Exelon Announces Second Quarter Results; Reaffirms Full-Year 2008 Earnings Guidance

Business Wire, July 23, 2008

CHICAGO -- Exelon Corporation's (Exelon) second quarter 2008 consolidated earnings prepared in accordance with GAAP were $748 million, or $1.13 per diluted share, compared with earnings of $702 million, or $1.03 per share, in the second quarter of 2007.

Exelon's adjusted (non-GAAP) operating earnings for the second quarter of 2008 were $746 million, or $1.13 per diluted share, compared with $700 million, or $1.03 per diluted share, for the same period in 2007. "Our strong second quarter results primarily reflected higher margins at Generation largely due to our first-rate operating performance. We also continue to realize the benefits of a large fleet of extremely well-run nuclear plants amid rising environmental pressures," said John W. Rowe, Exelon's chairman, president and CEO. "We recognize, however, that protecting these benefits requires that we actively meet our customers' needs for affordable energy in a climate constrained environment. As a result, last week we announced a comprehensive strategy to reduce, offset or displace more than 15 million metric tons of greenhouse gas emissions by 2020 with both efficiency and new sources of supply."

The increased level of second quarter 2008 earnings was primarily due to:

* higher energy margins at Exelon Generation Company, LLC (Generation) due to increased nuclear output, largely reflecting fewer refueling and non-refueling outages, and increased average realized market prices;

* increased revenue at Generation driven by certain long option positions in its proprietary trading portfolio;

* a gain at Generation related to the settlement of a uranium supply agreement; and

* increased transmission revenue reflecting Commonwealth Edison's (ComEd) 2007 transmission rate case, which became effective in May 2007.

The quarter-over-quarter earnings increase was partially offset by:

* the effect of unfavorable weather conditions compared with last year in the ComEd service territory;

* increased expense for uncollectible accounts at PECO Energy Company (PECO);

* increased operating and maintenance expense, in part due to labor and materials inflation at Generation, ComEd and PECO; and

* increased depreciation and amortization expense primarily related to the higher scheduled competitive transition charge (CTC) amortization at PECO.

Adjusted (non-GAAP) operating earnings for the second quarter of 2008 do not include the following items that were included in reported GAAP earnings (all after tax):

* Mark-to-market gains of $62 million, or $0.09 per diluted share, primarily from Generation's economic hedging activities.

* A charge of $45 million, or $0.07 per diluted share, for the costs associated with the Illinois electric rate settlement agreement.

* Unrealized losses of $15 million, or $0.02 per diluted share, related to nuclear decommissioning trust fund investments.

Adjusted (non-GAAP) operating earnings for the second quarter of 2007 did not include the following items that were included in reported GAAP earnings (all after tax):

* Mark-to-market losses of $13 million, or $0.02 per diluted share, primarily from Generation's economic hedging activities.

* A charge of $14 million, or $0.02 per diluted share, for the costs associated with ComEd's initial Rate Relief and Assistance Initiative.

* Earnings of $27 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.

2008 Earnings Outlook

Exelon reaffirmed its adjusted (non-GAAP) operating earnings guidance range for 2008 of $4.00 to $4.40 per share. The outlook for 2008 adjusted (non-GAAP) operating earnings for Exelon and its subsidiaries excludes the following items:

* mark-to-market adjustments from economic hedging activities

* unrealized gains and losses from nuclear decommissioning trust fund investments

* significant impairments of assets, including goodwill

* significant changes in decommissioning obligation estimates

* costs associated with the Illinois electric rate settlement agreement, including ComEd's previously announced customer rate relief programs

* costs associated with ComEd's settlement with the City of Chicago

* other unusual items

* significant future changes to GAAP

Giving consideration to these factors, Exelon estimates GAAP earnings in 2008 will likely be in the range of $3.70 to $4.10 per share. Both Exelon's operating earnings and GAAP earnings guidance are based on the assumption of normal weather.

Second Quarter and Recent Highlights

* Exelon 2020: A Low-Carbon Roadmap: On July 15, 2008, Exelon announced a comprehensive environmental plan that sets the standard for environmental action by a major U.S. energy utility. The plan, Exelon 2020, details an enterprise-wide approach and a host of initiatives being pursued by the Exelon companies to cut Exelon's greenhouse gas emissions and that of its customers, communities, suppliers and markets. Exelon 2020 sets a goal for Exelon to reduce, offset, or displace more than 15 million metric tons of greenhouse gas emissions per year by 2020. This is more than the company's total current carbon footprint and is equivalent to taking nearly 3 million cars off American roads and highways. Through Exelon 2020, Exelon is pursuing three broad strategies: reduce or offset its own carbon footprint, help customers and communities reduce their greenhouse gas emissions, and offer more low-carbon electricity in the marketplace.