Corporate Communication and Reputation Audit

Susan Fleming Alex Penovich Mackenzie Porter Jeff Troupe

PRAD 564 Corporate Communication

Section I - Executive Summary

Headquartered in Chicago, Exelon has operations and business activities in 47 states, the District of Columbia and Canada. The company is the largest competitive U.S. power generator, with approximately 35,000 megawatts of owned capacity. Its Constellation business unit provides energy products and services to approximately 100,000 business and public sector customers and approximately 1 million residential customers. Exelons utilities deliver electricity and natural gas to more than 6.6 million customers in central Maryland (BGE), northern Illinois (ComEd) and southeastern Pennsylvania. Exelon places a great deal of emphasis in terms of time and money on the environment, corporate social responsibility (CSR) and sustainable energy. Their major, multi-year effort to ensure a future with a healthy environment Exelon 2020 is centered on compliance, risk management, resource stewardship and leadership. Exelon views this effort as extremely important to building shareholder value. Corporate citizenship is one of Exelons values. Over the past six years, it has raised $139 billion. Unfortunately, Exelon is in a space with significant public relations challenges. Its reputation is weak, according to major reputation rankings. Traditional media coverage including print and broadcast has focused on acquisition activity. Social media leadership is lacking, with inconsistent activity by subsidiary companies and NO presence with Exelon itself. Exelon has huge opportunities to improve its corporate reputation. These opportunities range from establishing scholarships for environmental studies to expanding its public relations and investor relations efforts. These recommendations follow a review of reputation indicators, such as reputation rankings, media coverage and social media presence.

Section II Company Website, SEC Filings and Social Media Channels

The first thing you see when you enter the Exelon website is the word sustainability in large font across the top of the page. The transmission and delivery of energy is referred to by Exelon as the energy value chain. Clearly, Exelon wants to portray an image of responsibilityto the community, to its people and to its shareholders. Navigation across the top of the About Us page includes tabs for environment, community, people and performance. A Self-Proclaimed Commitment to the Environment Exelon 2020 is a major initiative its the Exelon business strategy guide for investment decisions and a framework for public policy advocacy on climate change. The goal is to identify 2

reliable, lower cost electricity supply options that can also achieve other key environmental objectives. From 2010 through 2015, the company is investing nearly $5 billion in cost-effective, clean energy projects to support the objectives of Exelon 2020. It is focusing on green operations, helping customers, reducing use and producing low carbon electricity. Environmental strategy focuses on four areas Regulatory Compliance, Risk Management, Resource Stewardship and Leadership. The Company reports out on all of these areas in its Environmental Performance Review, with concrete data and charts, indicating progress toward Exelon 2020 goals. In addition, sustainability is the topic of the majority of public speaking. Corporate Citizenship Giving focuses on four areas education, environment, arts and culture and neighborhood development. The company issues grants to organizations for initiatives that support these four areas. Over the past six years $139 million has been donated to organizations in Exelon service areas. In 2011, over 2,400 employees served over 61,000 hours as volunteers at various organizations in Exelon service areas. The company supports employee volunteers by helping them find community service opportunities, recognizing and rewarding their work, and providing grants to the nonprofit organizations through their Dollars for Doers program. The senior management team and other employees serve on the boards of more than 350 nonprofit organizations throughout the Chicago and Philadelphia areas. In 2011, they helped 12 organizations raise in excess of $900,000. Values and Mission The following are Exelons values: Safety Integrity Diversity Respect Corporate citizenship Accountability Continuous improvement

Culture focuses on performance, promotes thought leadership, encourages innovation and acknowledges the power of ideas that are generated by a diverse work force. Ethics and corporate governance seem to be important, along with sustainability. The Code of Conduct can be downloaded from the Exelon website. The Exelon vision:
To be the best group of electric generation and electric and gas delivery companies in the United States providing superior value for the customers, employees, investors and the communities we serve. The Exelon family of companies requires a workforce that is bold and committed to our core values: safety, integrity, diversity, respect, corporate citizenship, accountability and continuous improvement. We foster a culture that focuses on performance, promotes thought leadership, encourages innovation and acknowledges the power of ideas that are generated by a diverse work force.
Attract and retain employees who will best serve our customers and their communities

Treat diversity and inclusion as a business imperative

Create a challenging and rewarding workplace

Social media channels Exelon has no social media presence. However, there are varying degrees of social media presence with individual Exelon companies, such as Constellation Energy, PECO, BGE and ComEd. Three of these companies Constellation, ComEd, and BGE, are active on twitter. Constellation, BGE and PECO have Facebook Pages. Only one of these Facebook pages is robust Constellation has 9,000 likes and uses the page for education, tips/advice and answering customer questions. Constellation and BGE are the two most active on twitter. Constellation uses it for tips and advice, as well as announcements. They have about 4,600 followers and have tweeted about 1,500 times. BGE has about 4,500 followers and has tweeted more than 5,500 times. BGE uses twitter to give tips and advice, for announcements and to connect to their blog. PECO has no twitter presence and it appears that their Facebook page is unmanaged. Its apparent from this social media audit that Exelon has no corporate policy with regard to how its subsidiaries use social media. This is quite surprising, given that consumers love to hate their energy company and given the potential for customer dissatisfaction over interruptions in power.

SEC Filings The 10-K has some unique features, including nuclear site development, nuclear waste disposal and environmental information, such as hazardous waste risks and remediation costs. Quite a bit of real estate is taken with discussion of how Exelon is sponsoring energy efficiency programs and mitigating environmental risks. The proxy statement details the Board of Directors. There are 20 directors, of which three are women. Eleven of the directors are associated with companies that are suppliers to Exelon. Financial, banking, utilities, nuclear energy, legal, politics and science are all represented. Areas that are lightly or not represented at all include technology, with only one director having relevant background and marketing has no representation. This is surprising, given the degree to which public relations misadventures are a threat. As an aside, if you had bought $100 worth of Exelon stock in 2001, it would be worth $258.07 in 2011. This sounds good until you compare it to the high of $409.24 in 2007. Perception Based on its website, Exelon presents itself as a good corporate citizen, striking a balance between shareholder value, the community and customers. The company takes up plenty of real estate on their website talking about how they support the community. Also, it feels that it is truly concerned and supportive of sustainability. It appears that Exelon has invested quite a bit of time and money on planning and executing against the 2020 initiative. Most energy companies face significant public relations challenges. Prices for many types of energy sources in recent years have skyrocketed and outages due to storms are frequent and present challenges in getting back on line. Exelon subsidiaries have adopted social media in an inconsistent manner. Embracing social media could be a great way to communicate with customers during service interruptions.

Section III - Magazine Rankings of Reputation, Brand and CSR

The Reputation Institute does not include energy companies in the top five general dimensions of reputation. Companies represented in that dimension are Amazon, Google and Walt Disney. According to the Reputation Institute, the energy industry has a weak reputation, scoring 57.97 in 2012, a decrease from 59.41 in 2011.

According to Harris Interactive, energy companies are midrange for reputation ratings with 35% ranking the industry as positive, 23% ranking the industry as neutral, and 38% ranking the industry as negative.

Position among Competitors NextEra Energy NextEra Energy (NEE) was named in the FORTUNES Americas Most Admired Companies with a score of 6.95. Exelon received a score of 6.27. NextEra Energy tied with Southern for the #1 position in the Electric and Gas Industry with Exelon taking the #5 position. NextEra ranked #10 for Social Responsibility on CNN Money. NextEra Energy was named One of the 100 Best Corporate Citizens in the U.S. in 2010 by CRO (Corporate Responsibility Officer) magazine and IW Financial. In addition, NextEra received multiple awards for environmental sustainability. Integrys Integrys (TEG) is not ranked on CNN Money, Brand Z or Rep Trak in 2011 or 2012. Integrys has received only local awards and recognition in 2011,such as the Sheboygan Young Professionals Advocate of the Year Award and the Wausau Chamber of Commerce Athena Award for a Diverse Workplace. This is a drastic departure from 2010, in which Integrys was named FORTUNE Magazines 4th Most Admired Energy Company, Forbes 20 Most Responsible Companies, 12th in Newsweek Magazines Green Rankings for Utilities and an award from Wisconsin Governor, Jim Doyle. Southern Company Southern Company (SO) tied with NextEra for the first place position on FORTUNE Magazines Most Admired Companies in the industry. Southern is one of the 150 Most Reputable U.S. Companies according to the 2011 Reputation Industry Rep Trak with a rank of 61 and a Rep Trak score of 70.28. The Boston College Center for Corporate Citizenship ranked Southern among the top 50 in its 2010 Corporate and Social Responsibility Index. Southern Company was named among the top 100 Best Corporate Citizens for 2011 by Corporate Responsibility Magazine and was in the top five of its industry. Southern Company was named by the Platts 2011 Global Energy Awards as the Power Company of the Year. Business to Business Magazine named Southern Company Company of the Year in Georgia in 2010. In addition, Southern Company has received numerous state-level and national awards for sustainability and excellence, such as the 2011 State of Alabama Hall of Fame and EPA recognition in 2010 as ENERGY STAR Partner of the Year.

Exploring Exelons Rankings Exelon ranked fifth among natural and electric gas industry on FORTUNEs Americas 100 Most Admired Companies. Exelon has most recently received awards and recognition for sustainability, diversity, innovation in the industry and as a place of employment. Exelons Reputation Institute rankings are slightly up in position from 2011 at a rank of 130 to 2012 at a rank of 119; the Rep Track score decreased by -1.39. Exelon received a weak rank among energy companies according to the Reputation Institute. However, Exelon has received more awards and recognition than the majority of its competitors in a range of areas such as environmental sustainability, energy development and usage, diversity and reputation. While Exelon may not have a strong reputation, that is more a reflection of the industry as a whole as opposed to Exelons individual perception Exelon has been recognized in 2006-2011as one of FORTUNE Magazines Most Admired Companies. In addition, Exelon has received positive recognition for its work in energy according to the prestigious Edison Electric Institute, the United States Government, and the EPA. Exelon was also recognized for diversity and equality in the workplace as well as a Best place to work. Exelon has also received recognition as the third Best Corporate Citizen of America by Corporate Responsibility Magazine. Exelon Specialty List and Awards In 2010 and 2011, Edison Electric Institute, (EEI), named Exelon a finalist in contention for the Edison Award, the most prestigious award in the energy industry. Exelon was named the EPAs ENERGY STAR Partner of the Year in 2012. All three Exelon utilities, BGE, ComEd, and PECO were recognized for their contributions to energy efficiency. Exelon was listed in the Bronze Class of sustainability leaders by the Sustainable Asset Management Sustainability Yearbook in 2011, which recognizes the top 15% of sustainability companies. Exelon was named from 2006-2011 in the Dow Jones Sustainability North America Index. Exelon received a 100% rating and was named Best Place to Work by the Human Rights Campaign Best Places to Work 2012 recognizing the policies and practices for diversity within the company. FORTUNE Magazines Most Admired Companies listed Exelon from 2006-2011, making Exelon one of five energy companies on the list of the most admired United States companies in the world. Exelon ranked third by Corporate Responsibility Magazines 100 Best Corporate Citizens 2010. Edison Electric Institute, (EEI), named Exelon EEI Edison Award Finalist 2011, which is the most prestigious honor for promoting diversity.

Section IV - Media Coverage

Exelon Corporation is an extraordinarily complex company. As such, its media footprint is equally diverse. During the one-year span from May 15 of 2011 until May 15 2012, Exelon garnered significant national media coverage. In addition to national news, smaller markets covered a range localized stories on a variety of issues related to the company. In order to better understand the scope and content of Exelon-related media coverage, there sections will be examined: 1. Elite and National Media 2. Financial and Trade Publications, and 3. Localized Media. Elite and National Media The national story that generated the most news coverage in the past year is Exelons recent merger with Maryland-based Constellation Energy, which created a $33 billion company whose assets comprise the largest producer of nuclear power in the United States. Final plans for the merger were approved by the Federal Energy Regulatory Commission on March 9, 2012. In the year leading up to federal approval, elite media outlets, including the New York Times, Associated Press, Reuters, and the Wall Street Journal covered the merger extensively. The tone of these news stories was largely positive or neutral. This is likely due to Exelons relatively strong safety and environmental records, as well as little resistance among federal regulators. Simply put, the merger lacked any significant conflict between the company and outside stakeholders; or if conflict did exist, it simply wasnt juicy enough for reporters, who instead focused on the financial aspects of the merger. As the countrys largest nuclear-generating company, in the elite media outlets often feature Exelon when covering stories that deal with nuclear energy. Nuclear regulation, safety, homeland security and environmental issues are continually in the national spotlight, and Exelons role as a market leader means theyre often quoted or discussed in these stories. Over the last year, there have been some small safety incidents at Exelon facilities, but no serious crises. The vast majority of national coverage has examined the overarching role of nuclear energy in Americas diversified energy landscape. Nuclear energy allows Exelon two distinct advantages in the media that many of its competitors lack: a relatively low environmental impact often measured by carbon or mercury emissions and its status as a sustainable resource. Financial Publications Because it is a large public company, Exelon Corporation (EXC) is covered extensively by financial and trade publications. In addition to the companys large size, workforce and significant economic footprint, Exelon is a financially stable company with relatively little debt. 8

Reputable financially focused publications frequently scrutinize the monetary aspects of Exelon. Bloomberg Businessweek, Forbes, The Economist, Fortune, Investors Business Daily, and, of course, The Wall Street Journal, regularly feature articles about the company. One reason for this extensive coverage is that Exelons large market cap relative to other industry competitors and diverse energy portfolio means that it often serves as a financial indicator relative to other energy companies stock prices. In addition to mainstream financial publications, a wide array of financial websites, including Yahoo Finance, CNBC, CNN, and many other lesser-known websites, blogs and message boards speculate whether Exelons stock will rise or fall. One story that dominated the news in early 2012 was Exelons support for federal climate change legislation, with Forbes saying that then CEO John Rowe was painting the company as a steward of the environment, calling them a green knight. The media extensively speculated the positive impact such climate change legislation would have on Exelons stock price. Localized Media Based in Chicago, with primary markets in Illinois, Pennsylvania and Maryland, and with many smaller operations across the country, Exelon generates significant local media in smaller local and regional outlets. Many of these local stories focus on Exelons CSR initiatives, nuclear safety, business operations or fighting with competitors over shares of the energy market. For example, ComEd, an Illinois-based subsidiary of Exelon, has been engaged with an Omaha-based energy company named Tenaska, which has sought to build a $3.5 billion clean coal power plant in downstate Illinois. This story has generated high-profile statewide news coverage in Illinois for the last year. In Baltimore, home of newly-acquired Constellation Energy, local and regional media outlets have covered various components of Exelons 10-year, $70 million dollar financial commitment to the region. Most recently Constellation, through Exelon, has donated over $1 million to a Maryland science Museum. In addition to local stories about Exelon and its subsidiaries business operations, some coverage falls under the soft news category. For example, in Pennsylvania, a PECO employee who was installing electric lines in Philadelphia saved the life of an infant chocking on a cookie. The employee was honored with a municipal citation and PECO held a press event to highlight the occasion.

Section V - Social Media Discussion of Exelon

There has been a relatively large amount of social media conversation occurring on social media in the past six months surrounding Exelon. Due to Sysomos findings, it can be concluded 9

that social media is an important space for Exelon to observe conversations, uncover insights and sentiments and engage with its audiences. As demonstrated in the chart below, in the past six months, there were approximately 20,775 social mentions of Exelon with 12% coming from blogs, 10% from forums and 5% from Twitter. Online news sources accounted for 73% of social mentions and an estimated 35.2 million impressions. While it is important to note that most social mentions came from news sources, blogs, Twitter and forums played a crucial role in disseminating information on Exelon by spreading these news stories to audiences through its respective social media channels.

Trends in Social Media Coverage Shown below, the popularity curve charts from Sysomos illustrate the number of mentions of Exelon in social media over a six month period. Over time, the number of mentions of Exelon has remained relatively consistent on blogs. Mentions of Exelon in news sources have fluctuated consistently over the six month period. It is important to note that there has been an increase in the number of mentions on both forums and Twitter in the time period following November through January. This spike in conversation between January and February, specifically, correlates with Exelons announcement that they would be purchasing Constellation Energy in a multibillion dollar deal. For example, the most re-tweeted items on Exelon are the following: @CNBC: Federal Energy Regulatory Commission approves proposed merger of Exelon & Constellation Eneregy. $EXC $CEG @ConstellationEnergy: Its official! Yesterday, Constellation Energy was welcomed into the Exelon family of companies

These popularity curve charts demonstrate that conversations about Exelon on blogs, forums and Twitter are likely to increase primarily when there is a large news story breaking. Twitter users are not highly engaged with Exelon as most of their tweets are reactions to news items. Sysomos shows that 82% of all Twitter users that have mentioned Exelon only mention it in one tweet, with only 1.15% of users mentioning Exelon in eight or more tweets.

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Popularity Curve of Blogs

Popularity Curve of Tweets

Popularity Curve of News

Popularity Curve of Forums

Topics of Conversation Surrounding Exelon The top keywords mentioned with the term Exelon in social media conversation are present in the Word Cloud below. Dominant keywords include: energy, power, electric, nuclear gas, products and constellation. From these keywords, it can be inferred that most conversation about Exelon taking place on social media surrounds Exelons products and services as well as its association with industry trends, such as nuclear gas.The keyword Constellation has a strong presence in social media conversation, which demonstrates interest throughout social media of Exelons March purchase of Constellation Energy. The terms Illinois and Chicago are mentioned, demonstrating some local-interest coverage on social media, as Exelon is headquartered in Chicago. It is also important to note that there is a lot of conversation occurring surrounding Exelons economic performance on social media, with prominent keywords such as: million, NYSE, customers, market, billion and financial.

The Buzz Graph, which measures the strength of correlation between Exelon and words used with Exelon in social media conversation, demonstrates that Exelons stock ticker (EXC) is being frequently used in social media conversation about Exelon. There is a particularly strong correlation between EXC and NextEra, a top competitor of Exelon. This insight shows that Exelon stock is frequently being compared to a top industry competitor in social media conversation. This is important, because zooming in on this allows us to uncover insights as to what analysts and regular citizens from various audiences are saying about the performance of our stock or products as compared to top competitors.

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Word Cloud

Buzz Graph

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Sentiment of Social Media Conversation Surrounding Exelon The overall sentiment of conversations about Exelon across blogs, forums, twitter and news combined is favorable with 94% of mentions measuring as positive. Twitter content was measured as 99% positive, which likely is due to previous findings that most Twitter mentions of Exelon are re-tweets of news sources. Overall Sentiment Blog 62% 31% 7% Forum 63% 24% 13% News 81% 15% 4% Twitter 99% 1%

Positive Neutral Negative

Trends in sentiment of conversation surrounding Exelon have been relatively consistent; however, there has been a decrease in negative sentiment toward Exelon from January 11 through May 12. There was a sharp increase from 67% positive sentiment in January/February of 2012 to 82% in February/March of 2012. Again, this may be due to the announcement near that time that Exelon purchased Constellation Energy.

Sentiment by Industry Accounting 0% 0% 100% Comm./Media 33% 67% Education 100% Law 100% Marketing 33% 67%

Positive Neutral Negative

While sentiment trends increase, surprisingly there are certain industries that have negative sentiment toward Exelon. Most surprising, and troublesome, is a reported 100% negative sentiment toward Exelon amongst the accounting industry. The negative sentiment, however, may be due to the fact that Tweets with a negative word in them are often classified as 13

negative. Therefore, it does not appear there is a significant amount of deeply negative sentiment toward Exelon in the social media sphere, rather there is a discussion of poorly performing stock or small hiccups within the company. For example, Sysomos sentiment summary lists top negative Tweets as including: Top_In_Markets: Forbes Earnings Preview: Exelon: Excelon (EXC) is expected to report poor fourth quarter earnings on Wed. #Markets Breaking STL News: Officials investigating Illinois reactor shutdown: Exelon Energy officials say theyve traced a power failure.

Competitive Analysis of Social Media Coverage As previously identified, Exelons top industry competitors are Southern Company, NextEra and Integrys. Exelon is exceeding its competition in terms of positive sentiment in the social media space. Exelon is also second to Integrys in the least amount of negative sentiment surrounding its brand. Exelon, however, is behind some of its competitors in terms of share of voice in certain segments of social media conversation.

As shown below, Southern Company has nearly double the share of voice on Twitter as Exelon, with NextEra enjoying a three percent higher share of voice on Twitter than Exelon.

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As shown below, Exelon enjoys the highest share of voice in social media news sources, but is in danger of losing that lead, as the Southern Company is only behind Exelon by less than two percent.

It is clear from the competitive analysis, that Exelon faces the greatest risk from the Southern Company of losing share of voice and becoming the lesser authoritative of the two industry giants in engaging audiences through social media channels.

Section VI - Actionable Recommendations

Exelon is a company with a social conscience. It takes a leadership position when it comes to the environment, corporate social responsibility and sustainable energy. There is a disconnect between the actions and practices of Exelon and the public opinion. Part of this is relative to the overall view of energy companies they are all challenged with public relations issues, such as rate hikes, interruptions in power and environmental concerns. Exelon can definitely take some steps to improve its overall reputation: Beef up the Investor Relations function the financial industry has a negative sentiment toward Exelon. Social media can be used more effectively to help build reputation in this area.

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Place a director on the Board of Directors with deep marketing expertise. It appears that there is not a great deal of effort around public relations which is a unusual, especially within an industry that is highly regulated. Someone on the Board to champion proactive efforts would be a plus. Exelon needs to establish clear corporate policies around the use of social media for all of its subsidiary companies. Social media should be used to establish expertise on environmental concerns, to showcase CSR activities and to keep customers up-to-date on any interruptions in power. Highlight accomplishments Exelon invests a great deal of time and money in CSR and in ensuring a clean environment. Exelon 2020 should be highlighted in the media. CSR efforts should get more media attention as well. Exelon needs to step up the public relations efforts. Create and award or a scholarship for a science student or for students of environmental studies. This shows a commitment to the future of the environment and its workforce. Establish new leadership as the thought leader on nuclear energy. As the largest provider of nuclear energy, Exelon should have a large share of voice in this space. This is an opportunity to showcase its corporate expertise and corporate citizenship.

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References

Exelon GRI Index 2010. Retrieved from www.exeloncorp.com. Exelon 10-K. Retrieved from www.sec.gov/cgi-bin/browse-edgar Exelon DEF 14 A. Retrieved from www.sec.gov/cgi-bin/browse-edgar www.exeloncorp.com. Corporate Citizenship, Environment and People and Culture pages. www.southerncompany.com Corporate Responsibility, About Us www.nexteraenergyresources.com News, Who We Are, Environment www.integrysgroup.com News Room, About Us, Corporate Citizenship FORTUNE Magazine Worlds Most Admired Companies, 2010-2011 Reputation Institute RepTrak Pulse Study 2011-2012 Harris Interactive - Reputation Quotient Study 2011-2012

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