Exelon Announces Fourth Quarter and Full Year 2006 Results and Continued Superior Nuclear Operating Performance.

CHICAGO -- Exelon Corporation's (Exelon) fourth quarter 2006 consolidated earnings prepared in accordance with GAAP were $592 million, or $0.87 per diluted share, compared with a loss of $837 million, or $1.25 per share, in the fourth quarter of 2005. Full year 2006 consolidated earnings prepared in accordance with GAAP were $1,592 million, or $2.35 per diluted share, compared with $923 million, or $1.36 per diluted share in 2005. The fourth quarter 2005 loss in reported earnings was driven by an impairment of the goodwill at Commonwealth Edison Company (ComEd), resulting in a non-cash charge of $1,207 million, or $1.81 per share.

Full Year Operating Results

Full year 2006 adjusted (non-GAAP) operating earnings were $3.22 per diluted share, up 4% percent over 2005 adjusted (non-GAAP) operating earnings of $3.10 per diluted share. The full year adjusted (non-GAAP) operating earnings improvement was due to higher margins at Exelon Generation Company, LLC (Generation), which were partially offset by higher operating and maintenance expense and unfavorable weather conditions. Year over year, weather alone accounted for an estimated negative $0.18 per diluted share. On a weather-adjusted basis, full year 2006 adjusted (non-GAAP) operating earnings were up 10% over 2005.

"Our 2006 operating results reflected both improved generation margins and excellent operating performance, including record-setting nuclear output and summer capacity factor for our nuclear plants of 98.1%," said John W. Rowe, Exelon's chairman, president and CEO. "Improving power market fundamentals and the end of the transition period in Illinois will further drive earnings growth in 2007."

Fourth Quarter Operating Results

Exelon's adjusted (non-GAAP) operating earnings for the fourth quarter of 2006 were $487 million, or $0.72 per diluted share, compared with $495 million, or $0.73 per diluted share, for the same period in 2005. Adjusted (non-GAAP) operating earnings per share were down slightly as higher margins on wholesale market sales at Generation and higher electric revenues associated with certain authorized rate increases at PECO Energy Company (PECO) were offset by the effects of unfavorable weather conditions as compared with last year in the ComEd and PECO service territories, higher operating and maintenance expense, and increased depreciation and amortization, including the scheduled higher competitive transition charge (CTC) amortization at PECO.

A non-GAAP financial measure, adjusted (non-GAAP) operating earnings for the fourth quarter of 2006 do not include the following items that are included in reported GAAP earnings (all after tax):

* A one-time benefit of $95 million, or $0.14 per diluted share, to recover previously incurred severance costs related to ComEd's December 20, 2006 amended order.

* Earnings of $31 million, or $0.04 per diluted share, associated with investments in synthetic fuel-producing facilities, including the impact of mark-to-market losses associated with the related derivatives.

* Mark-to-market losses of $17 million, or $0.03 per diluted share, primarily from Generation's non-trading activities.

Adjusted (non-GAAP) operating earnings for the fourth quarter of 2005 do not include the following items that are included in reported GAAP earnings (all after tax):

* A charge of $1,207 million, or $1.81 per share, related to an impairment of ComEd's goodwill.

* Mark-to-market losses of $86 million, or $0.13 per diluted share, primarily from Generation's non-trading activities.

* Charges of $42 million, or $0.06 per diluted share, for the cumulative effect of adopting FASB Interpretation No. 47, "Accounting for Conditional Asset Retirement Obligations" (FIN 47).

* Earnings of $9 million, or $0.01 per diluted share, associated with investments in synthetic fuel-producing facilities, including the impact of mark-to-market losses associated with the related derivatives.

* Costs of $9 million, or $0.01 per diluted share, related to certain integration costs associated with the now terminated merger with Public Service Enterprise Group Incorporated (PSEG).

2007 Earnings Outlook

Exelon affirmed its adjusted (non-GAAP) operating earnings guidance range for 2007 at $4.00 to $4.30 per share. The following table indicates guidance ranges by operating company contribution to 2007 adjusted (non-GAAP) operating earnings per Exelon share.

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The outlook for 2007 adjusted (non-GAAP) operating earnings for Exelon and its subsidiaries excludes the following items:

* mark-to-market adjustments from non-trading activities

* investments in synthetic fuel-producing facilities

* significant impairments of intangible assets, including goodwill

* significant changes in decommissioning obligation estimates

* certain severance and severance-related charges

* other unusual items

* any future changes to GAAP

Giving consideration to these factors, Exelon estimates GAAP earnings in 2007 will fall in the range of $4.10 to $4.40 per share. Both Exelon's operating earnings and GAAP earnings guidance are based on the assumption of normal weather.

Fourth Quarter and Recent Highlights

* ComEd Rate Case: On December 20, 2006, the Illinois Commerce Commission (ICC) approved an amended order on the rehearing of ComEd's delivery service rate case, effective January 2, 2007. The amended order allowed a revenue increase of $74.3 million, which included additional amounts for administrative and general expenses and a debt return on the pension contribution. This amount is in addition to the ICC's July 26, 2006 rate order, which allowed an $8.3 million revenue increase, for a total increase of $82.6 million. "We are encouraged by the ICC's ruling on ComEd's rehearing request, which will help ComEd continue to maintain reliability to its customers," said Frank Clark, ComEd's chairman and CEO. "Even with the changes allowed by the ICC in the delivery service case as well as the new rates for the pass through of energy costs as part of the auction process, ComEd's rates will still remain lower than they were in 1995." ComEd had proposed a revenue increase of $317 million in order to reflect its rising costs and significant capital investment in its delivery system. ComEd believes that certain disallowances contained in the amended order are inappropriate and has filed an appeal of the order.

* ComEd Residential Rate Stabilization Program: On December 20, 2006, the ICC approved a rate stabilization program that allows residential customers the choice to limit the impact of any rate increases over the next three years. The order approved an "opt-in" feature to give customers the choice to participate in the program, beginning with the April 2007 billing period. The enrollment window runs through August 22, 2007. Under the program, residential customers choosing to participate would see average rate increases capped at 10 percent in 2007, 2008 and 2009. Costs that exceed the cap would be deferred and charged to customers over the following three years, 2010 to 2012. A carrying charge at a below-market rate of 3.25 percent per year will be assessed to participants to partially cover ComEd's cost of financing the program.

* ComEd Real-Time Pricing Program: On December 20, 2006, the ICC approved a real-time pricing program for residential customers, which offers customers an alternative to standard flat-rate utility billing. A third-party program administrator will begin to register participants early in 2007. Under the plan's hourly pricing structure, if residential customers use less power during higher-priced time periods, they will have the opportunity to control their electric bills. The program administrator will provide price information to these customers.

* Illinois Rate Freeze Extension and Rate Phase-in Proposals: On January 7, 2007, during the wrap-up of last year's session of the Illinois 94th General Assembly, the House passed legislation (SB 1714) to extend ComEd's recent rate freeze until at least 2010. On November 30, 2006, the Senate passed a compromise rate phase-in bill (HB 2197), which would provide residential rate caps for ComEd with costs that exceed those caps deferred for recovery in 2010-2012 and no carrying charges applied. Either bill would need to be voted on and passed by both the House and Senate before it could be presented to the Governor for signature. The Illinois 94th General Assembly took no further action on either bill and adjourned on January 9, 2007. The 95th General Assembly began its session on January 10. As a result, any legislation must begin the process anew and be reintroduced to the House or Senate. ComEd believes the rate freeze legislation, if proposed again and enacted into law, would have devastating consequences for Illinois, ComEd and consumers of electricity.

* Financing Activities: In December 2006, ComEd issued $345 million of 5.40% First Mortgage Bonds due 2011. The proceeds of the bonds were used to refinance borrowings under its revolving credit agreement, repay long-term debt and for other general corporate purposes.

* Nuclear Operations: Generation's nuclear fleet, including its owned output from the Salem Generating Station operated by PSEG with assistance from Generation through the Nuclear Operating Services Contract, produced 34,810 GWhs in the fourth quarter of 2006, compared with 34,887 GWhs in the fourth quarter of 2005. The Exelon-operated nuclear plants completed five scheduled refueling outages in the fourth quarter of 2006 and four in the fourth quarter of 2005, and refueling outage days totaled 88 and 73, respectively. Total non-refueling outage days for the Exelon-operated nuclear plants in the fourth quarter of 2006 were 18 versus 28 in the fourth quarter of 2005. The co-owned Salem Generating Station operated by PSEG completed one scheduled refueling outage in the fourth quarter of 2006 and one in the fourth quarter of 2005, with refueling outage days totaling 22 days and 25 days, respectively. For the full year 2006, the Exelon-operated nuclear plants achieved a 93.9 percent capacity factor, compared with 93.5 percent for 2005. "This was Exelon Nuclear's best year yet for net generation, our fourth consecutive annual generation record," said Chris Crane, Exelon Nuclear President and Chief Nuclear Officer. "That performance was based on continued excellence in refueling outage duration, and another best year ever in terms of generating equipment reliability."

* Fossil and Hydro Operations: Generation's fossil fleet commercial availability was 95.7 percent in the fourth quarter of 2006, compared with 91.5 percent in the fourth quarter of 2005, primarily due to improved performance of the coal units. The equivalent availability factor for the hydro facilities was 97.9 percent in the fourth quarter of 2006, compared with 92.6 percent in the fourth quarter of 2005, primarily due to a planned outage at Muddy Run Unit 2 in 2005. "Over the past four years, we've seen steady improvement from our fossil and hydro fleet. We have met challenges and successfully improved the condition of our fleet," said Mark Schiavoni, president of Exelon Power. "We had good performance in 2006 and continue to improve performance due to the dedication and hard work of Exelon Power employees."

OPERATING COMPANY RESULTS

Exelon Generation consists of Exelon's electric generation operations, competitive retail sales and power marketing and trading functions.

Fourth quarter 2006 net income was $245 million compared with $147 million in the fourth quarter of 2005. Fourth quarter 2006 net income included (all after tax) mark-to-market losses of $17 million, severance and severance-related charges of $1 million and an impairment charge of $1 million related to its investments in Termoelectrica del Golfo (TEG) and Termoelectrica PeSoles (TEP), the sale of which is expected to close in 2007. Fourth quarter 2005 net income included (all after tax) unrealized mark-to-market losses of $86 million from non-trading activities, a $30 million charge for the cumulative effect of adopting FIN 47, expenses of $3 million related to certain integration costs associated with the now terminated merger with PSEG and income of $2 million associated with its previous investment in Sithe Energies, Inc. Excluding the impact of these items, Generation's net income in the fourth quarter of 2006 was unchanged compared with the same quarter last year. Higher revenue, net of purchased power and fuel expense, was largely offset by increased operating and maintenance expense, which was driven primarily by inflationary cost pressures and favorable fourth quarter 2005 non-recurring items related to decommissioning and a settlement regarding postretirement benefits with PSEG related to our co-owner relationship.

Generation's revenue, net of purchased power and fuel expense, increased by $103 million in the fourth quarter of 2006 compared with the fourth quarter of 2005 excluding the mark-to-market impact in both years. The quarter-over-quarter increase in revenue, net of purchased power and fuel expense, was driven by higher average margins due to lower purchased power costs and the contractual increase in the prices associated with Generation's power sales agreement with PECO, partially offset by the contractual decrease in prices associated with Generation's power sales agreement with ComEd. Generation's average realized margin on all electric sales, including sales to affiliates and excluding trading activity, was $24.81 per MWh in the fourth quarter of 2006 compared with $22.03 per MWh in the fourth quarter of 2005.

ComEd consists of the retail and wholesale electricity transmission and distribution operations in northern Illinois.

ComEd recorded net income in the fourth quarter of 2006 of $213 million compared with a net loss of $1,088 million in the fourth quarter of 2005. Fourth quarter 2006 net income included a one-time after-tax benefit of $95 million attributable to the ICC's December 20, 2006 amended order to recover previously incurred severance costs. The fourth quarter 2005 net loss included (all after tax) a non-cash charge of $1,207 million related to the impairment of ComEd's goodwill, a $9 million charge for the cumulative effect of adopting FIN 47, expenses of $2 million related to certain integration costs associated with the now terminated merger with PSEG and a reduction in severance and severance-related reserves of $1 million. Excluding the impact of these items, ComEd's net income in the fourth quarter of 2006 decreased $11 million compared with the same quarter last year, primarily due to unfavorable weather and increased customer switching, partially offset by lower purchased power expense attributable to a contractual decrease in prices associated with ComEd's power purchase agreement with Generation. That power purchase agreement ended at year-end 2006.

In the ComEd service territory in the fourth quarter of 2006, heating degree-days were down 8 percent relative to the same period in 2005, and were 8 percent below normal. ComEd's total retail kWh deliveries decreased 1 percent in 2006 as compared with 2005, with a 1 percent decrease in deliveries to the residential customer class, largely due to less favorable weather. ComEd's fourth quarter 2006 revenues were $1,381 million, down 4 percent from $1,442 million in 2005, primarily due to decreased deliveries to residential and an increase in customer switching reducing the amount of revenue for supplying energy to end use customers. For ComEd, weather had an unfavorable after-tax impact of $13 million on fourth quarter 2006 earnings relative to 2005 and had an unfavorable after-tax impact of $5 million relative to the normal weather, which was incorporated in earnings guidance.

The number of customers being served in the ComEd region has increased 1.5 percent since the fourth quarter of 2005, and weather-normalized kWh deliveries increased 1.3 percent compared with the fourth quarter of 2005, according to our models.

PECO consists of the retail electricity transmission and distribution operations and the retail natural gas distribution business in southeastern Pennsylvania.

PECO's net income in the fourth quarter of 2006 was $121 million, an increase from net income of $112 million in the fourth quarter of 2005. Fourth quarter 2006 net income included after-tax severance and severance-related charges of $1 million. Fourth quarter 2005 net income included (all after tax) costs of $4 million related to certain integration costs associated with the now terminated merger with PSEG and a $3 million charge for the cumulative effect of adopting FIN 47. Excluding the impact of these items, PECO's net income in the fourth quarter of 2006 increased $3 million compared with the same quarter last year primarily due to higher revenues, net of purchased power and fuel expense, and the settlement of a research and development tax credit claim, partially offset by higher CTC amortization and the reversal of certain tax reserves in 2005. The increases in CTC amortization expense and CTC rates are in accordance with PECO's 1998 restructuring settlement with the Pennsylvania Public Utility Commission (PAPUC). As expected, the increase in CTC amortization expense exceeded the increase in CTC revenues.

In the PECO service territory in the fourth quarter of 2006, heating degree-days were down 17 percent from 2005, and were 18 percent below normal. PECO's total electric retail kWh deliveries decreased 2 percent, with residential deliveries down 7 percent. Total gas retail deliveries were down 16 percent from the 2005 period. PECO's fourth quarter 2006 revenues were $1,235 million, down slightly from $1,249 million in 2005, primarily due to the above-mentioned unfavorable weather and by decreases in gas rates effective September 1 and December 1 through PAPUC-approved changes to the purchased gas adjustment clause, partially offset by electric rate increases and a change in the estimate for electric unbilled revenues. For PECO, weather had an unfavorable after-tax impact of $18 million on fourth quarter 2006 earnings relative to 2005 and an unfavorable after-tax impact of $16 million relative to the normal weather, which was incorporated in earnings guidance.

The number of electric customers being served in the PECO region has increased 0.6 percent since the fourth quarter of 2005, with weather-normalized kWh growth of 1.3 percent compared with the fourth quarter of 2005, according to our models.

Adjusted (non-GAAP) Operating Earnings

Adjusted (non-GAAP) operating earnings, which generally exclude significant one-time charges or credits that are not normally associated with ongoing operations and mark-to-market adjustments from non-trading activities, are provided as a supplement to results reported in accordance with GAAP. Management uses such adjusted (non-GAAP) operating earnings measures internally to evaluate the company's performance and manage its operations. Reconciliations of GAAP to adjusted (non-GAAP) operating earnings for historical periods are attached. Additional earnings release attachments, which include the reconciliations on pages 7 and 8, are posted on Exelon's Web site: www.exeloncorp.com and have been filed with the Securities and Exchange Commission on Form 8-K on January 24, 2007.

Conference call information: Exelon has scheduled a conference call for 11 AM ET (10 AM CT) on January 24, 2007. The call-in number in the U.S. is 800-418-7236, and the international call-in number is 973-935-8757. No password is required. Media representatives are invited to participate on a listen-only basis. The call will be web-cast and archived on Exelon's Web site: www.exeloncorp.com. (Please select the Investor Relations page.)

Telephone replays will be available until February 6. The U.S. call-in number for replays is 877-519-4471, and the international call-in number is 973-341-3080. The confirmation code is 8292439.

This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that are subject to risks and uncertainties. The factors that could cause actual results to differ materially from these forward-looking statements include those discussed herein as well as those discussed in (1) Exelon Corporation's 2005 Annual Report on Form 10-K in (a) ITEM 1A. Risk Factors, (b) ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and (c) ITEM 8. Financial Statements and Supplementary Data: Exelon-Note 20, ComEd-Note 17, PECO-Note 15 and Generation-Note 17; (2) Exelon Corporation's forthcoming 2006 Annual Report on Form 10-K in (a) ITEM 1A. Risk Factors, (b) ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and (c) ITEM 8. Financial Statements and Supplementary Data; (3) Exelon Corporation's Third Quarter 2006 Quarterly Report on Form 10-Q in (a) Part II, Other Information, ITEM 1A. Risk Factors and (b) Part I, Financial Information, ITEM 1. Financial Statements: Note 13; and (4) other factors discussed in filings with the Securities and Exchange Commission (SEC) by Exelon Corporation, Commonwealth Edison Company, PECO Energy Company and Exelon Generation Company, LLC (Companies). Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this news release. None of the Companies undertakes any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this news release.

Exelon Corporation is one of the nation's largest electric utilities with approximately 5.3 million customers and more than $15 billion in annual revenues. The company has one of the industry's largest portfolios of electricity generation capacity, with a nationwide reach and strong positions in the Midwest and Mid-Atlantic. Exelon distributes electricity to approximately 5.3 million customers in Illinois and Pennsylvania and natural gas to more than 470,000 customers in southeastern Pennsylvania. Exelon is headquartered in Chicago and trades on the NYSE under the ticker EXC.

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