Exelon Corporation 2026 Q1 10-Q Summary
Business Context and Reporting Period
This is a combined Form 10-Q for Exelon Corporation and its six utility subsidiaries (ComEd, PECO, BGE, Pepco Holdings, DPL, and ACE) for the quarterly period ended March 31, 2026. Exelon operates as a utility services holding company engaged in energy transmission and distribution across Illinois, Pennsylvania, Maryland, the District of Columbia, Delaware, and New Jersey.
Key Financial Metrics
| Metric (in millions) | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Operating Revenues | $7,242 | $6,714 |
| Operating Income | $1,605 | $1,536 |
| Net Income (Attributable to Common Shareholders) | $919 | $908 |
| Diluted Earnings Per Share | $0.90 | $0.90 |
| Operating Cash Flow | $1,724 | $1,200 |
| Capital Expenditures | $(2,358) | $(1,946) |
| Total Debt (Long-term + Current Portion) | $50,185 | $49,078 |
| Cash and Restricted Cash | $1,297 | $1,582 |
Material Changes vs. Prior Period
- Revenue Growth: Total operating revenues increased by $528 million (7.9%) year-over-year, driven by approved rate increases at ComEd, BGE, and PHI, favorable weather at PECO, and the absence of customer surcharge credits at PECO.
- Profitability: Net income increased by $11 million. Operating income rose by $69 million, primarily due to higher distribution and transmission rate bases and higher Allowance for Funds Used During Construction (AFUDC) at ComEd.
- Cash Flow: Operating cash flow improved significantly by $524 million, aided by changes in working capital and regulatory asset/liability timing.
- Capital Spending: Capital expenditures increased by $412 million to $2.358 billion, reflecting ongoing grid modernization and reliability investments.
- Segment Performance:
- ComEd: Net income up $8 million; revenue down $152 million due to regulatory program adjustments, offset by lower purchased power costs.
- BGE: Net income up $38 million; revenue up $274 million driven by approved distribution rates.
- PECO: Net income up $12 million; revenue up $159 million due to favorable weather and absence of surcharge credits.
- PHI (Pepco/DPL/ACE): Net income down $25 million, primarily due to unfavorable impacts from the Pepco Maryland multi-year plan reconciliation and higher depreciation/interest expenses.
Guidance, Outlook, and Risks
- Regulatory Developments:
- ComEd: The Illinois Commerce Commission (ICC) approved a 2025 MRP Reconciliation reflecting a $234 million revenue increase. A 2024 reconciliation of $243 million was also approved.
- PECO: Withdrew a previously filed electric and gas distribution rate proceeding in April 2026 to evaluate future capital investment timing.
- Pepco (DC): A DCPSC order approving a multi-year plan was remanded by the District of Columbia Court of Appeals in March 2026 to hold evidentiary hearings.
- ACE: NJBPU approved a $54 million revenue requirement increase effective December 1, 2025.
- Tax Matters: New Treasury guidance on the Corporate Alternative Minimum Tax (CAMT) allowed Exelon to file amended returns for 2023 and 2024, reducing CAMT liability by $80 million. Exelon received a $235 million reimbursement from Constellation related to this reduction.
- Dividends: The quarterly dividend was maintained at $0.42 per share for Q1 2026 and declared for Q2 2026.
- Risks:
- Regulatory Uncertainty: Outcomes of pending rate cases (e.g., Pepco Maryland, DPL Delaware) and legislative changes (e.g., Maryland Utility RELIEF Act) could materially impact financial results.
- Environmental Liabilities: Ongoing remediation costs for Manufactured Gas Plant (MGP) sites and the Anacostia River project remain significant contingencies.
- Market Risk: Exposure to commodity price volatility is managed through hedging, but extreme weather or supply chain disruptions remain risks.
Investor Verification Checklist
- Regulatory Reconciliation Timing: Verify the timing of cash flow impacts from ComEd's MRP reconciliations and the Pepco Maryland multi-year plan reconciliation disallowances.
- Capital Expenditure Execution: Monitor the $9.9 billion full-year 2026 capital expenditure guidance against actual spending, particularly regarding grid modernization projects.
- Tax Normalization: Track the status of IRS Private Letter Rulings (PLRs) regarding Net Operating Loss Carryforwards (NOLC) for ratemaking, which could impact rate base and regulatory liabilities.
- Debt Maturities: Review the schedule for long-term debt maturities and refinancing needs, noting the issuance of $1.12 billion in long-term debt during Q1 2026.
- Environmental Accruals: Assess the sufficiency of accrued liabilities for environmental remediation, specifically the Benning Road and Anacostia River projects.