Hello, and welcome to Exelon's Fourth 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. 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 2023 fourth 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's 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, Andy, and good morning, everyone. We appreciate you joining us today. On Slide 4, we have laid out our key messages for today's call. First, we are pleased to share that final results for 2023 exceeded the midpoint of our narrowed guidance, delivering $2.38 per share of operating earnings, or almost 6% growth off of last year's guidance midpoint. This is the second year in our two years as a purely regulated T&D utility that we have delivered results in the top half of guidance. And that is despite historically mild weather in the Mid-Atlantic where PECO experienced its mildest year in the 50 years we have on record. We also executed exactly as expected on our financing plan, including issuing one-third of our original $425 million equity commitment. Operationally, we continue to set the bar for the industry. We closed out another year with leading performance setting records for performance at multiple utilities. As it pertains to our regulatory activity, we completed three rate cases last year and continue to make progress on the three others at Delmarva Power Delaware, Pepco Maryland and Pepco DC. We received the final order in BGE's second multiyear plan filing for rates effective 2024 to 2026. We were encouraged to receive an order that recognized the importance of investment in support of Maryland's energy goals and a thoughtful path towards decarbonization. We also reached a constructive settlement in Atlantic City Electric rate case. The increased revenue requirement will support its smart meter rollout, its EV smart program for easy and cost-efficient charger installation, and other investments to maintain safety and reliability, as well as improved service for our customers in New Jersey. Last, we received an order in ComEd's first multiyear rate plan, and it was a disappointing outcome. First, the order failed to recognize the financial cost of ComEd's investment, despite nation-leading reliability and low customer rates. It adopted a significantly below average return on equity (ROE), refused to reflect in rates the prudent share of equity and removed any return on our pension asset despite that asset delivering over $1 billion in customer value and counting. But more importantly, it rejected our grid plan which was carefully developed over almost two years through dozens of stakeholder workshops and presentations reaching over 1,000 people and bolstered by voluminous support in the rate case process. Support for the investment plan was very strong, up through the administrative law judge's proposed order. It's important to all of us who are working to meet our state's goals and serve our customers that we have a stable and certain regulatory environment, and we'll work with all of our stakeholders to achieve such an environment and ensure that Illinois is a state that investors are comfortable committing to. As such, a key focus of this team for 2024 will be regaining momentum in Illinois and resolving some of this uncertainty. It is in no one's interest, particularly those in the Illinois communities we serve and live in for the state to lose further ground in its opportunity to lead the energy transformation and forgo significant economic opportunity. We will be working diligently with stakeholders to get it back on track. Jeanne will cover more of the detail around Illinois shortly, and additional details on other rate cases can be found in the appendix. Our last key message pertains to our projected outlook. Consistent with past practice, we have rolled forward our disclosures after adding a year to our guidance window with our guidance running from 2024 through 2027. You'll see that we have added $3.2 billion of capital to our four-year outlook, growing from $31.3 billion over the 2023 to 2026 guidance period to $34.5 billion over 2024 to 2027, an increase of over 10%. This reflects a number of updates across the platform to meet customer needs and jurisdictional goals, including the addition of transmission investments assigned from the brand insurer's retirement and awarded in PJM's 3 RTEP reliability window to resolve reliability issues from data center growth in the region. These additions are partially offset by the reduction of approximately $1.25 billion in ComEd distribution spend. While we are working to finalize the revised grid plan for our March filing, we believe our plan appropriately accounts for the uncertain regulatory outlook while ensuring customers continue to receive safe and adequate service, and we meet the basic requirements laid out under the Climate and Equitable Jobs Act. This increase in capital expenditures results in rate base growth of 7.5% from 2023 to 2027. And as a result of the significant increase in investment, we have included in our four-year projections incremental equity of $1.3 billion, which represents approximately 40% of the net incremental capital and ensures we maintain a strong balance sheet as we lead the energy transformation. In addition, despite below average returns we are receiving at ComEd, we continue to expect to realize a consolidated ROE in the 9% to 10% range. The result of the plan is an annualized operating earnings growth target of 5% to 7% through 2027 from our 2023 guidance midpoint of $2.36 per share. Now lowering our earnings growth outlook is not a change we took lightly, particularly given the amount of investment needed for this multi-decade energy transformation and our unique scale and platform to lead that work. Reducing investment in ComEd as a result of the final quarter lowered our expected rate base growth, but it also provided us an additional opportunity to deploy capital in other parts of the system across our seven jurisdictions to serve our customers, particularly in transmission. I'll note that the financial benefits of these investments do take longer to play out. Given the larger scale and scope of transmission projects, they require more time to generate cash and earnings relative to the distribution investments they are replacing. But we are confident that we can deliver at the midpoint or better of our annualized growth rate change of 5% to 7% over the 2023 to 2027 horizon and beyond, even after accounting for the potential that the uncertain process in Illinois may require significant further adjustments. And once again, Jeanne will speak more to these updates to our long-term outlook shortly. Lastly, for 2024, we are initiating our projected operating earnings guidance at $2.40 to $2.50 per share. This range gives us confidence that we can accommodate a variety of outcomes through the ComEd rehearing and grid plan processes, along with our typical risks and opportunities we see across our platform. We have also announced an annualized dividend of $1.52 per share in 2024, reflecting 5.5% growth off of our $1.44 dividend per share in 2023, in line with our long-term earnings growth and approximately 60% payout ratio. Moving to slide 5, I will discuss the 2023 commitments and priorities we initiated during last year's fourth quarter call and highlight the significant progress we have made in all prioritized areas as a dedicated transmission and distribution utility leading the energy transformation. First, operationally, it has been another outstanding year. This is evident not only in our scorecard but also recognized by the industry. As we noted in our last call, ComEd received the ReliabilityOne Award from PA Consulting for being the most reliable utility in the country. The remarkable performance at ComEd and Pepco Holdings showcases the quality of our workforce and our efforts to attract, engage, and retain talent. We also achieved all our financial goals, investing $7.3 billion in capital to serve our customers and earning a 9.3% return on equity, which is within our targeted range of 9% to 10%. As I mentioned, our earnings were in the upper half of our guidance range. We successfully executed our strategy to maintain a strong balance sheet, issuing one-third of our existing equity commitment, raising debt at favorable interest rates for both our operating companies and holding company, and utilizing various hedging instruments. We actively secured grants made possible by the Infrastructure Investment and Jobs Act, receiving nearly $200 million in awards for grid resiliency and modernization at BGE, PECO, and ComEd, helping our jurisdictions achieve their energy objectives more affordably and equitably. Furthermore, in support of customer affordability, we secured $550 million in federal, state, and local assistance for low-income customers needing help with their energy bills. We also made significant strides in maximizing value for our customers by institutionalizing a permanent team dedicated to identifying and pursuing opportunities to deliver industry-leading operational excellence at a lower cost. Lastly, we tackled a busy regulatory calendar, settling a rate case at ACE and concluding another successful multiyear plan for BGE's electric and gas customers with a suitable investment strategy for the next three years, and making substantial progress in our Delmarva Power electric rate case and Pepco multiyear plans. While we finalized our ComEd rate case, the outcome was disappointing for all involved. However, we have already begun to lay out a path forward, which will be our top priority in 2024. I will now move to slide 6 to discuss how we wrapped up 2023 operationally. Beginning with reliability, we maintained outage frequency and duration at top quartile levels. ComEd and Pepco Holdings achieved record performance in both categories. Such performance stems from having a skilled and trained workforce. We appreciate our teams who consistently show up despite the conditions to maintain service during severe storms and extreme cold. In January, over 500,000 customers across ComEd, PECO, and PHI were affected, which requires ongoing investment. The increasing demands on our system due to severe weather, a more distributed generation fleet, and an economy increasingly dependent on electricity necessitate this investment. Thus, having stable regulatory environments is crucial as it allows us to plan for future investments and ensure the reliability our customers expect. Safety will remain a key focus in 2024. Our OSHA performance in 2023 fell short, and we are committed to understanding and addressing the factors leading to this underperformance across our utilities. The main issues stem from everyday basics like ergonomics and vehicle-related incidents rather than high-energy events that typically require special attention. Nonetheless, this subpar performance, even in lower impact areas, is unacceptable, and we strive for better outcomes in 2024. Customer satisfaction improved across the board in the fourth quarter, with ComEd reaching the first quartile. We are pleased that our initiatives to demonstrate the value of our service to customers are yielding results, and we look forward to continuing this momentum into 2024. Additionally, gas odor response metrics remained stable, reflecting our ongoing commitment to service. I am incredibly proud of the teams at BGE, PECO, Pepco, and Delmarva. There was much for our employees to celebrate in 2023, and we are confident in our capability to operate as a premier utility. I will now turn it over to Jeanne for more information about our financial and regulatory update. Jeanne?

Thank you, Calvin and good morning everyone. Today, I will cover our fourth quarter and full year results, key regulatory developments in Illinois and across the platform, and provide annual updates to our financial disclosures, including 2024 guidance. Starting on Slide 7. As Calvin noted, we delivered strong financial results for the second year in a row despite the historically mild weather impacting our non-decoupled jurisdictions. For the fourth quarter, Exelon earned $0.62 per share on a GAAP basis and $0.60 per share on a non-GAAP basis. For the full year 2023, we earned $2.34 per share on a GAAP basis and $2.38 per share on a non-GAAP basis, results that are at the top end of our narrowed guidance range, and represent almost 6% growth off the midpoint of the 2022 guidance range. Throughout the year, we benefited from a higher earned ROE at ComEd, primarily due to rising treasury rates impacting ComEd's distribution ROE as well as favorable depreciation of PECO relative to expectations. Additionally, the ruling in December on BGE's reconciliation from its first multiyear plan approved recovery for over 90% of the requested 2021 and 2022 amounts and established a precedent to record a portion related to the 2023 reconciliation, which is expected to be determined in a future proceeding. These benefits, coupled with our ability to manage our plans across the platform, allowed us to mitigate nearly $140 million of weather and storm challenges relative to the prior year, along with the labor strike in New Jersey that occurred late in the year, driving contracting costs up year-over-year. In a year in which we faced multiple headwinds, we delivered on our goal to achieve earnings in the top half of our guidance range. Quarter-to-date and year-to-date drivers relative to prior year are detailed in the appendix on Slides 30 and 31. Turning to our outlook for 2024, we are initiating adjusted operating earnings guidance of $2.40 to $2.50 per share, with BGE and PEPCO entering the next cycles of their multiyear plan. 2024 earnings are expected to grow approximately 4% relative to the midpoint of our 2023 original guidance range. Compared to our last update, the reduction in expected year-over-year earnings growth is driven solely by the December 14th rate order issued by the Illinois Commerce Commission and ComEd multiyear rate plan, which we were only able to partially mitigate in 2024 with cost management, redirected investment to serve our customers, and margin we had built up in the plan. Outright rejection of the grid plan, the challenging financial support for our net distribution investment in the December order, and uncertainty around the amount of spend ComEd will be able to recover has caused us to dramatically reduce the originally planned level of distribution investment in Illinois this year. Until there is resolution on the grid plan, our 2024 plan has been risk-adjusted for the overall uncertainty and prudently assumes earnings at ComEd consistent with the December rate order. While the rehearing on the interim revenue requirement is expected to provide additional cost recovery and grid plan approval, we have not assumed this as our base case. Therefore, despite the uncertainty that remains at ComEd, we expect our 2024 range to cover a range of possible outcomes, from not receiving any rate relief relative to the final order to the prospect that we receive approval of our revised grid plan. The uncertainty in Illinois will further cause volatile quarterly earnings shaping in 2024, both due to the significant rework of ComEd's operational plan in 2024, as well as due to the prospects for the rehearing and revised grid plan processes to impact ComEd's expected revenue requirements. We currently expect to realize approximately 29% of full year earnings in the first quarter, which accounts for the December rate order for ComEd, seasonal weather patterns and the completed rate cases at our other utilities. Moving to Slide 9. I would like to take a moment to step through the regulatory developments in Illinois since receipt of the ICC's final order in mid-December. First, starting with the application for rehearing on December 22, ComEd acted swiftly to request the commission correct fundamental, legal, and evidentiary errors around four primary issues with the final order: Return on equity, capital structure, return on pension assets, and the basis of the ordered revenue requirement across all test years that was adopted absent an approved grid plan. At an open meeting on January 10, the ICC granted one portion of ComEd's application, directing that the 150-day rehearing process reconsider the year-over-year revenue requirement increases absent an approved grid plan. While ComEd anticipates that the revenue requirements will be further updated upon approval of our revised grid plan, the rehearing order due on June 10 is expected to reset interim rates for 2024 at the discretion of the commission. Immediately following the open meeting on January 10, ComEd filed with the Third District of Appellate Court an appeal of the three other elements of the ICC's final order on which rehearing was denied. While there is no set schedule or deadline for an appeal conclusion, we will seek to move expeditiously through the core process. Separately, as directed in the final order, ComEd will file a revised grid plan by March 13. ComEd has fully reengaged staff and all parties to the proceeding to align on the appropriate adjustments to the revised grid plan to fully address the concerns expressed by the commission. We continue to believe significant investment is needed to support Illinois' clean energy goals and desire to promote economic development in the state, a fact acknowledged by all stakeholders. But the revised grid plan we expect to file will reflect the significantly below average financial support provided in the final order and address the commission's feedback to further prioritize affordability. We simply cannot invest at the same pace under an ROE that does not fairly recognize ComEd's cost of financing to do so, especially in the current interest rate and inflation environment. There is no statutory deadline action on the revised grid plan. However, the final order stated that the commission appreciates the urgency of having a compliant grid plan in place and is eager to move forward with the grid plan that satisfies the statutory requirements for approval. And so we are optimistic for resolution by year-end. In response to the challenging rate order, our long-term guidance reflects a $1.25 billion reduction in ComEd distribution capital expenditures over the three-year period spanning 2024 to 2026 relative to our Q4 2022 disclosure update. This updated investment outlook for ComEd distribution business includes reductions agreed to with stakeholders leading up to last October's per quarter. Along with additional reductions to result in a plan that further balances priorities across our stakeholders. As I will discuss later, around our long-term outlook, our guidance has accounted for the possibility that substantially more capital is removed from the plan as a result of the process, despite significant broad-reaching support for our investment strategy. On Slide 10, we provide our updated outlook for CapEx and rate base, covering 2024 to 2027. We plan to invest $7.4 billion in 2024 and a total of $34.5 billion over the next four years, an increase of $3.2 billion or over 10% from the prior planning period. So we reduced ComEd's distribution capital plan by over 18% in response to the final order. The multi-decade energy transformation continues to gain momentum, and we see no shortage of needs to invest for our customers across all of our service territories and an ability to do so at a reasonable cost. We are the largest transmission and distribution utility in the country by customer count, and we have the privilege and responsibility to serve many major densely populated areas. We operate six utilities across seven jurisdictions, including FERC. And beyond our industry-leading size and scale, we are also one of the best operators in this sector, providing a world-class customer experience for reliability at very competitive rates. Given the power of this platform, our updated four-year capital plan includes $3.2 billion of additional capital, net of the adjustments to common distribution to serve our customers. Included in that increase is $1.5 billion of incremental transmission capital over the 2023 to 2026 period since our last disclosure update. Addressing the significant need for high-voltage investments to support federal, state, and customer goals on renewable energy and electrification. $725 million of that increase is projected at ComEd for data center and other high-intensity new load growth, along with increasing renewables and retirements of older fossil fuel generation is driving increased transmission investment needs. The balance of the additional transmission largely relates to the two large transmission projects discussed on prior earnings calls. The RTEP reliability Window 3 projects awarded by PJM to mitigate reliability challenges driven by incremental data center demand in the region and the other assigned due to the retirement of the brand insurance coal plant. While some of the transmission capital at ComEd is expected to go in service during the guidance period, very little of the transmission spend for the large East Coast project is reflected in the updated rate base outlook. Brand Insurance is expected to go into service in 2028, while the RTEP Window 3 project will be in service closer to 2030, providing line of sight to strong rate base growth beyond the current guidance window. We continue to expect there will be transmission opportunity across our service territories, associated with the same drivers underpinning these projects, high-density localized load growth, traditional fossil fuel plant retirements increased renewables, not to mention from our extremely well-positioned footprint on the Mid-Atlantic Coast for offshore wind interconnection. To further put our competitive position into perspective, all but one mile of those two large transmission projects is expected to occur on our existing right-of-ways. We expect to remain active in seeking additional opportunities to lead in this space. And as always, we will only include spend in our plan that is identified and expected to proceed tied to the needs of our jurisdictions. In total, our capital plan updates are expected to result in an increase to rate base of 7.5% over the next four years on a compound annual growth basis to $74 billion. This growth adds approximately $18.5 billion to rate base from 2024 through 2027 and reflects a shift in the mix of our total capital growth portfolio by 2% from distribution to transmission since the last disclosure update despite a significant portion of the transmission capital added, not yet placed in service. Exelon's transmission rate base growth recovered through FERC formula rate provides a stable and predictable financial profile. As clean energy and electrification continue to grow, our transmission strategy is designed to adapt to this new paradigm while continuing to operate the transmission system at world class levels. Moving to slide 11. One way to ensure sustainability of our capital growth profile is to continue delivering superior value as efficiently as possible to our customers and communities. And as one Exelon, we are building from a strong foundation. Our history of steady cost discipline, while delivering a premier experience for our customers has positioned us very well, as you can see in the chart on the right. Exelon's investment in grid modernization has enabled an approximate 40% increase in reliability performance across the platform, whether based on outage frequency or outage duration, while maintaining average electric rates 17% below the top 20 metropolitan cities in the United States. More simply put, when a dollar is placed in our hands to invest, our customers entrust us to create value through reliable, affordable service. Had our adjusted O&M costs growing in line with the historical annualized inflation rate of 3.5% from 2016 through 2024, they would have increased by approximately $1.2 billion. Instead, we are projecting a 2.4% CAGR for the same period, eliminating $400 million of customer rate increases that would have occurred without our intentional focus on driving efficiencies. And while 2024 is expected to grow at a higher rate, one key driver is the number of significant back office and operational IT system investments whose savings will be monetized over a longer period of time, as I'll discuss in a minute. In addition, upon aligning with several of our jurisdictions on the spending programs associated with advancing their state's energy goals and priorities through the recently approved rate cases, we are anticipating some catchup to meet the levels of service and investment agreed upon with our jurisdictions. However, we expect to maintain an annualized growth rate of approximately 2% through 2027, a below inflation level that is expected to result in – to our customers over $400 million lower than they otherwise would have been. Our expectation is to limit the annualized O&M growth rate to approximately 2% over the long-term and maintain our competitive position with rates among those that are the lowest in the nation will improve our customers' experiences. In fact, our multiyear plan rate structures allow us to quickly flow any benefits back to customers. Let me take a moment to highlight a few ways in which we continue delivering value for our customers. First, as Calvin mentioned, a permanent team has been established in 2023 to continue efforts to standardize and streamline the structure and operations of the organization. Ensuring all of our efforts are coordinated with the sole purpose of serving our customers and communities in an efficient and superior manner. Second, we have several initiatives underway to upgrade major enterprise resource planning, customer billing and automated work order systems expected to create work efficiencies, some of which I mentioned are driving our spend in 2024. Third, we are standardizing storm response protocol to increase roll transparency and accountability and emergency events, mitigating cost risk and improving restoration performance in the future. Fourth, we are delivering a framework to migrate from a preventive maintenance asset management strategy to an automated condition-based maintenance strategy in our transmission operations. And lastly, we are streamlining processes and leveraging technology, particularly in the call center and field for increased efficiency and responsiveness to our customers. To ensure that rates and revenues remain strong and that we can invest at the levels our jurisdictions want, we are committed to leveraging our size and scale as one Exelon to manage costs across our operating companies and deliver affordable rates for our customers. Turning to slide 12. With $34.5 billion of projected capital spend driving 7.5% rate base growth and with continued focus on earning ROEs of 9% to 10%, we are initiating an annualized operating earnings growth target of 5% to 7% through 2027 from our 2023 guidance midpoint of $2.36 per share. The lower growth outlook from what we previously laid out is not a decision we took lightly, but as a result of the challenging rate case outcomes and decelerated pace of investment in Illinois. As you heard from Calvin, Illinois is only one jurisdiction in which we operate. We are continuing momentum in our other jurisdictions as the second multiyear plans at Pepco progressed in line with our expectations, as PECO anticipates filing in the first half of this year, consistent with our general two to three-year rate case cadence and does all of our utilities execute on the robust transmission strategy and cost management initiatives outlined on the prior slide. Accordingly, we are confident that our earnings compounded annual growth rate will be at midpoint or better of the 5% to 7% range over the 2023 to 2027 period and in future updates. Even with the process in Illinois remaining uncertain, our earnings growth guidance is resilient and accounts for the possibility that limited progress is made in Illinois, and we need to significantly reduce investment in common distribution further. We also continue to project an approximate 60% dividend payout ratio of operating earnings, with the dividend growing in line with our long-term earnings target. We announced today an expected annualized dividend of $1.52 per share in 2024 which is over 5.5% higher than the 2023 dividend. Maintaining our commitment to transparency and predictability, we have provided year-over-year drivers contributing to the expected annual growth in our earnings through 2027 on slide 13. While there is variability in the year-over-year growth over the four-year time period, the business drivers provide transparency into our expected 5% to 7% growth through 2027. I will conclude with a review of our balance sheet activity on slide 14. As you have heard from us before, maintaining a strong balance sheet is core to our strategy, and we closed out another year with credit metrics comfortably exceeding S&P and Moody's downgrade thresholds of 12%. Similar to the first two years since operation, over the guidance period, we project to continue to have approximately 100 basis points of cushion on average for our consolidated corporate credit metrics above the threshold specified by the agencies. While the final rate order issued by the commission in Illinois negatively impacted our future cash flow outlook, we have largely mitigated those impacts through cost management and curtailment of distribution capital spend at ComEd, while ensuring we maintain a safe, reliable growth for customers. As we identify new investments in the plan, we are funding in a prudent manner by incorporating an incremental $1.3 billion of equity to ensure we maintain our previous commitment on pushing and keep us on a path to 13% to 14% consolidated credit metrics over time. As our consolidated spend profile has shifted more towards transmission, the cash generated from these longer-dated investments is expected to follow the earnings largely beyond the guidance period and further strengthen our credit metrics over time. Additionally, I remind you that our plan continues to incorporate the assumption that the corporate alternative minimum tax will not allow for repairs. If implemented in a way that mitigates the cash impact, we'd expect an increase of approximately 50 basis points to our consolidated credit metrics average on average over the plan, which would provide incremental cushion. From a financing perspective, we expect the $34.5 billion capital plan to be supported by $19 billion of internally generated cash flow. $10 billion of debt at the utilities and $3 billion of debt at the holding company with the balance funded with a modest amount of equity. In the fourth quarter of 2023, we completed $142 million of equity via our ATM and expect $150 million to be issued in 2024. And as mentioned, to fund the robust $3.2 billion of incremental capital opportunities while maintaining a strong balance sheet, our financing plan includes $1.3 billion of additional equity that we expect to issue over the 2025 through 2027 period. The incremental equity funds 40% of the incremental capital investments over the four-year plan and represent slightly more than 1% per year of Exelon current market cap. As we work with our jurisdictions and identify needs for further investment of utilities, we anticipate that any incremental capital investment will be funded by no more than approximately 40% equity. I want to close by reiterating our confidence in investing an estimated $35 billion of capital across our diversified platform from 2024 to 2027, driving 5% to 7% earnings growth from 2023 to 2027 with an expectation of midpoint or better and maintaining a strong balance sheet while doing so. Thank you. I'll now turn the call back to Calvin for his closing remarks.

Thank you, Jeanne. I'd like to conclude with our priorities and commitments for this year and remind you of Exelon's unique value proposition for the jurisdictions it serves and its investors. As you'll see, they're very consistent with our focus areas for 2024, a good reminder that we aim to reliably deliver against a predictable and consistent strategy, as you'd expect from a premier utility. First, you can count on us to prioritize operational excellence and safety in service of our customers. As you may have seen, we created a Chief Operating Officer position and named Mike Innocenzo, the CEO of PECO to that role. Mike will build on the top-tier performance level customers have come to expect. And in succeeding him, Dave Velazquez will bring his wealth of experience and strong leadership to PECO. Both moves are a testament to the unparalleled bench strength that Exelon enjoys. And our Chief Human Resource Officer, Amy Best, has been instrumental in building that advantage. We wish her all the best in her next chapter and look forward to Denise Galambos' leadership as Exelon's new Head of HR. Second, we expect to deliver on the prudent financial plan that we have laid out. Spending $7.4 billion less in the grid on behalf of our customers and communities, earning a consolidated return on equity in the 9% to 10% range, consistent with the cost of investing in the grid, and delivering earnings in the range of $2.40 and $2.50 per share while maintaining a strong balance sheet in executing our financing strategy. Next, we expect to reach collaborative and constructive outcomes of the rate cases we have underway, along with the ones we expect to initiate in 2024 to ensure we can continue to deliver safe, reliable, and affordable energy to our customers and help the states make their desired progress on their energy goals. And we will continue our efforts to ensure the energy transformation is as equitable and affordable as possible. Building on our success in 2023 in mid-January, we submitted seven concept papers for the next $3.9 billion that the Department of Energy's grid deployment office is making available under its GRIP program enabled by the Infrastructure Investment and Jobs Act. With proposals ranging from software across the enterprise to enable increasing levels of distributed renewable energy sources to targeted investment at Pepco Holdings to combat coastal impacts of climate change, they highlight our creative and far-reaching efforts to partner with our jurisdictions and creatively align local state and federal policy. And beyond accessing these funding sources, as Jeanne highlighted, we will continue our efforts to standardize and simplify our operations to manage the increases in costs associated with the expanding needs of the grid while delivering premium service for customers. Lastly, what's distinct this year is a recognition that last December's final order in the ComEd multiyear plan did not bring the resolution on how to invest over the coming years in the first rate case process undertaken by the approach laid out in the Climate and Equitable Jobs Act. But while we are disappointed, we are not deterred. We are committed to finding a path forward with stakeholders that restore certainty for our customers, employees, and investors. We believe everyone wants a level of investment that can deliver on the promise of ceaseless energy transformation and positions us to lead the energy transformation. And so we will be working toward that outcome while preparing to pivot if that's not the case. Delivering against these priorities while continuing to establish our position as a premier T&D utility, and our platform is incredibly unique. We have the privilege and responsibility of serving some of the nation's greatest cities with jurisdictions that recognize the unique opportunity they have to lead the energy transformation. Our asset footprint, the transmission and distribution network that is the lifeblood of making that transformation happen for our jurisdictions is unmatched, as is our scale with over 10.5 million customers across our seven ratemaking jurisdictions. We have been setting the bar for operational performance for years and our ability to invest to support that performance is backed by strong forward-looking and predictable regulatory mechanisms. With our dividend yield at 4.5% and a 5% to 7% annualized earnings growth rate that we have a strong conviction in achieving, we are offering investors total shareholder returns in the 9.5% to 11.5% range and an extremely attractive risk-adjusted proposition. I am so proud of this team for the commitments made and kept in 2023, and we look forward to doing the same in 2024. As always, thank you for your time and support, and we'll now take your questions.

Thank you. Our first question comes from the line of Shar Pourreza from Guggenheim Partners.

Hey guys. Good morning.

Good morning, Shar.

Hey, good morning.

Good morning. Calvin, starting with Illinois, I mean the team has had a few months now to digest the order. You're not alone in facing sort of that disorder from the ICC. I mean, both the electric and gas guys have throttled investments and they've laid off workers. I guess what did you guys miss heading into that final order? But really more importantly, why is this current distribution spend now appropriate? Is it a floor kind of positioned for upside in Jeanne's comments for 2024 kind of broad with upside and downside. So just trying to handicap the path forward with this new guidance. Thanks.

Thank you, Shar. Both Jeanne and I are disappointed with the outcome. Despite our high level of engagement with stakeholders and the administration regarding the state's policy and alignment, as well as the passage of the Climate Equitable and Jobs Act, the results were not what we had hoped for. I want to acknowledge Joe Jonas and his team for their tremendous effort throughout this process. Leading up to our January 2023 filing, we participated in 15 ICC-led workshops with hundreds of participants and responded to over 10,000 data requests during the 11-month rate process. We received a proposed order that granted about 79% of our revenue requirement request, leaving a $350 million gap in rate base, or roughly 2% by 2027. However, throughout this engagement, we had not received input from the Illinois Commerce Commission. Now that we have their feedback, it's our responsibility to align with their requests. As Jeanne detailed, we are re-engaging in the stakeholder process, with Jill and his team regularly meeting with stakeholders to outline our plans and meet the commission's objectives of affordability and reliability. We are developing a plan to achieve these goals and will keep communicating with stakeholders. Additionally, we are prepared to adapt as necessary. I assure you that our projected earnings growth of 5% to 7% is based on various outcomes, and we will make adjustments accordingly. Our priorities remain providing safe and reliable electricity for the citizens of Illinois while maintaining a financially healthy company. We believe we can achieve these goals in partnership with the Illinois Commerce Commission, and we are committed to continuing this dialogue. Jeanne, do you have anything to add?

I will provide an update and address Shar's second question. For 2024, we have set a guidance range with a midpoint that takes into account the December 12, 2023 order. There's also a rehearing process underway that pertains to an interim revenue requirement while the grid plan is being approved. We filed the grid plan on March 13, and its approval will influence our 2024 outlook. If we secure an interim revenue requirement or advance the grid plan, there could be upward potential for 2024, but the midpoint reflects the December order. Moving beyond 2024, we expect the grid plan to be approved. It's a solid plan focused on safe and reliable operations and aligns with progress on CEJA, although we'll face challenges due to unfavorable economic conditions. We are committed to making progress regardless. There is no defined timeline for the commission's review of the grid plan, but we remain optimistic it will be resolved this year. The commission acknowledged the urgency in their December order. So, while 2025 to 2027 assumes the grid plan is approved, we are ready to make further reductions if necessary to ensure delivery.

Perfect. I appreciate it. Let me leave it at that. Thank you guys.

Thank you.

Thank you. One moment for our next question. Our next question comes from the line of Nicholas Campanella from Barclays.

Good morning, everyone. Thanks for taking my questions. So I guess just to clarify on the CapEx plan. I mean, the plan is $3 billion can change higher, to your point. I guess your 2026 rate base does seem like it is lower, though plan-over-plan. So I guess, could you just help us clarify what's maybe driving that? I know there's probably some moving pieces in the starting point for ComEd rate base, but yes.

Yeah, it's really the difference between the distribution. So pulling back on the distribution investments and then replacing it with transmission. We talked about it in the prepared remarks. There are kind of two slices of it. There's the awards we've been talking about, the brand insurers and the ARTEP window, where those projects will close in 2028 and at the end of 2028 for brand insurers and then 2030 for the ARTEP window. And so those will go into rate base outside of the planning period. And so as we move distribution out and layer those in, you're not seeing the 1:1 offset rate base. We do have other transmission that will close within the period, but it is back-end loaded. And as you know, transmission doesn't have, even if it's closed within that, you're right, it doesn't have the same impact as distribution. So it's really just the shift that we made from distribution to transmission.

That's helpful. I appreciate that. And then, I guess, maybe you can help us understand on the financing, really not much equity to do in 2024. Just where does your balance sheet stand for 2024 relative to the agency minimums? And just what's the feedback been from the agencies on this new plan and maintaining the stable outlook? Thanks.

Sure, no problem. The key point aligns with what we discussed last year. During the planning period, we anticipated having a 100 basis points cushion without the Corporate Minimum Tax. If we manage to alleviate that tax, we would return to the middle of our target range. Since our last conversation, a few developments have occurred, notably the ComEd order, which impacted our balance sheet. We successfully mitigated that effect significantly—not entirely—but by reducing distribution expenditures and operating and maintenance costs, along with adjusting pension contributions and other measures to recover from the ComEd order. Additionally, as we introduced new capital, funded with around 40% equity, we achieved our desired cushion of 100 basis points. From a year-over-year viewpoint, we expect the initial phase of our plan to be slightly lower, especially on the Moody's side, remaining above the threshold but lower in 2024. We anticipate improvement throughout the planning period, primarily due to regulatory cash recovery mechanisms, like the formula rate true-up for 2023, expected to be in 2025. This is reflected in our average of 13%. Furthermore, the impact of equity builds upon itself, so as we progress toward the latter part of the planning period and beyond, it will continue to strengthen that cushion. Additionally, as the transmission projects conclude, their cash flows will positively influence our metrics. Thank you, Nick.

Thank you.

Thank you. One moment for next question. Our next question comes from the line of Steve Fleishman from Wolfe Research.

Excuse me. Hi. Good morning. I know you're engaging with many parties in Illinois. Is there a possibility that you could resolve some of these issues, or do we need to let the commission decide everything? Additionally, apart from the order they issued, is there a way to better understand the commission's expectations? Are we going to have to wait for further clarification again?

Yes. No, thank you, Steve. I'll start with this, and then I have with me Gil Quiniones, who's the CEO of ComEd to really be in here as well. My view on this settlement, as I mentioned, Gil and his team are engaged with the stakeholders. We may reach some settlement in discussions with stakeholders about what they're looking for, and we would submit it to the commission. But I think overall, a settlement in principle on the rate case, I think, is unlikely. The process will continue to play out. The fact that we are in the midst of a pending proceeding, we cannot speak directly nor should we, with the commissioners themselves. So our view of where they stand came in the form of their December 14 order, and we have a clear understanding. But what we can do and what we are doing is engaging with staff, consistently talking again as we did for the last two years. We're back reengaged in that process. What we are providing them and sharing with them is under the tenets of the Climate and Equitable Jobs Act. The need to align policy and practice, what the law says and what we need to do to carry it out seek some alignment between the legislative body and the commission to accomplish the shared goals of all of us. And that is our conversation from day one, and that will continue to be based on the feedback that they've given. Gil, anything you want to add?

Yeah. Calvin and Steve, what's different now is that it's very clear in the final order what they identified as things that complied with the law and things that the commission thinks there are gaps. So one-by-one, we are making sure that we're addressing those gaps in the final order. Second, as Calvin said, we're working very closely with staff and each of the intervenors in this case to make sure that we have alignment. In some cases, some intervenors have very specific areas that they would like for us to address. And as Calvin said, in those cases, we may have alignment where we can stipulate in our testimony that we have arrived at an agreement with those specific issues. So, we're making sure that we are addressing what the final order set, where the gaps are. We're working very closely with staff to make sure we have alignment with them, and then we're working with each of the intervenors in the case for their very specific issues that they want included in our grid plan.

Okay, great. Thank you.

Thank you, Steve.

Thank you. Our next question comes from the line of Julien Dumoulin-Smith from Bank of America.

Hey good morning team. Hey great. Appreciate it. Just wanted to follow-up real quickly on some of Nick's cash questions real quickly. Can you guys comment a little bit? I mean, FFO looking through the four-year window here, a little bit better than the prior plan. And that's in spite of obviously some of the rate base dynamics, et cetera, but it looks like a $2 billion bump to CFO there helps the balance sheet. But can you talk about that a little bit further here? And then also maybe if you can to elaborate on some of the earlier questions, I mean, where do you guys overall within the plan? I know that you articulated here given years up and down. But overall, are you in the lower end or the midpoint, if you will, of the updated EPS?

So, let me take the last part first, and then I'll turn it over to Jeanne. So, as we talk about the 5% to 7% earnings growth, we are committed to midpoint or better. And I think Jeanne even referenced at least, right? So, this is a plan that we've put together that's very prudent and our ability to achieve it. And we've demonstrated as an organization, we can take on headwinds and continue to meet the target. As I said, Julien, I'm so proud of the team and the commitments made and commitments kept. And we will continue to do that. You think about what we had to overcome in 2023 to deliver in excess of our midpoint to $2.38. So, that's the commitment there. And I'll let Jeanne talk about the additional equity and balance sheet and so forth.

Yes. We continue to show you, Julien, in the year-by-year projections, which helps reach that midpoint or better. There will be some years above the range, some within the range, and various points that achieve that mid-screen or beyond, as Calvin mentioned, and that information is still in the presentation. Regarding the balance sheet, I would say it is a bit different. We are consistent with our previous expectations. We anticipated maintaining a cushion of 100 basis points and plan to uphold that. We largely mitigated the ComEd order through our internal measures. Additionally, to maintain that cushion, we funded it responsibly by incorporating 40% of every new dollar of equity.

Got it. And through the plan, you're assuming consistent authorized equity ratios and returns to get to that midpoint or better?

We are assuming the authorized, yes, for each of the jurisdictions on the cap structure.

Yes, cap structure and ROE, yes, indeed. Excellent. Well, I will leave it there guys. Thank you very much.

Thank you, Julien.

Thank you. One moment for the next question. Our last question comes from the line of Ross Fowler from UBS.

Good morning, Calvin. Good morning, Jeanne. So I want to acknowledge before I ask my question, that there is upside to the unit process, but I wanted to spend a minute on, Jeanne, I think what you talked about is the downside to the forecast and the risks in Illinois versus the plan. You did a great job mitigating some of that today with the transmission CapEx to replace sort of the distribution CapEx. But that was a lot of brownfield transmission that we've been talking about for a while, and even that is sort of back-end loaded in the forecast and greenfield would presumably take even longer. So maybe you can continue to do that if there's downside to distribution CapEx in ComEd in the plan, but what are the other levers that you could pull here? Is that lower equity as CapEx declines? Is that lower O&M? How do I think about what levers you have at your disposal to sort of offset that downside risk should that be the outcome in Illinois?

Yes, I understand several aspects of your question. First, for every plan we present, we always include a safety margin. We're modeling various scenarios to ensure we can manage outcomes based on the final grid plan. At lower return on equities, significant capital is required at ComEd to impact distribution meaningfully, and we're ready to adjust if necessary. This could have additional repercussions for financing and other factors. We will also consider operational and maintenance strategies, as we have in the past. Part of the transmission we added was related to new opportunities at ComEd linked to high-density localized load growth from data centers, as we continue to modernize our grid system. These needs must be met. Additionally, while we have mentioned two opportunities, we recognize potential for more transmission related to offshore wind interconnections due to Maryland and New Jersey executive orders. As these projects develop, we believe we will remain competitive. The plan acknowledges the potential for upside by executing the grid plan, while also allowing for adjustments if needed. Furthermore, we haven't factored in any performance metrics yet. Our growth plan is designed to capture some of these metrics, and we will work hard to achieve them, though they aren't included in the plan at this time.

Yes. And if I can just add, Ross, I think what's critical, what Jeanne has said is that understanding Illinois is just one of our many jurisdictions in which we operate and what we continue to demonstrate in terms of the value of Exelon is our scale and size and the jurisdictions and the opportunities that exist across our platform. We always talk about the power of the platform, and you saw it flexed in 2023, and you'll see it flexed over our long-range plans from 2024 to 2027. So Illinois is a focal area. And as I shared with you, it's a priority for all of us. I know Gil and his team are fixed on it, but we have other businesses that we will continue to run and as always, manage our costs to ensure that we do it on a very pragmatic basis. Thank you for the question.

Sure. Thanks, Calvin. Appreciate it. Thank you.

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

Thank you, Gigi. And more importantly, thank you to everyone for joining today's call. We look forward to seeing many of you in 2024 and as committed for the upcoming spring conferences, Jeanne and I and Andy, the IR team will be on the road. They promised me that we'd be doing that. So thank you, and I look forward to engaging with all of you. But more importantly, I just want to say to the 19,500 employees here at Exelon: Thank you for everything that you guys do each and every day. So proud of the performance that we delivered in 2023, and I know we're just getting started. So with that, 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.