Intrinsic value of Exelon - EXC

Previous Close

$44.33

  Intrinsic Value

$31.00

stock screener

  Rating & Target

sell

-30%

Previous close

$44.33

 
Intrinsic value

$31.00

 
Up/down potential

-30%

 
Rating

sell

We calculate the intrinsic value of EXC stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 42.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  6.90
  6.71
  6.54
  6.39
  6.25
  6.12
  6.01
  5.91
  5.82
  5.74
  5.66
  5.60
  5.54
  5.48
  5.43
  5.39
  5.35
  5.32
  5.29
  5.26
  5.23
  5.21
  5.19
  5.17
  5.15
  5.14
  5.12
  5.11
  5.10
  5.09
Revenue, $m
  35,845
  38,250
  40,751
  43,353
  46,061
  48,881
  51,818
  54,880
  58,073
  61,404
  64,881
  68,512
  72,306
  76,270
  80,415
  84,750
  89,286
  94,033
  99,003
  104,208
  109,659
  115,370
  121,354
  127,626
  134,201
  141,094
  148,322
  155,902
  163,852
  172,191
Variable operating expenses, $m
  20,708
  22,053
  23,451
  24,906
  26,420
  27,996
  29,639
  31,351
  33,136
  34,998
  36,274
  38,304
  40,425
  42,642
  44,959
  47,383
  49,919
  52,573
  55,351
  58,261
  61,309
  64,502
  67,847
  71,354
  75,030
  78,884
  82,925
  87,163
  91,607
  96,270
Fixed operating expenses, $m
  10,547
  10,779
  11,016
  11,259
  11,506
  11,759
  12,018
  12,283
  12,553
  12,829
  13,111
  13,400
  13,694
  13,996
  14,304
  14,618
  14,940
  15,268
  15,604
  15,948
  16,299
  16,657
  17,024
  17,398
  17,781
  18,172
  18,572
  18,980
  19,398
  19,825
Total operating expenses, $m
  31,255
  32,832
  34,467
  36,165
  37,926
  39,755
  41,657
  43,634
  45,689
  47,827
  49,385
  51,704
  54,119
  56,638
  59,263
  62,001
  64,859
  67,841
  70,955
  74,209
  77,608
  81,159
  84,871
  88,752
  92,811
  97,056
  101,497
  106,143
  111,005
  116,095
Operating income, $m
  4,590
  5,418
  6,284
  7,189
  8,135
  9,125
  10,162
  11,247
  12,385
  13,577
  15,496
  16,808
  18,186
  19,633
  21,152
  22,749
  24,428
  26,192
  28,047
  29,999
  32,051
  34,211
  36,483
  38,874
  41,390
  44,038
  46,825
  49,759
  52,846
  56,097
EBITDA, $m
  13,763
  15,162
  16,622
  18,144
  19,733
  21,392
  23,126
  24,938
  26,833
  28,816
  30,892
  33,066
  35,344
  37,732
  40,235
  42,861
  45,615
  48,506
  51,541
  54,727
  58,073
  61,588
  65,280
  69,159
  73,236
  77,520
  82,022
  86,754
  91,728
  96,957
Interest expense (income), $m
  1,340
  1,921
  2,250
  2,586
  2,936
  3,301
  3,680
  4,075
  4,486
  4,914
  5,361
  5,828
  6,314
  6,823
  7,354
  7,909
  8,489
  9,096
  9,731
  10,395
  11,091
  11,820
  12,583
  13,382
  14,220
  15,098
  16,018
  16,983
  17,995
  19,056
  20,169
Earnings before tax, $m
  2,668
  3,168
  3,697
  4,252
  4,834
  5,445
  6,087
  6,761
  7,470
  8,216
  9,668
  10,494
  11,363
  12,279
  13,244
  14,260
  15,332
  16,461
  17,652
  18,908
  20,232
  21,628
  23,101
  24,654
  26,292
  28,020
  29,842
  31,764
  33,790
  35,928
Tax expense, $m
  720
  855
  998
  1,148
  1,305
  1,470
  1,644
  1,826
  2,017
  2,218
  2,610
  2,833
  3,068
  3,315
  3,576
  3,850
  4,140
  4,445
  4,766
  5,105
  5,463
  5,840
  6,237
  6,657
  7,099
  7,565
  8,057
  8,576
  9,123
  9,700
Net income, $m
  1,948
  2,313
  2,699
  3,104
  3,529
  3,975
  4,444
  4,936
  5,453
  5,998
  7,058
  7,661
  8,295
  8,964
  9,668
  10,410
  11,192
  12,017
  12,886
  13,803
  14,769
  15,789
  16,864
  17,997
  19,193
  20,455
  21,785
  23,188
  24,667
  26,227

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  124,894
  133,275
  141,989
  151,056
  160,491
  170,317
  180,552
  191,221
  202,346
  213,952
  226,067
  238,719
  251,936
  265,749
  280,192
  295,297
  311,102
  327,643
  344,959
  363,093
  382,086
  401,985
  422,836
  444,690
  467,598
  491,616
  516,800
  543,211
  570,912
  599,968
Adjusted assets (=assets-cash), $m
  124,894
  133,275
  141,989
  151,056
  160,491
  170,317
  180,552
  191,221
  202,346
  213,952
  226,067
  238,719
  251,936
  265,749
  280,192
  295,297
  311,102
  327,643
  344,959
  363,093
  382,086
  401,985
  422,836
  444,690
  467,598
  491,616
  516,800
  543,211
  570,912
  599,968
Revenue / Adjusted assets
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
Average production assets, $m
  85,059
  90,767
  96,702
  102,877
  109,303
  115,994
  122,965
  130,231
  137,808
  145,712
  153,963
  162,580
  171,581
  180,989
  190,825
  201,113
  211,876
  223,141
  234,935
  247,285
  260,220
  273,772
  287,973
  302,856
  318,458
  334,816
  351,967
  369,955
  388,820
  408,609
Working capital, $m
  -2,007
  -2,142
  -2,282
  -2,428
  -2,579
  -2,737
  -2,902
  -3,073
  -3,252
  -3,439
  -3,633
  -3,837
  -4,049
  -4,271
  -4,503
  -4,746
  -5,000
  -5,266
  -5,544
  -5,836
  -6,141
  -6,461
  -6,796
  -7,147
  -7,515
  -7,901
  -8,306
  -8,730
  -9,176
  -9,643
Total debt, $m
  41,660
  47,895
  54,379
  61,124
  68,145
  75,455
  83,070
  91,007
  99,284
  107,920
  116,933
  126,346
  136,179
  146,456
  157,202
  168,440
  180,199
  192,505
  205,389
  218,880
  233,011
  247,816
  263,329
  279,588
  296,632
  314,501
  333,238
  352,888
  373,497
  395,116
Total liabilities, $m
  92,921
  99,156
  105,640
  112,385
  119,406
  126,716
  134,331
  142,268
  150,545
  159,181
  168,194
  177,607
  187,440
  197,717
  208,463
  219,701
  231,460
  243,766
  256,650
  270,141
  284,272
  299,077
  314,590
  330,849
  347,893
  365,762
  384,499
  404,149
  424,758
  446,377
Total equity, $m
  31,973
  34,118
  36,349
  38,670
  41,086
  43,601
  46,221
  48,952
  51,800
  54,772
  57,873
  61,112
  64,496
  68,032
  71,729
  75,596
  79,642
  83,877
  88,310
  92,952
  97,814
  102,908
  108,246
  113,841
  119,705
  125,854
  132,301
  139,062
  146,153
  153,592
Total liabilities and equity, $m
  124,894
  133,274
  141,989
  151,055
  160,492
  170,317
  180,552
  191,220
  202,345
  213,953
  226,067
  238,719
  251,936
  265,749
  280,192
  295,297
  311,102
  327,643
  344,960
  363,093
  382,086
  401,985
  422,836
  444,690
  467,598
  491,616
  516,800
  543,211
  570,911
  599,969
Debt-to-equity ratio
  1.300
  1.400
  1.500
  1.580
  1.660
  1.730
  1.800
  1.860
  1.920
  1.970
  2.020
  2.070
  2.110
  2.150
  2.190
  2.230
  2.260
  2.300
  2.330
  2.350
  2.380
  2.410
  2.430
  2.460
  2.480
  2.500
  2.520
  2.540
  2.560
  2.570
Adjusted equity ratio
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,948
  2,313
  2,699
  3,104
  3,529
  3,975
  4,444
  4,936
  5,453
  5,998
  7,058
  7,661
  8,295
  8,964
  9,668
  10,410
  11,192
  12,017
  12,886
  13,803
  14,769
  15,789
  16,864
  17,997
  19,193
  20,455
  21,785
  23,188
  24,667
  26,227
Depreciation, amort., depletion, $m
  9,174
  9,744
  10,338
  10,955
  11,598
  12,267
  12,964
  13,691
  14,448
  15,239
  15,396
  16,258
  17,158
  18,099
  19,082
  20,111
  21,188
  22,314
  23,493
  24,728
  26,022
  27,377
  28,797
  30,286
  31,846
  33,482
  35,197
  36,995
  38,882
  40,861
Funds from operations, $m
  11,121
  12,057
  13,037
  14,059
  15,127
  16,242
  17,408
  18,627
  19,902
  21,237
  22,454
  23,919
  25,453
  27,063
  28,750
  30,521
  32,380
  34,331
  36,380
  38,531
  40,791
  43,166
  45,661
  48,283
  51,039
  53,936
  56,981
  60,183
  63,549
  67,088
Change in working capital, $m
  -130
  -135
  -140
  -146
  -152
  -158
  -165
  -171
  -179
  -187
  -195
  -203
  -212
  -222
  -232
  -243
  -254
  -266
  -278
  -291
  -305
  -320
  -335
  -351
  -368
  -386
  -405
  -424
  -445
  -467
Cash from operations, $m
  11,251
  12,192
  13,177
  14,205
  15,279
  16,400
  17,572
  18,798
  20,081
  21,423
  22,649
  24,122
  25,666
  27,285
  28,983
  30,764
  32,634
  34,597
  36,658
  38,823
  41,097
  43,486
  45,996
  48,634
  51,407
  54,322
  57,386
  60,607
  63,994
  67,555
Maintenance CAPEX, $m
  -7,956
  -8,506
  -9,077
  -9,670
  -10,288
  -10,930
  -11,599
  -12,297
  -13,023
  -13,781
  -14,571
  -15,396
  -16,258
  -17,158
  -18,099
  -19,082
  -20,111
  -21,188
  -22,314
  -23,493
  -24,728
  -26,022
  -27,377
  -28,797
  -30,286
  -31,846
  -33,482
  -35,197
  -36,995
  -38,882
New CAPEX, $m
  -5,504
  -5,707
  -5,935
  -6,175
  -6,426
  -6,691
  -6,971
  -7,266
  -7,577
  -7,905
  -8,251
  -8,616
  -9,001
  -9,408
  -9,836
  -10,288
  -10,764
  -11,265
  -11,793
  -12,350
  -12,935
  -13,552
  -14,201
  -14,884
  -15,602
  -16,357
  -17,152
  -17,987
  -18,866
  -19,789
Cash from investing activities, $m
  -13,460
  -14,213
  -15,012
  -15,845
  -16,714
  -17,621
  -18,570
  -19,563
  -20,600
  -21,686
  -22,822
  -24,012
  -25,259
  -26,566
  -27,935
  -29,370
  -30,875
  -32,453
  -34,107
  -35,843
  -37,663
  -39,574
  -41,578
  -43,681
  -45,888
  -48,203
  -50,634
  -53,184
  -55,861
  -58,671
Free cash flow, $m
  -2,208
  -2,021
  -1,835
  -1,640
  -1,435
  -1,222
  -998
  -764
  -519
  -262
  -173
  109
  406
  719
  1,048
  1,394
  1,759
  2,144
  2,550
  2,979
  3,433
  3,912
  4,418
  4,954
  5,520
  6,119
  6,753
  7,424
  8,133
  8,884
Issuance/(repayment) of debt, $m
  6,078
  6,235
  6,484
  6,745
  7,020
  7,310
  7,615
  7,937
  8,277
  8,635
  9,014
  9,413
  9,833
  10,277
  10,745
  11,239
  11,759
  12,306
  12,883
  13,491
  14,131
  14,805
  15,513
  16,259
  17,044
  17,869
  18,737
  19,650
  20,609
  21,618
Issuance/(repurchase) of shares, $m
  168
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  6,246
  6,235
  6,484
  6,745
  7,020
  7,310
  7,615
  7,937
  8,277
  8,635
  9,014
  9,413
  9,833
  10,277
  10,745
  11,239
  11,759
  12,306
  12,883
  13,491
  14,131
  14,805
  15,513
  16,259
  17,044
  17,869
  18,737
  19,650
  20,609
  21,618
Total cash flow (excl. dividends), $m
  4,038
  4,214
  4,649
  5,106
  5,585
  6,088
  6,617
  7,173
  7,758
  8,373
  8,840
  9,522
  10,240
  10,996
  11,793
  12,633
  13,518
  14,450
  15,434
  16,471
  17,564
  18,716
  19,931
  21,213
  22,564
  23,988
  25,490
  27,073
  28,743
  30,502
Retained Cash Flow (-), $m
  -2,116
  -2,145
  -2,231
  -2,321
  -2,416
  -2,515
  -2,620
  -2,731
  -2,848
  -2,971
  -3,101
  -3,239
  -3,384
  -3,536
  -3,697
  -3,867
  -4,046
  -4,234
  -4,433
  -4,642
  -4,862
  -5,094
  -5,338
  -5,595
  -5,865
  -6,149
  -6,447
  -6,761
  -7,091
  -7,438
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  1,922
  2,068
  2,418
  2,785
  3,169
  3,573
  3,997
  4,442
  4,910
  5,402
  5,739
  6,283
  6,856
  7,460
  8,096
  8,765
  9,472
  10,216
  11,001
  11,828
  12,701
  13,622
  14,593
  15,618
  16,699
  17,840
  19,043
  20,312
  21,651
  23,064
Discount rate, %
  7.60
  7.98
  8.38
  8.80
  9.24
  9.70
  10.18
  10.69
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.20
  20.17
  21.17
  22.23
  23.34
  24.51
  25.74
  27.02
  28.37
  29.79
  31.28
PV of cash for distribution, $m
  1,786
  1,774
  1,899
  1,987
  2,038
  2,050
  2,027
  1,971
  1,884
  1,772
  1,589
  1,450
  1,299
  1,144
  989
  838
  697
  567
  452
  352
  268
  199
  144
  102
  70
  46
  30
  19
  11
  7
Current shareholders' claim on cash, %
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6
  99.6

Exelon Corporation is a utility services holding company. The Company, through its subsidiary, Exelon Generation Company, LLC (Generation), is engaged in the energy generation business. The Company, through its subsidiaries, Commonwealth Edison Company (ComEd), PECO Energy Company (PECO), Baltimore Gas and Electric Company (BGE), Pepco Holdings LLC (PHI), Potomac Electric Power Company (Pepco), Delmarva Power & Light Company (DPL) and Atlantic City Electric Company (ACE), is engaged in the energy delivery businesses. It operates through 12 segments: Generation's six segments: Mid-Atlantic, Midwest, New England, New York, ERCOT and Other Power Regions; ComEd; PECO; BGE, and PHI's three utility segments: Pepco, DPL and ACE. Generation's integrated business consists of the generation, physical delivery and marketing of power across geographical regions through its customer-facing business, Constellation, which sells electricity and natural gas to both wholesale and retail customers.

FINANCIAL RATIOS  of  Exelon (EXC)

Valuation Ratios
P/E Ratio 36.1
Price to Sales 1.3
Price to Book 1.6
Price to Tangible Book
Price to Cash Flow 4.9
Price to Free Cash Flow -379.3
Growth Rates
Sales Growth Rate 6.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 12.2%
Cap. Spend. - 3 Yr. Gr. Rate 9.7%
Financial Strength
Quick Ratio 1
Current Ratio 0.3
LT Debt to Equity 124.7%
Total Debt to Equity 139%
Interest Coverage 2
Management Effectiveness
Return On Assets 1.9%
Ret/ On Assets - 3 Yr. Avg. 2.6%
Return On Total Capital 2%
Ret/ On T. Cap. - 3 Yr. Avg. 3.4%
Return On Equity 4.4%
Return On Equity - 3 Yr. Avg. 6.9%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 21.9%
EBITDA Margin - 3 Yr. Avg. 21.4%
Operating Margin 9.9%
Oper. Margin - 3 Yr. Avg. 12.1%
Pre-Tax Margin 6.3%
Pre-Tax Margin - 3 Yr. Avg. 8.9%
Net Profit Margin 3.6%
Net Profit Margin - 3 Yr. Avg. 5.7%
Effective Tax Rate 38.3%
Eff/ Tax Rate - 3 Yr. Avg. 32.4%
Payout Ratio 102.8%

EXC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the EXC stock intrinsic value calculation we used $33531 million for the last fiscal year's total revenue generated by Exelon. The default revenue input number comes from 2017 income statement of Exelon. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our EXC stock valuation model: a) initial revenue growth rate of 6.9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 7.6%, whose default value for EXC is calculated based on our internal credit rating of Exelon, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Exelon.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of EXC stock the variable cost ratio is equal to 57.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $10320 million in the base year in the intrinsic value calculation for EXC stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Exelon.

Corporate tax rate of 27% is the nominal tax rate for Exelon. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the EXC stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for EXC are equal to 237.3%.

Life of production assets of 10 years is the average useful life of capital assets used in Exelon operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for EXC is equal to -5.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $29857 million for Exelon - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 947 million for Exelon is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Exelon at the current share price and the inputted number of shares is $42.0 billion.

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COMPANY NEWS

▶ Army Corps of Engineers ceases review of Annova LNG's permit application   [Aug-10-18 04:09PM  American City Business Journals]
▶ Exelon: 2Q Earnings Snapshot   [07:27AM  Associated Press]
▶ Exelon Reports Second Quarter 2018 Results   [06:56AM  Business Wire]
▶ Exelon Corporation Declares Dividend   [Jul-24-18 11:34AM  Business Wire]
▶ WGL Holdings names new CEO, executive payouts after AltaGas deal closes   [Jul-13-18 12:44PM  American City Business Journals]
▶ Bankrupt utility tells court how much its electricity contracts are worth   [Jul-11-18 12:14PM  American City Business Journals]
▶ Exelon bids $140M for FirstEnergy Solutions retail contracts   [08:16AM  American City Business Journals]
▶ [$$] Exelon Makes Bid to Buy FirstEnergy's Retail Power Business   [Jul-10-18 06:02PM  The Wall Street Journal]
▶ [$$] FirstEnergy Solutions Pitches Retail Power Sale   [02:31PM  The Wall Street Journal]
▶ Exelon Appoints John F. Young to Board of Directors   [Jul-09-18 06:00PM  Business Wire]
▶ BGE faces potential fine for response to Winter Storm Riley   [Jul-06-18 02:19PM  American City Business Journals]
▶ 10 Best Blue-Chip Stocks to Buy in July   [Jul-03-18 02:25PM  InvestorPlace]
▶ Exelon division exploring an office move   [11:58AM  American City Business Journals]
▶ Oldest US nuke plant, near Jersey shore, closing Sept. 17   [Jul-02-18 12:44PM  Associated Press]
▶ BGE requesting rate hikes to give shareholders better returns   [Jun-13-18 08:20AM  American City Business Journals]
▶ BGE requests 3.5 percent increase in gas rates   [Jun-08-18 02:26PM  American City Business Journals]
▶ Is It Time To Buy Exelon Corporation (NYSE:EXC)?   [Jun-05-18 04:42PM  Simply Wall St.]
▶ Owner of nation's oldest nuke plant files $1.4B closing plan   [Jun-01-18 01:54PM  Associated Press]
▶ OPEC Sends Oil Prices Crashing   [May-25-18 03:00PM  Oilprice.com]
▶ Constellation gets new CEO as Exelon shakes up C-suite   [06:16AM  American City Business Journals]
▶ Exelon: 1Q Earnings Snapshot   [07:22AM  Associated Press]
▶ Exelon Reports First Quarter 2018 Results   [07:04AM  Business Wire]
▶ Exelon Corporation Declares Dividend   [May-01-18 11:04AM  Business Wire]
▶ PSEG shines, NYT upgraded, Walmart to sell Asda majority   [Apr-30-18 11:04AM  Yahoo Finance Video]
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