Exelon Announces First Quarter Results; Reaffirms Full Year 2006 Operating Earnings Guidance

Business Wire, April 26, 2006

CHICAGO -- Exelon Corporation's (Exelon) first quarter 2006 consolidated earnings prepared in accordance with GAAP were $400 million, or $0.59 per diluted share, compared with earnings of $521 million, or $0.77 per diluted share, in the first quarter of 2005.

Exelon's adjusted (non-GAAP) operating earnings for the first quarter of 2006 were $420 million, or $0.62 per diluted share, compared with $452 million, or $0.67 per diluted share, for the same period in 2005. The decrease in adjusted (non-GAAP) operating earnings per share was primarily the result of unfavorable weather conditions in the Commonwealth Edison Company (ComEd) and PECO Energy Company (PECO) service territories; higher operating and maintenance expenses, including expenses related to stock-based compensation in accordance with SFAS No.123-R; and increased depreciation and amortization, including the higher competitive transition charge (CTC) amortization scheduled at PECO; partially offset by higher margins on wholesale market sales at Exelon Generation Company, LLC (Generation). Excluding the effects of unfavorable weather and timing-related items in the first quarter of 2006 and favorable one-time items in the first quarter of 2005, operating earnings increased in line with management expectations.

"While very mild weather and the timing of certain expense items put some pressure on first quarter results, Exelon's earnings engine remains healthy," said John W. Rowe, Exelon's chairman, president and CEO. "Operational performance was strong, as demonstrated by a higher nuclear capacity factor and improved availability of our fossil fleet. Generation margins increased, as expected, over the first quarter of last year, and we had solid core growth in our delivery service business." Rowe continued, "While our efforts to secure approval of our proposed merger with PSEG have progressed slowly, we believe we will be able to complete the merger and are committed to that end as long as the deal continues to make economic sense. Our most significant success in the first quarter came with the Illinois Commerce Commission's approval of the auction process for ComEd's power procurement beginning next year."

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

--Mark-to-market losses of $11 million, or $0.02 per diluted share, from non-trading activities.

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

--Charges of $5 million, or $0.01 per diluted share, associated with the settlement of a tax matter at Generation related to its previous investment in Sithe Energies, Inc. (Sithe) and severance costs recorded at Exelon during the period.

--Earnings of $5 million, or $0.01 per diluted share, resulting from investments in synthetic fuel-producing facilities.

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

--Mark-to-market gains of $39 million, or $0.06 per diluted share, from non-trading activities.

--Earnings of $16 million, or $0.02 per diluted share, resulting from investments in synthetic fuel-producing facilities.

--Earnings of $16 million, or $0.02 per diluted share, associated with Generation's investment in Sithe.

--Charges of $2 million related to certain integration costs associated with the proposed merger with PSEG.

2006 Earnings Outlook

"We are reaffirming our 2006 operating earnings guidance range of $3.00 to $3.30 per share," said Rowe, "due to the ongoing strength of our core generation and delivery businesses. We remain comfortable with our original guidance range despite the challenge of mild weather and ongoing cost pressures across our businesses."

Exelon's outlook for 2006 adjusted (non-GAAP) operating earnings excludes mark-to-market adjustments from non-trading activities, income resulting from investments in synthetic fuel-producing facilities, significant impairments of intangible assets, certain severance costs, and certain costs associated with the proposed merger with PSEG. Giving consideration to these factors, Exelon estimates GAAP earnings in 2006 will also fall in the range of $3.00 to $3.30 per share, down from the previous estimate of $3.05 to $3.35 per share due to the expected partial phase-out of tax credits related to synthetic fuel-producing facilities. Continued high oil prices could result in a further reduction in GAAP earnings related to synthetic fuel-producing facilities due to an additional phase-out of tax credits and a potentially significant asset impairment related to the credits. These earnings estimates do not include any impact of future changes to GAAP. Earnings guidance is based on the assumption of normal weather.

First Quarter Highlights