corporate financing done was important, and we had also pre-issuance hedge, a significant portion of that as we always do heading into the year. So that's why we give you the sensitivity on an open year, it's about $0.01 absent any hedges. So we've really -- we work hard leading into the year to mitigate it and then getting it done early in the year, leaves -- any amount that isn't hedged sort of takes that risk off the table. The other thing I'll note is coming out of the separation, we were holding a little bit more short-term debt than we normally do. As part of that financing in the first quarter, we termed out all about $500 million. So that's all we carry in short-term debt, and that's typically what we would normally carry. So also completed that. And then in our operating companies, for the most part, interest expenses are covered, whether immediately through sort of reconciliations or over time as we capture them in new rate cases. So it's really the corporate exposure that we continue to manage.

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

Let me just always say thank you for joining today and for your interest in Exelon. Always appreciated you taking the time and asking questions, and we look forward to connecting with all of you over the next several months. And with that, Gigi, that concludes today's call.

Thanks to all our participants for joining us today. This concludes our presentation. You may now disconnect. Have a good day.