##### 



UNITED
    STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
    20549
  FORM 10-Q
  þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Quarterly Period Ended June 30, 2007oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Name of Registrant; State of Incorporation;

IRS EmployerCommission

Address of Principal Executive Offices; and

IdentificationFile Number

Telephone Number

Number1-16169

EXELON CORPORATION
    (a Pennsylvania corporation)
    10 South Dearborn Street
    P.O. Box 805379 Chicago, Illinois
    60680-5379(312) 394-7398

23-2990190333-85496

EXELON GENERATION COMPANY, LLC
    (a Pennsylvania limited liability company)
    300 Exelon Way
    Kennett Square, Pennsylvania 19348(610) 765-5959

23-30642191-1839

COMMONWEALTH EDISON COMPANY
    (an Illinois corporation)
    440 South LaSalle Street
    Chicago, Illinois
    60605-1028(312) 394-4321

36-0938600000-16844

PECO ENERGY COMPANY
    (a Pennsylvania corporation)
    P.O. Box 8699
    2301 Market Street
    Philadelphia, Pennsylvania
    19101-8699(215) 841-4000

23-0970240   þ o
    Exelon Corporation Common Stock,
    without par value

674,171,814Exelon Generation Company, LLC

not applicableCommonwealth Edison Company Common
    Stock, $12.50 par value

127,016,519PECO Energy Company Common Stock,
    without par value

170,478,507   Rule 12b-2
  Large Accelerated Filer


Accelerated Filer


Non-accelerated FilerExelon Corporation


üExelon Generation Company, LLC










üCommonwealth Edison Company










üPECO Energy Company










ü   Rule 12b-2 o þ




---



##### 



TABLE OF
    CONTENTS
  
  Page No.FILING
    FORMAT


3FORWARD-LOOKING
    STATEMENTS


3WHERE TO FIND
    MORE INFORMATION


3PART I.

FINANCIAL
    INFORMATION


4ITEM
    1.

FINANCIAL
    STATEMENTS


4Exelon
    Corporation


5Consolidated
    Statements of Operations and Comprehensive Income


5Consolidated
    Statements of Cash Flows


6Consolidated
    Balance Sheets


7Consolidated
    Statement of Changes in Shareholders Equity


9Exelon Generation
    Company, LLC


10Consolidated
    Statements of Operations and Comprehensive Income


10Consolidated
    Statements of Cash Flows


11Consolidated
    Balance Sheets


12Consolidated
    Statement of Changes in Members Equity


14Commonwealth Edison
    Company


15Consolidated
    Statements of Operations and Comprehensive Income


15Consolidated
    Statements of Cash Flows


16Consolidated
    Balance Sheets


17Consolidated
    Statement of Changes in Shareholders Equity


19PECO Energy
    Company


20Consolidated
    Statements of Operations and Comprehensive Income


20Consolidated
    Statements of Cash Flows


21Consolidated
    Balance Sheets


22Consolidated
    Statement of Changes in Shareholders Equity


24Combined Notes to
    Consolidated Financial Statements1. Basis of
    Presentation


252. Discontinued
    Operations


263. New Accounting
    Pronouncements


264. Acquisitions and
    Dispositions


285. Regulatory
    Issues


286. Intangible
    Assets


407. Debt and Credit
    Agreements


408. Derivative
    Financial Instruments


439. Retirement
    Benefits


4910. Income
    Taxes


5211. Asset
    Retirement Obligations


5912. Earnings Per
    Share and Shareholders Equity


6013. Commitments and
    Contingencies


6214. Supplemental
    Financial Information


7315. Segment
    Information


8016. Related-Party
    Transactions


8317. Subsequent
    Events


91 1




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##### 



Page No.ITEM
    2.

MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS


92Exelon
    Corporation


92Exelon Generation
    Company, LLC


149Commonwealth Edison
    Company


151PECO Energy
    Company


153ITEM
    3.

QUANTITATIVE AND
    QUALITATIVE DISCLOSURES ABOUT MARKET RISK


155ITEM
    4.

CONTROLS AND
    PROCEDURES


162ITEM
    4T.

CONTROLS AND
    PROCEDURES


163PART II.

OTHER
    INFORMATION


164ITEM
    1.

LEGAL
    PROCEEDINGS


164ITEM
    1A.

RISK
    FACTORS


164ITEM
    2.

UNREGISTERED
    SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


165ITEM
    4.

SUBMISSION OF
    MATTERS TO A VOTE OF SECURITY HOLDERS


165ITEM
    5.

OTHER
    INFORMATION


166ITEM
    6.

EXHIBITS


167SIGNATURES


168Exelon
    Corporation


168Exelon Generation
    Company, LLC


168Commonwealth Edison
    Company


169PECO Energy
    Company


169CERTIFICATION
    EXHIBITS


170Exelon Corporation


170, 178Exelon Generation Company, LLC


172, 180Commonwealth Edison
    Company


174, 182PECO Energy Company


176, 184   2




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##### 



FILING
    FORMAT  Form 10-Q
 FORWARD-LOOKING
    STATEMENTS  Form 10-K:
 WHERE TO
    FIND MORE INFORMATION  1-800-SEC-0330. www.sec.gov www.exeloncorp.com.
 3




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##### 



PART I.
    FINANCIAL INFORMATION Item 1.  Financial
    Statements  4




---



##### 



EXELON
    CORPORATION EXELON
    CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
    INCOME

(Unaudited)  Three Months


Six MonthsEnded June 30,


Ended June 30,(In millions, except per share data)

2007


2006


2007


2006Operating revenues

$
4,501


$
3,697


$
9,330


$
7,559Operating expensesPurchased power


1,118



571



2,363



1,096Fuel


522



502



1,292



1,438Operating and maintenance


1,062



881



2,120



1,906Depreciation and amortization


369



371



738



735Taxes other than income


199



170



395



364Total operating expenses


3,270



2,495



6,908



5,539Operating income


1,231



1,202



2,422



2,020Other income and
    deductionsInterest expense


(161
)


(154
)


(318
)


(306
)Interest expense to affiliates, net


(53
)


(68
)


(109
)


(139
)Equity in losses of unconsolidated
    affiliates and investments


(43
)


(22
)


(69
)


(61
)Other, net


43



46



106



91Total other income and deductions


(214
)


(198
)


(390
)


(415
)Income from continuing
    operations before income taxes


1,017



1,004



2,032



1,605Income taxes


314



363



648



564Income from continuing
    operations


703



641



1,384



1,041Discontinued
    operationsIncome (loss) from discontinued
    operations (net of taxes of $0 and $2 for the three and six
    months ended June 30, 2007, respectively)


(1
)






4



Gain on disposal of discontinued
    operations (net of taxes of $0, $3, $2 and $(1) for the three
    and six months ended June 30, 2007 and 2006, respectively)






3



5



3Income (loss) from discontinued
    operations, net


(1
)


3



9



3Net income


702



644



1,393



1,044Other comprehensive income
    (loss), net of income taxesPension and non-pension
    postretirement benefit plans:Prior service benefit reclassified
    to periodic benefit cost ($2, $(4), $4 and $(10) related to
    pension and non-pension postretirement benefit plans for the
    three and six months ended June 30, 2007, respectively)


(2
)






(6
)


Actuarial loss reclassified to
    periodic benefit cost ($12, $1, $31 and $8 related to pension
    and non-pension postretirement benefit plans for the three and
    six months ended June 30, 2007, respectively)


13







39



Transition obligation reclassified
    to periodic benefit cost ($0, $0, $0 and $2 related to pension
    and non-pension postretirement benefit plans for the three and
    six months ended June 30, 2007, respectively)










2



Finalization of pension and
    non-pension postretirement benefit plans valuation


19







19



Change in unrealized gain (loss) on
    cash-flow hedges


210



140



(209
)


232Unrealized gain (loss) on
    marketable securities


29



(13
)


38



15Other comprehensive income (loss)


269



127



(117
)


247Comprehensive income

$
971


$
771


$
1,276


$
1,291Average shares of common stock
    outstanding:Basic


675



670



674



669Diluted


680



676



679



675Earnings per average common
    share  basic:Income from continuing operations

$
1.04


$
0.96


$
2.05


$
1.56Income from discontinued operations










0.02



Net income

$
1.04


$
0.96


$
2.07


$
1.56Earnings per average common
    share  diluted:Income from continuing operations

$
1.03


$
0.95


$
2.04


$
1.55Income from discontinued operations










0.01



Net income

$
1.03


$
0.95


$
2.05


$
1.55Dividends per common
    share

$
0.44


$
0.40


$
0.88


$
0.80    5




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##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)  Six Months Ended June 30,(In millions)

2007


2006Cash flows from operating
    activitiesNet income

$
1,393


$
1,044Adjustments to reconcile net
    income to net cash flows provided by operating activities:Depreciation, amortization and
    accretion, including nuclear fuel


1,066



1,060Deferred income taxes and
    amortization of investment tax credits


(128
)


(81
)Net realized and unrealized
    mark-to-market transactions


120



(69
)Impairment of long-lived assets






117Other non-cash operating activities


369



124Changes in assets and liabilities:Accounts receivable


(304
)


230Inventories


69



11Accounts payable, accrued expenses
    and other current liabilities


(122
)


(406
)Counterparty collateral asset


(231
)


178Counterparty collateral liability


(264
)


5Income taxes


87



300Restricted cash


(42
)


Pension and non-pension
    postretirement benefit contributions


(40
)


(30
)Other assets and liabilities


(347
)


(295
)Net cash flows provided by
    operating activities


1,626



2,188Cash flows from investing
    activitiesCapital expenditures


(1,284
)


(1,156
)Proceeds from nuclear
    decommissioning trust fund sales


2,268



2,554Investment in nuclear
    decommissioning trust funds


(2,402
)


(2,706
)Proceeds from sale of investments


95



1Change in restricted cash


2



1Other investing activities


(46
)


(54
)Net cash flows used in investing
    activities


(1,367
)


(1,360
)Cash flows from financing
    activitiesIssuance of long-term debt


465



326Retirement of long-term debt


(198
)


(34
)Retirement of long-term debt to
    financing affiliates


(534
)


(422
)Change in short-term debt


348



(106
)Dividends paid on common stock


(592
)


(535
)Proceeds from employee stock plans


145



107Purchase of treasury stock


(37
)


(53
)Other financing activities


55



31Net cash flows used in financing
    activities


(348
)


(686
)(Decrease) Increase in cash and
    cash equivalents


(89
)


142Cash and cash equivalents at
    beginning of period


224



140Cash and cash equivalents at
    end of period

$
135


$
282    6




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)  June 30,


December 31,(In millions)

2007


2006ASSETSCurrent assetsCash and cash equivalents

$
135


$
224Restricted cash and investments


98



58Accounts receivable, netCustomer


2,046



1,747Other


423



462Mark-to-market derivative assets


765



1,418Inventories, netFossil fuel


238



300Materials and supplies


431



431Other


823



352Total current assets


4,959



4,992Property, plant and equipment,
    net


23,431



22,775Deferred debits and other
    assetsRegulatory assets


5,438



5,808Nuclear decommissioning trust funds


6,777



6,415Investments


664



725Investments in affiliates


73



85Goodwill


2,641



2,694Mark-to-market derivative assets


210



171Other


1,112



654Total deferred debits and other
    assets


16,915



16,552Total assets

$
45,305


$
44,319    7




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##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
 CONSOLIDATED BALANCE SHEETS
 (Unaudited)
  June 30,


December 31,(In millions)

2007


2006LIABILITIES AND
    SHAREHOLDERS EQUITYCurrent liabilitiesShort-term borrowings

$
653


$
305Long-term debt due within one year


935



248Long-term debt to ComEd
    Transitional Funding Trust and PECO Energy Transition Trust due
    within one year


510



581Accounts payable


1,289



1,382Mark-to-market derivative
    liabilities


649



1,015Accrued expenses


814



1,180Other


511



1,084Total current liabilities


5,361



5,795Long-term debt


8,477



8,896Long-term debt to ComEd
    Transitional Funding Trust and PECOEnergy Transition
    Trust


1,984



2,470Long-term debt to other
    financing trusts


545



545Deferred credits and other
    liabilitiesDeferred income taxes and
    unamortized investment tax credits


5,193



5,340Asset retirement obligations


3,890



3,780Pension obligations


725



747Non-pension postretirement benefit
    obligations


1,808



1,817Spent nuclear fuel obligation


974



950Regulatory liabilities


3,240



3,025Mark-to-market derivative
    liabilities


301



78Other


1,549



782Total deferred credits and other
    liabilities


17,680



16,519Total liabilities


34,047



34,225Commitments and
    contingenciesPreferred securities of
    subsidiary


87



87Shareholders
    equityCommon stock (No par value,
    2,000 shares authorized, 674 and 670 shares
    outstanding at June 30, 2007 and December 31, 2006,
    respectively)


8,552



8,314Treasury stock, at cost (13 and
    13 shares held at June 30, 2007 and December 31,
    2006, respectively)


(667
)


(630
)Retained earnings


4,506



3,426Accumulated other comprehensive
    loss, net


(1,220
)


(1,103
)Total shareholders equity


11,171



10,007Total liabilities and
    shareholders equity

$
45,305


$
44,319    8




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS
    EQUITY

(Unaudited)  AccumulatedOther


TotalIssued


Common


Treasury


Retained


Comprehensive


Shareholders(In millions)

Shares


Stock


Stock


Earnings


Loss


EquityBalance, December 31,
    2006


683


$
8,314


$
(630
)

$
3,426


$
(1,103
)

$
10,007Net income














1,393







1,393Long-term incentive plan activity


4



238















238Common stock purchases










(37
)










(37
)Common stock dividends declared














(300
)






(300
)Adoption of Financial Accounting
    Standards Board Interpretation No. 48 (FIN 48)














(13
)






(13
)Other comprehensive loss, net of
    income taxes of $(43)


















(117
)


(117
)Balance, June 30,
    2007


687


$
8,552


$
(667
)

$
4,506


$
(1,220
)

$
11,171    9




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##### 



EXELON
    GENERATION COMPANY, LLC EXELON
    GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
    INCOME

(Unaudited)  Three Months


Six MonthsEnded June 30,


Ended June 30,(In millions)

2007


2006


2007


2006Operating revenuesOperating revenues

$
1,813


$
1,100


$
3,655


$
2,132Operating revenues from affiliates


828



1,114



1,689



2,302Total operating revenues


2,641



2,214



5,344



4,434Operating expensesPurchased power


538



418



1,131



781Fuel


436



425



907



1,036Operating and maintenance


545



362



1,106



955Operating and maintenance from
    affiliates


73



78



151



153Depreciation and amortization


65



72



133



139Taxes other than income


47



41



88



84Total operating expenses


1,704



1,396



3,516



3,148Operating income


937



818



1,828



1,286Other income and
    deductionsInterest expense


(31
)


(40
)


(66
)


(81
)Interest expense to affiliates, net














(1
)Equity in (losses) earnings of
    investments


(1
)


(1
)


1



(5
)Other, net


22



14



54



20Total other income and deductions


(10
)


(27
)


(11
)


(67
)Income from continuing
    operations before income taxes


927



791



1,817



1,219Income taxes


349



294



684



454Income from continuing
    operations


578



497



1,133



765Discontinued
    operationsGain on disposal of discontinued
    operations (net of taxes of $0, $2, $2 and $2 for the three and
    six months ended June 30, 2007 and 2006, respectively)






3



5



3Income from discontinued
    operations, net






3



5



3Net income


578



500



1,138



768Other comprehensive income
    (loss), net of income taxesPension and non-pension
    postretirement benefit plans:Prior service benefit reclassified
    to periodic benefit cost related to non-pension postretirement
    benefit plans


(1
)






(1
)


Finalization of year-end valuation


5







5



Change in unrealized gain (loss) on
    cash-flow hedges


208



141



(214
)


232Unrealized gain (loss) on
    marketable securities


28



(13
)


37



15Other comprehensive income (loss)


240



128



(173
)


247Comprehensive income

$
818


$
628


$
965


$
1,015    10




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##### 



EXELON
    GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)  Six MonthsEndedJune 30,(In millions)

2007


2006Cash flows from operating
    activitiesNet income

$
1,138


$
768Adjustments to reconcile net
    income to net cash flows provided by operating activities:Depreciation, amortization and
    accretion, including nuclear fuel


460



464Deferred income taxes and
    amortization of investment tax credits


(12
)


81Net realized and unrealized
    mark-to-market transactions


109



(37
)Other non-cash operating activities


130



(56
)Changes in assets and liabilitiesAccounts receivable


(244
)


79Receivables from and payables to
    affiliates, net


253



6Inventories


3



10Accounts payable, accrued expenses
    and other current liabilities


(85
)


(237
)Counterparty collateral asset


(231
)


178Counterparty collateral liability


(267
)


5Income taxes


29



38Pension and non-pension
    postretirement benefit contributions


(22
)


(14
)Other assets and liabilities


(146
)


(218
)Net cash flows provided by
    operating activities


1,115



1,067Cash flows from investing
    activitiesCapital expenditures


(550
)


(512
)Proceeds from nuclear
    decommissioning trust fund sales


2,268



2,554Investment in nuclear
    decommissioning trust funds


(2,402
)


(2,706
)Proceeds from sale of investments


95



Changes in Exelon intercompany
    money pool contributions


13



Change in restricted cash


1



1Other investing activities


(9
)


(3
)Net cash flows used in investing
    activities


(584
)


(666
)Cash flows from financing
    activitiesChange in short-term debt


39



(2
)Changes in Exelon intercompany
    money pool borrowings






(92
)Distribution to member


(665
)


(322
)Contribution from member






5Other financing activities


1



Net cash flows used in financing
    activities


(625
)


(411
)Decrease in cash and cash
    equivalents


(94
)


(10
)Cash and cash equivalents at
    beginning of period


128



34Cash and cash equivalents at
    end of period

$
34


$
24    11




---



##### 



EXELON
    GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)  June 30,


December 31,(In millions)

2007


2006ASSETSCurrent assetsCash and cash equivalents

$
34


$
128Restricted cash and investments


1



2Accounts receivable, netCustomer


802



575Other


188



122Mark-to-market derivative assets


749



1,408Receivable from affiliates


214



437Inventories, netFossil fuel


123



127Materials and supplies


344



335Contributions to Exelon
    intercompany money pool






13Prepayments and other current
    assets


504



286Total current assets


2,959



3,433Property, plant and equipment,
    net


7,720



7,514Deferred debits and other
    assetsNuclear decommissioning trust funds


6,777



6,415Investments


36



115Mark-to-market derivative assets


210



171Prepaid pension asset


978



996Other


355



265Total deferred debits and other
    assets


8,356



7,962Total assets

$
19,035


$
18,909    12




---



##### 



EXELON
    GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
 CONSOLIDATED BALANCE SHEETS
 (Unaudited)
  June 30,


December 31,(In millions)

2007


2006LIABILITIES AND MEMBERS
    EQUITYCurrent liabilitiesShort-term borrowings

$
39


$
Long-term debt due within one year


12



12Accounts payable


762



899Mark-to-market derivative
    liabilities


628



1,003Payables to affiliates


30



Accrued expenses


493



496Deferred income taxes


31



142Other


133



362Total current liabilities


2,128



2,914Long-term debt


1,778



1,778Deferred credits and other
    liabilitiesAsset retirement obligations


3,709



3,602Pension obligation


32



37Non-pension postretirement benefit
    obligations


567



538Spent nuclear fuel obligation


974



950Deferred income taxes and
    unamortized investment tax credits


1,418



1,380Payables to affiliates


2,048



1,911Mark-to-market derivative
    liabilities


298



77Other


343



238Total deferred credits and other
    liabilities


9,389



8,733Total liabilities


13,295



13,425Commitments and
    contingenciesMinority interest of
    consolidated subsidiary


1



1Members equityMembership interest


3,267



3,267Undistributed earnings


2,229



1,800Accumulated other comprehensive
    income, net


243



416Total members equity


5,739



5,483Total liabilities and
    members equity

$
19,035


$
18,909    13




---



##### 



EXELON
    GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENT OF CHANGES IN MEMBERS EQUITY

(Unaudited)  AccumulatedOther


TotalMembership


Undistributed


Comprehensive


Members(In millions)

Interest


Earnings


Income


EquityBalance, December 31,
    2006

$
3,267


$
1,800


$
416


$
5,483Net income






1,138







1,138Distribution to member






(665
)






(665
)Adoption of FIN 48






(44
)






(44
)Other comprehensive loss, net of
    income taxes of $(76)










(173
)


(173
)Balance, June 30,
    2007

$
3,267


$
2,229


$
243


$
5,739    14




---



##### 



COMMONWEALTH
    EDISON COMPANY COMMONWEALTH
    EDISON COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
    INCOME

(Unaudited)  Three Months


Six MonthsEnded June 30,


Ended June 30,(In millions)

2007


2006


2007


2006Operating revenuesOperating revenues

$
1,419


$
1,450


$
2,907


$
2,874Operating revenues from affiliates


1



3



4



6Total operating revenues


1,420



1,453



2,911



2,880Operating expensesPurchased power


508



81



1,096



172Purchased power from affiliate


330



685



710



1,456Operating and maintenance


221



165



415



329Operating and maintenance from
    affiliates


45



53



95



105Depreciation and amortization


109



106



217



205Taxes other than income


76



71



157



152Total operating expenses


1,289



1,161



2,690



2,419Operating income


131



292



221



461Other income and
    deductionsInterest expense


(73
)


(58
)


(141
)


(114
)Interest expense to affiliates, net


(14
)


(19
)


(29
)


(39
)Equity in losses of unconsolidated
    affiliates


(2
)


(3
)


(4
)


(5
)Other, net


5



1



7



1Total other income and deductions


(84
)


(79
)


(167
)


(157
)Income before income
    taxes


47



213



54



304Income taxes


18



86



21



123Net income


29



127



33



181Other comprehensive income, net
    of income taxesChange in unrealized gain on
    cash-flow hedges


1







4



Unrealized gain on marketable
    securities


1







1



Other comprehensive income


2







5



Comprehensive income

$
31


$
127


$
38


$
181    15




---



##### 



COMMONWEALTH
    EDISON COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)  Six Months Ended June 30,(In millions)

2007


2006Cash flows from operating
    activitiesNet income

$
33


$
181Adjustments to reconcile net
    income to net cash flows provided by operating activities:Depreciation, amortization and
    accretion


217



205Deferred income taxes and
    amortization of investment tax credits


14



(25
)Net realized and unrealized
    mark-to-market and hedging transactions






7Other non-cash operating activities


107



72Changes in assets and liabilities:Accounts receivable


(38
)


24Inventories


10



(8
)Accounts payable, accrued expenses
    and other current liabilities


84



(3
)Receivables from and payables to
    affiliates, net


(129
)


10Income taxes


24



100Change in restricted cash


(42
)


Pension and non-pension
    postretirement benefit contributions


(3
)


(4
)Other assets and liabilities


(93
)


(7
)Net cash flows provided by
    operating activities


184



552Cash flows from investing
    activitiesCapital expenditures


(559
)


(465
)Change in restricted cash


(1
)


(1
)Other investing activities


11



5Net cash flows used in investing
    activities


(549
)


(461
)Cash flows from financing
    activitiesChanges in short-term debt


415



(120
)Issuance of long-term debt


286



320Retirement of long-term debt


(146
)


(1
)Retirement of long-term debt to
    ComEd Transitional Funding Trust


(180
)


(174
)Changes in Exelon intercompany
    money pool borrowings






(140
)Contributions from parent






23Other financing activities






(3
)Net cash flows provided by (used
    in) financing activities


375



(95
)Increase (decrease) in cash and
    cash equivalents


10



(4
)Cash and cash equivalents at
    beginning of period


35



38Cash and cash equivalents at
    end of period

$
45


$
34    16




---



##### 



COMMONWEALTH
    EDISON COMPANY AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)  June 30,


December 31,(In millions)

2007


2006ASSETSCurrent assetsCash and cash equivalents

$
45


$
35Restricted cash


43



Accounts receivable, netCustomer


750



740Other


110



62Inventories, net


72



83Deferred income taxes


27



29Receivables from affiliates






18Regulatory assets


104



Other


36



40Total current assets


1,187



1,007Property, plant and equipment,
    net


10,827



10,457Deferred debits and other
    assetsRegulatory assets


519



532Investments


46



44Investments in affiliates


12



20Goodwill


2,641



2,694Receivables from affiliates


1,873



1,774Prepaid pension asset


895



914Other


466



332Total deferred debits and other
    assets


6,452



6,310Total assets

$
18,466


$
17,774    17




---



##### 



COMMONWEALTH
    EDISON COMPANY AND SUBSIDIARY COMPANIES
 CONSOLIDATED BALANCE SHEETS
 (Unaudited)
  June 30,


December 31,(In millions)

2007


2006LIABILITIES AND
    SHAREHOLDERS EQUITYCurrent liabilitiesShort-term borrowings

$
475


$
60Long-term debt due within one year


418



147Long-term debt to ComEd
    Transitional Funding Trust due within one year


273



308Accounts payable


286



203Accrued expenses


281



467Payables to affiliates


96



219Customer deposits


116



114Other


80



82Total current liabilities


2,025



1,600Long-term debt


3,304



3,432Long-term debt to ComEd
    Transitional Funding Trust


170



340Long-term debt to other
    financing trusts


361



361Deferred credits and other
    liabilitiesDeferred income taxes and
    unamortized investment tax credits


2,026



2,310Asset retirement obligations


160



156Non-pension postretirement benefit
    obligations


205



176Regulatory liabilities


2,933



2,824Other


947



277Total deferred credits and other
    liabilities


6,271



5,743Total liabilities


12,131



11,476Commitments and
    contingenciesShareholders
    equityCommon stock


1,588



1,588Other paid-in capital


4,906



4,906Retained deficit


(161
)


(193
)Accumulated other comprehensive
    income (loss), net


2



(3
)Total shareholders equity


6,335



6,298Total liabilities and
    shareholders equity

$
18,466


$
17,774    18




---



##### 



COMMONWEALTH
    EDISON COMPANY AND SUBSIDIARY COMPANIESCONSOLIDATED STATEMENT OF CHANGES IN
    SHAREHOLDERS EQUITY
    (Unaudited)
  AccumulatedOther


Retained


Retained


Other


TotalCommon


Paid-In


Deficit


Earnings


Comprehensive


Shareholders(In millions)

Stock


Capital


Unappropriated


Appropriated


Income (Loss)


EquityBalance, December 31,
    2006

$
1,588


$
4,906


$
(1,632
)

$
1,439


$
(3
)

$
6,298Net income










33











33Appropriation of retained earnings
    for future dividends










(21
)


21







Adoption of FIN 48










(1
)










(1
)Other comprehensive income, net of
    income taxes of $3


















5



5Balance, June 30,
    2007

$
1,588


$
4,906


$
(1,621
)

$
1,460


$
2


$
6,335    19




---



##### 



PECO
    ENERGY COMPANY  PECO
    ENERGY COMPANY AND SUBSIDIARY COMPANIESCONSOLIDATED STATEMENTS OF OPERATIONS AND
    COMPREHENSIVE INCOME(Unaudited)
  Three Months


Six MonthsEnded June 30,


Ended June 30,(In millions)

2007


2006


2007


2006Operating revenuesOperating revenues

$
1,266


$
1,144


$
2,762


$
2,546Operating revenues from affiliates


3



4



7



8Total operating revenues


1,269



1,148



2,769



2,554Operating expensesPurchased power


72



72



136



142Purchased power from affiliate


497



429



977



845Fuel


86



76



385



402Operating and maintenance


119



109



238



225Operating and maintenance from
    affiliates


27



32



56



64Depreciation and amortization


185



172



370



343Taxes other than income


71



53



142



117Total operating expenses


1,057



943



2,304



2,138Operating income


212



205



465



416Other income and
    deductionsInterest expense


(24
)


(18
)


(44
)


(35
)Interest expense to affiliates, net


(40
)


(49
)


(82
)


(101
)Equity in losses of unconsolidated
    affiliates


(2
)


(2
)


(4
)


(6
)Other, net


5



2



10



5Total other income and deductions


(61
)


(67
)


(120
)


(137
)Income before income
    taxes


151



138



345



279Income taxes


55



45



121



93Net income


96



93



224



186Preferred stock
    dividends


1



1



2



2Net income on common
    stock

$
95


$
92


$
222


$
184Comprehensive income, net of
    income taxesNet income

$
96


$
93


$
224


$
186Other comprehensive loss, net
    of income taxesChange in net unrealized loss on
    cash-flow hedges






(1
)






(1
)Other comprehensive loss






(1
)






(1
)Comprehensive income

$
96


$
92


$
224


$
185    20




---



##### 



PECO
    ENERGY COMPANY AND SUBSIDIARY COMPANIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)
  Six Months Ended June 30,(In millions)

2007


2006Cash flows from operating
    activitiesNet income

$
224


$
186Adjustments to reconcile net
    income to net cash flows provided by operating activities:Depreciation, amortization and
    accretion


370



343Deferred income taxes and
    amortization of investment tax credits


(117
)


(138
)Other non-cash operating activities


47



61Changes in assets and liabilities:Accounts receivable


(60
)


73Inventories


55



9Accounts payable, accrued expenses
    and other current liabilities


(46
)


(123
)Receivables from and payables to
    affiliates, net


(32
)


27Income taxes


114



142Pension and non-pension
    postretirement benefit contributions


(11
)


(10
)Other assets and liabilities


(77
)


(20
)Net cash flows provided by
    operating activities


467



550Cash flows from investing
    activitiesCapital expenditures


(161
)


(164
)Changes in Exelon intercompany
    money pool contributions






8Change in restricted cash


3



(1
)Other investing activities


(2
)


Net cash flows used in investing
    activities


(160
)


(157
)Cash flows from financing
    activitiesIssuance of long-term debt


179



6Retirement of long-term debt to
    PECO Energy Transition Trust


(354
)


(248
)Change in short-term debt


27



7Changes in Exelon intercompany
    money pool borrowings


(45
)


Dividends paid on common and
    preferred stock


(278
)


(253
)Contributions from parent


165



83Net cash flows used in financing
    activities


(306
)


(405
)Increase (decrease) in cash and
    cash equivalents


1



(12
)Cash and cash equivalents at
    beginning of period


29



37Cash and cash equivalents at
    end of period

$
30


$
25    21




---



##### 



PECO
    ENERGY COMPANY AND SUBSIDIARY COMPANIESCONSOLIDATED BALANCE SHEETS
    (Unaudited)
  June 30,


December 31,(In millions)

2007


2006ASSETSCurrent assetsCash and cash equivalents

$
30


$
29Restricted cash


1



4Accounts receivable, netCustomer


480



426Other


69



79Inventories, netGas


116



173Materials and supplies


15



13Deferred income taxes


32



25Prepaid utility taxes


89



Other


13



13Total current assets


845



762Property, plant and equipment,
    net


4,735



4,651Deferred debits and other
    assetsRegulatory assets


3,603



3,896Investments


24



21Investments in affiliates


61



64Receivable from affiliate


192



151Other


473



228Total deferred debits and other
    assets


4,353



4,360Total assets

$
9,933


$
9,773    22




---



##### 



PECO
    ENERGY COMPANY AND SUBSIDIARY COMPANIES
    CONSOLIDATED BALANCE SHEETS
    (Unaudited)
  June 30,


December 31,(In millions)

2007


2006LIABILITIES AND
    SHAREHOLDERS EQUITYCurrent
    liabilitiesShort-term borrowings

$
122


$
95Borrowings from Exelon
    intercompany money pool






45Long-term debt due within one year


450



Long-term debt to PECO Energy
    Transition Trust due within one year


236



273Accounts payable


169



175Accrued expenses


160



121Payables to affiliates


171



203Customer deposits


58



50Other


25



16Total current liabilities


1,391



978Long-term debt


1,200



1,469Long-term debt to PECO Energy
    Transition Trust


1,814



2,131Long-term debt to other
    financing trusts


184



184Deferred credits and other
    liabilitiesDeferred income taxes and
    unamortized investment tax credits


2,682



2,601Asset retirement obligations


22



21Non-pension postretirement benefit
    obligations


287



283Regulatory liabilities


263



151Other


147



146Total deferred credits and other
    liabilities


3,401



3,202Total liabilities


7,990



7,964Commitments and
    contingenciesShareholders
    equityCommon stock


2,223



2,223Preferred stock


87



87Receivable from parent


(925
)


(1,090
)Retained earnings


553



584Accumulated other comprehensive
    income, net


5



5Total shareholders equity


1,943



1,809Total liabilities and
    shareholders equity

$
9,933


$
9,773    23




---



##### 



PECO
    ENERGY COMPANY AND SUBSIDIARY COMPANIESCONSOLIDATED STATEMENT OF CHANGES IN
    SHAREHOLDERS EQUITY(Unaudited)
  AccumulatedReceivable





Other


TotalCommon


Preferred


from


Retained


Comprehensive


Shareholders(In millions)

Stock


Stock


Parent


Earnings


Income


EquityBalance, December 31,
    2006

$
2,223


$
87


$
(1,090
)

$
584


$
5


$
1,809Net income














224







224Common stock dividends














(276
)






(276
)Preferred stock dividends














(2
)






(2
)Repayment of receivable from parent










165











165Adoption of FIN 48














23







23Balance, June 30,
    2007

$
2,223


$
87


$
(925
)

$
553


$
5


$
1,943    24




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIESCOMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS
 (Dollars in millions, except per share data, unless
    otherwise noted)
  1.
    Basis of
    Presentation (Exelon, Generation, ComEd and PECO)              Form 10-Q. Form 10-K.
 25




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2.
    Discontinued
    Operations (Exelon and Generation)       3. New
    Accounting Pronouncements (Exelon, Generation, ComEd and
    PECO)  FIN 48
     26




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    FIN 48-1, FIN 48-1
  SFAS No. 157
    SFAS No. 159
    FSP
    FIN 39-1
  FIN 39-1, FIN 39-1). FIN 39-1 FIN 39-1
 27




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  4.
    Acquisitions
    and Dispositions (Exelon and Generation)  Sithe
    (Exelon and Generation)
      Form 10-K
  Sale
    of Termoeléctrica del Golfo (TEG) and Termoeléctrica
    Peñoles (TEP) (Exelon and Generation)
    5.
    Regulatory
    Issues (Exelon, Generation, ComEd and PECO)    Rate Freeze, Generation Tax and Other Proposed Legislation
    (Exelon, Generation and ComEd).
 28




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      
    A rollback of electricity rates to rates in effect in 2006,
    effective for at least one year. Furthermore, ComEd would have
    been required to provide refunds, with interest, of charges
    collected from residential customers in excess of those
    rolled-back rates since January 1, 2007.
    A limit to rate increases for all bundled service customers for
    at least one year, and until 2010 in other versions of the
    legislation.
    A tax of $70,000 for each megawatt of nameplate capacity on
    certain electric generating facilities located in Illinois
    including those owned by Generation.
    Establishment of a generation tax and a fund from the proceeds
    of the generation tax to be used to reimburse ComEd and other
    Illinois utilities for rate refunds and also to refund ComEd and
    other Illinois utilities for differences between 2007 and 2006
    rates prior to July 1, 2008.
    ComEd would be required to supply all residential and small
    commercial and industrial customers who have central air
    conditioning with direct load control devices. ComEd would not
    be allowed to recover the cost of these devices through rates,
    but only from the generation tax fund.
    Beginning in 2009, no electric utility, including ComEd, could
    have been owned by a company, such as Exelon, which also
    participates, as Exelon does through Generation, in power
    generation or marketing.
    Require electric utilities, including ComEd, to remove
    themselves from participation in regional transmission
    organizations, including PJM Interconnection, LLC (PJM).     29




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    
    Illinois electric utilities, their affiliates, and generators of
    electricity in Illinois would make voluntary contributions of
    approximately $1 billion over a period of four years to
    programs that would provide rate relief to Illinois electricity
    customers and funding for the new Illinois Power Agency to be
    created by the Proposed Legislation. Exelon has committed to
    contributing approximately $800 million to rate relief
    programs over four years and funding for the Illinois Power
    Agency, in addition to approximately $11 million of rate
    relief credits provided by ComEd prior to June 14, 2007
    under rate relief programs previously announced. ComEd would
    continue executing upon its $64 million rate relief package
    announced April 23, 2007, as described above. Generation
    would contribute an aggregate of up to $747 million, of
    which $435 million would be available to reimburse ComEd
    for rate relief programs for ComEd customers, and
    $307.5 million would be available for rate relief programs
    for customers of other Illinois utilities, and $4.5 million
    would be available for funding operations of the Illinois Power
    Agency. Of the $800 million to be contributed to rate
    relief by Generation and ComEd, $459 million will be
    contributed in 2007, $222 million will be contributed in
    2008, $105 million will be contributed in 2009, and
    $14 million will be contributed in 2010.
    In the event that the Illinois General Assembly passes
    legislation prior to August 1, 2011 that freezes or reduces
    electric rates or imposes a generation tax on any party to the
    Settlement, the contributors to the rate relief funds would be
    allowed to terminate their funding commitments and may recover
    any undisbursed funds set aside for rate relief.
    The existing contracts resulting from the procurement auction in
    2006 will be honored. As those contracts expire, procurement
    will be made pursuant to a horizontal, sealed bid procurement
    process to establish long-term market-based contracts.
    To fulfill a requirement of the Settlement, ComEd and Generation
    have entered into a five-year financial swap arrangement, the
    effect of which will cause ComEd to pay fixed prices and cause
    Generation to pay a market price for a portion of ComEds
    load. The financial terms cover energy costs only, not capacity
    or ancillary services. The contract has been fully executed but
    is not effective until the Proposed Legislation contemplated by
    the Settlement is effective.  
    The contract is designed to dovetail with ComEds remaining
    auction contracts for energy, increasing in volume as the
    contracts expire.
    The contract volumes will be 1,000 MW for the period from
    June 2008 through May 2009, 2,000 MW for the period from
    June 2009 through May 2010, and 3,000 MW in each of the
    periods June 2010 through May 2011, June 2011 through May 2012,
    and June 2012 through May 2013.
    This arrangement will be deemed prudent and ComEd will receive
    full cost recovery in rates.  
    A new state agency, known as the Illinois Power Agency (the
    Agency), would be created and authorized to design annual
    five-year electricity supply portfolio plans for electric
    utilities and administer a competitive procurement process for
    utilities to procure the electricity supply resources identified
    in the supply portfolio plans. The Agency, under certain
    conditions, would also be authorized to construct generation and
    co-generation facilities that use indigenous coal or renewable
    resources, or both, to supply electricity at cost to municipal
    electric systems and rural electric cooperatives. The
    Agencys operations will be funded from fees 30




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  and bond proceeds and the interest on $25 million of the
    $1 billion customer rate relief package to be contributed
    to the Illinois Power Agency Trust Fund.  
    The ability of utilities to engage in divestiture and other
    restructuring transactions without prior Illinois Commerce
    Commission (ICC) approval would be extended until all classes of
    tariffed service are declared competitive.
    The Proposed Legislation would also declare that the 400 kw and
    above customer classes of ComEd are competitive and would
    establish an expedited procedure for finding customer classes
    with demands of 100 kw or greater but less than 400 kw are
    competitive.
    Until at least June 30, 2022, the state would not prohibit
    an electric utility from maintaining its membership in a Federal
    Energy Regulatory Commission (FERC) approved regional
    transmission organization chosen by the utility.
    ComEd would be required to provide tariffed service to
    condominium associations at rates that do not exceed rates
    offered to residential customers.
    Utilities would be prohibited from terminating electric service
    to a residential electric space heat customer due to nonpayment
    before September 1, 2007 or between December 1 of any year
    and March 1 of the following year.
    Electric utilities would be required to use cost-effective
    energy efficiency and demand response resources to meet defined
    incremental annual program energy and demand savings goals.
    These goals generally call for reductions in delivered energy
    from the prior year for energy efficiency programs and for
    reductions in peak demand from the prior year for eligible
    customers. The goals would be subject to rate impact caps each
    year. Utilities would be allowed recovery of costs for energy
    efficiency and demand response programs, subject to approval by
    the ICC. Failure to comply with the energy efficiency and demand
    response requirements in the Proposed Legislation would result
    in ComEd being subject to penalties and other charges.
    The procurement plans developed by the Illinois Power Agency and
    implemented by electric utilities must include cost-effective
    renewable energy resources in amounts that equal or exceed 2% of
    the total electricity that each electric utility supplies to its
    eligible retail customers by June 1, 2008, increasing to
    10% by June 1, 2015, with a goal of 25% by June 1,
    2025. Utilities would be allowed to pass-through any costs or
    savings from the procurement of these renewable resources.     31




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Customers Affordable Reliable Energy (Exelon and
    ComEd).
    Illinois Procurement Case and Related Proceedings (Exelon,
    Generation and ComEd).
     32




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Illinois Rate Case (Exelon and
    ComEd).
  Illinois Rate Design Investigation (Exelon and
    ComEd).
  Original Cost Audit (Exelon and
    ComEd).
  Renewable Energy Filings (Exelon and
    ComEd).
  Residential Rate Stabilization Program (Exelon and
    ComEd).
 33




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    City of Chicago Negotiations (Exelon and
    ComEd).
  Post-2006 Summary (Exelon, Generation and
    ComEd).
       34




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Transmission Rate Case (Exelon and
    ComEd).
  Authorized Return on Rate Base (Exelon, ComEd and
    PECO).
 35




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Through and Out (T&O) Rates and Seams Elimination
    Charge/Cost Adjustment/Assignment (SECA) (Exelon, ComEd and
    PECO).
  PJM Transmission Rate Design (Exelon, ComEd and
    PECO).
 36




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Alternative Energy Filing (Exelon and
    PECO).
  Default Service Regulations (Exelon and
    PECO). case-by-case
 37




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Pennsylvania Bulletin
  Pennsylvania Regulatory Matters (Exelon and
    PECO).
  Procurement Auctions (Exelon and
    Generation).
  Market-Based Rates (Exelon and
    Generation).
 38




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Reliability Pricing Model (RPM) (Exelon and
    Generation).
    Marginal-Loss Pricing (Exelon and
    Generation).
 39




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  6.
    Intangible
    Assets (Exelon and ComEd)  Goodwill (Exelon and ComEd).
      Balance as of December 31,
    2006

$
2,694Uncertain tax positions(a)


(53
)Balance as of June 30, 2007

$
2,641     (a)
    
    For uncertain tax positions of
    ComEd that existed at October 20, 2000, the date of the
    merger in which Exelon became the parent corporation of PECO and
    ComEd (PECO / Unicom merger), the impact of adopting FIN 48
    is recorded to goodwill in accordance with Emerging Issues Task
    Force (EITF) Issue
    No. 93-7,
    Uncertainties Related to Income Taxes in a Purchase
    Business Combination (EITF
    93-7). See
    Notes 3 and 10 for further information regarding the
    adoption of FIN 48. 7. Debt
    and Credit Agreements (Exelon, Generation, ComEd and
    PECO)  Short-Term
    Borrowings
    June 30,


December 31,Borrower

2007


2006Exelon Corporate

$
17


$
150Generation


39



ComEd






60PECO


122



95   Form 10-K
 40




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Carrying
    Amounts and Fair Values of Long-Term Debt
    Exelon
    June 30, 2007


December 31, 2006Carrying


Fair


Carrying


FairAmount


Value


Amount


ValueLong-term debt (including amounts
    due within one year)

$
9,412


$
9,178


$
9,144


$
9,122Long-term debt to ComEd
    Transitional Funding Trust and PECO Energy Transition Trust
    (PETT) (including amounts due within one year)


2,494



2,557



3,051



3,149Long-term debt to other financing
    trusts


545



474



545



517   Generation
    June 30, 2007


December 31, 2006Carrying


Fair


Carrying


FairAmount


Value


Amount


ValueLong-term debt (including amounts
    due within one year)

$
1,790


$
1,798


$
1,790


$
1,821   ComEd
    June 30, 2007


December 31, 2006Carrying


Fair


Carrying


FairAmount


Value


Amount


ValueLong-term debt (including amounts
    due within one year)

$
3,722


$
3,644


$
3,579


$
3,592Long-term debt to ComEd
    Transitional Funding Trust (including amounts due within one
    year)


443



445



648



652Long-term debt to other financing
    trusts


361



306



361



338    41




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  PECO
    June 30, 2007


December 31, 2006Carrying


Fair


Carrying


FairAmount


Value


Amount


ValueLong-term debt (including amounts
    due within one year)

$
1,650


$
1,611


$
1,469


$
1,464Long-term debt to PETT (including
    amounts due within one year)


2,050



2,112



2,404



2,496Long-term debt to other financing
    trusts


184



168



184



179   Issuance
    of Long-Term Debt
    InterestCompany

Type

Rate


Maturity


Amount(a)ComEd

First Mortgage Bonds


5.90
%


March 15, 2036


$
300PECO

First and Refunding Mortgage Bonds


5.70
%


March 15, 2037



175Other












7     (a)
    
    Excludes unamortized bond discounts.  Retirement
    of Long-Term Debt
    InterestCompany

Type

Rate


Maturity

AmountExelon

Notes payable for investments in
    synthetic fuel-producing facilities


6.00-8.00
%

Various

$
52ComEd

Notes payable


7.625
%

January 15, 2007


145ComEd

ComEd Transitional Funding Trust


5.63
%

June 25, 2007


138
(a)(b)ComEd

ComEd Transitional Funding Trust


5.74
%

December 25, 2008


67ComEd

Sinking fund debenture


4.75
%

December 1, 2011


1PECO

PETT


6.13
%

September 1, 2008


354     (a)
    
    Amount includes $17 million
    previously reflected in prepaid interest. This amount did not
    have an impact on ComEds Consolidated Statement of
    Operations or ComEds Consolidated Statement of Cash Flows.(b)
    
    ComEd applied $8 million of
    previously prepaid balances against the long-term debt to ComEd
    Transitional Funding Trust. 42




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  8.
    Derivative
    Financial Instruments (Exelon, Generation, ComEd and
    PECO)  Interest-Rate
    Swaps (Exelon, Generation, ComEd and PECO)
    Fair-Value Hedges.
  Cash-Flow Hedges.
  Energy-Related
    Derivatives (Exelon, Generation, ComEd and PECO)
    Form 10-K.
   43




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        June 30, 2007ExelonGeneration


ComEd





Energy-Cash-Flow


Other


Proprietary





Cash-Flow


Other








RelatedDerivatives

Hedges


Derivatives


Trading


Subtotal


Hedge


Derivatives


Subtotal


Other(a)


Derivatives(b)Current assets

$
231


$
415


$
103


$
749


$



$



$



$
16


$
765Noncurrent assets


75



105



30



210



















210Total mark-to-market energy
    contract assets

$
306


$
520


$
133


$
959


$



$



$



$
16


$
975Current liabilities

$
(106
)

$
(444
)

$
(78
)

$
(628
)

$



$
(5
)

$
(5
)

$
(16
)

$
(649
)Noncurrent liabilities


(147
)


(135
)


(16
)


(298
)














(3
)


(301
)Total mark-to-market energy
    contract liabilities

$
(253
)

$
(579
)

$
(94
)

$
(926
)

$



$
(5
)

$
(5
)

$
(19
)

$
(950
)Total mark-to-market energy
    contract net assets (liabilities)

$
53


$
(59
)

$
39


$
33


$



$
(5
)

$
(5
)

$
(3
)

$
25     (a)
    
    Other includes corporate
    operations, shared service entities, including Exelon Business
    Services Company (BSC), Enterprises and investments in synthetic
    fuel-producing facilities.(b)
    
    Excludes Exelons
    interest-rate swaps. 44




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     December 31, 2006ExelonGeneration


ComEd





Energy-Cash-Flow


Other


Proprietary





Cash-Flow


Other








RelatedDerivatives

Hedges


Derivatives


Trading


Subtotal


Hedge


Derivatives


Subtotal


Other(a)


Derivatives(b)Current assets

$
460


$
751


$
197


$
1,408


$



$



$



$
10


$
1,418Noncurrent assets


104



52



15



171



















171Total mark-to-market energy
    contract assets

$
564


$
803


$
212


$
1,579


$



$



$



$
10


$
1,589Current liabilities

$
(119
)

$
(697
)

$
(187
)

$
(1,003
)

$
(6
)

$
(5
)

$
(11
)

$
(1
)

$
(1,015
)Noncurrent liabilities


(30
)


(33
)


(14
)


(77
)














(1
)


(78
)Total mark-to-market energy
    contract liabilities

$
(149
)

$
(730
)

$
(201
)

$
(1,080
)

$
(6
)

$
(5
)

$
(11
)

$
(2
)

$
(1,093
)Total mark-to-market energy
    contract net assets (liabilities)

$
415


$
73


$
11


$
499


$
(6
)

$
(5
)

$
(11
)

$
8


$
496     (a)
    
    Other includes corporate
    operations, shared service entities, including BSC, Enterprises
    and investments in synthetic fuel-producing facilities.(b)
    
    Excludes Exelons
    interest-rate swaps.  Normal Operations and Hedging Activities
    (Generation).
  Cash-Flow Hedges (Generation and ComEd).
  Total Cash-Flow HedgeOCI Activity, Net ofIncome TaxThree Months Ended June 30, 2007

Generation


ComEd


ExelonAccumulated OCI derivative loss at
    March 31, 2007

$
(174
)

$
(1
)

$
(175
)Changes in fair value


211







211Reclassifications from accumulated
    OCI to net income


(4
)


1



(3
)Accumulated OCI derivative gain at
    June 30, 2007

$
33


$



$
33  45




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Total Cash-Flow HedgeOCI Activity, Net ofIncome TaxSix Months Ended June 30, 2007

Generation


ComEd


ExelonAccumulated OCI derivative gain
    (loss) at December 31, 2006

$
250


$
(4
)

$
246Changes in fair value


(200
)






(200
)Reclassifications from accumulated
    OCI to net income


(17
)


4



(13
)Accumulated OCI derivative gain at
    June 30, 2007

$
33


$



$
33   Total Cash-Flow HedgeOCI Activity, Net ofIncome TaxThree Months Ended June 30, 2006

Exelon and GenerationAccumulated OCI derivative loss at
    March 31, 2006

$
(223
)Changes in fair value


117Reclassifications from accumulated
    OCI to net income


22Accumulated OCI derivative loss at
    June 30, 2006

$
(84
)   Total Cash-Flow HedgeOCI Activity, Net ofIncome TaxSix Months Ended June 30, 2006

Exelon and GenerationAccumulated OCI derivative loss at
    December 31, 2005

$
(314
)Changes in fair value


163Reclassifications from accumulated
    OCI to net income


67Accumulated OCI derivative loss at
    June 30, 2006

$
(84
)       Other Derivatives (Exelon, Generation and
    ComEd).
 46




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Three Months Ended June 30, 2007Generation


ComEd(a)


Other(b)


ExelonUnrealized mark-to-market losses

$
(5
)

$
(3
)

$
(10
)

$
(18
)Realized mark-to-market gains
    (losses)


(12
)


1







(11
)Total net mark-to-market losses

$
(17
)

$
(2
)

$
(10
)

$
(29
)     (a)
    
    See Energy-Related
    Derivatives above.(b)
    
    Other includes corporate
    operations, shared service entities, including BSC, Enterprises
    and investments in synthetic fuel-producing facilities.  Six Months Ended June 30, 2007Generation


ComEd(a)


Other(b)


ExelonUnrealized mark-to-market losses

$
(81
)

$
(2
)

$
(11
)

$
(94
)Realized mark-to-market gains
    (losses)


(54
)


2







(52
)Total net mark-to-market losses

$
(135
)

$



$
(11
)

$
(146
)     (a)
    
    See Energy-Related
    Derivatives above.(b)
    
    Other includes corporate
    operations, shared service entities, including BSC, Enterprises
    and investments in synthetic fuel-producing facilities.  Three Months Ended June 30, 2006Generation


ComEd(a)


Other(b)


ExelonUnrealized mark-to-market gains

$
30


$
2


$
28


$
60Realized mark-to-market gains


28



1







29Total net mark-to-market gains

$
58


$
3


$
28


$
89     (a)
    
    See Energy-Related
    Derivatives above.(b)
    
    Other includes corporate
    operations, shared service entities, including BSC, Enterprises
    and investments in synthetic fuel-producing facilities.  Six Months Ended June 30, 2006Generation


ComEd(a)


Other(b)


ExelonUnrealized mark-to-market gains
    (losses)

$
(26
)

$
(9
)

$
41


$
6Realized mark-to-market gains


63



1







64Total net mark-to-market gains
    (losses)

$
37


$
(8
)

$
41


$
70     (a)
    
    See Energy-Related
    Derivatives above.(b)
    
    Other includes corporate
    operations, shared service entities, including BSC, Enterprises
    and investments in synthetic fuel-producing facilities. 47




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Proprietary Trading Activities
    (Generation).
  Three Months


Six MonthsEnded


EndedJune 30,


June 30,2007


2006


2007


2006Unrealized mark-to-market gains

$
32


$
2


$
32


$
4Realized mark-to-market losses


(2
)


(2
)


(4
)


(4
)Total net mark-to-market gains

$
30


$



$
28


$
   Credit
    Risk Associated with Derivative Instruments (Exelon and
    Generation)
       48




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      9.
    Retirement
    Benefits (Exelon, Generation, ComEd and PECO)      Defined
    Benefit Pension and Other Postretirement Benefits 
    Consolidated Plans (Exelon, Generation, ComEd and
    PECO)
        49




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  OtherPension


PostretirementBenefits


BenefitsThree Months


Three MonthsEnded


EndedJune 30,


June 30,2007


2006


2007


2006Service cost

$
40


$
38


$
28


$
25Interest cost


151



139



47



44Expected return on assets


(204
)


(204
)


(30
)


(27
)Amortization of:Transition obligation










3



3Prior service cost (benefit)


4



4



(14
)


(23
)Actuarial loss


37



34



15



21Net periodic benefit cost

$
28


$
11


$
49


$
43   OtherPension


PostretirementBenefits


BenefitsSix Months


Six MonthsEnded


EndedJune 30,


June 30,2007


2006


2007


2006Service cost

$
81


$
79


$
53


$
50Interest cost


302



281



96



91Expected return on assets


(408
)


(408
)


(58
)


(53
)Amortization of:Transition obligation










5



5Prior service cost (benefit)


8



8



(28
)


(46
)Actuarial loss


74



74



32



44Net periodic benefit cost

$
57


$
34


$
100


$
91     Three Months


Six MonthsEnded


EndedJune 30,


June 30,Pension and Postretirement Benefit Costs

2007


2006


2007


2006Generation

$
35


$
26


$
71


$
57ComEd


27



19



51



38PECO


6



5



16



15Exelon Corporate(a)


9



4



19



15  50




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (a)
    
    Represents amounts billed to
    Exelons subsidiaries through intercompany allocations.  Pension
    and Other Postretirement Benefits  AmerGen Plans
    (Generation)
    OtherPension


PostretirementBenefits


BenefitsThree Months


Three MonthsEnded


EndedJune 30,


June 30,2007


2006


2007


2006Service cost

$
3


$
3


$
2


$
2Interest cost


2



1



2



2Expected return on assets


(2
)


(1
)






Amortization of prior service cost










(1
)


(1
)Net periodic benefit cost

$
3


$
3


$
3


$
3   OtherPension


PostretirementBenefits


BenefitsSix Months


Six MonthsEnded


EndedJune 30,


June 30,2007


2006


2007


2006Service cost

$
6


$
6


$
4


$
4Interest cost


4



3



3



3Expected return on assets


(4
)


(3
)






Amortization of prior service cost










(1
)


(1
)Net periodic benefit cost

$
6


$
6


$
6


$
6  51




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  401(k)
    Savings Plan (Exelon, Generation, ComEd and PECO)
    Three Months


Six MonthsEnded


EndedJune 30,


June 30,Savings Plan Matching Contributions

2007


2006


2007


2006Exelon

$
16


$
15


$
32


$
30Generation


7



8



15



16ComEd


5



4



9



8PECO


2



1



3



3   10.
    Income
    Taxes (Exelon, Generation, ComEd and PECO)    Three Months Ended June 30, 2007Exelon


Generation


ComEd


PECOU.S. Federal statutory rate


35.0
%


35.0
%


35.0
%


35.0
%Increase (decrease) due to:State income taxes, net of Federal
    income tax benefit


3.9



4.3



4.7



(0.2
)Qualified nuclear decommissioning
    trust fund income


0.8



0.9







Plant basis differences














0.1Synthetic fuel-producing
    facilities credit(a)


(6.5
)










Domestic production activities
    deduction


(1.5
)


(1.9
)






Tax exempt income


(0.4
)


(0.4
)






Amortization of investment tax
    credit


(0.3
)


(0.2
)


(1.6
)


(0.4
)Nontaxable postretirement benefits


(0.3
)


(0.2
)


(1.6
)


(0.5
)Allowance for funds used during
    construction (AFUDC), equity










(0.5
)


Lobbying activities










2.2



Investment tax credit charge


0.3











2.3Other


(0.1
)


0.1



0.1



0.1Effective income tax rate


30.9
%


37.6
%


38.3
%


36.4
%     (a)
    
    See Notes 2 and 12 of the
    Combined Notes to Consolidated Financial Statements within
    Exelons 2006 Annual Report on
    Form 10-K
    for further information regarding investments in synthetic
    fuel-producing facilities.  52




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Six Months Ended June 30, 2007Exelon


Generation


ComEd


PECOU.S. Federal statutory rate


35.0
%


35.0
%


35.0
%


35.0
%Increase (decrease) due to:State income taxes, net of Federal
    income tax benefit


4.7



4.8



4.7



(0.6
)Qualified nuclear decommissioning
    trust fund income


0.5



0.7







Plant basis differences














0.3Synthetic fuel-producing
    facilities credit(a)


(5.6
)










Domestic production activities
    deduction


(1.5
)


(1.7
)






Tax exempt income


(0.3
)


(0.4
)






Amortization of investment tax
    credit


(0.3
)


(0.1
)


(1.6
)


(0.3
)Nontaxable postretirement benefits


(0.3
)


(0.2
)


(1.6
)


(0.3
)AFUDC, equity










(0.4
)


Lobbying activities


0.1







2.0



Investment tax credit charge


0.2











1.0Other


(0.6
)


(0.5
)


0.8



Effective income tax rate


31.9
%


37.6
%


38.9
%


35.1
%     (a)
    
    See Notes 2 and 12 of the
    Combined Notes to Consolidated Financial Statements within
    Exelons 2006 Annual Report on
    Form 10-K
    for further information regarding investments in synthetic
    fuel-producing facilities.  Three Months Ended June 30, 2006Exelon


Generation


ComEd


PECOU.S. Federal statutory rate


35.0
%


35.0
%


35.0
%


35.0
%Increase (decrease) due to:State income taxes, net of Federal
    income tax benefit


3.7



4.4



4.9



(2.1
)Qualified nuclear decommissioning
    trust fund income


0.3



0.4







Amortization of regulatory asset










0.7



Plant basis differences


0.1











0.8Domestic production activities
    deduction


(0.5
)


(0.6
)






Tax exempt income


(0.3
)


(0.4
)






Amortization of investment tax
    credit


(0.3
)


(0.1
)


(0.3
)


(0.4
)Nontaxable postretirement benefits


(0.3
)


(0.2
)


(0.3
)


(0.3
)Other


(1.5
)


(1.3
)


0.4



(0.4
)Effective income tax rate


36.2
%


37.2
%


40.4
%


32.6
%   53




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Six Months Ended June 30, 2006Exelon


Generation


ComEd


PECOU.S. Federal statutory rate


35.0
%


35.0
%


35.0
%


35.0
%Increase (decrease) due to:State income taxes, net of Federal
    income tax benefit


3.6



4.4



4.8



(1.3
)Qualified nuclear decommissioning
    trust fund income


0.4



0.5







Amortization of regulatory asset










0.7



Plant basis differences


0.1











0.4Synthetic fuel-producing
    facilities credit(a)


(1.6
)










Domestic production activities
    deduction


(0.6
)


(0.8
)






Tax exempt income


(0.4
)


(0.5
)






Amortization of investment tax
    credit


(0.4
)


(0.2
)


(0.5
)


(0.4
)Nontaxable postretirement benefits


(0.3
)


(0.2
)


(0.4
)


(0.3
)Lobbying activities










0.2



Other


(0.7
)


(1.0
)


0.7



(0.1
)Effective income tax rate


35.1
%


37.2
%


40.5
%


33.3
%     (a)
    
    See Notes 2 and 12 of the
    Combined Notes to Consolidated Financial Statements within
    Exelons 2006 Annual Report on
    Form 10-K
    for further information regarding investments in synthetic
    fuel-producing facilities.  Accounting
    for Uncertainty in Income Taxes (Exelon, Generation, ComEd and
    PECO)
    Increase (decrease)

Exelon


Generation


ComEd


PECOAccounts receivable,
    net  Other

$
83


$



$
72


$
12Goodwill


(53
)






(53
)


Other deferred debits and other
    assets


381



22



137



208Accrued expenses


(197
)


5



(186
)


Deferred income taxes and
    unamortized investment tax credits


(83
)


30



(299
)


186Other deferred credits and other
    liabilities


705



31



642



11Retained earnings


(14
)


(44
)


(1
)


23        54




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      EITF 93-7.
     55




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            1999
    Sale of Fossil Generating Assets (Exelon, Generation and
    ComEd)
   56




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Investments
    in Synthetic Fuel-Producing Facilities (Exelon)
     57




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Estimated2007Beginning of Phase-Out Range(a)

$
62End of Phase-Out Range(a)


782007 Annual Average NYMEX


66     (a)
    
    The estimated 2007 phase-out range
    as of June 30, 2007 is based upon the actual 2006 phase-out
    range. The actual 2006 phase-out range was determined using the
    inflation adjustment factor published by the IRS in April 2007.
    The actual 2006 phase-out range was increased by 2%
    (Exelons estimate of inflation) to arrive at the estimated
    2007 phase-out range.           58




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  11.
    Asset
    Retirement Obligations (Exelon and Generation)  Nuclear
    Decommissioning Asset Retirement Obligations (ARO)
      Exelon and GenerationNuclear decommissioning AROs at
    January 1, 2007

$
3,533Accretion expense


115Payments to decommission retired
    plants


(4
)Nuclear decommissioning AROs at
    June 30, 2007

$
3,644       Nuclear
    Decommissioning Trust Fund Investments
       59




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Form 10-K
  12.
    Earnings
    Per Share and Shareholders Equity (Exelon)  Earnings
    per Share
    Three Months


Six MonthsEnded


EndedJune 30,


June 30,2007


2006


2007


2006Income from continuing operations

$
703


$
641


$
1,384


$
1,041Income (loss) from discontinued
    operations


(1
)


3



9



3Net income

$
702


$
644


$
1,393


$
1,044Average common shares
    outstanding  basic


675



670



674



669Assumed exercise of stock options,
    performance share awards and restricted stock


5



6



5



6Average common shares
    outstanding  diluted


680



676



679



675  60




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Share
    Repurchases
  Form 10-K
  Long-Term
    Incentive Plans
    Three Months


Six MonthsEnded


EndedJune 30,


June 30,2007


2006


2007


2006Stock options

$
7


$
8


$
22


$
25Performance shares


19



20



36



41Restricted stock units


2



1



8



2Employee stock purchase plan


1



1



1



1Total stock-based compensation
    included in operating and maintenance expense


29



30



67



69Income tax benefit


12



11



27



26Total after-tax stock-based
    compensation expense

$
17


$
19


$
40


$
43   Stock
    Options and Performance Shares
  Form 10-K.
  Restricted
    Stock Units
    (SFAS No. 123-R),
 61




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      13.
    Commitments
    and Contingencies (Exelon, Generation, ComEd and PECO)  Form 10-K.
  Energy
    Commitments
    
    Generations total commitments for future sales of energy
    to unaffiliated third-party utilities and others decreased by
    approximately $760 million during the six months ended
    June 30, 2007, reflecting increases of approximately
    $819 million, $495 million and $124 million
    related to 2008, 2009 and 2010 sales commitments, respectively,
    offset by the fulfillment of approximately $2,198 million
    of 2007 commitments during the six months ended June 30,
    2007. The increases were primarily due to increased forward
    sales of energy to counterparties other than ComEd as a result
    of the expiration of the PPA with ComEd on December 31,
    2006, as well as increased overall hedging activity in the
    normal course of business.
    On April 4, 2007, Generation agreed to sell its rights to
    942 MWs of capacity, energy, and ancillary services
    supplied from its existing long-term contract with Tenaska
    Georgia Partners, LP through a tolling agreement with Georgia
    Power, a subsidiary of Southern Company, commencing June 1,
    2010 and lasting for 15 or 20 years. The transaction
    between Generation and Georgia Power is subject to approval by
    the Georgia Public Service Commission (GPSC). Upon approval of
    the transaction by the GPSC, Exelon and Generation will
    recognize a non-cash after-tax loss of up to $75 million.
    Generation expects to receive approval from the GPSC during the
    third quarter of 2007. The transaction provides Generation with
    approximately $43 million in annual revenue in the form of
    capacity payments over the term of the tolling agreement.  Form 10-K
 62




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Fuel
    Purchase Obligations
    
    Generations total fuel purchase obligations for nuclear
    and fossil generation as of June 30, 2007 increased by
    $108 million, $120 million, $95 million,
    $102 million, and $293 million for 2008, 2009, 2010,
    2011, 2012 and beyond, respectively, as compared to
    December 31, 2006 due to contracts entered into in the
    normal course of business.
    PECOs total fuel purchase obligations increased by
    approximately $134 million during the six months ended
    June 30, 2007, reflecting an increase of $18 million,
    $63 million, $34 million and $19 million in 2007,
    2008, 2009 and 2010, respectively, primarily related to the
    purchase of natural gas and related transportation services.  Commercial
    and Construction Commitments
    
    Exelons letters of credit increased $42 million and
    guarantees increased by $209 million primarily as a result
    of leasing activities, energy trading and performance guarantees.
    Generations letters of credit increased by
    $41 million and its guarantees increased by
    $176 million primarily as a result of energy trading
    activities and the performance guaranty agreement entered into
    in connection with the sale of TEG and TEP.    July toDecemberTotal


2007


2008


2009


2010


2011


2012ComEd

$
151


$
64


$
32


$
9


$
13


$
15


$
18PECO


151



4



28



58



28



26



7   Rate
    Relief Commitments
   63




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    June 14 to


July toJune 30,


DecemberTotal


2007(a)


2007


2008


2009


2010Generation

$
747


$



$
426


$
212


$
95


$
14ComEd(a)


53



7



26



10



10



Total

$
800


$
7


$
452


$
222


$
105


$
14     (a)
    
    During the six months ended
    June 30, 2007, ComEd has credited approximately
    $18 million to its customers, including $11 million
    prior to June 14, 2007.  Nuclear
    Insurance
    Form 10-K
  Environmental
    Liabilities
  and/or
 64




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          TotalEnvironmentalInvestigation and


Portion of Total RelatedRemediation


to MGP InvestigationJune 30, 2007

Reserve


and RemediationExelon

$
127


$
101Generation


17



ComEd


72



65PECO


38



36   TotalEnvironmentalInvestigation and


Portion of Total RelatedRemediation


to MGP InvestigationDecember 31, 2006

Reserve


and RemediationExelon

$
119


$
88Generation


20



ComEd


58



49PECO


41



39    65




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Section 316(b)
    of the Clean Water Act
         66




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Nuclear
    Generating Station Groundwater
       67




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
           68




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Cotter
    Corporation
    Greenhouse
    Gas Emissions Reductions
    cap-and-trade
 69




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Litigation
    and Regulatory Matters
  Exelon,
    Generation and PECO
  PJM Billing Dispute.
    Real Estate Tax Appeals.
   70




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Exelon
    and Generation
  Asbestos Personal Injury Claims.
    Oil Spill Liability
    Trust Fund Claim.
  Supply Agreement Non-performance
    Claims.
  Exelon
  Pension Claim.
 71




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Savings Plan Claim.
  Exelon,
    Generation, ComEd and PECO
  General.
  Fund Transfer
    Restrictions
  Form 10-K
  Income
    Taxes
   72




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  EITF 93-7.
    14.
    Supplemental
    Financial Information (Exelon, Generation, ComEd and
    PECO)  Supplemental
    Statement of Operations Information
    Three Months Ended June 30, 2007Exelon


Generation


ComEd


PECOInvestment income

$
3


$



$
1


$
2Gain on disposition of assets and
    investments, net


4



3



1



Decommissioning-related activities:Decommissioning trust fund
    income(a)


58



58







Decommissioning trust fund
    income  AmerGen(a)


15



15







Other-than-temporary impairment of
    decommissioning trust funds(b)


(12
)


(12
)






Other-than-temporary impairment of
    decommissioning trust funds  AmerGen


(2
)


(2
)






Regulatory offset to non-operating
    decommissioning-related activities(c)


(45
)


(45
)






Net direct financing lease income


4











AFUDC, equity


1







1



Recovery of tax credits related to
    Exelons investments in synthetic fuel-producing
    facilities(d)


9











Interest income related to
    uncertain income tax positions under FIN 48(e)














2Other


8



5



2



1Other, net

$
43


$
22


$
5


$
5     (a)
    
    Includes investment income and
    realized gains and losses.(b)
    
    Includes other-than-temporary
    impairments totaling $12 million on nuclear decommissioning
    trust funds for the former ComEd units.(c)
    
    Includes the elimination of
    non-operating decommissioning-related activity for those units
    that are subject to regulatory accounting, including the
    elimination of decommissioning trust fund income and
    other-than-temporary impairments. See 73




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Notes 9 and 13 of the Combined
    Notes to Consolidated Financial Statements within Exelons
    2006 Annual Report on
    Form 10-K
    for additional information regarding the accounting for nuclear
    decommissioning.(d)
    
    Receivable for the contractual
    recovery of unrealized income tax credits related to
    Exelons investment in synthetic fuel-producing facilities.
    See Note 10  Income Taxes for additional
    information.(e)
    
    See Note 3  New
    Accounting Pronouncements and Note 10  Income
    Taxes for additional information.  Six Months Ended June 30, 2007Exelon


Generation


ComEd


PECOInvestment income

$
5


$



$
2


$
3Gain on disposition of assets and
    investments, net


19



18



1



Decommissioning-related activities:Decommissioning trust fund
    income(a)


104



104







Decommissioning trust fund
    income  AmerGen(a)


26



26







Other-than-temporary impairment of
    decommissioning trust funds(b)


(20
)


(20
)






Other-than-temporary impairment of
    decommissioning trust funds  AmerGen


(4
)


(4
)






Regulatory offset to non-operating
    decommissioning-related activities(c)


(82
)


(82
)






Net direct financing lease income


10











AFUDC, equity


2







2



Recovery of tax credits related to
    Exelons investments in synthetic fuel-producing
    facilities(d)


29











Interest income related to
    settlement of PJM billing dispute(e)


5



4







1Interest income related to
    uncertain income tax positions under FIN 48(f)














5Other


12



8



2



1Other, net

$
106


$
54


$
7


$
10     (a)
    
    Includes investment income and
    realized gains and losses.(b)
    
    Includes other-than-temporary
    impairments totaling $20 million on nuclear decommissioning
    trust funds for the former ComEd units.(c)
    
    Includes the elimination of
    non-operating decommissioning-related activity for those units
    that are subject to regulatory accounting, including the
    elimination of decommissioning trust fund income and
    other-than-temporary impairments. See Notes 9 and 13 of the
    Combined Notes to Consolidated Financial Statements within
    Exelons 2006 Annual Report on
    Form 10-K
    for additional information regarding the accounting for nuclear
    decommissioning.(d)
    
    Receivable for the contractual
    recovery of unrealized income tax credits related to
    Exelons investment in synthetic fuel-producing facilities.
    See Note 10  Income Taxes for additional
    information.(e)
    
    See Note 13 
    Commitments and Contingencies for additional information.(f)
    
    See Note 3  New
    Accounting Pronouncements and Note 10  Income
    Taxes for additional information.  74




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Three Months Ended June 30, 2006Exelon


Generation


ComEd


PECOInvestment income

$
2


$



$



$
2Loss on disposition of assets and
    investments, net


(3
)






(2
)


(1
)Decommissioning-related activities:Decommissioning trust fund
    income(a)


37



37







Decommissioning trust fund
    income  AmerGen(a)


10



10







Other-than-temporary impairment of
    decommissioning trust funds(b)


(7
)


(7
)






Regulatory offset to non-operating
    decommissioning-related activities(c)


(31
)


(31
)






Net direct financing lease income


6











Recovery of tax credits related to
    Exelons investments in synthetic fuel-producing
    facilities(d)


24











Other


8



5



3



1Other, net

$
46


$
14


$
1


$
2     (a)
    
    Includes investment income and
    realized gains and losses.(b)
    
    Includes other-than-temporary
    impairments totaling $7 million on nuclear decommissioning
    trust funds for the former ComEd units.(c)
    
    Includes the elimination of
    non-operating decommissioning-related activity for those units
    that are subject to regulatory accounting, including the
    elimination of decommissioning trust fund income and
    other-than-temporary impairments. See Notes 9 and 13 of the
    Combined Notes to Consolidated Financial Statements within
    Exelons 2006 Annual Report on
    Form 10-K
    for additional information regarding the accounting for nuclear
    decommissioning.(d)
    
    Receivable for the contractual
    recovery of unrealized income tax credits related to
    Exelons investment in synthetic fuel-producing facilities.
    See Note 10  Income Taxes for further
    information.  Six Months Ended June 30, 2006Exelon


Generation


ComEd


PECOInvestment income

$
4


$



$



$
4Loss on disposition of assets and
    investments, net


(2
)






(2
)


Decommissioning-related activities:Decommissioning trust fund
    income(a)


66



66







Decommissioning trust fund
    income  AmerGen(a)


19



19







Other-than-temporary impairment of
    decommissioning trust funds(b)


(10
)


(10
)






Regulatory offset to non-operating
    decommissioning-related activities(c)


(57
)


(57
)






Net direct financing lease income


12











Unrealized income tax credits(d)


53











Other


6



2



3



1Other, net

$
91


$
20


$
1


$
5  75




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (a)
    
    Includes investment income and
    realized gains and losses.(b)
    
    Includes other-than-temporary
    impairments totaling $10 million on nuclear decommissioning
    trust funds for the former ComEd units.(c)
    
    Includes the elimination of
    non-operating decommissioning-related activity for those units
    that are subject to regulatory accounting, including the
    elimination of decommissioning trust fund income and
    other-than-temporary impairments. See Notes 9 and 13 of the
    Combined Notes to Consolidated Financial Statements within
    Exelons 2006 Annual Report on
    Form 10-K
    for additional information regarding the accounting for nuclear
    decommissioning.(d)
    
    Receivable for the contractual
    recovery of unrealized income tax credits related to
    Exelons investment in synthetic fuel-producing facilities.
    See Note 10  Income Taxes for further
    information.  Supplemental
    Cash Flow Information
    Six Months Ended June 30, 2007Exelon


Generation


ComEd


PECOOther non-cash operating
    activities:Pension and non-pension
    postretirement benefits costs

$
157


$
71


$
51


$
16Equity in (earnings) losses of
    unconsolidated affiliates and investments


69



(1
)


4



4Provision for uncollectible
    accounts


44







24



20Stock-based compensation costs


41











Net realized gains on nuclear
    decommissioning trust funds


(19
)


(19
)






Gain on sale of investments, net


(18
)


(18
)






Amortization of energy-related
    options


66



66







Non-cash accounts receivable
    activity


(25
)










Spent nuclear fuel expense


24



24







Amortization of regulatory asset
    related debt costs


16







13



3Other


14



7



15



4Total other non-cash operating
    activities

$
369


$
130


$
107


$
47Changes in other assets and
    liabilities:Under/over-recovered energy costs

$
(96
)

$



$
(104
)

$
8Other current assets


(198
)


(91
)(a)






(86
)(b)Other noncurrent assets and
    liabilities


(53
)


(55
)(a)


11



1Total changes in other assets and
    liabilities

$
(347
)

$
(146
)

$
(93
)

$
(77
)     (a)
    
    Relates primarily to the purchase
    of energy-related options.(b)
    
    Relates primarily to prepaid
    utility taxes.  76




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Six Months Ended June 30, 2006Exelon


Generation


ComEd


PECOOther non-cash operating
    activities:Pension and non-pension
    postretirement benefits costs

$
125


$
57


$
38


$
15Equity in losses of unconsolidated
    affiliates and investments


61



5



5



6Provision for uncollectible
    accounts


42







11



31Stock-based compensation costs


53











Amortization of energy-related
    options


39



39







Amortization of deferred revenue


(34
)


(34
)






Non-cash accounts receivable
    activity


(57
)










Spent nuclear fuel expense


20



20Other decommissioning-related
    activities


(149
)


(149
)






Amortization of regulatory asset
    related debt costs


7







5



2Other


17



6



13



7Total other non-cash operating
    activities

$
124


$
(56
)

$
72


$
61Changes in other assets and
    liabilities:Under/over-recovered energy costs

$
61


$



$



$
61Other current assets


(197
)


(70
)(a)


(10
)


(84
)(b)Other noncurrent assets and
    liabilities


(159
)


(148
)(a)


3



3Total changes in other assets and
    liabilities

$
(295
)

$
(218
)

$
(7
)

$
(20
)     (a)
    
    Relates primarily to the purchase
    of energy-related options.(b)
    
    Relates primarily to prepaid
    utility taxes. 77




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Supplemental
    Balance Sheet Information
    June 30, 2007Exelon


ComEd


PECORegulatory assetsCompetitive transition charge

$
2,688


$



$
2,688Pension and other postretirement
    benefits


1,352







36Deferred income taxes


806



11



795Debt costs


193



166



27Severance


147



147



Conditional asset retirement
    obligations


112



98



14MGP remediation costs


80



59



21Rate case costs


6



6



Department of Energy facility
    decommissioning


3







3Procurement case costs


4



4



Other


47



28



19Noncurrent regulatory assets


5,438



519



3,603Under-recovered energy costs
    current asset(a)


104



104



Total regulatory assets

$
5,542


$
623


$
3,603   June 30, 2007Exelon


ComEd


PECORegulatory
    liabilitiesNuclear decommissioning

$
2,048


$
1,856


$
192Removal costs


1,077



1,077



Deferred taxes


44







Refund of PURTA taxes(b)


71







71Noncurrent regulatory liabilities


3,240



2,933



263Over-recovered energy costs
    current liability(a)


14







14Total regulatory liabilities

$
3,254


$
2,933


$
277     (a)
    
    Starting in 2007, the ComEd costs
    represent electricity and transmission costs recoverable
    (refundable) under ComEds ICC-approved rates. ComEds
    deferred energy costs are earning (paying) a rate of return. See
    Note 5  Regulatory Issues. The PECO costs
    represent gas supply related costs recoverable (refundable)
    under PECOs PAPUC-approved rates. PECOs deferred
    energy costs are earning (paying) a rate of return.(b)
    
    See Note 13 
    Commitments and Contingencies for additional information.  78




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December 31, 2006Exelon


ComEd


PECORegulatory assetsCompetitive transition charge

$
2,982


$



$
2,982Pension and other postretirement
    benefits


1,419







39Deferred income taxes


801



11



790Debt costs


209



179



30Severance


158



158



Conditional asset retirement
    obligations


109



95



14MGP remediation costs


73



47



26Rate case costs


7



7



Department of Energy facility
    decommissioning


6







6Procurement case costs


5



5



Other


39



30



9Total regulatory assets

$
5,808


$
532


$
3,896   December 31, 2006Exelon


ComEd


PECORegulatory
    liabilitiesNuclear decommissioning

$
1,911


$
1,760


$
151Removal costs


1,059



1,059



Deferred taxes


50







Other


5



5



Noncurrent regulatory liabilities


3,025



2,824



151Over-recovered energy costs
    current liability(a)


6







6Total regulatory liabilities

$
3,031


$
2,824


$
157     (a)
    
    The PECO costs represent gas supply
    related costs recoverable (refundable) under PECOs
    PAPUC-approved rates. PECOs deferred energy costs are
    earning (paying) a rate of return.    June 30, 2007Exelon


Generation


ComEd


PECOProperty, plant and
    equipment:Accumulated depreciation

$
7,442
(a)

$
3,456
(a)

$
1,542


$
2,266Accounts receivable:Allowance for uncollectible
    accounts


110



16



35



57     (a)
    
    Includes accumulated amortization
    of nuclear fuel of $1,089 million. 79




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December 31, 2006Exelon


Generation


ComEd


PECOProperty, plant and
    equipment:Accumulated depreciation

$
7,250
(a)

$
3,414
(a)

$
1,445


$
2,228Accounts receivable:Allowance for uncollectible
    accounts


91



17



20



51     (a)
    
    Includes accumulated amortization
    of nuclear fuel of $1,078 million.    June 30, 2007Exelon


Generation


ComEdOther current assets:Counterparty collateral deposits
    paid

$
257


$
257


$
Option premiums


166



166



Other current
    liabilities:Counterparty collateral deposits
    received


9



6



3
(a)     (a)
    
    ComEd has received counterparty
    collateral deposits from suppliers under its supplier forward
    contracts for the procurement of electricity.  December 31, 2006Exelon andGenerationOther current assets:Counterparty collateral deposits
    paid

$
26Option premiums


179Other current
    liabilities:Counterparty collateral deposits
    received


273     June 30,

December 31,Exelon

2007

2006Other current
    liabilities:Dividends payable

$
1


$
295   15.
    Segment
    Information (Exelon, Generation, ComEd and PECO)   80




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Three
    Months Ended June 30, 2007 and 2006
    IntersegmentGeneration


ComEd


PECO


Other(a)


Eliminations


ConsolidatedTotal revenues(b):2007

$
2,641


$
1,420


$
1,269


$
183


$
(1,012
)

$
4,5012006


2,214



1,453



1,148



203



(1,321
)


3,697Intersegment
    revenues:2007

$
828


$



$
2


$
183


$
(1,013
)

$
2006


1,114



2



2



203



(1,321
)


Income (loss) from continuing
    operations before income taxes:2007

$
927


$
47


$
151


$
(108
)

$



$
1,0172006


791



213



138



(138
)






1,004Income taxes:2007

$
349


$
18


$
55


$
(108
)

$



$
3142006


294



86



45



(62
)






363Income (loss) from continuing
    operations:2007

$
578


$
29


$
96


$



$



$
7032006


497



127



93



(76
)






641Income (loss) from discontinued
    operations:2007

$



$



$



$
(1
)

$



$
(1
)2006


3



















3Net income (loss):2007

$
578


$
29


$
96


$
(1
)

$



$
7022006


500



127



93



(76
)






644     (a)
    
    Other includes corporate
    operations, shared service entities, including BSC, Enterprises
    and investments in synthetic fuel-producing facilities.(b)
    
    For the three months ended
    June 30, 2007 and 2006, utility taxes of $60 million
    and $57 million, respectively, are included in revenues and
    expenses for ComEd. For the three months ended June 30,
    2007 and 2006, utility taxes of $65 million and
    $58 million, respectively, are included in revenues and
    expenses for PECO. 81




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Six
    Months Ended June 30, 2007 and 2006
    IntersegmentGeneration


ComEd


PECO


Other(a)


Eliminations


ConsolidatedTotal revenues(b):2007

$
5,344


$
2,911


$
2,769


$
377


$
(2,071
)

$
9,3302006


4,434



2,880



2,554



410



(2,719
)


7,559Intersegment
    revenues:2007

$
1,689


$
2


$
4


$
377


$
(2,072
)

$
2006


2,302



4



4



409



(2,719
)


Income (loss) from continuing
    operations before income taxes:2007

$
1,817


$
54


$
345


$
(184
)

$



$
2,0322006


1,219



304



279



(197
)






1,605Income taxes:2007

$
684


$
21


$
121


$
(178
)

$



$
6482006


454



123



93



(106
)






564Income (loss) from continuing
    operations:2007

$
1,133


$
33


$
224


$
(6
)

$



$
1,3842006


765



181



186



(91
)






1,041Income from discontinued
    operations:2007

$
5


$



$



$
4


$



$
92006


3



















3Net income (loss):2007

$
1,138


$
33


$
224


$
(2
)

$



$
1,3932006


768



181



186



(91
)






1,044Total assets:June 30, 2007

$
19,035


$
18,466


$
9,933


$
14,856


$
(16,985
)

$
45,305December 31, 2006


18,909



17,774



9,773



14,295



(16,432
)


44,319     (a)
    
    Other includes corporate
    operations, shared service entities, including BSC, Enterprises
    and investments in synthetic fuel-producing facilities.(b)
    
    For the six months ended
    June 30, 2007 and 2006, utility taxes of $126 million
    and $119 million, respectively, are included in revenues
    and expenses for ComEd. For the six months ended June 30,
    2007 and 2006, utility taxes of $128 million and
    $115 million, respectively, are included in revenues and
    expenses for PECO. 82




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  16.
    Related-Party
    Transactions (Exelon, Generation, ComEd and PECO)  Exelon
    Three Months


Six MonthsEnded June 30,


Ended June 30,2007


2006


2007


2006Operating revenues from affiliatesComEd Transitional Funding Trust

$
1


$
1


$
2


$
2PETT


1



2



3



4Total operating revenues from
    affiliates

$
2


$
3


$
5


$
6Fuel purchases from related partiesKeystone Fuels, LLC

$
12


$
11


$
21


$
22Conemaugh Fuels, LLC


9



11



21



22Total fuel purchases from related
    parties

$
21


$
22


$
42


$
44Interest expense to affiliates, netComEd Transitional Funding Trust

$
7


$
12


$
15


$
26ComEd Financing II


4



4



7



7ComEd Financing III


3



3



6



6PETT


36



46



75



95PECO Trust III


1



1



3



3PECO Trust IV


2



2



3



2Total interest expense to
    affiliates, net

$
53


$
68


$
109


$
139Equity in earnings (losses) of
    unconsolidated affiliates and investmentsComEd Funding LLC

$
(2
)

$
(3
)

$
(4
)

$
(5
)PETT


(2
)


(2
)


(4
)


(6
)TEG and TEP






(2
)


3



(4
)Investment in synthetic
    fuel-producing facilities


(39
)


(16
)


(63
)


(46
)Other






1



(1
)


Total equity in earnings (losses)
    of unconsolidated affiliates and investments

$
(43
)

$
(22
)

$
(69
)

$
(61
)   83




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  June 30,


December 31,2007


2006Receivables from affiliates
    (current)ComEd Transitional Funding Trust

$



$
17Investments in affiliatesComEd Funding LLC

$
(4
)

$
4ComEd Financing II


10



10ComEd Financing III


6



6PETT


51



54PECO Energy Capital Corporation


4



4PECO Trust IV


6



6Other






1Total investments in affiliates

$
73


$
85Receivable from affiliates
    (noncurrent)ComEd Transitional Funding Trust

$
15


$
14Payables to affiliates (current)ComEd Financing II

$
6


$
6ComEd Financing III


4



4PECO Trust III


1



1Total payables to affiliates
    (current)

$
11


$
11Long-term debt to ComEd
    Transitional Funding Trust, PETT and other financing trusts
    (including due within one year)ComEd Transitional Funding Trust

$
444


$
648ComEd Financing II


155



155ComEd Financing III


206



206PETT


2,050



2,403PECO Trust III


81



81PECO Trust IV


103



103Total long-term debt due to
    financing trusts

$
3,039


$
3,596  84




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Generation
    Three Months Ended


Six Months EndedJune 30,


June 30,2007


2006


2007


2006Operating revenues from affiliatesComEd(a)

$
330


$
685


$
710


$
1,456PECO(b)


497



429



978



845BSC(c)


1







1



1Total operating revenues from
    affiliates

$
828


$
1,114


$
1,689


$
2,302Fuel purchases from related partiesKeystone Fuels, LLC

$
12


$
11


$
21


$
22Conemaugh Fuels, LLC


9



11



21



22Total fuel purchases from related
    parties

$
21


$
22


$
42


$
44Operating and maintenance from
    affiliatesComEd(d)

$



$
2


$
1


$
3PECO(d)


2



2



4



4BSC(c)


71



74



146



146Total operating and maintenance
    from affiliates

$
73


$
78


$
151


$
153Interest expense to affiliates, netExelon intercompany money pool(e)

$



$



$



$
1Equity in earnings (losses) of
    investmentsTEG and TEP






(2
)


3



(4
)NuStart Energy Development, LLC


(1
)


1



(2
)


(1
)Total equity in earnings (losses)
    of investments

$
(1
)

$
(1
)

$
1


$
(5
)Cash distribution paid to member

$
370


$
157


$
665


$
322   85




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  June 30,


December 31,2007


2006Receivables from affiliates
    (current)Exelon(f)

$



$
85ComEd(a)


68



197PECO(b)


146



153BSC(c)






2Total receivables from affiliates
    (current)

$
214


$
437Contributions to Exelon
    intercompany money pool(e)

$



$
13Payables to affiliates (current)Exelon(f)

$
5


$
BSC(c)


25



Total payables to affiliates
    (current)

$
30


$
Payables to affiliates (noncurrent)ComEd decommissioning(g)

$
1,856


$
1,760PECO decommissioning(g)


192



151Total payables to affiliates
    (noncurrent)

$
2,048


$
1,911     (a)
    
    Effective January 1, 2007,
    Generation has a supplier forward agreement with ComEd to
    provide up to 35% of ComEds electricity supply
    requirements. Prior to 2007, Generation had a PPA with ComEd,
    which expired December 31, 2006. As a result of the
    expiration of the PPA with ComEd and the results of the Illinois
    procurement auctions, Generation is selling more power through
    bilateral agreements. See Note 13  Commitments
    and Contingencies for further detail.(b)
    
    Generation has a PPA with PECO, as
    amended, to provide the full energy requirements of PECO through
    2010.(c)
    
    Generation receives a variety of
    corporate support services from BSC, including legal, human
    resources, financial, information technology and supply
    management services. All services are provided at cost,
    including applicable overhead. A portion of such services is
    capitalized. Some third-party reimbursements due to Generation
    are recovered through BSC.(d)
    
    Generation requires electricity for
    its own use at its generating stations. Generation purchases
    electricity and distribution and transmission services from
    PECO. Starting in 2007, Generation purchases only distribution
    and transmission services from ComEd for the delivery of
    electricity to its generating stations. In 2006, Generation
    purchased both electricity and distribution and transmission
    services from ComEd. Generations PPA with ComEd expired
    December 31, 2006. See Note 13  Commitments
    and Contingencies for further detail regarding the PPAs.(e)
    
    Generation participates in
    Exelons intercompany money pool. Generation earns interest
    on its contributions to the money pool, and pays interest on its
    borrowings from the money pool at a market rate of interest.(f)
    
    In order to facilitate payment
    processing, Exelon processes certain invoice payments on behalf
    of Generation. In addition, Generation has a receivable from
    Exelon for the allocation of certain tax benefits related to a
    capital loss carryback.(g)
    
    Generation has long-term payables
    to ComEd and PECO as a result of the nuclear decommissioning
    contractual construct whereby, to the extent the assets
    associated with decommissioning are greater than the applicable
    ARO, such amounts are due back to ComEd and PECO, as applicable,
    for payment to the customers. See Note 11  Asset
    Retirement Obligations for additional information. 86




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   ComEd
    Three Months Ended


Six Months EndedJune 30,


June 30,2007


2006


2007


2006Operating revenues from affiliatesGeneration(a)

$



$
2


$
1


$
3ComEd Transitional Funding Trust


1



1



2



2Other










1



1Total operating revenues from
    affiliates

$
1


$
3


$
4


$
6Purchased power from affiliateGeneration(b)

$
330


$
685


$
710


$
1,456Operation and maintenance from
    affiliatesBSC(c)

$
45


$
53


$
95


$
105Interest expense to affiliates, netComEd Transitional Funding Trust(e)

$
7


$
12


$
16


$
26ComEd Financing II


4



4



7



7ComEd Financing III


3



3



6



6Total interest expense to
    affiliates, net

$
14


$
19


$
29


$
39Equity in losses of unconsolidated
    affiliatesComEd Funding LLC

$
2


$
3


$
4


$
5Capitalized costsBSC(c)

$
16


$
19


$
33


$
36Cash contributions received from
    parent

$



$



$



$
23   87




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  June 30,


December 31,2007


2006Receivables from affiliates
    (current)ComEd Transitional Funding Trust

$



$
17Other






1Total receivables from affiliates
    (current)

$



$
18Investments in affiliatesComEd Funding LLC

$
(4
)

$
4ComEd Financing II


10



10ComEd Financing III


6



6Total investments in affiliates

$
12


$
20Receivable from affiliates
    (noncurrent)Generation(d)

$
1,856


$
1,760ComEd Transitional Funding Trust


15



14Other


2



Total receivable from affiliates
    (noncurrent)

$
1,873


$
1,774Payables to affiliates (current)Generation(b)

$
68


$
197BSC(c)


18



10ComEd Financing II


6



6ComEd Financing III


4



4Other






2Total payables to affiliates
    (current)

$
96


$
219Long-term debt to ComEd
    Transitional Funding Trust and other financing trusts (including
    due within one year)ComEd Transitional Funding Trust(e)

$
443


$
648ComEd Financing II


155



155ComEd Financing III


206



206Total long-term debt due to
    financing trusts

$
804


$
1,009     (a)
    
    Starting in 2007, ComEd is
    delivering electricity to Generation for Generations own
    use at its generation stations. In 2006, ComEd delivered and
    provided electricity to Generation.(b)
    
    ComEds full-requirements PPA,
    as amended, with Generation expired December 31, 2006.
    Starting January 2007, ComEd began procuring electricity from
    Generation under the supplier forward contract resulting from
    the reverse-auction procurement process. See
    Note 5  Regulatory Issues for more information.(c)
    
    ComEd receives a variety of
    corporate support services from BSC, including legal, human
    resources, financial, information technology, supply management
    services, planning and engineering of delivery systems,
    management of construction, maintenance and operations of the
    transmission and delivery systems and management of other
    support services. All services are provided at cost, including
    applicable overhead. A portion of such services is capitalized. 88




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (d)
    
    ComEd has a long-term receivable
    from Generation as a result of the nuclear decommissioning
    contractual construct, whereby, to the extent the assets
    associated with decommissioning are greater than the applicable
    ARO at the end of decommissioning, such amounts are due back to
    ComEd for payment to ComEds customers.(e)
    
    Amount includes a $17 million
    reallocation from prepaid interest to long-term debt. This
    reallocation did not have an impact on ComEds Consolidated
    Statement of Operations or ComEds Consolidated Statement
    of Cash Flows.  PECO
    Three Months Ended


Six Months EndedJune 30,


June 30,2007


2006


2007


2006Operating revenues from affiliatesGeneration(a)

$
2


$
2


$
4


$
4PETT(b)


1



2



3



4Total operating revenues from
    affiliates

$
3


$
4


$
7


$
8Purchased power from affiliateGeneration(c)

$
497


$
429


$
977


$
845Operating and maintenance from
    affiliatesBSC(d)

$
27


$
32


$
55


$
63Generation










1



Other














1Total operating and maintenance
    from affiliates

$
27


$
32


$
56


$
64Interest expense to affiliates, netPETT

$
36


$
46


$
75


$
95PECO Trust III


1



1



3



3PECO Trust IV


2



2



3



3Other


1







1



Total interest expense to
    affiliates, net

$
40


$
49


$
82


$
101Equity in losses of unconsolidated
    affiliatesPETT

$
2


$
2


$
4


$
6Capitalized costsBSC(d)

$
6


$
12


$
14


$
29Cash dividends paid to parent

$
121


$
135


$
276


$
251Cash contributions received from
    parent

$
100


$
35


$
165


$
83   89




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  June 30,


December 31,2007


2006Investments in affiliatesPETT

$
51


$
54PECO Energy Capital Corporation


4



4PECO Trust IV


6



6Total investments in affiliates

$
61


$
64Receivable from affiliate
    (noncurrent)Generation decommissioning(e)

$
192


$
151Borrowings from Exelon
    intercompany money pool(f)

$



$
45Payables to affiliates (current)Generation(c)

$
146


$
153BSC(d)


23



48Exelon


1



1PECO Trust III


1



1Total payables to affiliates
    (current)

$
171


$
203Long-term debt to PETT and other
    financing trusts (including due within one year)PETT

$
2,050


$
2,404PECO Trust III


81



81PECO Trust IV


103



103Total long-term debt to financing
    trusts

$
2,234


$
2,588Shareholders
    equity  receivable from parent(g)

$
925


$
1,090     (a)
    
    PECO provides energy to Generation
    for Generations own use primarily at its generation
    stations.(b)
    
    PECO receives a monthly service fee
    from PETT based on a percentage of the outstanding balance of
    all series of transition bonds.(c)
    
    PECO has entered into a PPA with
    Generation. See Note 18 of the Combined Notes to
    Consolidated Financial Statements within Exelons 2006
    Annual Report on
    Form 10-K
    for more information regarding the PPA.(d)
    
    PECO receives a variety of
    corporate support services from BSC, including legal, human
    resources, financial, information technology, supply management
    services, planning and engineering of delivery systems,
    management of construction, maintenance and operations of the
    transmission and delivery systems and management of other
    support services. All services are provided at cost, including
    applicable overhead. A portion of such services is capitalized.(e)
    
    PECO has a long-term receivable
    from Generation as a result of the nuclear decommissioning
    contractual construct, whereby, to the extent the assets
    associated with decommissioning are greater than the applicable
    ARO at the end of decommissioning, such amounts are due back to
    PECO for payment to PECOs customers.(f)
    
    PECO participates in Exelons
    intercompany money pool. PECO earns interest on its
    contributions to the money pool and pays interest on its
    borrowings from the money pool at a market rate of interest.(g)
    
    PECO has a non-interest bearing
    receivable from Exelon related to the 2001 corporate
    restructuring. The receivable is expected to be settled over the
    years 2007 through 2010. 90




---



##### 



EXELON
    CORPORATION AND SUBSIDIARY COMPANIES
    EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
    COMMONWEALTH EDISON COMPANY AND SUBSIDIARY COMPANIES
    PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
    COMBINED NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  17.
    Subsequent
    Events (Exelon and ComEd)   91




---



##### 



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations    General
    
    Generation, whose business consists of its owned and
    contracted electric generating facilities, its wholesale energy
    marketing operations and competitive retail sales operations.
    ComEd, whose business consists of the purchase and
    regulated retail and wholesale sale of electricity and the
    provision of distribution and transmission services to retail
    and wholesale customers in northern Illinois, including the City
    of Chicago.
    PECO, whose businesses consists of the purchase and
    regulated retail sale of electricity and the provision of
    distribution and transmission services to retail customers in
    southeastern Pennsylvania, including the City of Philadelphia,
    as well as the purchase and regulated retail sale of natural gas
    and the provision of distribution services to retail customers
    in Pennsylvania in the counties surrounding the City of
    Philadelphia.     EXELON
    CORPORATION  Executive
    Overview
  Financial Results.
      
    higher average margins on Generations wholesale market
    sales primarily due to the end of the below-market power
    purchase agreement (PPA) with ComEd;
    favorable weather conditions in the ComEd and PECO service
    territories;
    increased delivery volume, excluding the effects of weather, at
    ComEd and PECO;
    increased transmission revenues at ComEd as a result of the 2007
    transmission rate case; and
    increased rates for delivery services at ComEd.    
    a favorable PJM Interconnection, LLC (PJM) billing settlement
    with PPL Electric (PPL);
    increased nuclear output at Generation reflecting fewer outage
    days; and
    decreased nuclear refueling outage costs. 92




---



##### 




    unrealized mark-to-market losses on contracts not yet settled;
    lower margins (operating revenues less purchased power expense)
    at ComEd due to the end of the regulatory transition period and
    associated transition revenues;
    the impact of ComEds 2007 rate relief program and other
    post rate freeze period transition expenses;
    higher operating and maintenance expenses, primarily associated
    with an update of the nuclear decommissioning asset retirement
    obligation recorded in the second quarter of 2006, labor-related
    inflation, and increased allowance for uncollectible accounts
    expense;
    increased depreciation and amortization expense, primarily
    related to competitive transition charge (CTC) amortization at
    PECO; and
    the impact of favorable tax settlements at PECO in 2006.  Financing Activities.
  Regulatory and Environmental Developments.
  
    On April 23, 2007, ComEd announced the implementation of a
    new $64 million rate relief package to be provided to ComEd
    customers most affected by recent electricity rate increases.
    The rate relief package is expected to provide benefits to
    ComEds customers of $44 million in 2007 and
    $10 million per year during 2008 and 2009. Approximately
    $18 million of credits were issued to customers through
    June 30, 2007.     93




---



##### 




    Illinois Procurement Case and Related Proceedings  In
    January 2007, ComEd began procuring electricity under supplier
    forward contracts with various suppliers, including Generation.
    The supplier forward contracts resulted from a
    reverse-auction competitive bidding process, which
    was approved by the Illinois Commerce Commission (ICC) on
    January 24, 2006 and permits recovery by ComEd of its
    electricity procurement costs from retail customers with no
    markup. The first auction took place in September 2006. The ICC
    order approving the auction process is under appeal by various
    parties; the Illinois Attorney General has agreed to dismiss its
    appeal in connection with the Settlement. Consistent with the
    process previously approved by the ICC, the ICC has opened a
    proceeding to consider improvements to the competitive
    procurement process. It is anticipated that a final order will
    be entered in that proceeding with sufficient time to
    incorporate changes into the 2008 procurement process.
    Residential Rate Stabilization Program  In January
    2007, ComEd launched the rate stabilization program approved by
    the ICC that allows residential customers the choice to limit
    the impact of any rate increases over the next three years. The
    program has an opt-in feature that gives customers
    the choice to participate, which began with the April 2007
    billing period. Under the program, residential customers
    choosing to participate will have their average annual rate
    increases capped at 10% in 2007, 2008 and 2009. Costs that
    exceed the cap are deferred and charged to customers over the
    following three years, 2010 to 2012. A carrying charge at a rate
    of 3.25% per year is assessed to participants to partially cover
    ComEds cost of financing the program. As of June 30,
    2007, approximately 36,000 or 1% of ComEds residential
    customers had enrolled in the program, and ComEd had deferred
    less than $1 million under this program.
    Illinois Rate Design Investigation  On March 2,
    2007, the ICC voted to initiate investigations into ComEds
    and the Ameren Corporation (Ameren) utilities rate
    designs, particularly for residential and residential
    space-heating customers. The ICC has a schedule that
    contemplates a final order by September 2007, which would allow
    implementation of changes, if any, prior to the next winter
    heating season.
    Transmission Rate Case  On March 1, 2007, ComEd
    filed a request with the Federal Energy Regulatory Commission
    (FERC), seeking approval to increase the rate ComEd receives for
    transmission services. ComEd also requested incentive rate
    treatment for certain transmission projects. On June 5,
    2007, FERC issued an order that conditionally approves
    ComEds proposal to implement a formula-based transmission
    rate effective as of May 1, 2007, but subject to refund,
    hearing procedures and conditions. The FERC order provides that
    further hearing and settlement procedures be conducted to
    determine the reasonableness of 94




---



##### 



certain elements of ComEds formula-based rate. The order
    denied ComEds request for incentive rate treatment on
    investment in two transmission projects and the inclusion of
    construction work in progress in rate base.  The order directed
    ComEd to file a revised formula reflecting these findings within
    30 days. The new rate will increase an average residential
    customer bill by about 1% and will result in an annual increase
    in the transmission revenue requirement of $116 million,
    although the rate increase is subject to further adjustment and
    refund depending on the outcome of the settlement and hearing
    procedures. On July 5, 2007, ComEd filed a request for
    rehearing, asking FERC to reconsider the denial of incentive
    rate treatment on the two new transmission projects and the
    denial of construction work in progress in rate base and certain
    other elements of the June 5, 2007 order.  
    PECO AEPS Filing  On March 19, 2007, PECO filed
    a request with the Pennsylvania Public Utility Commission
    (PAPUC) for approval to acquire and bank up to 450,000 non-solar
    Tier I Alternative Energy Credits (equivalent to up to
    240 MW of electricity generated by wind) annually for a
    five-year term in order to prepare for 2011, the first year of
    PECOs required compliance under the Alternative Energy
    Portfolio Standards Act of 2004 (AEPS Act) following the
    completion of its transition period. On July 16, 2007, the
    Pennsylvania legislature modified the previously proposed AEPS
    Act in House Bill (HB) 1203. The modification did not affect
    PECOs request for acquiring and banking Alternative Energy
    Credits or the proposed deferral of related costs.
    On May 19, 2006, FERC issued a Notice of Proposed
    Rule Making (NOPR) on Market-Based Rates for Wholesale
    Sales of Electric Energy, Capacity and Ancillary Services by
    Public Utilities. The NOPR proposes a set of regulations that
    would modify the tests that Generation and other market
    participants must satisfy to be entitled to market-based rates.
    On June 21, 2007, FERC issued a Final Rule. Generation is
    currently evaluating the impact of the Final Rule.  Outlook
    for 2007 and Beyond.
    
    Legislation proposed in the State of Illinois in July 2007 in
    connection with the Settlement has significantly reduced the
    probability of rate freeze legislation and other legislative
    actions proposed in previous periods. The Proposed Legislation
    contemplated by the Settlement, if enacted, should provide ComEd
    with greater stability and certainty that it will be able to
    procure electricity and pass through the costs of that
    electricity to its customers. The Proposed Legislation would
    establish a new competitive procurement model developed by the
    new Illinois Power Agency, by which ComEd would procure its
    energy supply. ComEd would stabilize a portion of its costs of
    procurement pursuant to a five-year financial swap arrangement
    with Generation. ComEd would be allowed to fully recover the
    costs of procuring energy, including the impacts of the swap
    agreement, in its rates. In the event that legislation is passed
    in the Illinois General Assembly prior to August 1, 2011
    that freezes or reduces electric rates or imposes a generation
    tax, ComEd and Generation, as contributors to certain rate
    relief programs, would be allowed to terminate their funding
    commitments to such programs and recover any undisbursed funds
    set aside for rate relief. 95




---



##### 




    PECO was subject to electric rate caps on its transmission and
    distribution rates through December 31, 2006 and is subject
    to caps on its generation rates through December 31, 2010.
    PECOs transmission and distribution rates will continue in
    effect until PECO files a rate case or there is some other
    specific regulatory action to adjust the rates. There are no
    current proceedings to do so. PECO is or will be involved in
    proceedings involving annual changes in its electric and gas
    universal service fund cost charges, its electric CTC/intangible
    transition charge reconciliation mechanism, and its purchased
    gas cost rate, all of which relate to PECOs recovery of
    the applicable costs.
    Effective for customer bills for electric generation service
    delivered after customers January 2007 meter readings, and
    in accordance with its 1998 restructuring settlement with the
    PAPUC, PECO implemented a scheduled electric generation rate
    increase that will result in approximately $190 million of
    additional operating revenues in 2007 as compared to 2006 and a
    corresponding increase in purchased power, in accordance with
    PECOs PPA with Generation, with no resulting impact on
    pre-tax operating income. The impact of this rate increase on
    Exelon and Generation will be an increase in operating revenues
    and pre-tax operating income of approximately $190 million.
    Generation is exposed to commodity price risk associated with
    the unhedged portion of its electricity portfolio. Generation
    enters into derivative contracts, including forwards, futures,
    swaps, and options, with approved counterparties to hedge this
    anticipated exposure. Generation has hedges in place that
    significantly mitigate this risk for 2007 and 2008. However,
    Generation is exposed to relatively greater commodity price risk
    in the subsequent years for which a larger portion of its
    electricity portfolio may be unhedged. Generation has been and
    will continue to be proactive in using hedging strategies to
    mitigate this risk in subsequent years as well.
    Generation procures coal through annual, short-term and
    spot-market purchases and natural gas through annual, monthly
    and spot-market purchases. Nuclear fuel assemblies are obtained
    through long-term contracts for uranium concentrates, and long
    term contracts for conversion services, enrichment services and
    fuel fabrication services. The supply markets for coal, natural
    gas, uranium concentrates and certain nuclear fuel services are
    subject to price fluctuations and availability restrictions.
    Supply market conditions may make Generations procurement
    contracts subject to credit risk related to the potential
    non-performance of counterparties to deliver the contracted
    commodity or service at the contracted prices. Non-performance
    by these counterparties could have a material impact on
    Exelons and Generations results of operations, cash
    flows and financial position. Generation uses long-term
    contracts and financial instruments such as over-the-counter and
    exchange-traded instruments to mitigate price risk associated
    with these commodity price exposures.
    The PPA between Generation and PECO expires at the end of 2010.
    Current market prices for electricity have increased
    significantly over the past few years due to the rise in natural
    gas and other fuel prices. As a result, PECO customers
    generation rates are below current wholesale energy market
    prices and Generations margins on sales in excess of
    PECOs requirements have improved historically.
    Generations ability to maintain those margins following
    the expiration of the PPA will partially depend on future
    wholesale market prices.
    Select northeast and Mid-Atlantic States have developed a model
    rule, via the Regional Greenhouse Gas Initiative, to regulate
    carbon emissions from fossil-fired generation in participating
    states starting in 2009. Federal
    and/or state
    legislation to regulate carbon emissions could occur in the
    future. If such state regulation
    and/or
    legislation become effective, Exelon may incur costs in further
    limiting the emissions from certain of its fossil-fuel fired
    facilities or in procuring emission allowance credits issued by
    various governing bodies. However, Exelon may benefit from
    stricter emission standards due to its significant nuclear
    capacity, which is not anticipated to be affected by the
    proposed emission standards.
    Exelon anticipates that it will be subject to the ongoing
    pressures of rising operating expenses due to increases in
    costs, such as medical benefits and rising payroll costs due to
    inflation. Also, Exelon will continue to incur significant
    capital costs associated with its commitment to produce and
    deliver energy reliably to its customers. Increasing capital
    costs may include the price of uranium, which fuels the nuclear
    facilities, and continued capital investment in Exelons
    aging distribution infrastructure and generating 96




---



##### 



facilities. Exelon is determined to operate its businesses
    responsibly and to appropriately manage its operating and
    capital costs while serving its customers and producing value
    for its shareholders.  
    Exelon pursues growth opportunities that are consistent with its
    disciplined approach to investing to maximize earnings and cash
    flows. On September 29, 2006, Generation notified the
    Nuclear Regulatory Commission (NRC) that Generation will begin
    the application process for a combined construction and
    operating license that would allow for the possible construction
    of a new nuclear plant at an as-yet unnamed location in Texas.
    The filing of the letter with the NRC launches a process that
    preserves for Exelon the option to develop a new nuclear plant
    in Texas without immediately committing to the full project. The
    decision to build a new nuclear plant has not been made at this
    time; however on June 28, 2007, Generation announced that
    it has selected primary and secondary sites, both in southeast
    Texas, for a federal license application that, if obtained,
    would allow construction and operation of a new nuclear plant
    should Generation decide to build one. Among the various
    conditions that must be resolved before any formal decision to
    build is made are a permanent solution to spent nuclear fuel
    disposal, broad public acceptance of a new nuclear plant and
    assurances that a new plant using new technology can be
    financially successful. Generation expects to submit the
    application to the NRC for the combined construction and
    operating license in 2008.
    During 2006, FERC issued its order approving PJMs
    settlement proposal related to its Reliability Pricing Model
    (RPM) to provide for a forward capacity auction using a demand
    curve and locational deliverability zones for capacity phased in
    over a several year period beginning on June 1, 2006.
    FERCs adoption of the settlement proposal has had a
    favorable impact for owners of generation facilities,
    particularly for such facilities located in constrained zones.
    The first auction took place in April 2007 and resulted in
    Generation auctioning capacity at prices ranging from $40.80/MW
    to $197.67/MW per day for the regions in which Generation has
    capacity for the period from June 1, 2007 through
    May 31, 2008. The second auction took place in July 2007
    and resulted in Generation auctioning capacity at prices ranging
    from $111.92/MW to $148.80/MW per day for the regions in which
    Generation has capacity for the period from June 1, 2008
    through May 31, 2009. Subsequent auctions will be conducted
    in October 2007 and January 2008 to auction capacity for periods
    through May 2011.
    On April 2, 2007, the U.S. Supreme Court issued a
    decision in the case of Massachusetts v.
    U.S. Environmental Protection Agency (EPA) holding that
    carbon dioxide and other greenhouse gas (GHG) emissions are
    pollutants subject to regulation under the new motor vehicle
    provisions of the Clean Air Act. The case was remanded to the
    EPA for further rulemaking to determine whether GHG emissions
    may reasonably be anticipated to endanger public health or
    welfare, or in the alternative provide a reasonable explanation
    why GHG emissions should not be regulated. Possible outcomes
    from this decision include regulation of GHG emissions from
    manufacturing plants, including electric generation,
    transmission and distribution facilities, under a new EPA rule,
    and Federal or state legislation.
    On January 25, 2007, the U.S. Court of Appeals for the
    Second Circuit issued its opinion in a challenge to the final
    Phase II rule implementing Section 316(b) of the Clean
    Water Act. By its action, the court invalidated compliance
    measures that the utility industry supported because they were
    cost-effective and provided existing plants with needed
    flexibility in selecting the compliance option appropriate to
    its location and operations. The courts decision has
    created significant uncertainty about the specific nature, scope
    and timing of the final compliance requirements. Several
    industry parties to the litigation sought review by the entire
    U.S. Court of Appeals for the Second Circuit, which was
    denied on July 5, 2007. Parties to the litigation have
    until October 3, 2007 to file a petition seeking review by
    the U.S. Supreme Court. On July 9, 2007, the EPA
    formally suspended the Phase II rule due to the uncertainty
    about the specific compliance requirements created by the
    courts remand of significant provisions of the rule. Until
    the EPA finalizes the rule on remand (which could take up to
    several years), the state permitting agencies will continue the
    current practice of applying their best professional judgment to
    address impingement and entrainment requirements at plant
    cooling water intake structures. Due to this uncertainty,
    Generation cannot estimate the effect that compliance with the
    Phase II rule requirements will have on the operation of
    its generating facilities and its future results of operations,
    financial condition and cash flows. If the final rule, or
    interim state requirements under best professional judgment,
    have performance standards that require the reduction of cooling
    water 97




---



##### 



intake flow at the plants consistent with closed loop cooling
    systems, then the impact on the operation of the facilities and
    Exelons and Generations future results of
    operations, financial position and cash flows could be material.  
    On May 10, 2007, after completion of a two year rule making
    process, the PAPUC adopted final Default Supplier (Provider of
    Last Resort) regulations, an accompanying policy statement, and
    a price mitigation policy statement. The regulations allow for
    competitive procurement by distribution companies through
    auctions or Requests for Proposals, with full cost recovery and
    no retrospective prudence review. According to the policy
    statement, the PAPUC expects companies to procure power, on a
    customer-class basis, using contracts of varying expiration
    dates, and prefers contracts with a duration of one year or
    less, except for contracts for compliance with the AEPS Act. The
    PAPUC also expects companies to reconcile costs and adjust rates
    at least quarterly for most customers, but hourly or monthly for
    larger energy users. The PAPUC believes this combination will
    stimulate competition, send market-price signals and avoid price
    spikes following long periods of fixed, capped rates. The PAPUC
    also ordered the elimination of (1) declining-block rates, while
    allowing rates to be phased out if the resulting rate increase
    is greater than 25%; and (2) demand charges for large customers,
    while entertaining requests to retain those charges on a
    case-by-case basis. Default service providers such as PECO will
    be required to make their implementation filings a minimum of 12
    months prior to the end of the generation rate cap period, which
    for PECO, expires December 31, 2010. The final Default Service
    Regulations adopted by the PAPUC will become effective once
    approved by Pennsylvanias Independent Regulatory Review
    Commission (such approval being received on July 19, 2007), and
    after subsequent review by the Pennsylvania Office of Attorney
    General, the Pennsylvania Governors Budget Office and the
    standing committees of both houses of the Pennsylvania General
    Assembly. Once that review and approval process is completed,
    the regulations would become final once published in the
    Pennsylvania Bulletin.
    In Pennsylvania and other states where transition periods have
    ended or rate caps have expired, there is growing pressure from
    state regulators and politicians to mitigate the potential
    impact of generation price increases on retail customers. The
    experiences in other states following the end of a regulatory
    transition period has led to a heightened state of political
    concern that significant generation price increases also will
    occur after the expiration of rate caps in Pennsylvania. While
    PECOs regulatory transition period does not end until
    December 31, 2010, these transition periods have ended for
    six Pennsylvania electric distribution companies and, in some
    instances, generations price increases have ensued. Partly in
    response to the rate increases and as part of his environmental
    agenda, Pennsylvania Governor Edward Rendell announced an Energy
    Independence Strategy earlier this year that included a package
    of proposed legislation. Provisions of that legislation would,
    among other things, require default suppliers such as PECO to
    procure electricity for their default-service customers, after
    the end of their electric restructuring period (post-2010 for
    PECO), through a least-cost portfolio approach, with preferences
    for conservation and renewable power. The legislation also would
    require installation of metering technology to provide
    time-of-use rates to retail customers, provide for a phase-in of
    increased generation rates after expiration of rate caps, permit
    distribution companies to enter into long-term contracts with
    large industrial customers, and create a fee on electric
    consumption that the state would direct toward conservation and
    renewable technologies. On July 18, 2007, Governor Rendell
    signed into law HB1203, amending the AEPS Act (amending the
    force majeure and solar provisions), and HB1530, which amends
    Title 66 of the Pennsylvania Utility Code, allowing electric
    distribution companies to negotiate special contracts for larger
    customers. Other elements of the Governors proposed energy
    package will be considered further at a special legislative
    session to be held beginning September 17, 2007.
    Prior to June 30, 2007, the Illinois House and Senate
    passed Senate Bill (SB) 1544 which provides for market
    based sourcing of generation and the sale of electricity for
    Illinois tax purposes. SB1544 is currently awaiting signature by
    the Governor of Illinois to become law. The Governor of Illinois
    has 60 days from June 29, 2007 to act on SB1544 before
    such legislation automatically becomes law. If enacted, the
    legislation becomes effective January 1, 2008. Exelon and
    Generation are currently assessing the impact SB1544 may have on
    their results of operations or cash flows. 98




---



##### 



Critical
    Accounting Policies and Estimates
  Form 10-K
  Taxation
      New
    Accounting Pronouncements
   99




---



##### 



Results
    of Operations  Exelon Corporation
  Three
    Months Ended June 30, 2007 Compared To Three Months Ended
    June 30, 2006
  Three MonthsEnded


FavorableJune 30,


(Unfavorable)Exelon Corporation

2007


2006


VarianceOperating revenues

$
4,501


$
3,697


$
804Operating
    expensesPurchased power and fuel expense


1,640



1,073



(567
)Operating and maintenance expense


1,062



881



(181
)Depreciation and amortization


369



371



2Taxes other than income


199



170



(29
)Total operating expenses


3,270



2,495



(775
)Operating income


1,231



1,202



29Other income and
    deductionsInterest expense


(161
)


(154
)


(7
)Interest expense to affiliates, net


(53
)


(68
)


15Equity in losses of unconsolidated
    affiliates and investments


(43
)


(22
)


(21
)Other, net


43



46



(3
)Total other income and deductions


(214
)


(198
)


(16
)Income from continuing
    operations before income taxes


1,017



1,004



13Income taxes


314



363



49Income from continuing
    operations


703



641



62Income (loss) from discontinued
    operations, net of income taxes


(1
)


3



(4
)Net income

$
702


$
644


$
58Diluted earnings per
    share

$
1.03


$
0.95


$
0.08   Net Income.
  Operating Revenues.
 100




---



##### 



Purchased Power and Fuel
    Expense.
  Operating and Maintenance
    Expense.
  Depreciation and Amortization
    Expense.
  Taxes Other Than Income.
  Other Income and Deductions.
  Effective Income Tax Rate.
  Discontinued Operations.
  Results
    of Operations by Business Segment
    Income
    (Loss) from Continuing Operations by Business Segment
  Three Months Ended


FavorableJune 30,


(Unfavorable)2007


2006


VarianceGeneration

$
578


$
497


$
81ComEd


29



127



(98
)PECO


96



93



3Other(a)






(76
)


76Total

$
703


$
641


$
62     (a)
    
    Other includes corporate
    operations, shared service entities, including BSC, Enterprises,
    investments in synthetic fuel-producing facilities and
    intersegment eliminations. 101




---



##### 



Net
    Income (Loss) by Business Segment
  Three Months Ended


FavorableJune 30,


(Unfavorable)2007


2006


VarianceGeneration

$
578


$
500


$
78ComEd


29



127



(98
)PECO


96



93



3Other(a)


(1
)


(76
)


75Total

$
702


$
644


$
58     (a)
    
    Other includes corporate
    operations, shared service entities, including BSC, Enterprises,
    investments in synthetic fuel-producing facilities and
    intersegment eliminations.  Results
    of Operations  Generation
  Three Months Ended


FavorableJune 30,


(Unfavorable)2007


2006


VarianceOperating revenues

$
2,641


$
2,214


$
427Operating
    expensesPurchased power and fuel


974



843



(131
)Operating and maintenance


618



440



(178
)Depreciation and amortization


65



72



7Taxes other than income


47



41



(6
)Total operating expenses


1,704



1,396



(308
)Operating income


937



818



119Other income and
    deductionsInterest expense


(31
)


(40
)


9Equity in losses of investments


(1
)


(1
)


Other, net


22



14



8Total other income and deductions


(10
)


(27
)


17Income from continuing
    operations before income taxes


927



791



136Income taxes


349



294



(55
)Income from continuing
    operations


578



497



81Income from discontinued
    operations, net of income taxes






3



(3
)Net income

$
578


$
500


$
78   Net Income.
 102




---



##### 



Operating Revenues.
  Three MonthsEndedJune 30,Revenue

2007


2006


Variance


% ChangeElectric sales to affiliates

$
828


$
1,098


$
(270
)


(24.6
)%Wholesale and retail electric sales


1,680



943



737



78.1
%Total electric sales revenue


2,508



2,041



467



22.9
%Retail gas sales


87



91



(4
)


(4.4
)%Trading portfolio


32



3



29



n.m.Other operating revenue(a)


14



79



(65
)


(82.3
)%Total operating revenue

$
2,641


$
2,214


$
427



19.3
%     (a)
    
    Includes sales relating to fossil
    fuel sales, operating service agreements and decommissioning
    revenue from PECO in 2007 and tolling agreements, fossil fuel
    sales, operating service agreements and decommissioning revenue
    from ComEd and PECO in 2006. n.m. Not meaningful
  Three MonthsEndedJune 30,Sales (in GWhs)

2007


2006


Variance


% ChangeElectric sales to affiliates


14,878



27,947



(13,069
)


(46.8
)%Wholesale and retail electric sales


30,911



18,744



12,167



64.9
%Total electric sales


45,789



46,691



(902
)


(1.9
)%     Electric sales to affiliates.
      Wholesale and retail electric sales.
  Increase(Decrease)Volume

$
615Price


122Increase in wholesale and retail
    electric sales

$
737  103




---



##### 



Retail gas sales.
  Other revenue.
  Purchased Power and Fuel
    Expense.
  Three MonthsEndedJune 30,Supply Source (in GWhs)

2007


2006


Variance


% ChangeNuclear generation(a)


34,350



35,442



(1,092
)


(3.1
)%Purchases  economic
    hedge portfolio


8,580



8,101



479



5.9
%Fossil and hydroelectric generation


2,859



3,148



(289
)


(9.2
)%Total supply


45,789



46,691



(902
)


1.9
%     (a)
    
    Represents Generations
    proportionate share of the output of its nuclear generating
    plants, including Salem, which is operated by PSEG Nuclear,
    LLC.    IncreasePrice


Volume


(Decrease)Purchased power costs

$
30


$
56


$
86Generation cost


(23
)


(9
)


(32
)Fuel resale cost


5



(8
)


(3
)Mark-to-market


n.m.



n.m.



80Increase in purchased power and
    fuel expense









$
131     n.m. Not meaningful
  Purchased Power Cost.
  Generation Cost.
  Fuel Resale Cost.
 104




---



##### 



Mark-to-market.
    Three Months EndedJune 30,($/MWh)

2007


2006


% ChangeAverage electric revenueElectric sales to affiliates

$
55.65


$
39.29



41.6
%Wholesale and retail electric sales


54.35



50.31



8.0
%Total  excluding the
    trading portfolio


54.77



43.71



25.3
%Average electric supply
    cost(a)  excluding the trading portfolio


19.27



16.04



20.1
%Average margin 
    excluding the trading portfolio


35.50



27.67



28.3
%     (a)
    
    Average supply cost includes
    purchased power and fuel costs associated with electric sales.
    Average electric supply cost does not include fuel costs
    associated with retail gas sales and other sales.    Three MonthsEndedJune 30,2007


2006Nuclear fleet capacity factor(a)


93.6
%


95.5
%Nuclear fleet production cost per
    MWh(a)

$
14.29


$
12.94     (a)
    
    Excludes Salem, which is operated
    by PSEG Nuclear, LLC.    Operating and Maintenance Expense.
  Increase(Decrease)Decommissioning-related activities

$
133Nuclear refueling outage costs


19Pension, payroll and benefit costs


19Other


7Increase in operating and
    maintenance expense

$
178   
    The $133 million increase in the nuclear
    decommissioning-related activities was associated with the
    recognition of a credit totaling $149 million which
    represented the reduction in the asset retirement 105




---



##### 



obligation in excess of the asset retirement cost balance for
    the AmerGen units recorded in the same period in 2006, offset by
    a $16 million decrease resulting from the termination of
    revenue collections from ComEd, which likewise no longer
    required an offset through operating and maintenance expense.  
    The $19 million increase in nuclear fueling outage costs
    was associated with more planned refueling outage days during
    the three months ended June 30, 2007 as compared to the
    same period 2006.
    The $19 million increase in pension, payroll and benefit
    costs reflected the impact of inflation as well as an increase
    in various direct and allocated fringe costs.
    The $7 million increase in other operating and maintenance
    expenses for the three months ended June 30, 2007 compared
    to the same period in 2006 was primarily due to an increase in
    contracting charges resulting from increased outage costs for
    fossil and hydroelectric facilities, offset primarily by a
    decrease in service agreement-related expenses.  Depreciation and Amortization.
  Interest Expense.
  Other, Net.
  Effective Income Tax Rate.
  Discontinued Operations.
   106




---



##### 



Results
    of Operations  ComEd
  Three Months Ended


FavorableJune 30,


(Unfavorable)2007


2006


VarianceOperating revenues

$
1,420


$
1,453


$
(33
)Operating
    expensesPurchased power


838



766



(72
)Operating and maintenance


266



218



(48
)Depreciation and amortization


109



106



(3
)Taxes other than income


76



71



(5
)Total operating expenses


1,289



1,161



(128
)Operating income


131



292



(161
)Other income and
    deductionsInterest expense, net


(87
)


(77
)


(10
)Equity in losses of unconsolidated
    affiliates


(2
)


(3
)


1Other, net


5



1



4Total other income and deductions


(84
)


(79
)


(5
)Income before income
    taxes


47



213



(166
)Income taxes


18



86



68Net income

$
29


$
127


$
(98
)   Net Income.
 107




---



##### 



Operating Revenues and Purchased Power
    Expense.
  Increase (Decrease)Operating


Purchased


Revenue Net ofRevenues


Power


Purchased PowerCustomer choice

$
(311
)

$
(228
)

$
(83
)Rate changes and mix


217



273



(56
)Rate Relief Program


(18
)






(18
)Transmission


26







26Weather


57



34



23Volume


4







4Other


(8
)


(7
)


(1
)Total increase (decrease)

$
(33
)

$
72


$
(105
)   Customer
    choice
  Revenue.
    Three MonthsEnded June 30,2007


2006Retail customers purchasing
    electricity from a competitive electric generation supplier:Volume (GWhs)(a)


11,290



5,063Percentage of total retail
    deliveries


51
%


24
%Retail customers purchasing
    electricity from a competitive electric generation supplier or
    the ComEd PPO:Number of customers at period end


41,500



16,100Percentage of total retail
    customers


1
%


(b
)Volume (GWhs)(a)


11,291



6,552Percentage of total retail
    deliveries


51
%


31
%     (a)
    
    One GWh is the equivalent of one
    million kilowatthours (kWh).(b)
    
    Less than one percent.  Purchased Power.
 108




---



##### 



Rate
    changes and mix
  Revenue.
  Purchased Power.
  Rate
    Relief Program
  Revenue.
  Transmission
  Revenue.
  Weather
  Revenue.
  Purchased Power.
  Volume
  Revenue.
  Other
  Revenue  Economic Hedge Derivative
    Contracts.
 109




---



##### 



Revenue  Wholesale
    Contracts.
  Purchased Power  Wholesale
    Contracts.
  Operating and Maintenance Expense.
  IncreasePost rate freeze period transition
    expenses(a)

$
17Allowance for uncollectible
    accounts expense(b)


12Contracting


5Fringe benefits(c)


5Wages and salaries


4Other


5Increase in operating and
    maintenance expense

$
48     (a)
    
    Includes increased advertising
    costs, costs associated with the Rate Relief and Customers
    Affordable Reliable Energy (CARE) programs of $7 million,
    costs associated with implementing ComEds Rate
    Stabilization plan and other costs associated with transitioning
    to the post rate freeze period. See Note 5 of the Combined
    Notes to Consolidated Financial Statements for more information.(b)
    
    Reflects higher revenues due to
    increased customer receivables resulting from the inclusion of
    market-based electricity rates and higher delivery rates. Also
    reflects an increase in older outstanding receivable balances
    from customers as a result of a management decision to reduce
    the number of non-paying customers being disconnected.(c)
    
    Reflects increases in various
    fringe benefits primarily due to increased pension and other
    postretirement benefits costs of $5 million.  Depreciation and Amortization
    Expense.
  Increase(Decrease)Depreciation expense associated
    with higher plant balances

$
5Amortization of regulatory assets


(2
)Increase in depreciation and
    amortization expense

$
3     Taxes Other Than Income.
  Interest Expense, Net.
 110




---



##### 



Other, Net.
  IncreaseGain on disposal of assets and
    investments, net

$
3Allowance for funds used during
    construction, equity


1Increase in other, net

$
4   Income Taxes.
  ComEd
    Electric Operating Statistics and Revenue Detail
  Three MonthsEndedJune 30,Retail Deliveries  (in GWhs)

2007


2006


Variance


% ChangeFull
    service(a)Residential


6,359



6,124



235



3.8
%Small commercial &
    industrial


3,835



5,709



(1,874
)


(32.8
)%Large commercial &
    industrial


539



2,430



(1,891
)


(77.8
)%Public authorities &
    electric railroads


213



514



(301
)


(58.6
)%Total full service


10,946



14,777



(3,831
)


(25.9
)%PPOSmall commercial &
    industrial






814



(814
)


(100.0
)%Large commercial &
    industrial


1



675



(674
)


(99.9
)%1



1,489



(1,488
)


(99.9
)%Delivery
    only(b)Small commercial &
    industrial


4,390



1,291



3,099



n.m.Large commercial &
    industrial


6,785



3,772



3,013



79.9
%Public authorities &
    electric railroads


115







115



n.m.11,290



5,063



6,227



123.0
%Total PPO and delivery only


11,291



6,552



4,739



72.3
%Total retail
    deliveries


22,237



21,329



908



4.3
%     (a)
    
    Full service reflects deliveries to
    customers taking electric service under tariff rates.(b)
    
    Delivery only service reflects
    customers electing to receive electricity from a competitive
    electric generation supplier.  n.m. Not meaningful.
  111




---



##### 



Three MonthsEndedJune 30,Electric Revenue

2007


2006


Variance


% ChangeFull
    service(a)Residential

$
696


$
547


$
149



27.2
%Small commercial &
    industrial


380



452



(72
)


(15.9
)%Large commercial &
    industrial


35



130



(95
)


(73.1
)%Public authorities &
    electric railroads


18



32



(14
)


(43.8
)%Total full service


1,129



1,161



(32
)


(2.8
)%PPO(b)Small commercial &
    industrial






61



(61
)


(100.0
)%Large commercial &
    industrial






42



(42
)


(100.0
)%



103



(103
)


(100.0
)%Delivery
    only(c)Small commercial &
    industrial


70



21



49



n.m.Large commercial &
    industrial


71



40



31



77.5
%Public authorities &
    electric railroads


1







1



n.m.142



61



81



132.8
%Total PPO and delivery only


142



164



(22
)


(13.4
)%Total electric retail
    revenues


1,271



1,325



(54
)


(4.1
)%Other revenue(d)


151



125



26



20.8
%Economic hedge derivative contracts


(2
)


3



(5
)


(166.7
)%Total operating
    revenues

$
1,420


$
1,453


$
(33
)


(2.3
)%     (a)
    
    Full service revenue reflects
    deliveries to customers taking electric service under tariff
    rates, which include the cost of electricity and the cost of
    transmission and distribution of the electricity.(b)
    
    Revenues from customers choosing
    the PPO include an energy charge at market rates, transmission
    and distribution charges, and a CTC through December 31,
    2006.(c)
    
    Delivery only revenues reflect
    revenue under tariff rates from customers electing to receive
    electricity from a competitive electric generation supplier,
    which includes a distribution charge and a CTC through
    December 31, 2006.(d)
    
    Other revenues include transmission
    revenue (including revenue from PJM), sales to municipalities
    and other wholesale energy sales.   n.m. Not meaningful.
 112




---



##### 



Results
    of Operations  PECO
  Three MonthsEnded


FavorableJune 30,


(Unfavorable)2007


2006


VarianceOperating revenues

$
1,269


$
1,148


$
121Operating
    expensesPurchased power and fuel


655



577



(78
)Operating and maintenance


146



141



(5
)Depreciation and amortization


185



172



(13
)Taxes other than income


71



53



(18
)Total operating expenses


1,057



943



(114
)Operating income


212



205



7Other income and
    deductionsInterest expense, net


(64
)


(67
)


3Equity in losses of unconsolidated
    affiliates


(2
)


(2
)


Other, net


5



2



3Total other income and deductions


(61
)


(67
)


6Income before income
    taxes


151



138



13Income taxes


55



45



(10
)Net income


96



93



3Preferred stock dividends


1



1



Net income on common
    stock

$
95


$
92


$
3   Net Income.
  Electric and Gas Operating Revenues, Purchased Power and
    Fuel Expense.
  Increase (Decrease)Electric


Gas


TotalPurchasedOperating


Purchased





Operating


Fuel





Operating


Power andRevenues


Power


Net


Revenues


Expense


Net


Revenues


Fuel


NetWeather

$
29


$
12


$
17


$
26


$
21


$
5


$
55


$
33


$
22Volume


29



12



17



4



4







33



16



17Rate increases (decreases)


44



44







(16
)


(16
)






28



28



Customer choice


2



2



















2



2



Other rate changes and mix


(3
)


3



(6
)


(2
)


1



(3
)


(5
)


4



(9
)Other


6



(5
)


11



2







2



8



(5
)


13Total increase

$
107


$
68


$
39


$
14


$
10


$
4


$
121


$
78


$
43  113




---



##### 



Weather
  Revenues.
  Purchased Power and Fuel Expense.
  Volume
  Revenues.
  Purchased Power and Fuel Expense.
  Rate
    increases (decreases)
  Revenues.
  Purchased Power and Fuel Expense.
  Customer
    choice
  Revenues and Purchased Power.
    114




---



##### 



Three Months Ended June 30,2007


2006Retail customers purchasing energy
    from a competitive electric generation supplier:Number of customers at period end


31,700



38,300Percentage of total retail
    customers


2
%


3
%Volume (GWhs)(a)


158



188Percentage of total retail
    deliveries


2
%


2
%     (a)
    
    One GWh is the equivalent of one
    million kWh.    Other
    rate changes and mix
  Revenues.
  Purchased Power and Fuel Expense.
  Other
    revenues and expenses
  Revenues.
  Purchased Power and Fuel.
  Operating and Maintenance Expense.
  Increase(Decrease)Wages and salaries

$
4Storm costs


3Allowance for uncollectible
    accounts expense


(4
)Other


2Increase in operating and
    maintenance expense

$
5   Depreciation and Amortization
    Expense.
 115




---



##### 



Taxes Other Than Income.
  Increase(Decrease)Taxes on utility revenues(a)

$
7State franchise tax adjustment in
    2006(b)


7Sales and use tax adjustment in
    2006(b)


5Other


(1
)Increase in taxes other than income

$
18     (a)
    
    As these taxes were collected from
    customers and remitted to the taxing authorities and included in
    revenues and expenses, the increase in tax expense was offset by
    a corresponding increase in revenues.(b)
    
    Represents the reduction of tax
    accruals in the second quarter of 2006 following settlements
    related to 2005 tax assessments.  Interest Expense, Net.
  Other, Net.
  Income Taxes.
  PECO
    Electric Operating Statistics and Revenue Detail
    Three MonthsEndedJune 30,Retail Deliveries  (in GWhs)

2007


2006


Variance


% ChangeFull
    service(a)Residential


2,963



2,719



244



9.0
%Small commercial &
    industrial


1,995



1,869



126



6.7
%Large commercial &
    industrial


4,054



3,875



179



4.6
%Public authorities &
    electric railroads


202



229



(27
)


(11.8
)%Total full service


9,214



8,692



522



6.0
%Delivery
    only(b)Residential


10



14



(4
)


(28.6
)%Small commercial &
    industrial


145



163



(18
)


(11.0
)%Large commercial &
    industrial


3



11



(8
)


(72.7
)%Total delivery only


158



188



(30
)


(16.0
)%Total retail
    deliveries


9,372



8,880



492



5.5
%     (a)
    
    Full service reflects deliveries to
    customers taking electric service under tariff rates.(b)
    
    Delivery only service reflects
    customers receiving electric generation service from a
    competitive electric generation supplier.  116




---



##### 



Three MonthsEndedJune 30,Electric Revenue

2007


2006


Variance


% ChangeFull
    service(a)Residential

$
445


$
392


$
53



13.5
%Small commercial &
    industrial


265



236



29



12.3
%Large commercial &
    industrial


341



319



22



6.9
%Public authorities &
    electric railroads


21



22



(1
)


(4.5
)%Total full service


1,072



969



103



10.6
%Delivery
    only(b)Residential


1



1







0.0
%Small commercial &
    industrial


8



9



(1
)


(11.1
)%Large commercial &
    industrial






1



(1
)


(100.0
)%Total delivery only


9



11



(2
)


(18.2
)%Total electric retail
    revenues


1,081



980



101



10.3
%Other revenue(c)


66



60



6



10.0
%Total electric and other
    revenue

$
1,147


$
1,040


$
107



10.3
%     (a)
    
    Full service revenue reflects
    revenue from customers taking generation service under tariff
    rates, which include the cost of energy, the cost of
    transmission and distribution of the energy and a CTC.(b)
    
    Delivery only revenue reflects
    revenue from customers receiving generation service from a
    competitive electric generation supplier, which includes the
    cost of distribution of the energy and a CTC.(c)
    
    Other revenues include transmission
    revenue from PJM and other wholesale energy sales.  PECO
    Gas Sales Statistics and Revenue Detail
    Three Months Ended June 30,Deliveries to customers (in million cubic feet (mmcf))

2007


2006


Variance


% ChangeRetail sales


8,317



6,292



2,025



32.2
%Transportation


5,928



6,139



(211
)


(3.4
)%Total


14,245



12,431



1,814



14.6
%   Three Months Ended June 30,Revenue

2007


2006


Variance


% ChangeRetail sales

$
116


$
103


$
13



12.6
%Transportation


3



4



(1
)


(25.0
)%Resales and other


3



1



2



n.m.Total gas revenue

$
122


$
108


$
14



13.0
%     n.m. Not meaningful
 117




---



##### 



Results
    of Operations  Exelon Corporation
  Six
    Months Ended June 30, 2007 Compared To Six Months Ended
    June 30, 2006
  Six MonthsEnded


FavorableJune 30,


(Unfavorable)Exelon Corporation

2007


2006


VarianceOperating revenues

$
9,330


$
7,559


$
1,771Operating
    expensesPurchased power and fuel expense


3,655



2,534



(1,121
)Operating and maintenance expense


2,120



1,906



(214
)Depreciation and amortization


738



735



(3
)Taxes other than income


395



364



(31
)Total operating expenses


6,908



5,539



(1,369
)Operating income


2,422



2,020



402Other income and
    deductionsInterest expense


(318
)


(306
)


(12
)Interest expense to affiliates, net


(109
)


(139
)


30Equity in losses of unconsolidated
    affiliates and investments


(69
)


(61
)


(8
)Other, net


106



91



15Total other income and deductions


(390
)


(415
)


25Income from continuing
    operations before income taxes


2,032



1,605



427Income taxes


648



564



(84
)Income from continuing
    operations


1,384



1,041



343Income from discontinued
    operations, net of income taxes


9



3



6Net income

$
1,393


$
1,044


$
349Diluted earnings per
    share

$
2.05


$
1.55


$
0.50   Net Income.
  Operating Revenues.
 118




---



##### 



Purchased Power and Fuel
    Expense.
  Operating and Maintenance
    Expense.
  Depreciation and Amortization
    Expense.
  Taxes Other Than Income.
  Other Income and Deductions.
  Effective Income Tax Rate.
  Discontinued Operations.
    Results
    of Operations by Business Segment
   119




---



##### 



Income
    (Loss) from Continuing Operations by Business Segment
  Six MonthsEnded


FavorableJune 30,


(Unfavorable)2007


2006


VarianceGeneration

$
1,133


$
765


$
368ComEd


33



181



(148
)PECO


224



186



38Other(a)


(6
)


(91
)


85Total

$
1,384


$
1,041


$
343     (a)
    
    Other includes corporate
    operations, shared service entities, including BSC, Enterprises,
    investments in synthetic fuel-producing facilities and
    intersegment eliminations.  Net
    Income (Loss) by Business Segment
  Six MonthsEnded


FavorableJune 30,


(Unfavorable)2007


2006


VarianceGeneration

$
1,138


$
768


$
370ComEd


33



181



(148
)PECO


224



186



38Other(a)


(2
)


(91
)


89Total

$
1,393


$
1,044


$
349     (a)
    
    Other includes corporate
    operations, shared service entities, including BSC, Enterprises,
    investments in synthetic fuel-producing facilities and
    intersegment eliminations. 120




---



##### 



Results
    of Operations  Generation
  Six MonthsEnded


FavorableJune 30,


(Unfavorable)2007


2006


VarianceOperating revenues

$
5,344


$
4,434


$
910Operating
    expensesPurchased power and fuel


2,038



1,817



(221
)Operating and maintenance


1,257



1,108



(149
)Depreciation and amortization


133



139



6Taxes other than income


88



84



(4
)Total operating expenses


3,516



3,148



(368
)Operating income


1,828



1,286



542Other income and
    deductionsInterest expense


(66
)


(82
)


16Equity in earnings (losses) of
    investments


1



(5
)


6Other, net


54



20



34Total other income and deductions


(11
)


(67
)


56Income from continuing
    operations before income taxes


1,817



1,219



598Income taxes


684



454



(230
)Income from continuing
    operations


1,133



765



368Income from discontinued
    operations, net of income taxes


5



3



2Net income

$
1,138


$
768


$
370   Net Income.
 121




---



##### 



Operating Revenues.
  Six MonthsEndedJune 30,Revenue

2007


2006


Variance


% ChangeElectric sales to affiliates

$
1,688


$
2,270


$
(582
)


(25.6
)%Wholesale and retail electric sales


3,317



1,689



1,628



96.4
%Total electric sales revenue


5,005



3,959



1,046



26.4
%Retail gas sales


269



340



(71
)


(20.9
)%Trading portfolio


32



5



27



n.m.Other operating revenue(a)


38



130



(92
)


(70.7
)%Total operating revenue

$
5,344


$
4,434


$
910



20.5
%     (a)
    
    Includes sales relating to fossil
    fuel sales, operating service agreements and decommissioning
    revenue from PECO in 2007 and tolling agreements, fossil fuel
    sales, operating service agreements and decommissioning revenue
    from ComEd and PECO in 2006.  n.m.
    
    Not meaningful.  Six MonthsEndedJune 30,Sales (in GWhs)

2007


2006


Variance


% ChangeElectric sales to affiliates


31,083



57,870



(26,787
)


(46.3
)%Wholesale and retail electric sales


61,740



33,052



28,688



86.8
%Total electric sales


92,823



90,922



1,901



2.1
%     Electric sales to affiliates.
      Wholesale and retail electric sales.
  IncreaseVolume

$
1,483Price


145Increase in wholesale and retail
    electric sales

$
1,628    122




---



##### 



Retail gas sales.
  Other revenue.
  Purchased Power and Fuel
    Expense.
  Six MonthsEndedJune 30,Supply Source (in GWhs)

2007


2006


Variance


% ChangeNuclear generation(a)


69,707



68,933



774



1.1
%Purchases  economic
    hedge portfolio


17,263



15,870



1,393



8.8
%Fossil and hydroelectric generation


5,853



6,119



(266
)


(4.3
)%Total supply


92,823



90,922



1,901



2.1
%     (a)
    
    Represents Generations
    proportionate share of the output of its nuclear generating
    plants, including Salem, which is operated by PSEG Nuclear, LLC.    IncreasePrice


Volume


(Decrease)Purchased power costs

$
6


$
122


$
128Generation cost


(10
)


3



(7
)Fuel resale cost


(45
)


(28
)


(73
)Mark-to-market


n.m.



n.m.



173Increase in purchased power and
    fuel expense









$
221     n.m. Not meaningful
  Purchased Power Cost.
  Generation Cost.
  Fuel Resale Cost.
 123




---



##### 



Mark-to-market.
    Six MonthsEndedJune 30,($/MWh)

2007


2006


% ChangeAverage electric revenueElectric sales to affiliates

$
54.31


$
39.23



38.4
%Wholesale and retail electric sales


53.73



51.10



5.1
%Total  excluding the
    trading portfolio


53.92



43.54



23.8
%Average electric supply
    cost(a)  excluding the trading portfolio


19.08



16.23



17.6
%Average margin 
    excluding the trading portfolio


34.84



27.31



27.6
%     (a)
    
    Average supply cost includes
    purchased power and fuel costs associated with electric sales.
    Average electric supply cost does not include fuel costs
    associated with retail gas sales and other sales.    Six MonthsEndedJune 30,2007


2006Nuclear fleet capacity factor(a)


95.0
%


93.3
%Nuclear fleet production cost per
    MWh(a)

$
14.28


$
14.19     (a)
    
    Excludes Salem, which is operated
    by PSEG Nuclear, LLC.    Operating and Maintenance Expense.
  Increase(Decrease)Decommissioning-related activities

$
118Pension, payroll and benefit costs


43Nuclear refueling outage costs


(9
)Other


(3
)Increase in operating and
    maintenance expense

$
149  124




---



##### 




    A $118 million increase in nuclear decommissioning-related
    activities was associated with the recognition of a credit
    totaling $149 million which represented a reduction in the
    asset retirement obligation in excess of the asset retirement
    cost balance for the AmerGen units recorded in the same period
    in 2006, offset by a $31 million decrease resulting from
    the termination of revenue collections from ComEd, which
    likewise no longer required an offset through operating and
    maintenance expense.
    A $43 million increase in pension, payroll and benefit
    costs reflected the impact of inflation as well as an increase
    in various direct and allocated fringe costs.
    A $9 million decrease in nuclear refueling outage costs was
    associated with the fewer planned refueling outage days during
    the six months ended June 30, 2007 as compared to the same
    period in 2006.
    A $3 million decrease in other operating and maintenance
    expense for the six months ended June 30, 2007 compared to
    the same period in 2006 was primarily due to a decrease in
    service agreement-related expenses, offset by an increase in
    contracting charges resulting from increased outage costs for
    fossil and hydroelectric facilities.  Depreciation and Amortization.
  Interest Expense.
  Other, Net.
  Effective Income Tax Rate.
  Discontinued Operations.
   125




---



##### 



Results
    of Operations  ComEd
  Six MonthsEnded


FavorableJune 30,


(Unfavorable)2007


2006


VarianceOperating revenues

$
2,911


$
2,880


$
31Operating
    expensesPurchased power


1,806



1,628



(178
)Operating and maintenance


510



434



(76
)Depreciation and amortization


217



205



(12
)Taxes other than income


157



152



(5
)Total operating expenses


2,690



2,419



(271
)Operating income


221



461



(240
)Other income and
    deductionsInterest expense, net


(170
)


(153
)


(17
)Equity in losses of unconsolidated
    affiliates


(4
)


(5
)


1Other, net


7



1



6Total other income and deductions


(167
)


(157
)


(10
)Income before income
    taxes


54



304



(250
)Income taxes


21



123



102Net income

$
33


$
181


$
(148
)   Net Income.
 126




---



##### 



Operating Revenues and Purchased Power
    Expense.
  Increase (Decrease)Operating


Purchased


Revenue Net ofRevenues


Power


Purchased PowerCustomer choice

$
(604
)

$
(463
)

$
(141
)Rate changes and mix


521



603



(82
)Rate Relief Program


(19
)






(19
)Transmission


32



(6
)


38Weather


89



53



36Volume


11







11Other


1



(9
)


10Total increase (decrease)

$
31


$
178


$
(147
)   Customer
    choice
  Revenue.
    Six MonthsEnded June 30,2007


2006Retail customers purchasing
    electricity from a competitive electric generation supplier:Volume (GWhs)(a)


21,361



8,908Percentage of total retail
    deliveries


48
%


21
%Retail customers purchasing
    electricity from a competitive electric generation supplier or
    the ComEd PPO:Number of customers at period end


41,500



16,100Percentage of total retail
    customers


1
%


(b
)Volume (GWhs)(a)


21,418



13,428Percentage of total retail
    deliveries


48
%


31
%     (a)
    
    One GWh is the equivalent of one
    million kilowatthours (kWh).(b)
    
    Less than one percent.  Purchased Power.
 127




---



##### 



Rate
    changes and mix
  Revenue.
  Purchased Power.
  Rate
    Relief Program
  Revenue.
  Transmission
  Revenue.
  Purchased Power. Charge/Cost
  Weather
  Revenue.
  Purchased Power.
 128




---



##### 



Volume
  Revenue.
  Other
  Revenue  Economic Hedge Derivative
    Contracts.
  Revenue  Wholesale
    Contracts.
  Purchased Power  Wholesale
    Contracts.
  Operating and Maintenance Expense.
  IncreasePost rate freeze period transition
    expenses(a)

$
21Allowance for uncollectible
    accounts expense(b)


13Wages and salaries


9Contracting


7Fringe benefits(c)


7Severance-related expenses


4Corporate allocations


2Repair and maintenance of
    transformer and synchronous condenser


3Materials and supplies expense


2Rents and leases


2Other


6Increase in operating and
    maintenance expense

$
76     (a)
    
    Includes increased advertising
    costs, costs associated with the Rate Relief and CARE programs
    of $8 million, costs associated with implementing
    ComEds Rate Stabilization plan and other costs associated
    with transitioning to the post rate freeze period. See
    Note 5 of the Combined Notes to Consolidated Financial
    Statements for more information.(b)
    
    Reflects the impact of higher
    revenues due to increased customer receivables resulting from
    the inclusion of market-based electricity rates and higher
    delivery rates. Also reflects an increase in older outstanding
    receivable balances from customers as a result of a management
    decision to reduce the number of non-paying customers being
    disconnected.(c)
    
    Reflects increases in various
    fringe benefits primarily due to increased pension and other
    postretirement benefits costs of $8 million.  Depreciation and Amortization
    Expense.
  IncreaseDepreciation expense associated
    with higher plant balances

$
10Amortization of regulatory assets


2Increase in depreciation and
    amortization expense

$
12    129




---



##### 



Taxes Other Than Income.
  Interest Expense, Net.
  Other, Net.
  IncreaseGain on disposal of assets and
    investments, net

$
3Allowance for funds used during
    construction, equity


2Other


1Increase in other, net

$
6   Income Taxes.
  ComEd
    Electric Operating Statistics and Revenue Detail
  Six MonthsEndedJune 30,Retail Deliveries  (in GWhs)

2007


2006


Variance


% ChangeFull
    service(a)Residential


13,448



12,921



527



4.1
%Small commercial &
    industrial


8,421



11,028



(2,607
)


(23.6
)%Large commercial &
    industrial


1,245



4,609



(3,364
)


(73.0
)%Public authorities &
    electric railroads


396



1,115



(719
)


(64.5
)%Total full service


23,510



29,673



(6,163
)


(20.8
)%PPOSmall commercial &
    industrial


23



2,322



(2,299
)


(99.0
)%Large commercial &
    industrial


34



2,198



(2,164
)


(98.5
)%57



4,520



(4,463
)


(98.7
)%Delivery
    only(b)Small commercial &
    industrial


7,885



2,185



5,700



n.m.Large commercial &
    industrial


13,208



6,723



6,485



96.5
%Public authorities &
    electric railroads


268







268



n.m.21,361



8,908



12,453



139.8
%Total PPO and delivery only


21,418



13,428



7,990



59.5
%Total retail
    deliveries


44,928



43,101



1,827



4.2
%     (a)
    
    Full service reflects deliveries to
    customers taking electric service under tariff rates.(b)
    
    Delivery only service reflects
    customers electing to receive electricity from a competitive
    electric generation supplier.   n.m. Not meaningful.
  130




---



##### 



Six MonthsEndedJune 30,Electric Revenue

2007


2006


Variance


% ChangeFull
    service(a)Residential

$
1,423


$
1,096


$
327



29.8
%Small commercial &
    industrial


814



839



(25
)


(3.0
)%Large commercial &
    industrial


96



240



(144
)


(60.0
)%Public authorities &
    electric railroads


34



68



(34
)


(50.0
)%Total full service


2,367



2,243



124



5.5
%PPO(b)Small commercial &
    industrial


2



163



(161
)


(98.8
)%Large commercial &
    industrial


3



132



(129
)


(97.7
)%5



295



(290
)


(98.3
)%Delivery
    only(c)Small commercial &
    industrial


119



33



86



n.m.Large commercial &
    industrial


134



67



67



100.0
%Public authorities &
    electric railroads


3







3



n.m.256



100



156



156.0
%Total PPO and delivery only


261



395



(134
)


(33.9
)%Total electric retail
    revenues


2,628



2,638



(10
)


(0.4
)%Other revenue(d)


285



250



35



14.0
%Economic hedge derivative contracts


(2
)


(8
)


6



(75.0
)%Total operating
    revenues

$
2,911


$
2,880


$
31



1.1
%     (a)
    
    Full service revenue reflects
    deliveries to customers taking electric service under tariff
    rates, which include the cost of electricity and the cost of
    transmission and distribution of the electricity.(b)
    
    Revenues from customers choosing
    the PPO include an energy charge at market rates, transmission
    and distribution charges, and a CTC through December 31,
    2006.(c)
    
    Delivery only revenues reflect
    revenue under tariff rates from customers electing to receive
    electricity from a competitive electric generation supplier,
    which includes a distribution charge and a CTC through
    December 31, 2006.(d)
    
    Other revenues include transmission
    revenue (including revenue from PJM), sales to municipalities
    and other wholesale energy sales.   n.m. Not meaningful.
 131




---



##### 



Results
    of Operations  PECO
  Six MonthsEnded


FavorableJune 30,


(Unfavorable)2007


2006


VarianceOperating revenues

$
2,769


$
2,554


$
215Operating
    expensesPurchased power and fuel


1,498



1,389



(109
)Operating and maintenance


294



289



(5
)Depreciation and amortization


370



343



(27
)Taxes other than income


142



117



(25
)Total operating expenses


2,304



2,138



(166
)Operating income


465



416



49Other income and
    deductionsInterest expense, net


(126
)


(136
)


10Equity in losses of unconsolidated
    affiliates


(4
)


(6
)


2Other, net


10



5



5Total other income and deductions


(120
)


(137
)


17Income before income
    taxes


345



279



66Income taxes


121



93



(28
)Net income


224



186



38Preferred stock dividends


2



2



Net income on common
    stock

$
222


$
184


$
38   Net Income.
  Electric and Gas Operating Revenues, Purchased Power and
    Fuel Expense.
  Increase (Decrease)Electric


Gas


TotalPurchasedOperating


Purchased





Operating


Fuel





Operating


PowerRevenues


Power


Net


Revenues


Expense


Net


Revenues


and Fuel


NetWeather

$
61


$
26


$
35


$
81


$
67


$
14


$
142


$
93


$
49Volume


57



24



33



17



14



3



74



38



36Rate increases (decreases)


99



88



11



(120
)


(120
)






(21
)


(32
)


11Settlement of PJM billing dispute






(10
)


10



















(10
)


10Customer choice


5



5



















5



5



Other rate changes and mix


(13
)






(13
)


(3
)


7



(10
)


(16
)


7



(23
)Other


13



(7
)


20



18



15



3



31



8



23Total increase (decrease)

$
222


$
126


$
96


$
(7
)

$
(17
)

$
10


$
215


$
109


$
106  132




---



##### 



Weather
  Revenues.
  Purchased Power and Fuel Expense.
  Volume
  Revenues.
  Purchased Power and Fuel Expense.
  Rate
    increases (decreases)
  Revenues.
  Purchased Power and Fuel Expense.
  Settlement
    of PJM billing dispute
  Purchased Power.
  Customer
    choice
  Revenues and Purchased Power.
    133




---



##### 



Six MonthsEndedJune 30,2007


2006Retail customers purchasing energy
    from a competitive electric generation supplier:Number of customers at period end


31,700



38,300Percentage of total retail
    customers


2
%


3
%Volume (GWhs)(a)


317



406Percentage of total retail
    deliveries


2
%


2
%     (a)
    
    One GWh is the equivalent of one
    million kWh.    Other
    rate changes and mix
  Revenues.
  Purchased Power and Fuel Expense.
  Other
    revenues and expenses
  Revenues.
  Purchased Power and Fuel.
  Operating and Maintenance Expense.
  Increase(Decrease)Contractors

$
7Wages and salaries


5Environmental reserve(a)


4Allowance for uncollectible
    accounts expense(b)


(11
)Increase in operating and
    maintenance expense

$
5     (a)
    
    Reflects lower expense in 2006 due
    to a settlement related to a Superfund site in the first quarter
    of 2006.(b)
    
    Reflects the following factors,
    each  of which decreased expense in 2007 compared to 2006;
    (1) lower net charge-offs of customer receivables in 2007
    compared to 2006; (2) changes in PAPUC-approved regulations
    which relaxed customer payment terms in 2006, which resulted in
    higher expense in 2006. 134




---



##### 



Depreciation and Amortization
    Expense.
  Increase(Decrease)CTC amortization(a)

$
32Accelerated amortization of PECO
    billing system(b)


(7
)Other


2Increase in depreciation and
    amortization expense

$
27     (a)
    
    PECOs additional amortization
    of the CTC is in accordance with its original settlement under
    the Competition Act.(b)
    
    In January 2005, as part of a
    broader systems strategy at PECO associated with the proposed
    merger with PSEG, Exelons Board of Directors approved the
    implementation of a new customer information and billing system
    at PECO. The approval of this new system required the
    accelerated amortization of PECOs current system through
    2006 and the recognition of additional amortization expense in
    2005 and 2006. The new system was implemented in the fourth
    quarter 2006.  Taxes Other Than Income.
  IncreaseTaxes on utility revenues(a)

$
13State franchise tax adjustment in
    2006(b)


7Sales and use tax adjustment in
    2006(b)


5Increase in taxes other than income

$
25     (a)
    
    As these taxes were collected from
    customers and remitted to the taxing authorities and included in
    revenues and expenses, the increase in tax expense was offset by
    a corresponding increase in revenues.(b)
    
    Represents the reduction of tax
    accruals in the second quarter of 2006 following settlements
    related to 2005 tax assessments.  Interest Expense, Net.
  Other, Net.
  Income Taxes.
 135




---



##### 



PECO
    Electric Operating Statistics and Revenue Detail
    Six Months Ended June 30,Retail Deliveries  (in GWhs)

2007


2006


Variance


% ChangeFull
    service(a)Residential


6,377



5,917



460



7.8
%Small commercial &
    industrial


4,064



3,753



311



8.3
%Large commercial &
    industrial


7,961



7,576



385



5.1
%Public authorities &
    electric railroads


434



472



(38
)


(8.1
)%Total full service


18,836



17,718



1,118



6.3
%Delivery
    only(b)Residential


21



32



(11
)


(34.4
)%Small commercial &
    industrial


289



345



(56
)


(16.2
)%Large commercial &
    industrial


7



29



(22
)


(75.9
)%Total delivery only


317



406



(89
)


(21.9
)%Total retail
    deliveries


19,153



18,124



1,029



5.7
%     (a)
    
    Full service reflects deliveries to
    customers taking electric service under tariff rates.(b)
    
    Delivery only service reflects
    customers receiving electric generation service from a
    competitive electric generation supplier.  Six Months Ended June 30,Electric Revenue

2007


2006


Variance


% ChangeFull
    service(a)Residential

$
894


$
795


$
99



12.5
%Small commercial &
    industrial


504



446



58



13.0
%Large commercial &
    industrial


670



614



56



9.1
%Public authorities &
    electric railroads


43



43







0.0
%Total full service


2,111



1,898



213



11.2
%Delivery
    only(b)Residential


2



2







0.0
%Small commercial &
    industrial


15



18



(3
)


(16.7
)%Large commercial &
    industrial






1



(1
)


(100.0
)%Total delivery only


17



21



(4
)


(19.0
)%Total electric retail
    revenues


2,128



1,919



209



10.9
%Other revenue(c)


131



118



13



11.0
%Total electric and other
    revenue

$
2,259


$
2,037


$
222



10.9
%     (a)
    
    Full service revenue reflects
    revenue from customers taking generation service under tariff
    rates, which include the cost of energy, the cost of
    transmission and distribution of the energy and a CTC.(b)
    
    Delivery only revenue reflects
    revenue from customers receiving generation service from a
    competitive electric generation supplier, which includes the
    cost of distribution of the energy and a CTC.(c)
    
    Other revenues include transmission
    revenue from PJM and other wholesale energy sales. 136




---



##### 



PECO
    Gas Sales Statistics and Revenue Detail
    Six MonthsEndedJune 30,Deliveries to customers (in million cubic feet (mmcf))

2007


2006


Variance


% ChangeRetail sales


37,285



31,213



6,072



19.5
%Transportation


12,977



13,019



(42
)


(0.3
)%Total


50,262



44,232



6,030



13.6
%   Six MonthsEndedJune 30,Revenue

2007


2006


Variance


% ChangeRetail sales

$
482


$
507


$
(25
)


(4.9
)%Transportation


8



8







0.0
%Resales and other


20



2



18



n.m.Total gas revenue

$
510


$
517


$
(7
)


(1.4
)%     n.m. Not meaningful
  Liquidity
    and Capital Resources
  Form 10-K
     137




---



##### 



Cash
    Flows from Operating Activities
       138




---



##### 



Six MonthsEndedJune 30,2007


2006


VarianceNet income

$
1,393


$
1,044


$
349Add (subtract):Non-cash operating activities(a)


1,427



1,151



276Income taxes


87



300



(213
)Changes in working capital and
    other noncurrent assets and liabilities(b)


(1,241
)


(277
)


(964
)Pension and non-pension
    postretirement benefit contributions


(40
)


(30
)


(10
)Net cash flows provided by
    operations

$
1,626


$
2,188


$
(562
)     (a)
    
    Represents depreciation,
    amortization and accretion, deferred income taxes, provision for
    uncollectible accounts, pension and non-pension postretirement
    benefit expense, equity in earnings and losses of unconsolidated
    affiliates and investments, other decommissioning-related
    activities, stock compensation expense and other non-cash
    charges.(b)
    
    Changes in working capital and
    other noncurrent assets and liabilities exclude the changes in
    commercial paper, income taxes and the current portion of
    long-term debt.    Six MonthsEndedJune 30,2007


2006Exelon

$
1,626


$
2,188Generation


1,115



1,067ComEd


184



552PECO


467



550    139




---



##### 



Generation
  
    At June 30, 2007 and December 31, 2006, Generation had
    accounts receivable from ComEd of $68 million under its
    supplier forward agreement and $197 million under the PPA,
    which expired on December 31, 2006, respectively. The
    decrease was primarily due to lower revenues resulting from the
    expiration of the PPA with ComEd as well as ComEd making
    semi-monthly payments under its supplier forward contracts in
    2007 as opposed to making monthly payments in 2006. At
    June 30, 2006 and December 31, 2005, Generation had
    accounts receivable from ComEd under the PPA of
    $247 million and $242 million, respectively.
    At June 30, 2007 and December 31, 2006, Generation had
    accounts receivable from PECO under the PPA of $146 million
    and $153 million, respectively. At June 30, 2006 and
    December 31, 2005, Generation had accounts receivable from
    PECO under the PPA of $170 million and $151 million,
    respectively.
    During the six months ended June 30, 2007 and 2006,
    Generation had net disbursements of counterparty collateral of
    $498 million and net collections of counterparty collateral
    of $183 million, respectively. The decrease in cash flows
    was primarily due to changes in collateral requirements
    resulting from increased activity within exchange-based markets
    for energy and fossil fuel.
    In 2005, Exelon received a $102 million Federal income tax
    refund for capital losses generated in 2003 related to
    Generations previously owned investment in Sithe, which
    were carried back to prior periods. In the first quarter of
    2006, Exelon remitted a $98 million payment to the IRS in
    connection with the settlement of the IRSs challenge of
    the timing of the above-described deduction. This payment
    included $6 million of interest, which was recognized as
    interest expense in the first quarter of 2006.  ComEd
  
    As a result of ComEds downgraded credit ratings, ComEd is
    making accelerated semi-monthly payments under its supplier
    forward contracts with its energy suppliers, including
    Generation. Prior to the credit ratings downgrade, ComEd made
    monthly payments to its energy suppliers. At June 30, 2007
    and December 31, 2006, ComEd had accrued payments to
    Generation for energy purchases of $68 million and
    $197 million, respectively. At June 30, 2006 and
    December 31, 2005, ComEd had accrued payments to Generation
    for energy purchases of $247 million and $242 million,
    respectively. At June 30, 2007 and December 31, 2006,
    ComEd had accrued payments to other energy suppliers of
    $68 million and $10 million, respectively. At
    June 30, 2006 and December 31, 2005, ComEd had accrued
    payments to other energy suppliers of $3 million and
    $12 million, respectively.
    During the six months ended June 30, 2007, ComEd had net
    under-recovered energy costs of $104 million. See
    Note 5 of the Combined Notes to the Consolidated Financial
    Statements for more information.
    During the six months ended June 30, 2007, ComEds
    revenue exceeded its cash collections from customers by
    $38 million. During the six months ended June 30,
    2006, ComEds cash collections exceeded its revenue to
    customers by $24 million.
    As part of its Rate Relief programs, ComEd has deposited
    $39 million into an escrow account classified as restricted
    cash. As ComEd issues credits to customers and funds various
    customer programs, ComEd will request reimbursements from the
    escrow account. See Note 5 of the Combined Notes to the
    Consolidated Financial Statements for more information on the
    Rate Relief Programs. 140




---



##### 



Cash
    Flows from Investing Activities
    Six MonthsEndedJune 30,2007


2006Exelon

$
(1,367
)

$
(1,360
)Generation


(584
)


(666
)ComEd


(549
)


(461
)PECO


(160
)


(157
)     Six MonthsEnded


ProjectedJune 30, 2007


2007Generation

$
550


$
1,353ComEd


559



1,055PECO


161



355Other(a)


14



38Total Exelon capital expenditures

$
1,284


$
2,801     (a)
    
    Other includes corporate operations
    and shared service entities, including BSC.    Generation.
  ComEd and PECO.
    Exelon
  
    Exelon contributed $49 million and $53 million to its
    investments in synthetic fuel-producing facilities during the
    six months ended June 30, 2007 and 2006, respectively.  Generation
  
    As a result of its prior contributions to the Exelon
    intercompany money pool, $13 million was returned to
    Generation during the six months ended June 30, 2007. 141




---



##### 




    On February 9, 2007, Tamuin International Inc., a wholly
    owned subsidiary of Generation, sold its 49.5% ownership
    interests in TEG and TEP to a subsidiary of AES Corporation
    for $95 million in cash plus certain purchase price
    adjustments.
    Generation and Peoples Calumet, LLC (Peoples Calumet), a
    subsidiary of Peoples Energy Corporation, were joint owners of
    SCEP, a 350-megawatt natural gas-fired, peaking electric power
    plant located in Chicago, Illinois, which began operation in
    2002. In 2002, Generation and Peoples Calumet owned 70% and 30%,
    respectively, of SCEP. Generation reflected the third-party
    interest in this majority-owned investment as a long-term
    liability in its consolidated financial statements. Pursuant to
    the joint owners agreement, Generation was obligated to purchase
    Peoples Calumets 30% interest ratably over a
    20-year
    period. On March 31, 2006, Generation entered into an
    agreement to accelerate the acquisition of Peoples
    Calumets interest in SCEP. This transaction closed on
    May 31, 2006. Under the agreement, Generation paid Peoples
    Calumet approximately $47 million for its remaining
    interest in SCEP. Generation financed this transaction using
    short-term debt and available cash.  PECO
  
    As a result of its prior contributions to the Exelon
    intercompany money pool, $8 million was returned to PECO
    during the six months ended June 30, 2006.  Cash
    Flows from Financing Activities
    Six Months EndedJune 30,2007


2006Exelon

$
(348
)

$
(686
)Generation


(625
)


(411
)ComEd


375



(95
)PECO


(306
)


(405
)   Debt.
         142




---



##### 



Dividends.
  Six Months EndedJune 30,2007


2006Exelon

$
592


$
535Generation


665



322PECO


278



253   Form 10-K
    Intercompany Money Pool.
  Short-Term Borrowings.
  Retirement of Long-Term Debt to Financing
    Affiliates.
  Six Months EndedJune 30,2007


2006Exelon

$
534


$
422ComEd


180



174PECO


354



248  143




---



##### 



Contributions from
    Parent/Member.
  Six MonthsEndedJune 30,2007


2006Generation

$



$
5ComEd






23PECO


165



83   Other.
  
    Exelon purchased treasury shares totaling $37 million and
    $53 million during the six months ended June 30, 2007
    and 2006, respectively.
    Exelon received proceeds from employee stock plans of
    $145 million and $107 million during the six months
    ended June 30, 2007 and 2006, respectively.
    There were $55 million and $29 million of excess tax
    benefits included as a cash inflow in other financing activities
    during the six months ended June 30, 2007 and 2006,
    respectively.  Credit
    Matters
  Credit Facilities.
    Aggregate Bank


Available


OutstandingBorrower

Commitment(a)


Capacity(b)


Commercial PaperExelon

$
1,000


$
993


$
17Generation


5,000



4,879



39ComEd


1,000



455



PECO


600



598



122     (a)
    
    Represents the total bank
    commitments to the borrower under credit agreements to which the
    borrower is a party.(b)
    
    Available capacity represents the
    unused bank commitments under the borrowers credit
    agreements net of outstanding letters of credit and any required
    reserves. The amount of commercial paper outstanding does not
    reduce the available capacity under the credit agreements.       144




---



##### 



Exelon


Generation


ComEd


PECOCredit agreement threshold


2.50 to 1



3.00 to 1



2.25 to 1



2.00 to 1       Intercompany Money Pool.
  June 30,2007Maximum


Maximum


ContributedContributed


Borrowed


(Borrowed)Generation

$
314


$
87


$
PECO


60



207



BSC


87



165



(4
)Exelon


56



N/A



4   Security Ratings.
          ComEd Security Ratings

Fitch


Moodys


S&PSenior secured debt


BBB



Baa2



BBB-Senior unsecured debt


BB+



Ba1



B+Commercial paper


B



Not prime



B    145




---



##### 



Form 10-K.
        Shelf
    Registrations
    Investments
    in Synthetic Fuel-Producing Facilities
      Estimated 2007Beginning of Phase-Out Range(a)

$
62End of Phase-Out Range(a)


782007 Annual Average NYMEX


66     (a)
    
    The estimated 2007 phase-out range
    as of June 30, 2007 is based upon the actual 2006 phase-out
    range. The actual 2006 phase-out range was determined using the
    inflation adjustment factor published by the IRS in April 2007.
    The actual 2006 phase-out range was increased by 2%
    (Exelons estimate of inflation) to arrive at the estimated
    2007 phase-out range.   146




---



##### 



Contractual
    Obligations and Off-Balance Sheet Arrangements
  Form 10-K
  Exelon
  
    Letters of credit increased $42 million and guarantees
    increased by $209 million primarily as a result of leasing
    activities, energy trading and performance guarantees.
    Exelon adopted FIN 48 as of January 1, 2007. As of the
    date of adoption, Exelons FIN 48 liability was
    $501 million and FIN 48 net interest payable was
    $130 million. As of June 30, 2007, Exelons
    FIN 48 liability was $487 million and FIN 48 net
    interest payable was $141 million. The FIN 48 interest
    payable was calculated based on Exelons
    net FIN 48 position at January 1, 2007 and
    June 30, 2007. As of June 30, 2007, Exelon was unable
    to reasonably estimate the timing of FIN 48 liability and
    interest payments in individual years beyond 12 months due
    to uncertainties in the timing of the effective settlement of
    tax positions.  Generation
  
    Letters of credit increased by $41 million and guarantees
    increased by $176 million primarily as a result of
    Generations energy trading activities and the performance
    guaranty agreement entered into in connection with the sale of
    TEG and TEP.
    Generations total commitments for future sales of energy
    to unaffiliated third-party utilities and others decreased by
    approximately $760 million during the six months ended
    June 30, 2007, reflecting increases of approximately
    $819 million, $495 million and $124 million in
    2008, 2009 and 2010 sales commitments, respectively, offset by
    the fulfillment of approximately $2,198 million of 2007
    commitments during the six months ended June 30, 2007. The
    increases were primarily due to increased forward sales of
    energy to counterparties other than ComEd as a result of the
    expiration of the PPA with ComEd on December 31, 2006 (see
    Note 5 of the Combined Notes to Consolidated Financial
    Statements for further information), as well as increased
    overall hedging activity in the normal course of business.
    Generations long-term commitments for nuclear fuel as of
    June 30, 2007 increased by $17 million,
    $72 million, $93 million, $102 million, and
    $293 million for 2008, 2009, 2010, 2011, 2012 and beyond,
    respectively, as compared to December 31, 2006.
    Generations long-term commitments for coal as of
    June 30, 2007 increased by $91 million,
    $48 million and $2 million for 2008, 2009 and 2010,
    respectively, as compared to December 31, 2006. Increases
    in nuclear fuel and coal commitments are due to contracts
    entered into in the normal course of business.
    Generation adopted FIN 48 as of January 1, 2007. As of
    the date of adoption, Generations FIN 48 liability
    was $38 million and FIN 48 net interest receivable was
    $1 million. As of June 30, 2007, Generations
    FIN 48 liability was $41 million and FIN 48 net
    interest receivable was $1 million. The FIN 48
    interest receivable was calculated based on Generations
    net FIN 48 position at January 1, 2007 and
    June 30, 2007. As of June 30, 2007, Generation was
    unable to reasonably estimate the timing of FIN 48
    liability payments in individual years beyond 12 months due
    to uncertainties in the timing of the effective settlement of
    tax positions.  ComEd
  
    ComEd issued $300 million First Mortgage 5.90% Bonds due
    March 15, 2036. 147




---



##### 




    ComEd adopted FIN 48 as of January 1, 2007. As of the
    date of adoption, ComEds FIN 48 liability was
    $427 million and FIN 48 net interest payable was
    $167 million. As of June 30, 2007, ComEds
    FIN 48 liability was $415 million and FIN 48 net
    interest payable was $184 million. The FIN 48 interest
    payable was calculated based on ComEds
    net FIN 48 position at January 1, 2007 and
    June 30, 2007. As of June 30, 2007, ComEd was unable
    to reasonably estimate the timing of FIN 48 liability and
    interest payments in individual years beyond 12 months due
    to uncertainties in the timing of the effective settlement of
    tax positions.  PECO
  
    PECO issued $175 million First and Refunding Mortgage
    Bonds, 5.70% Series due March 15, 2037.
    PECOs total fuel purchase obligations increased by
    approximately $134 million during the six months ended
    June 30, 2007, reflecting an increase of $18 million,
    $63 million, $34 million and $19 million in 2007,
    2008, 2009 and 2010, respectively, primarily related to the
    purchase of natural gas and related transportation services.
    PECO adopted FIN 48 as of January 1, 2007. As of the
    date of adoption, PECOs FIN 48 liability was
    $11 million and FIN 48 net interest receivable was
    $21 million. As of June 30, 2007, PECOs
    FIN 48 liability was $2 million and FIN 48 net
    interest receivable was $27 million. The FIN 48
    interest receivable was calculated based on PECOs
    net FIN 48 position at January 1, 2007 and
    June 30, 2007. As of June 30, 2007, PECO was unable to
    reasonably estimate the timing of FIN 48 liability payments
    in individual years beyond 12 months due to uncertainties
    in the timing of the effective settlement of tax positions.   148




---



##### 



EXELON
    GENERATION COMPANY  General
    Executive
    Overview
  Form 10-Q.
  Results
    of Operations
  Form 10-Q.
  Liquidity
    and Capital Resources
      Cash
    Flows from Operating Activities
  Form 10-Q.
  Cash
    Flows from Investing Activities
  Form 10-Q.
 149




---



##### 



Cash
    Flows from Financing Activities
  Form 10-Q.
  Credit
    Matters
  Form 10-Q.
  Contractual
    Obligations and Off-Balance Sheet Arrangements
  Form 10-Q.
 150




---



##### 



COMMONWEALTH
    EDISON COMPANY  General
    Executive
    Overview
  Form 10-Q.
  Results
    of Operations
  Form 10-Q.
  Liquidity
    and Capital Resources
        Cash
    Flows from Operating Activities
  Form 10-Q.
 151




---



##### 



Cash
    Flows from Investing Activities
  Form 10-Q.
  Cash
    Flows from Financing Activities
  Form 10-Q.
  Credit
    Matters
  Form 10-Q.
  Contractual
    Obligations and Off-Balance Sheet Arrangements
  Form 10-Q.
 152




---



##### 



PECO
    ENERGY COMPANY  General
    Executive
    Overview
  Form 10-Q.
  Results
    of Operations
  Form 10-Q.
  Liquidity
    and Capital Resources
      Cash
    Flows from Operating Activities
  Form 10-Q.
  Cash
    Flows from Investing Activities
  Form 10-Q.
 153




---



##### 



Cash
    Flows from Financing Activities
  Form 10-Q.
  Credit
    Matters
  Form 10-Q.
  Contractual
    Obligations and Off-Balance Sheet Arrangements
  Form 10-Q.
 154




---



##### 



Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk    Commodity
    Price Risk (Exelon, Generation and ComEd)
    Exelon
    and Generation
    Generation
  Form 10-K.
  Normal Operations and Hedging
    Activities.
 155




---



##### 



Proprietary Trading
    Activities. Value-at-Risk
  Trading and Economic Hedge Marketing
    Activities.
    TotalTotal mark-to-market energy
    contract net assets at January 1, 2007

$
499Total change in fair value during
    2007 of contracts recorded in earnings


(49
)Reclassification to realized at
    settlement of contracts recorded in earnings


(55
)Reclassification to realized at
    settlement from accumulated OCI


(31
)Effective portion of changes in
    fair value  recorded in OCI


(331
)Total mark-to-market energy
    contract net assets at June 30, 2007

$
33  156




---



##### 



June 30,


December 31,2007


2006Current assets

$
749


$
1,408Noncurrent assets


210



171Total mark-to-market energy
    contract assets


959



1,579Current liabilities


(628
)


(1,003
)Noncurrent liabilities


(298
)


(77
)Total mark-to-market energy
    contract liabilities


(926
)


(1,080
)Total mark-to-market energy
    contract net assets

$
33


$
499       Maturities Within2012 and


Total Fair2007


2008


2009


2010


2011


Beyond


ValueNormal Operations, qualifying
    cash-flow hedge contracts(a):Prices provided by external sources

$
128


$
(1
)

$
(66
)

$
(8
)

$



$



$
53Normal Operations, other
    derivative contracts(b):Actively quoted prices

$
(81
)

$
2


$
(19
)

$



$



$



$
(98
)Prices provided by external sources


92



(9
)


4















87Prices based on model or other
    valuation methods


7



(6
)


(10
)














(9
)Total

$
18


$
(13
)

$
(25
)

$



$



$



$
(20
)     (a)
    
    Mark-to-market gains and losses on
    economic hedge contracts that qualify as cash-flow hedges are
    recorded in OCI.(b)
    
    Mark-to-market gains and losses on
    other economic hedge and trading derivative contracts that do
    not qualify as cash-flow hedges are recorded in earnings. 157




---



##### 



Total Cash-Flow Hedge OCI Activity,Net of Income TaxPower Team Normal


Interest-Rate


TotalOperations and


and Other


Cash-FlowHedging Activities


Hedges


HedgesAccumulated OCI derivative gain
    (loss) at January 1, 2007

$
250


$
(3
)

$
247Changes in fair value


(200
)


3



(197
)Reclassifications from accumulated
    OCI to net income


(17
)






(17
)Accumulated OCI derivative gain at
    June 30, 2007

$
33


$



$
33   ComEd
      Credit
    Risk (Exelon, Generation, ComEd and PECO)
  Generation
     158




---



##### 



Total








Number of


Net Exposure ofExposure








Counterparties


CounterpartiesBefore Credit


Credit


Net


Greater than 10%


Greater than 10%Rating as of June 30, 2007(a)

Collateral


Collateral


Exposure


of Net Exposure


of Net ExposureInvestment grade

$
875


$
19


$
856



2


$
194Non-investment grade


7







7







No external ratingsInternally rated 
    investment grade


5



1



4







Internally rated 
    non-investment grade


5



2



3







Total

$
892


$
22


$
870



2


$
194     (a)
    
    This table does not include
    accounts receivable exposure and credit risk exposure from
    retail energy sales or uranium procurement contracts.  Maturity of Credit Risk ExposureExposure


Total ExposureLess than





Greater than


Before CreditRating as of June 30, 2007(a)

2 Years


2-5 Years


5 Years


CollateralInvestment grade

$
843


$
32


$



$
875Non-investment grade


6



1







7No external ratingsInternally rated 
    investment grade


5











5Internally rated 
    non-investment grade


4



1







5Total

$
858


$
34


$



$
892     (a)
    
    This table does not include
    accounts receivable exposure and credit risk exposure from
    retail energy sales or uranium procurement contracts.  Collateral.
 159




---



##### 



Form 10-K
    RTOs and ISOs.
  Fuel Procurement.
  ComEd
    and PECO
     160




---



##### 



Exelon
    Interest-Rate
    Risk (Exelon, Generation, ComEd and PECO)
  Variable Rate Debt.
  Equity
    Price Risk (Exelon and Generation)
    Form 10-K
 161




---



##### 



Item 4.
    Controls
    and Procedures     162




---



##### 



Item 4T.
    Controls
    and Procedures     163




---



##### 



PART II 
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings  Form 10-K
  Item 1A.
    Risk
    Factors    Generations
    financial performance may be negatively affected by liabilities
    arising from its ownership and operation of nuclear
    facilities.
  Decommissioning.
   164




---



##### 



Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds  (c)
    Exelon    Maximum Number(or ApproximateTotal Number of


Dollar Value) ofShares Purchased


Shares that MayTotal Number





As Part of Publicly


Yet Be Purchasedof Shares


Average Price


Announced Plans


Under the PlansPeriod

Purchased(a)


Paid per Share


or Programs(b)


or ProgramsApril 1  April 30,
    2007


19,893


$
67.63







(b
)May 1  May 31, 2007


5,399



72.51







(b
)June 1  June 30,
    2007


11,176



76.01







(b
)Total


36,468


$
70.92







(b
)     (a)
    
    Shares other than those purchased
    as part of a publicly announced plan primarily represent
    restricted and performance shares surrendered by employees to
    satisfy tax obligations arising upon the vesting of restricted
    shares.(b)
    
    In April 2004, Exelons Board
    of Directors approved a discretionary share repurchase program
    that allows Exelon to repurchase shares of its common stock on a
    periodic basis in the open market. The share repurchase program
    is intended to mitigate, in part, the dilutive effect of shares
    issued under Exelons employee stock option plan and
    Exelons Employee Stock Purchase Plan. The aggregate shares
    of common stock repurchased pursuant to the program cannot
    exceed the economic benefit received after January 1, 2004
    due to stock option exercises and share purchases pursuant to
    Exelons Employee Stock Purchase Plan. The economic benefit
    consists of direct cash proceeds from purchases of stock and tax
    benefits associated with exercises of stock options. The share
    repurchase program has no specified limit and no specified
    termination date.  Item 4.
    Submission
    of Matters to a Vote of Security Holders  Exelon
      Votes For


Votes Against


Votes AbstainingClass I
    DirectorsNicholas DeBenedictis


458,731,310



83,641,677



7,044,481Sue L. Gin


536,508,585



6,315,167



6,593,716William C. Richardson


536,985,739



5,825,921



6,605,808Thomas J. Ridge


421,335,195



119,271,938



8,810,335Don Thompson


536,700,363



5,899,904



6,817,201Class III
    DirectorStephen D. Steinour


536,762,711



5,781,618



6,873,139      165




---



##### 



Item 5.
    Other
    Information  PECO
   166




---



##### 



Item 6.
    Exhibits  ExhibitNo.

Description10-1


Amended and Restated Articles of
    Incorporation of Exelon Corporation10-2


Exelon Corporation Amended and
    Restated Bylaws10-3


Amendment Number One to the Exelon
    Corporation Stock Deferral Plan (As Amended and Restated
    Effective January 1, 2005)   Rule 13a-14(a) 15d-14(a) Form 10-Q
  31-1




Filed by John W. Rowe for Exelon
    Corporation31-2




Filed by John F. Young for Exelon
    Corporation31-3




Filed by John L. Skolds for Exelon
    Generation Company, LLC31-4




Filed by John F. Young for Exelon
    Generation Company, LLC31-5




Filed by Frank M. Clark for
    Commonwealth Edison Company31-6




Filed by Robert K. McDonald for
    Commonwealth Edison Company31-7




Filed by John L. Skolds for PECO
    Energy Company31-8




Filed by John F. Young for PECO
    Energy Company   Form 10-Q
  32-1




Filed by John W. Rowe for Exelon
    Corporation32-2




Filed by John F. Young for Exelon
    Corporation32-3




Filed by John L. Skolds for Exelon
    Generation Company, LLC32-4




Filed by John F. Young for Exelon
    Generation Company, LLC32-5




Filed by Frank M. Clark for
    Commonwealth Edison Company32-6




Filed by Robert K. McDonald for
    Commonwealth Edison Company32-7




Filed by John L. Skolds for PECO
    Energy Company32-8




Filed by John F. Young for PECO
    Energy Company  167




---



##### 



SIGNATURES   EXELON
    CORPORATION  /s/  John
    W. RoweJohn
    W. Rowe
    Chairman, Chief Executive Officer and President
    (Principal Executive Officer)

/s/  John
    F. YoungJohn
    F. Young
    Executive Vice President, Finance and Markets
    and Chief Financial Officer
    (Principal Financial Officer)/s/  Matthew
    F. HilzingerMatthew
    F. Hilzinger
    Senior Vice President and Corporate Controller (Principal
    Accounting Officer)      EXELON
    GENERATION COMPANY, LLC  /s/  John
    W. RoweJohn
    W. Rowe
    Chairman, Chief Executive Officer and
    President, Exelon

/s/  John
    L.
    SkoldsJohn
    L. Skolds
    President
    (Principal Executive Officer)/s/  John
    F. YoungJohn
    F. Young
    Executive Vice President, Finance and Markets and Chief
    Financial Officer, Exelon, and Chief Financial Officer
    (Principal Financial Officer)

/s/  Jon
    D.
    VeurinkJon
    D. Veurink
    Vice President and Controller
    (Principal Accounting Officer)    168




---



##### 



COMMONWEALTH
    EDISON COMPANY  /s/  Frank
    M. ClarkFrank
    M. Clark
    Chairman and Chief Executive Officer 
    (Principal Executive Officer)

/s/  J.
    Barry
    MitchellJ.
    Barry Mitchell
    President/s/  Robert
    K. McdonaldRobert
    K. McDonald
    Senior Vice President, Chief Financial Officer, Treasurer and
    Chief Risk Officer 
    (Principal Financial Officer)

/s/  Matthew
    R.
    GalvanoniMatthew
    R. Galvanoni
    Principal Accounting Officer      PECO
    ENERGY COMPANY  /s/  John
    L.
    SkoldsJohn
    L. Skolds
    President, Exelon Energy Delivery
    (Principal Executive Officer)

/s/  Denis
    P.
    OBrienDenis
    P. OBrien
    President/s/  John
    F. YoungJohn
    F. Young
    Executive Vice President, Finance and Markets and Chief
    Financial Officer, Exelon, and
    Chief Financial Officer
    (Principal Financial Officer)

/s/  Matthew
    R. GalvanoniMatthew
    R. Galvanoni
    Vice President and Controller
    (Principal Accounting Officer)    169