UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q/A

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                  For the Quarterly Period Ended June 30, 2002
                                       OR
          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

<TABLE>
<CAPTION>
       Commission File           Name of Registrant; State of Incorporation; Address of        IRS Employer
       Number                    Principal Executive Offices; and Telephone Number             Identification Number
       ---------------------     ----------------------------------------------------------    ------------------------
<S>                              <C>                                                           <C>
       1-16169                   EXELON CORPORATION                                            23-2990190
                                 (a Pennsylvania corporation)
                                 10 South Dearborn Street - 37th Floor
                                 P.O. Box 805379
                                 Chicago, Illinois 60680-5379
                                 (312) 394-7398

       333-85496                 EXELON GENERATION COMPANY, LLC                                23-3064219
                                 (a Pennsylvania limited liability company)
                                 300 Exelon Way
                                 Kennett Square, Pennsylvania 19348
                                 (610) 765-8200
</TABLE>

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [_].

         The number of shares outstanding of each registrant's common stock as
of August 1, 2002 was as follows:

        Exelon Corporation Common Stock, without par value       322,874,719
        Exelon Generation Company, LLC                        not applicable

<PAGE>


                                                           TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                           Page No.
<S>                                                                                                           <C>
  Explanatory Note                                                                                                3
  Filing Format                                                                                                   3
  Forward-Looking Statements                                                                                      3

  PART I.   FINANCIAL INFORMATION                                                                                 4
  ITEM 1.   FINANCIAL STATEMENTS                                                                                  4
                  Exelon Corporation
                           Consolidated Statements of Income and Comprehensive Income                             5
                           Consolidated Statements of Cash Flows                                                  6
                           Consolidated Balance Sheets                                                            7
                  Exelon Generation Company, LLC
                           Consolidated Statements of Income and Comprehensive Income                             9
                           Consolidated Statements of Cash Flows                                                 10
                           Consolidated Balance Sheets                                                           11
                  Combined Notes to Consolidated Financial Statements                                            13

  PART II.  OTHER INFORMATION                                                                                    38

  ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K                                                                     38

SIGNATURES                                                                                                       43

CERTIFICATIONS                                                                                                   45

</TABLE>

                                                         2
<PAGE>

Explanatory Note

         This amendment to Exelon  Corporation's  (Exelon) and Exelon Generation
Company,  LLC's (Generation) quarterly report on Form 10-Q for the quarter ended
June 30,  2002  reflects  a  restatement  as a result of a $101  million  double
posting of deferred income taxes recorded  associated with unrealized  losses on
Generation's nuclear decommissioning trust fund securities. Additionally, Exelon
and Generation determined that Other Comprehensive Income should be restated for
the amount of $27  million to reflect  Generation's  ownership  interest  in the
Other Comprehensive  Income of its equity investments in AmerGen Energy Company,
LLC and Sithe Energies Inc. Earnings per share, net income and cash flow for the
periods  are not  affected by the  restatements.  However,  Other  Comprehensive
Income,  which is a component of Shareholders'  Equity, is reduced by a total of
$128 million as of December 31, 2001,  and by $129 million in the second quarter
of 2002 as a result of the  revision.  See Note 2. No  attempt  has been made in
this Form  10-Q/A to modify or update  other  disclosures  as  presented  in the
original   Form  10-Q   except  as  required  to  reflect  the  effects  of  the
restatements.

Filing Format

         This   combined   Form  10-Q  is  being  filed   separately  by  Exelon
Corporation,  and Exelon  Generation  Company,  LLC  (Registrants).  Information
contained  herein  relating to any individual  registrant has been filed by such
registrant  on its own behalf.  No  registrant  makes any  representation  as to
information relating to any other registrant.

Forward-Looking Statements

         Except for the historical  information contained herein, certain of the
matters discussed in this Report are forward-looking statements that are subject
to risks and  uncertainties.  The  factors  that could cause  actual  results to
differ materially include those discussed herein as well as those listed in Note
9  of  Notes  to   Consolidated   Financial   Statements,   those  discussed  in
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations--Outlook" in Exelon Corporation's 2001 Annual Report, those discussed
in "Risk  Factors"  and  "Management's  Discussion  and  Analysis  of  Financial
Condition  and  Results  of  Operations"  in Exelon  Generation  Company,  LLC's
Registration  Statement  on Form S-4,  Reg.  No.  333-85496  and  other  factors
discussed  in  filings  with  the  Securities  and  Exchange  Commission  by the
Registrants.  Readers  are  cautioned  not to  place  undue  reliance  on  these
forward-looking statements,  which apply only as of the date of this Report. The
Registrants  undertake  no  obligation  to  publicly  release  any  revision  to
forward-looking  statements to reflect events or circumstances after the date of
this Report.




                                       3
<PAGE>

                          PART I. FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS

















                                       4
<PAGE>

EXELON CORPORATION

<TABLE>
<CAPTION>
                                            EXELON CORPORATION AND SUBSIDIARY COMPANIES
                                     CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                                                            (Unaudited)

                                                                      Three Months Ended June 30,       Six Months Ended June 30,
(in millions, except per share data)                                     2002             2001              2002          2001
----------------------------------------------------------------------------------------------------------------------------------
                                                                 Restated, see Note 2                Restated, see Note 2
<S>                                                                    <C>               <C>               <C>             <C>
OPERATING REVENUES                                                     $ 3,519           $ 3,616           $ 6,876         $ 7,439

OPERATING EXPENSES
     Purchased Power                                                       699               754             1,311           1,385
     Purchased Power from Unconsolidated Affiliate                          60                12               116              22
     Fuel                                                                  364               409               860           1,098
     Operating and Maintenance                                           1,070             1,134             2,137           2,192
     Depreciation and Amortization                                         332               362               667             740
     Taxes Other Than Income                                               181               153               367             321
----------------------------------------------------------------------------------------------------------------------------------
         Total Operating Expense                                         2,706             2,824             5,458           5,758
----------------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME                                                           813               792             1,418           1,681
----------------------------------------------------------------------------------------------------------------------------------
OTHER INCOME AND DEDUCTIONS
     Interest Expense                                                     (241)             (289)             (490)           (581)
     Distributions on Preferred Securities of Subsidiaries                 (11)              (12)              (23)            (23)
     Equity in Earnings of Unconsolidated Affiliates, net                    9                 7                22              25
     Other, net                                                            194                44               222              99
----------------------------------------------------------------------------------------------------------------------------------
         Total Other Income and Deductions                                 (49)             (250)             (269)           (480)
----------------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES AND CUMULATIVE
   EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES                              764               542             1,149           1,201
INCOME TAXES                                                               279               227               427             499
----------------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE CUMULATIVE EFFECT OF CHANGES IN
   ACCOUNTING PRINCIPLES                                                   485               315               722             702
CUMULATIVE EFFECT OF CHANGES IN ACCOUNTING
   PRINCIPLES (net of income taxes of $90 and $8 for the six
   months ended June 30, 2002 and 2001, respectively)                     --                --                (230)             12
----------------------------------------------------------------------------------------------------------------------------------
NET INCOME                                                                 485               315               492             714
----------------------------------------------------------------------------------------------------------------------------------

OTHER COMPREHENSIVE INCOME (LOSS) (net of income taxes)
   (Restated, See Note 2.)
       SFAS 133 Transition Adjustment                                     --                --                --                44
       Cash Flow Hedge Fair Value Adjustment                               (21)              (28)              (78)            (43)
       Unrealized Gain (Loss) on Marketable Securities, net                (72)               31               (87)            (72)
       Equity in Other Comprehensive Income of
                Unconsolidated Affiliates                                   (7)                1                (1)              2
----------------------------------------------------------------------------------------------------------------------------------
   Total Other Comprehensive Income (Loss)                                (100)                4              (166)            (69)
----------------------------------------------------------------------------------------------------------------------------------

TOTAL COMPREHENSIVE INCOME                                             $   385           $   319           $   326         $   645
==================================================================================================================================

AVERAGE SHARES OF COMMON STOCK OUTSTANDING - Basic                         322               321               322             320
==================================================================================================================================
AVERAGE SHARES OF COMMON STOCK OUTSTANDING - Diluted                       324               324               324             323

EARNINGS PER AVERAGE COMMON SHARE:
     BASIC:
     Income Before Cumulative Effect of Changes in Accounting
        Principles                                                     $  1.50           $  0.98           $  2.24         $  2.19
     Cumulative Effect of Changes in Accounting Principles                --                --               (0.71)           0.04
----------------------------------------------------------------------------------------------------------------------------------
     Net Income                                                        $  1.50           $  0.98           $  1.53         $  2.23
==================================================================================================================================

     DILUTED:
     Income Before Cumulative Effect of Changes in
        Accounting Principles                                          $  1.50           $  0.97           $  2.23         $  2.17
     Cumulative Effect of Changes in Accounting Principles                --                --               (0.71)           0.04
----------------------------------------------------------------------------------------------------------------------------------
     Net Income                                                        $  1.50           $  0.97           $  1.52         $  2.21
==================================================================================================================================

DIVIDENDS PER COMMON SHARE                                             $  0.44           $  0.42           $  0.88         $  0.98
==================================================================================================================================




                                           See Notes to Consolidated Financial Statements


                                                                 5
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                          EXELON CORPORATION AND SUBSIDIARY COMPANIES
                                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                          (Unaudited)


                                                                                          Six Months Ended June 30,
(in millions)                                                                                2002              2001
-----------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                                     <C>                 <C>
     Net Income                                                                         $     492           $   714
     Adjustments to Reconcile Net Income to Net Cash Flows
      Provided by Operating Activities:
       Depreciation and Amortization, including nuclear fuel                                  848               939
       Cumulative Effect of a Change in Accounting Principle (net of income taxes)            230               (12)
       Net Gain on Sale of Investments (net of income taxes)                                 (199)               --
       Provision for Uncollectible Accounts                                                    67                60
       Deferred Income Taxes                                                                  (10)                7
       Deferred Energy Costs                                                                   49                 7
       Equity in Earnings of Unconsolidated Affiliates, net                                   (22)              (25)
       Net Realized Losses on Nuclear Decommissioning Trust Funds                              21                24
       Other Operating Activities                                                             115               (78)
         Changes in Working Capital:
          Accounts Receivable                                                                (259)               68
          Inventories                                                                         (42)              (12)
          Accounts Payable, Accrued Expenses and Other Current Liabilities                    342               280
          Changes in Receivables and Payables to Unconsolidated Affiliates, net                12                --
          Other Current Assets                                                                 (6)              (19)
-----------------------------------------------------------------------------------------------------------------------------
Net Cash Flows provided by Operating Activities                                             1,638             1,953
-----------------------------------------------------------------------------------------------------------------------------


CASH FLOWS FROM INVESTING ACTIVITIES
     Capital Expenditures                                                                  (1,028)             (937)
     Acquisition of Generating Plants                                                        (443)               --
     Enterprises Acquisitions, net of cash acquired                                            --               (39)
     Proceeds from the Sale of Investment                                                     285                --
     Proceeds from Nuclear Decommissioning Trust Funds                                        889               621
     Investment in Nuclear Decommissioning Trust Funds                                       (943)             (655)
     Note Receivable from Unconsolidated Affiliate                                            (75)               --
     Other Investing Activities                                                                47                12
-----------------------------------------------------------------------------------------------------------------------------
Net Cash Flows used in Investing Activities                                                (1,268)             (998)


CASH FLOWS FROM FINANCING ACTIVITIES
     Issuance of Long-Term Debt                                                               701             2,058
     Retirement of Long-Term Debt                                                            (697)           (1,153)
     Change in Short-Term Debt                                                                110              (949)
     Dividends on Common Stock                                                               (280)             (312)
     Change in Restricted Cash                                                                (26)              (16)
     Proceeds from Employee Stock Plans                                                        60                51
     Other Financing Activities                                                               (10)               --
-----------------------------------------------------------------------------------------------------------------------------
Net Cash Flows used in Financing Activities                                                  (142)             (321)


INCREASE IN CASH AND CASH EQUIVALENTS                                                         228               634


CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                              485               526
-----------------------------------------------------------------------------------------------------------------------------


CASH AND CASH EQUIVALENTS AT END OF PERIOD                                              $     713           $ 1,160
=============================================================================================================================

SUPPLEMENTAL CASH FLOW INFORMATION
Noncash Investing and Financing Activities:
Regulatory Asset Fair Value Adjustment                                                         --           $   347


                                        See Notes to Consolidated Financial Statements
</TABLE>


                                                               6
<PAGE>

<TABLE>
<CAPTION>
                                          EXELON CORPORATION AND SUBSIDIARY COMPANIES
                                                  CONSOLIDATED BALANCE SHEETS
                                                          (Unaudited)


                                                                                         June 30,      December 31,
(in millions)                                                                                2002              2001
----------------------------------------------------------------------------------------------------------------------------
                                                                                       (Restated)        (Restated)
                                                                                    (See Note 2.)       (See Note 2.)
ASSETS

CURRENT ASSETS
<S>                                                                                     <C>               <C>
     Cash and Cash Equivalents                                                          $     713         $     485
     Restricted Cash                                                                          398               372
     Accounts Receivable, net
         Customer                                                                           1,978             1,687
         Other                                                                                196               428
     Receivable from Unconsolidated Affiliate                                                 107                44
     Inventories, at average cost
         Fossil Fuel                                                                          206               222
         Materials and Supplies                                                               308               249
     Deferred Income Taxes                                                                     76                23
     Other                                                                                    354               272
----------------------------------------------------------------------------------------------------------------------------
         Total Current Assets                                                               4,336             3,782
----------------------------------------------------------------------------------------------------------------------------

PROPERTY, PLANT AND EQUIPMENT, NET                                                         14,654            13,781

DEFERRED DEBITS AND OTHER ASSETS
     Regulatory Assets                                                                      6,237             6,423
     Nuclear Decommissioning Trust Funds                                                    3,060             3,165
     Investments                                                                            1,613             1,623
     Goodwill, net                                                                          4,971             5,335
     Other                                                                                    705               708
----------------------------------------------------------------------------------------------------------------------------
         Total Deferred Debits and Other Assets                                            16,586            17,254
----------------------------------------------------------------------------------------------------------------------------

TOTAL ASSETS                                                                            $  35,576         $  34,817
============================================================================================================================


                                        See Notes to Consolidated Financial Statements
</TABLE>



                                                              7
<PAGE>

<TABLE>
<CAPTION>
                                          EXELON CORPORATION AND SUBSIDIARY COMPANIES
                                                  CONSOLIDATED BALANCE SHEETS
                                                          (Unaudited)


                                                                                         June 30,      December 31,
(in millions)                                                                                2002              2001
-------------------------------------------------------------------------------------------------------------------------
                                                                                       (Restated)        (Restated)
                                                                                    (See Note 2.)       (See Note 2.)
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
<S>                                                                                     <C>               <C>
     Notes Payable                                                                      $     470         $     360
     Long-Term Debt Due within One Year                                                     1,772             1,406
     Accounts Payable                                                                       1,164               964
     Accrued Expenses                                                                       1,339             1,182
     Other                                                                                    527               505
-------------------------------------------------------------------------------------------------------------------------
         Total Current Liabilities                                                          5,272             4,417
-------------------------------------------------------------------------------------------------------------------------

LONG-TERM DEBT                                                                             12,591            12,879

DEFERRED CREDITS AND OTHER LIABILITIES
     Deferred Income Taxes                                                                  4,288             4,388
     Unamortized Investment Tax Credits                                                       308               316
     Nuclear Decommissioning Liability for Retired Plants                                   1,379             1,353
     Pension Obligation                                                                       313               334
     Non-Pension Postretirement Benefits Obligation                                           878               847
     Spent Nuclear Fuel Obligation                                                            851               843
     Other                                                                                    866               725
-------------------------------------------------------------------------------------------------------------------------
         Total Deferred Credits and Other Liabilities                                       8,883             8,806
-------------------------------------------------------------------------------------------------------------------------

PREFERRED SECURITIES OF SUBSIDIARIES                                                          613               613

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
     Common Stock                                                                           6,990             6,930
     Deferred Compensation                                                                     (1)               (2)
     Retained Earnings                                                                      1,421             1,200
     Accumulated Other Comprehensive Income (Loss)                                           (193)              (26)
-------------------------------------------------------------------------------------------------------------------------
         Total Shareholders' Equity                                                         8,217             8,102
-------------------------------------------------------------------------------------------------------------------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                              $  35,576         $  34,817
=========================================================================================================================


                                        See Notes to Consolidated Financial Statements

</TABLE>

                                                              8
<PAGE>

EXELON GENERATION COMPANY, LLC

<TABLE>
<CAPTION>
                                 EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
                                CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                                                       (Unaudited)

                                                           Three Months Ended June 30,    Six Months Ended June 30,
(in millions)                                                          2002       2001           2002          2001
------------------------------------------------------------------------------------------------------------------------
                                                                    Restated,                  Restated,
                                                                   see Note 2                 see Note 2

OPERATING REVENUES
<S>                                                                  <C>        <C>            <C>          <C>
     Operating Revenues                                              $  606     $  677         $1,175       $ 1,392
     Operating Revenues from Affiliates                                 953        906          1,845         1,819
------------------------------------------------------------------------------------------------------------------------
         Total Operating Revenues                                     1,559      1,583          3,020         3,211
------------------------------------------------------------------------------------------------------------------------

OPERATING EXPENSES
     Purchased Power                                                    634        690          1,186         1,272
     Purchased Power from Affiliates                                     71         31            137            48
     Fuel                                                               224        230            433           449
     Operating and Maintenance                                          405        400            833           798
     Operating and Maintenance Expense from Affiliates                    6          5             11            11
     Depreciation and Amortization                                       65         75            128           167
     Taxes Other Than Income                                             41         39             90            85
------------------------------------------------------------------------------------------------------------------------
         Total Operating Expense                                      1,446      1,470          2,818         2,830
------------------------------------------------------------------------------------------------------------------------

OPERATING INCOME                                                        113        113            202           381
------------------------------------------------------------------------------------------------------------------------

OTHER INCOME AND DEDUCTIONS
     Interest Expense                                                   (10)       (17)           (27)          (35)
     Interest Expense from Affiliates                                    (1)        (9)            (1)          (24)
     Equity in Earnings of Unconsolidated Affiliates                      9         13             32            39
     Other, net                                                          24         14             40            18
------------------------------------------------------------------------------------------------------------------------
         Total Other Income and Deductions                               22          1             44            (2)
------------------------------------------------------------------------------------------------------------------------

INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT
   OF CHANGES IN ACCOUNTING PRINCIPLES                                  135        114            246           379

------------------------------------------------------------------------------------------------------------------------
INCOME TAXES                                                             51         43             96           150

INCOME BEFORE CUMULATIVE EFFECT OF CHANGES IN
   ACCOUNTING PRINCIPLES                                                 84         71            150           229

CUMULATIVE EFFECT OF CHANGES IN ACCOUNTING
------------------------------------------------------------------------------------------------------------------------
   PRINCIPLES                                                            --         --             13            12

NET INCOME                                                               84         71            163           241
------------------------------------------------------------------------------------------------------------------------

OTHER COMPREHENSIVE INCOME (LOSS) (net of income taxes)
   (Restated, See Note 2.)
       Unrealized Gain (Loss) on Marketable Securities                  (74)        31            (83)          (80)
       SFAS 133 Transition Adjustment                                    --         --             --             4
       Cash Flow Hedge Fair Value Adjustment                              6        (35)           (67)          (36)
------------------------------------------------------------------------------------------------------------------------
       Equity in Other Comprehensive Income of Unconsolidated
                 Affiliates                                              (7)         1             (1)            2
         Total Other Comprehensive Income (Loss)                        (75)        (3)          (151)         (110)
------------------------------------------------------------------------------------------------------------------------

TOTAL COMPREHENSIVE INCOME                                           $    9     $   68         $   12       $   131
========================================================================================================================




                                      See Notes to Consolidated Financial Statements
</TABLE>

                                                            9

<PAGE>
<TABLE>
<CAPTION>

                                        EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
                                                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                              (Unaudited)

                                                                                          Six Months Ended June 30,
(in millions)                                                                                2002              2001
---------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                                      <C>               <C>
     Net Income                                                                          $    163          $    241
     Adjustments to Reconcile Net Income to Net Cash Flows
      Provided by Operating Activities:
       Depreciation and Amortization, including nuclear fuel                                  312               366
       Cumulative Effect of a Change in Accounting Principle (net of income taxes)            (13)              (12)
       Provision for Uncollectible Accounts                                                    17                 3
       Deferred Income Taxes                                                                   (4)               (6)
       Equity in (Earnings) Losses of Unconsolidated Affiliates                               (32)              (39)
       Net Realized Losses on Nuclear Decommissioning Trust Funds                              21                24
       Other Operating Activities                                                              70              (116)
        Changes in Working Capital:
           Accounts Receivable                                                               (136)              115
           Changes in Receivables and Payables to Affiliates, net                             (93)             (161)
           Inventories                                                                        (54)             (110)
           Accounts Payable, Accrued Expenses and Other Current Liabilities                   316               156
           Other Current Assets                                                               (48)               24
---------------------------------------------------------------------------------------------------------------------------
Net Cash Flows provided by Operating Activities                                               519               485
---------------------------------------------------------------------------------------------------------------------------


CASH FLOWS FROM INVESTING ACTIVITIES
     Capital Expenditures                                                                    (475)             (301)
     Acquisition of Generating Plants                                                        (443)               --
     Proceeds from Nuclear Decommissioning Trust Funds                                        889               621
     Investment in Nuclear Decommissioning Trust Funds                                       (943)             (655)
     Note Receivable from Affiliate                                                           (75)              236
     Other Investing Activities                                                                (1)               --
---------------------------------------------------------------------------------------------------------------------------
Net Cash Flows used in Investing Activities                                                (1,048)              (99)


CASH FLOWS FROM FINANCING ACTIVITIES
     Change in Intercompany Payable, Affiliate                                                331              (696)
     Issuance of Long-Term Debt                                                                --               752
     Retirement of Long-Term Debt                                                              (2)               (2)
     Distribution to Member                                                                    --              (121)
---------------------------------------------------------------------------------------------------------------------------
Net Cash Flows provided by (used in) Financing Activities                                     329               (67)


INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                             (200)              319
---------------------------------------------------------------------------------------------------------------------------


CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                              224                 4
---------------------------------------------------------------------------------------------------------------------------


CASH AND CASH EQUIVALENTS AT END OF PERIOD                                               $     24          $    323
===========================================================================================================================


                                            See Notes to Consolidated Financial Statements
</TABLE>

                                                                  10

<PAGE>

<TABLE>
<CAPTION>
                                EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
                                              CONSOLIDATED BALANCE SHEETS
                                                      (Unaudited)


                                                                                         June 30,      December 31,
(in millions)                                                                                2002              2001
----------------------------------------------------------------------------------------------------------------------
                                                                                       (Restated)        (Restated)
                                                                                    (See Note 2.)       (See Note 2.)
ASSETS

CURRENT ASSETS
<S>                                                                                     <C>               <C>
     Cash and Cash Equivalents                                                          $      24         $     224
     Accounts Receivable, net
         Customer                                                                             503               316
         Other                                                                                 38               150
     Receivable from Affiliate                                                                523               444
     Inventories, at average cost
         Fossil Fuel                                                                          135               105
         Materials and Supplies                                                               227               202
     Deferred Income Taxes                                                                      7                --
     Other                                                                                    103                65
----------------------------------------------------------------------------------------------------------------------
         Total Current Assets                                                               1,560             1,506
----------------------------------------------------------------------------------------------------------------------

PROPERTY, PLANT AND EQUIPMENT, NET                                                          2,650             2,003

DEFERRED DEBITS AND OTHER ASSETS
     Nuclear Decommissioning Trust Funds                                                    3,060             3,165
     Investments                                                                              868               816
     Notes Receivable from Affiliates                                                         261               291
     Deferred Income Taxes                                                                    353               212
     Other                                                                                    223               223
----------------------------------------------------------------------------------------------------------------------
         Total Deferred Debits and Other Assets                                             4,765             4,707
----------------------------------------------------------------------------------------------------------------------

TOTAL ASSETS                                                                            $   8,975         $   8,216
======================================================================================================================


                                     See Notes to Consolidated Financial Statements

</TABLE>


                                                          11
<PAGE>

<TABLE>
<CAPTION>
                                EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
                                              CONSOLIDATED BALANCE SHEETS
                                                      (Unaudited)



                                                                                         June 30,      December 31,
(in millions)                                                                                2002              2001
----------------------------------------------------------------------------------------------------------------------
                                                                                       (Restated)        (Restated)
                                                                                    (See Note 2.)       (See Note 2.)
LIABILITIES AND MEMBER'S EQUITY

CURRENT LIABILITIES
<S>                                                                                     <C>               <C>
     Long-Term Debt Due within One Year                                                 $       6         $       4
     Accounts Payable                                                                         788               585
     Accounts Payable to Affiliate                                                             16               105
     Notes Payable to Affiliate                                                               331                --
     Accrued Expenses                                                                         416               303
     Deferred Income Taxes                                                                     --                 7
     Other                                                                                    215               171
----------------------------------------------------------------------------------------------------------------------
         Total Current Liabilities                                                          1,772             1,175
----------------------------------------------------------------------------------------------------------------------

LONG-TERM DEBT                                                                              1,065             1,021

DEFERRED CREDITS AND OTHER LIABILITIES
     Unamortized Investment Tax Credits                                                       230               234
     Nuclear Decommissioning Liability for Retired Plants                                   1,379             1,353
     Pension Obligation                                                                       102               118
     Non-Pension Postretirement Benefits Obligation                                           396               384
     Spent Nuclear Fuel Obligation                                                            851               843
     Other                                                                                    361               280
----------------------------------------------------------------------------------------------------------------------
         Total Deferred Credits and Other Liabilities                                       3,319             3,212
----------------------------------------------------------------------------------------------------------------------

COMMITMENTS AND CONTINGENCIES

MEMBER'S EQUITY
     Membership Interest                                                                    2,316             2,316
     Undistributed Earnings                                                                   686               523
     Accumulated Other Comprehensive Income (Loss)                                           (183)              (31)
----------------------------------------------------------------------------------------------------------------------
         Total Member's Equity                                                              2,819             2,808
----------------------------------------------------------------------------------------------------------------------

TOTAL LIABILITIES AND MEMBER'S EQUITY                                                   $   8,975         $   8,216
======================================================================================================================


                                     See Notes to Consolidated Financial Statements

                                                          12
</TABLE>
<PAGE>


                   EXELON CORPORATION AND SUBSIDIARY COMPANIES
             EXELON GENERATION COMPANY, LLC AND SUBSIDIARY COMPANIES
               COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      (Dollars in millions, except per share data, unless otherwise noted)

1.   BASIS OF PRESENTATION (Exelon and Generation)

         The accompanying  consolidated financial statements as of June 30, 2002
and for the three and six  months  then ended are  unaudited,  but  include  all
adjustments that Exelon Corporation (Exelon and Exelon Generation  Company,  LLC
(Generation)  consider  necessary for a fair  presentation  of their  respective
financial statements.  All adjustments are of a normal, recurring nature, except
as otherwise  disclosed.  The December 31, 2001 consolidated  balance sheet data
were  derived  from  audited  financial   statements  but  do  not  include  all
disclosures  required  by  generally  accepted  accounting  principles.  Certain
prior-year  amounts  have been  reclassified  for  comparative  purposes.  These
reclassifications  had no effect  on net  income or  shareholders'  or  member's
equity. These notes should be read in conjunction with the Notes to Consolidated
Financial  Statements of Exelon included in or incorporated by reference in Item
8 of its Annual  Report on Form 10-K/A for the year ended  December 31, 2001 and
the  Notes  to  Consolidated  Financial  Statements  in  Generation's  Form  S-4
registration  statement  declared  effective on April 24, 2002 by the Securities
and Exchange Commission (SEC), (Generation's Form S-4). See ITEM 6. Exhibits and
Reports on Form 8-K.

2.       RESTATEMENT (Exelon and Generation)

In October 2002, Exelon  determined that its June 30, 2002 financial  statements
required a restatement as a result of a double posting of deferred  income taxes
recorded   associated   with   unrealized   losses   on   Generation's   nuclear
decommissioning  trust fund  securities.  Additionally,  Exelon  and  Generation
determined  that  Other  Comprehensive  Income  should  be  revised  to  reflect
Generation's  ownership interest in the Other Comprehensive Income of its equity
investments  in  AmerGen  Energy  Company,  LLC and  Sithe  Energies  Inc.  Such
asjustments  had no  effect on  either  Exelon's  or  Generation's  net  income,
earnings per share or cash flows.

The  following  tables show the items that have been  restated  on Exelon's  and
Generation's  Condensed  Consolidated  Statements  of Income  and  Comprehensive
Income for the three and six months ended June 30, 2002 and June 30,  2001,  and
the Condensed  Consolidated  Balance Sheets as of June 30, 2002 and December 31,
2001, and Note 7, Segment Information:


<TABLE>
<CAPTION>
Exelon

Condensed Consolidated Statements of Income and Comprehensive Income
Three Months Ended June 30, 2002
                                                            As Previously                                  As
                                                              Reported          Restatement          Restated
                                                            --------------------------------------------------
<S>                                                           <C>                 <C>             <C>
Equity in Other Comprehensive Income of
    Unconsolidated Affiliates                                 $     -             $    (7)        $      (7)
Total Other Comprehensive Income                              $   (93)            $    (7)        $    (100)
Total Comprehensive Income                                    $   392             $    (7)        $     385



                                       13
<PAGE>


Condensed Consolidated Statements of Income and Comprehensive Income
Three Months Ended June 30, 2001
                                                            As Previously                                  As
                                                              Reported          Restatement          Restated
                                                            --------------------------------------------------
Equity in Other Comprehensive Income of
    Unconsolidated Affiliates                                 $     -             $     1         $       1
Total Other Comprehensive Income                              $     3             $     1         $       4
Total Comprehensive Income                                    $   318             $     1         $     319


Condensed Consolidated Statements of Income and Comprehensive Income
Six Months Ended June 30, 2002
                                                            As Previously                                  As
                                                              Reported          Restatement          Restated
                                                            --------------------------------------------------
Equity in Other Comprehensive Income of
    Unconsolidated Affiliates                                 $     -             $    (1)        $      (1)
Total Other Comprehensive Income                              $  (165)            $    (1)        $    (166)
Total Comprehensive Income                                    $   327             $    (1)        $     326


Condensed Consolidated Statements of Income and Comprehensive Income
Six Months Ended June 30, 2001
                                                            As Previously                                  As
                                                              Reported          Restatement          Restated
                                                            --------------------------------------------------
Equity in Other Comprehensive Income of
    Unconsolidated Affiliates                                 $     -             $     2         $       2
Total Other Comprehensive Income                              $   (71)            $     2         $     (69)
Total Comprehensive Income                                    $   643             $     2         $     645

Condensed Consolidated Balance Sheets at December 31, 2001

                                                            As Previously                                  As
                                                              Reported          Restatement          Restated
                                                            --------------------------------------------------
Investments                                                   $   1,666           $   (43)        $   1,623
Total Deferred Debits and Other Assets                        $  17,297           $   (43)        $  17,254
Total Assets                                                  $  34,860           $   (43)        $  34,817
Deferred Income Taxes                                         $   4,303           $    85         $   4,388
Total Deferred Credits and Other Liabilities                  $   8,721           $    85         $   8,806
Accumulated Other Comprehensive Income                        $     102           $  (128)        $     (26)
Total Shareholders' Equity                                    $   8,230           $  (128)        $   8,102
Total Liabilities and Shareholders' Equity                    $  34,860           $   (43)        $  34,817




                                       14
<PAGE>

Condensed Consolidated Balance Sheets at June 30, 2002

                                                            As Previously                                  As
                                                              Reported          Restatement          Restated
                                                            --------------------------------------------------
Investments                                                   $   1,658           $   (45)        $   1,613
Total Deferred Debits and Other Assets                        $  16,631           $   (45)        $  16,586
Total Assets                                                  $  35,621           $   (45)        $  35,576
Deferred Income Taxes                                         $   4,204           $    84         $   4,288
Total Deferred Credits and Other Liabilities                  $   8,799           $    84         $   8,883
Accumulated Other Comprehensive Income                        $     (64)          $  (129)        $    (193)
Total Shareholders' Equity                                    $   8,346           $  (129)        $   8,217
Total Liabilities and Shareholders' Equity                    $  35,621           $   (45)        $  35,576


Note 7 Segment Note

                                                            As Previously                                  As
                                                              Reported          Restatement          Restated
at December 31, 2001                                        --------------------------------------------------
Total Assets - Generation                                     $   8,344           $  (128)        $   8,216
Total Assets - Corporate and
    Intersegment Eliminations                                 $  (1,735)          $    85         $  (1,650)
Total Assets - Consolidated                                     $34,860           $   (43)        $  34,817

                                                            As Previously                                  As
                                                              Reported          Restatement          Restated
at June 30, 2002                                            --------------------------------------------------
Total Assets - Generation                                     $   9,104           $  (129)        $   8,975
Total Assets - Corporate and
    Intersegment Eliminations                                 $  (1,688)          $    84         $  (1,604)
Total Assets - Consolidated                                   $  35,621           $   (45)        $  35,576


Generation

Condensed Consolidated Statements of Income and Comprehensive Income
Three Months Ended June 30, 2002
                                                            As Previously                                  As
                                                              Reported          Restatement          Restated
                                                            --------------------------------------------------
Equity in Other Comprehensive Income of
    Unconsolidated Affiliates                                 $     -             $    (7)        $      (7)
Total Other Comprehensive Income                              $   (68)            $    (7)        $     (75)
Total Comprehensive Income                                    $    16             $    (7)        $       9



                                       15
<PAGE>

Condensed Consolidated Statements of Income and Comprehensive Income
Three Months Ended June 30, 2001
                                                            As Previously                                  As
                                                              Reported          Restatement          Restated
                                                            --------------------------------------------------
Equity in Other Comprehensive Income of
    Unconsolidated Affiliates                                 $     -             $     1         $       1
Total Other Comprehensive Income                              $    (4)            $     1         $      (3)
Total Comprehensive Income                                    $    67             $     1         $      68


Condensed Consolidated Statements of Income and Comprehensive Income
Six Months Ended June 30, 2002
                                                            As Previously                                  As
                                                              Reported          Restatement          Restated
                                                            --------------------------------------------------
Equity in Other Comprehensive Income of
    Unconsolidated Affiliates                                 $     -             $    (1)        $      (1)
Total Other Comprehensive Income                              $  (150)            $    (1)        $    (151)
Total Comprehensive Income                                    $    13             $    (1)        $      12


Condensed Consolidated Statements of Income and Comprehensive Income
Six Months Ended June 30, 2001
                                                            As Previously                                  As
                                                              Reported          Restatement          Restated
                                                            --------------------------------------------------
Equity in Other Comprehensive Income of
    Unconsolidated Affiliates                                 $     -             $     2         $       2
Total Other Comprehensive Income                              $  (112)            $     2         $    (110)
Total Comprehensive Income                                    $   129             $     2         $     131


Condensed Consolidated Balance Sheets at December 31, 2001
                                                            As Previously                                  As
                                                              Reported          Restatement          Restated
                                                            --------------------------------------------------
Investments                                                   $     859           $   (43)        $     816
Deferred Income Taxes                                         $     297           $   (85)        $     212
Total Deferred Debits and Other Assets                        $   4,835           $  (128)        $   4,707
Total Assets                                                  $   8,344           $  (128)        $   8,216
Accumulated Other Comprehensive Income                        $      97           $  (128)        $     (31)
Total Member's Equity                                         $   2,936           $  (128)        $   2,808
Total Liabilities and Member's Equity                         $   8,344           $  (128)        $   8,216


Condensed Consolidated Balance Sheets at June 30, 2002

                                                            As Previously                                  As
                                                              Reported          Restatement          Restated
                                                            --------------------------------------------------
Investments                                                   $     913           $   (45)        $     868
Deferred Income Taxes                                         $     437           $   (84)        $     353
Total Deferred Debits and Other Assets                        $   4,894           $  (129)        $   4,765
Total Assets                                                  $   9,104           $  (129)        $   8,975
Accumulated Other Comprehensive Income                        $     (54)          $  (129)        $    (183)
Total Member's Equity                                         $   2,948           $  (129)        $   2,819
Total Liabilities and Member's Equity                         $   9,104           $  (129)        $   8,975
</TABLE>


                                       16
<PAGE>


3.  ADOPTION OF NEW ACCOUNTING PRINCIPLES (Exelon and
     Generation)
SFAS No. 141 and SFAS No. 142

         In  2001,  the  Financial   Accounting  Standard  Board  (FASB)  issued
Statement of Accounting  Standard (SFAS) No. 141, "Business  Combinations" (SFAS
No. 141),  which requires that all business  combinations be accounted for under
the purchase  method of  accounting  and  establishes  criteria for the separate
recognition of intangible assets acquired in business combinations. SFAS No. 141
is  effective  for  business  combinations  initiated  after June 30,  2001.  In
addition,  SFAS No. 141 requires that unamortized  negative  goodwill related to
pre-July 1, 2001  purchases be recognized  as a change in  accounting  principle
concurrent  with the adoption of SFAS No. 142,  "Goodwill  and Other  Intangible
Assets"  (SFAS No. 142).  At December  31, 2001,  AmerGen  Energy  Company,  LLC
(AmerGen), an equity-method investee of Generation,  had $43 million of negative
goodwill, net of accumulated  amortization,  recorded on its balance sheet. Upon
AmerGen's  adoption of SFAS No. 141 in January 2002,  Generation  recognized its
proportionate share of income of $22 million ($13 million,  net of income taxes)
as a cumulative effect of a change in accounting principle.

         Exelon,  ComEd, PECO and Generation  adopted SFAS No. 142 as of January
1, 2002.  SFAS No. 142  establishes  new accounting and reporting  standards for
goodwill  and  intangible  assets.  Other than  goodwill,  Exelon  does not have
significant other intangible assets recorded on its consolidated balance sheets.
Under SFAS No. 142,  goodwill  is no longer  subject to  amortization,  however,
goodwill is subject to an assessment for impairment  using a two-step fair value
based test, the first step of which must be performed at least annually, or more
frequently if events or circumstances  indicate that goodwill might be impaired.
The first step  compares  the fair  value of a  reporting  unit to its  carrying
amount, including goodwill. If the carrying amount of the reporting unit exceeds
its fair value,  the second step is  performed.  The second  step  compares  the
carrying  amount of the goodwill to the fair value of the goodwill.  If the fair
value of  goodwill  is less than the  carrying  amount,  an  impairment  loss is
reported as a reduction to goodwill and a charge to operating expense, except at
the  transition  date,  when the loss is reflected  as a cumulative  effect of a
change in accounting principle.

         As of December 31, 2001, Exelon's Consolidated Balance Sheets reflected
approximately  $5.3  billion  in  goodwill  net  of  accumulated   amortization,
including $4.9 billion of net goodwill related to the October 20, 2000 merger of
Unicom Corporation (Unicom), the former parent company of ComEd, and PECO Energy
Company (PECO) recorded on the Consolidated Balance Sheet of Commonwealth Edison
Company  (ComEd),   with  the  remainder   related  to  acquisitions  by  Exelon
Enterprises  Company,  LLC  (Enterprises).  The first  step of the  transitional
impairment analysis indicated that ComEd's goodwill was not impaired but that an
impairment did exist with respect to goodwill recorded in Enterprises' reporting
units.  Exelon's  infrastructure  services  business  (InfraSource),  the energy
services  business  (Exelon  Services) and the  competitive  retail energy sales
business  (Exelon  Energy)  were  determined  to be  those  reporting  units  of
Enterprises  that  had  goodwill  allocated  to  them.  The  second  step of the
analysis, which compared the fair value of each of Enterprises' reporting units'


                                       17
<PAGE>

goodwill to the carrying value at December 31, 2001,  indicated a total goodwill
impairment  of $357  million  ($243  million,  net of income  taxes and minority
interest).  The fair value of the  Enterprises'  reporting  units was determined
using  discounted cash flow models  reflecting the expected range of future cash
flow outcomes  related to each of the Enterprises  reporting units over the life
of the model.  These cash flows were  discounted  to 2002 using a  risk-adjusted
discount rate. The impairment was recorded as a cumulative effect of a change in
accounting principle in the first quarter of 2002.

         The changes in the carrying  amount of goodwill by  reportable  segment
(see Note 7 for further  discussion of  reportable  segments) for the six months
ended June 30, 2002 are as follows:

<TABLE>
<CAPTION>
                                                                          Energy
                                                                        Delivery      Enterprises             Total
----------------------------------------------------------------------------------------------------------------------
<S>                   <C>                                              <C>              <C>               <C>
Balance as of January 1, 2002                                          $   4,902        $     433         $   5,335
Impairment losses                                                             --             (357)             (357)
Settlement of pre-merger income tax contingency                               (7)              --                (7)
----------------------------------------------------------------------------------------------------------------------
Balance as of June 30, 2002                                            $   4,895        $      76         $   4,971
----------------------------------------------------------------------------------------------------------------------
</TABLE>

         The June 30, 2002,  Energy Delivery  goodwill  relates to ComEd and the
remaining  Enterprises  goodwill  relates to the InfraSource and Exelon Services
reporting  units.  Consistent with SFAS No. 142, the remaining  goodwill will be
reviewed for  impairment on an annual basis or more  frequently  if  significant
events occur that could indicate an impairment exists.

         The components of the net  transitional  impairment  loss recognized in
the first  quarter  of 2002 as a  cumulative  effect  of a change in  accounting
principle are as follows:

<TABLE>
<CAPTION>
Exelon
----------------------------------------------------------------------------------------------------------------------
<S>                                                                                                    <C>
Enterprises goodwill impairment (net of income taxes of $103 million)                                   $      (254)
Minority interest (net of income taxes of $4 million)                                                            11
Elimination of AmerGen negative goodwill (net of income taxes of $9 million)                                     13
----------------------------------------------------------------------------------------------------------------------
Total cumulative effect of a change in accounting principle                                             $      (230)
----------------------------------------------------------------------------------------------------------------------

Generation
----------------------------------------------------------------------------------------------------------------------
Elimination of AmerGen negative goodwill (net of income taxes of $9 million)
    recorded as cumulative effect of a change in accounting principle                                   $        13
----------------------------------------------------------------------------------------------------------------------
</TABLE>


                                       18
<PAGE>

         The  following  tables set forth  Exelon's  net income and earnings per
common  share and ComEd's net income for the three and six months ended June 30,
2002 and 2001,  respectively,  adjusted  to exclude  2001  amortization  expense
related to goodwill that is no longer being amortized.

<TABLE>
<CAPTION>
Exelon
                                                     Three Months Ended June 30,         Six Months Ended June 30,
                                                          2002              2001             2002              2001
----------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>              <C>               <C>               <C>
Reported income before cumulative effect
     of changes in accounting principles              $    485         $     315         $    722          $    702
Cumulative effect of changes in
----------------------------------------------------------------------------------------------------------------------
     accounting principles                                  --                --             (230)               12
----------------------------------------------------------------------------------------------------------------------
Reported net income                                        485               315              492               714
Goodwill amortization                                       --                38               --                77
----------------------------------------------------------------------------------------------------------------------
Adjusted net income                                  $     485         $     353         $    492          $    791
----------------------------------------------------------------------------------------------------------------------

Basic earnings per common share:
    Reported income before cumulative effect
       of changes in accounting principles            $   1.50          $   0.98         $   2.24          $   2.19
    Cumulative effect of changes in
----------------------------------------------------------------------------------------------------------------------
       accounting principles                                --                --            (0.71)             0.04
----------------------------------------------------------------------------------------------------------------------
    Reported net income                                   1.50              0.98             1.53              2.23
    Goodwill amortization                                   --              0.12               --              0.24
----------------------------------------------------------------------------------------------------------------------
    Adjusted net income                               $   1.50          $   1.10         $   1.53          $   2.47
----------------------------------------------------------------------------------------------------------------------

Diluted earnings per common share:
    Reported income before cumulative effect
       of changes in accounting principles            $   1.50          $   0.97         $   2.23          $   2.17
    Cumulative effect of changes in
----------------------------------------------------------------------------------------------------------------------
       accounting principles                                --                --            (0.71)             0.04
----------------------------------------------------------------------------------------------------------------------
    Reported net income                                   1.50              0.97             1.52              2.21
    Goodwill amortization                                   --              0.12               --              0.24
----------------------------------------------------------------------------------------------------------------------
    Adjusted net income                               $   1.50          $   1.09         $   1.52          $   2.45
----------------------------------------------------------------------------------------------------------------------

ComEd
                                                     Three Months Ended June 30,          Six Months Ended June 30,
                                                          2002              2001             2002              2001
----------------------------------------------------------------------------------------------------------------------
Reported net income                                   $   231           $    182         $    360          $    329
Goodwill amortization                                      --                 32               --                64
----------------------------------------------------------------------------------------------------------------------
Adjusted net income                                   $   231           $    214         $    360          $    393
----------------------------------------------------------------------------------------------------------------------
</TABLE>

Generation

         The cessation of the  amortization  of negative  goodwill of AmerGen on
January  1, 2002 did not have a material  impact on  Generation's  reported  net
income for the three or six months ended June 30, 2002.


                                       19
<PAGE>

EITF Issue 02-3
         Exelon and  Generation  early adopted the provision of Emerging  Issues
Task Force  (EITF)  Issue 02-3  "Accounting  for  Contracts  Involved  in Energy
Trading and Risk Management  Activities"  (EITF 02-3) issued by the FASB EITF in
June 2002 that  requires  revenues  and energy costs  related to energy  trading
contracts to be presented on a net basis in the income  statement.  Prior to the
second quarter of 2002, revenues from trading activity were presented in Revenue
and the  energy  costs  related  to  energy  trading  were  presented  as either
Purchased  Power  or  Fuel  expense  on  Exelon  and  Generation's  Consolidated
Statements of Income. For comparative  purposes,  energy costs related to energy
trading have been  reclassified  in prior periods to revenue to conform with the
net basis of  presentation  required by EITF 02-3.  For the three and six months
ended June 30, 2001,  $30 million of purchased  power  expense and $5 million of
fuel expense was reclassified and reflected as a reduction to revenue. The three
months ended March 31, 2002 included $504 million of purchased power expense and
$9  million  of fuel  expense  that has been  reclassified  and  reflected  as a
reduction to revenue in the six months ended June 30, 2002.

SFAS No. 144
         In August  2001,  the FASB  issued SFAS No.  144,  "Accounting  for the
Impairment or Disposal of Long-Lived Assets" (SFAS No. 144). Exelon, ComEd, PECO
and Generation adopted SFAS No. 144 on January 1, 2002. SFAS No. 144 establishes
accounting  and  reporting  standards  for both the  impairment  and disposal of
long-lived  assets.  SFAS No. 144 is effective for fiscal years  beginning after
December 15, 2001 and its provisions are generally  applied  prospectively.  The
adoption  of  this  statement  had no  effect  on  Exelon's  reported  financial
positions, results of operations or cash flows.

SFAS No. 133
         SFAS No.  133,  "Accounting  for  Derivative  Instruments  and  Hedging
Activities"  (SFAS No. 133) applies to all derivative  instruments  and requires
that such  instruments  be recorded on the balance sheet either as an asset or a
liability measured at their fair value through earnings, with special accounting
permitted for certain  qualifying  hedges.  On January 1, 2001,  Exelon,  ComEd,
PECO, and Generation adopted SFAS No. 133. Generation recognized a non-cash gain
of $12 million, net of income taxes, in earnings and deferred a non-cash gain of
$4 million,  net of income taxes, in accumulated other comprehensive  income and
PECO  deferred  a  non-cash  gain  of $40  million,  net  of  income  taxes,  in
accumulated other comprehensive income.


4. ACQUISITIONS AND DISPOSITIONS (Exelon and Generation)
Acquisition of Generating Plants from TXU

On April 25, 2002, Generation acquired two natural-gas and oil-fired plants from
TXU Corp.  (TXU) for an aggregate  purchase price of $443 million.  The purchase
included the  893-megawatt  Mountain Creek Steam Electric  Station in Dallas and
the 1,441-megawatt Handley Steam Electric Station in Fort Worth. The transaction
included a power purchase  agreement for TXU to purchase power during the months
of May through  September from 2002 through 2006.  During the periods covered by
the power purchase  agreement,  TXU will make fixed  capacity  payments and will
provide fuel to Exelon in return for exclusive rights to the energy and capacity
of the  generation  plants.  Substantially  all of the  purchase  price has been
allocated to property,  plant,  and equipment  pending final  valuation of plant
assets.


                                       20
<PAGE>

Sale of AT&T Wireless

         On April 1, 2002,  Enterprises  sold its 49% interest in AT&T  Wireless
PCS of  Philadelphia,  LLC to a subsidiary  of AT&T  Wireless  Services for $285
million in cash.  Enterprises  recorded  an  after-tax  gain of $116  million in
other, net on the $84 million investment, which was reflected in Deferred Debits
and Other Assets on Exelon's Consolidated Balance Sheets.

Sithe New England Holdings, LLC Acquisition

         On June 26,  2002,  Generation  agreed to  purchase  Sithe New  England
Holdings,  LLC, (Sithe New England) a subsidiary of Sithe Energies Inc. (Sithe),
and related power marketing  operations in exchange for a $543 million note plus
the assumption of non-recourse debt,  estimated to be approximately $1.2 billion
at the  transaction  closing  date.  The  parties  are  seeking  Federal  Energy
Regulatory  Commission  (FERC) and other  required  approvals of the purchase by
October 31, 2002. Exelon has negotiated  closing conditions that allow Exelon to
terminate the purchase if the conditions are not satisfied.  If approved, and if
the closing  conditions are  satisfied,  the  transaction  could be completed in
November 2002.

         The purchase involves  approximately 4,471 MWs of generation  capacity,
consisting  of 2,050 MWs in operation  and 2,421 MWs under  construction,  which
will increase  Generation's  net assets by  approximately  $1.7 billion when the
transaction  closes.  Sithe New  England's  generation  facilities  are  located
primarily in Massachusetts, but are also located in Maine.

         Generation is a 49.9% owner of Sithe and accounts for the investment as
an  unconsolidated  equity  investment.  The Sithe New England purchase will not
affect  the  accounting  for  Sithe  as  an  equity  investment.   Additionally,
Generation is subject to a Put and Call  Agreement  (PCA) that gives  Generation
the right to purchase (Call) the remaining  50.1% of Sithe,  and gives the other
Sithe shareholders the right to sell (Put) their interest to Generation.  If the
Put option is exercised, Generation has the obligation to complete the purchase.
The PCA provides that the Put and Call options become exercisable as of December
18, 2002. The Sithe New England purchase is a separate  transaction from the PCA
that is intended to enable  Generation to acquire only the Sithe assets that fit
Generation's strategy,  accelerate the realization of synergies,  and reduce the
amount of debt needed to finance the transaction.

         See ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations - Exelon  Corporation - for further  discussion of the
PCA.


5.  REGULATORY ISSUES (Exelon)

         On April 1, 2002,  the  Illinois  Commerce  Commission  (ICC) issued an
interim  order in ComEd's  Delivery  Services  Rate Case.  The interim  order is
subject  to an  audit  of  test  year  expenditures  that is  anticipated  to be
completed by the end of 2002 with a final order to be issued in 2003.  The order
sets new delivery rates for residential customers choosing a new retail electric
supplier.  The new rates became effective May 1, 2002 when residential customers
were eligible to choose their supplier of electricity. Traditional bundled rates



                                       21
<PAGE>

paid by  customers  that  retain  ComEd as their  electricity  supplier  are not
affected by this order.  Bundled  rates will remain  frozen  through  2006, as a
result of the June 6, 2002  amendments  to the Illinois  Restructuring  Act that
extended  the  freeze on bundled  rates for an  additional  two years.  Delivery
service rates for  non-residential  customers are not affected by the order. The
potential  revenue impact of the interim order is not expected to be material in
2002.

         As  permitted  by  the  Pennsylvania   Electric  Competition  Act,  the
Pennsylvania  Department  of  Revenue  has  calculated  a 2002  Revenue  Neutral
Reconciliation  (RNR)  adjustment  to the  gross  receipts  tax rate in order to
neutralize the impact of electric  restructuring on its tax revenues. In January
2002,  the  Pennsylvania  Public  Utility  Commission  (PUC)  approved  the  RNR
adjustment to the gross receipts tax rate collected  from  customers.  Effective
January 1, 2002, PECO implemented the change in the gross receipts tax rate. The
RNR adjustment is under appeal. The RNR adjustment  increases the gross receipts
tax rate,  which will increase  PECO's annual  revenues and tax  obligations  by
approximately $50 million in 2002.


6.  EARNINGS PER SHARE (Exelon)

         Diluted earnings per share are calculated by dividing net income by the
weighted average number of shares of common stock outstanding,  including shares
issuable upon exercise of stock options  outstanding under Exelon's stock option
plans considered to be common stock  equivalents.  The following table shows the
effect  of  these  stock  options  on the  weighted  average  number  of  shares
outstanding used in calculating diluted earnings per share (in millions):

<TABLE>
<CAPTION>
                                                            Three Months Ended June 30,     Six Months Ended June 30,
                                                                    2002           2001          2002            2001
----------------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>            <C>           <C>             <C>
Average common shares outstanding                                    322            321           322             320
Assumed exercise of stock options                                      2              3             2               3
----------------------------------------------------------------------------------------------------------------------
Average diluted common shares outstanding                            324            324           324             323
----------------------------------------------------------------------------------------------------------------------
</TABLE>

         Stock options not included in average common shares used in calculating
diluted earnings per share due to their  antidilutive  effect were three million
for the three and six months  ended June 30,  2002 and one million for the three
and six months ended June 30, 2001.



                                       22
<PAGE>

7.  SEGMENT INFORMATION (Exelon)

         Exelon operates in three business segments: energy delivery, generation
and enterprises.  Energy delivery  consists of the operations of ComEd and PECO.
Beginning in 2002,  Exelon evaluates the performance of its business segments on
the basis of net income.  Exelon's segment  information for the three months and
six months  ended June 30, 2002 as  compared to the same  periods in 2001 and at
June 30, 2002 and December 31, 2001 are as follows:

Three Months Ended June 30, 2002 as compared to Three Months Ended June 30, 2001
<TABLE>
<CAPTION>
                                                                                    Corporate and
                                       Energy                                        Intersegment
                                     Delivery       Generation     Enterprises       Eliminations     Consolidated
-------------------------------------------------------------------------------------------------------------------
Revenues:
<S>                                  <C>              <C>               <C>              <C>              <C>
    2002                              $ 2,476          $ 1,559           $ 476            $ (992)          $ 3,519
    2001                                2,436            1,583             546              (949)            3,616
Intersegment Revenues:
    2002                                $  15            $ 953            $ 24            $ (992)           $   --
    2001                                   16              906              27              (949)               --
Net Income:
    2002                               $  322            $  84            $ 83             $  (4)           $  485
    2001                                  264               71             (5)               (15)              315
-------------------------------------------------------------------------------------------------------------------

Six Months Ended June 30, 2002 as compared to Six Months Ended June 30, 2001

                                                                                    Corporate and
                                       Energy                                        Intersegment
                                     Delivery       Generation     Enterprises       Eliminations      Consolidated
--------------------------------------------------------------------------------------------------------------------
Revenues:
    2002                              $ 4,811          $ 3,020           $ 966           $(1,921)           $ 6,876
    2001                                4,933            3,211           1,213            (1,918)             7,439
Intersegment Revenues:
    2002                                $  29          $ 1,845           $  47           $(1,921)            $   --
    2001                                   59            1,819              40            (1,918)                --
Net Income:
    2002                               $  538           $  163          $(188)            $  (21)            $  492
    2001                                  530              241            (30)               (27)               714
--------------------------------------------------------------------------------------------------------------------

Total Assets:
    June 30, 2002                    $ 26,915          $ 8,975          $1,290           $(1,604)          $ 35,576
    December 31, 2001                  26,461            8,216           1,790            (1,650)            34,817
--------------------------------------------------------------------------------------------------------------------
</TABLE>



                                       23
<PAGE>


8. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES (Exelon and Generation)

         During the three and six months  ended June 30,  2002 and 2001,  Exelon
recorded  net   gains/(losses)  in  other   comprehensive   income  relating  to
mark-to-market  (MTM) adjustments of contracts designated as cash flow hedges as
follows:

<TABLE>
<CAPTION>
                                             ComEd            PECO            Generation      Enterprises       Exelon
-----------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>              <C>              <C>            <C>             <C>
Three months ended June 30, 2002              $(13)            $(7)             $ 15           $   (3)         $ (8)
Three months ended June 30, 2001                --              15               (61)              (2)          (48)
Six months ended June 30, 2002                  (6)             (1)             (107)              14          (100)
Six months ended June 30, 2001                  --               8               (62)               2           (52)
-----------------------------------------------------------------------------------------------------------------------------

         During  the three  months  ended  June 30,  2002 and 2001,  and the six
months  ended June 30,  2002 and 2001,  Generation  recognized  net MTM gains on
non-trading  energy derivative  contracts not designated as cash flow hedges, in
operating revenues as follows:

                                                                                                 2002          2001
-----------------------------------------------------------------------------------------------------------------------------
Three months ended June 30,                                                                    $    4     $       5
Six months ended June 30,                                                                          10            22
-----------------------------------------------------------------------------------------------------------------------------

         During the three months ended June 30, 2002 and 2001 and the six months
ended June 30, 2002 and 2001,  no amounts  were  reclassified  from  accumulated
other  comprehensive  income  into  earnings  as a result of  forecasted  energy
commodity transactions no longer being probable.

         During  the three  months  ended  June 30,  2002 and 2001,  and the six
months  ended June 30, 2002 and 2001,  Generation  recognized  net MTM losses on
energy trading contracts, in operating revenues as follows:

                                                                                                 2002          2001
-----------------------------------------------------------------------------------------------------------------------------
Three months ended June 30,                                                                    $   (9)    $      (6)
Six months ended June 30,                                                                         (13)           (6)
-----------------------------------------------------------------------------------------------------------------------------

         During the three months ended June 30, 2002 and 2001 and the six months
ended June 30, 2002 and 2001, PECO reclassified other income in the Consolidated
Statements of Income and Comprehensive Income, as a result of the discontinuance
of cash flow hedges related to certain  forecasted  financing  transactions that
were no longer probable of occurring as follows:

                                                                                                 2002          2001
-----------------------------------------------------------------------------------------------------------------------------
Three months ended June 30,                                                                    $   --     $      --
Six months ended June 30,                                                                          --             6
-----------------------------------------------------------------------------------------------------------------------------

         As of June 30,  2002,  deferred  net  gains on  derivative  instruments
accumulated in other  comprehensive  income are expected to be  reclassified  to
earnings during the next twelve months are as follows:

                                                         ComEd         PECO   Generation  Enterprises       Exelon
-----------------------------------------------------------------------------------------------------------------------------
Gains Expected to be Reclassified                      $     1       $   15       $   --       $    2       $    18
-----------------------------------------------------------------------------------------------------------------------------


                                       24
<PAGE>

         Amounts in accumulated other  comprehensive  income related to interest
rate cash  flow  hedges  are  reclassified  into  earnings  when the  forecasted
interest  payment  occurs.  Amounts in accumulated  other  comprehensive  income
related to energy commodity cash flows are  reclassified  into earnings when the
forecasted purchase or sale of the energy commodity occurs.

         Generation   classifies   investments   in  the  trust   accounts   for
decommissioning nuclear plants as available-for-sale.  The following tables show
the fair values,  gross unrealized gains and losses and amortized cost bases for
the securities held in these trust accounts.

                                                                                                      June 30, 2002
                                                     ------------------------------------------------------------------------
                                                                           Gross            Gross
                                                     Amortized        Unrealized       Unrealized         Estimated
                                                          Cost             Gains           Losses        Fair Value
-----------------------------------------------------------------------------------------------------------------------------
Equity securities                                    $   1,677         $     115        $    (406)        $   1,386
Debt securities
    Government obligations                                 994                39               (1)            1,032
    Other debt securities                                  641                18              (17)              642
-----------------------------------------------------------------------------------------------------------------------------
Total debt securities                                    1,635                57              (18)            1,674
-----------------------------------------------------------------------------------------------------------------------------
Total available-for-sale securities                  $   3,312         $     172        $    (424)        $   3,060
=============================================================================================================================
</TABLE>

         Unrealized gains and losses are recognized in Accumulated  Depreciation
and Accumulated Other Comprehensive Income in Generation's  Consolidated Balance
Sheet.

         For the three  months ended June 30,  2002,  proceeds  from the sale of
decommissioning  trust  investments and gross realized gains and losses on those
sales were $309 million, $13 million and $24 million,  respectively. For the six
months  ended June 30, 2002,  proceeds  from the sale of  decommissioning  trust
investments  and gross  realized  gains  and  losses  on those  sales  were $889
million, $31 million and $56 million, respectively.

         Net  realized  losses of $4  million  were  recognized  in  Accumulated
Depreciation  in Generation's  Consolidated  Balance Sheets at June 30, 2002 and
$21  million  of net  realized  losses  were  recognized  in  Other  Income  and
Deductions in Generation's  Consolidated  Statements of Income and Comprehensive
Income for the six months ended June 30, 2002. The available-for-sale securities
held at June 30, 2002 have an average  maturity of eight to ten years.  The cost
of these securities was determined on the basis of specific identification.




                                       25
<PAGE>


9.  COMMITMENTS AND CONTINGENCIES (Exelon and Generation)

         For information regarding capital commitments,  nuclear decommissioning
and spent  fuel  storage,  see the  Commitments  and  Contingencies  Note in the
Consolidated  Financial  Statements of Exelon, ComEd and PECO for the year ended
December 31, 2001 and Generation's S-4 dated April 24, 2002.

Environmental Liabilities

         Exelon has  identified  72 sites where  former  manufactured  gas plant
(MGP) activities have or may have resulted in actual site  contamination.  As of
June 30, 2002, Exelon had accrued $139 million for  environmental  investigation
and remediation costs that currently can be reasonably estimated, including $115
million for MGP investigation and remediation.

         ComEd had accrued $96 million  (discounted)  as of June 30,  2002,  for
environmental   investigation  and  remediation  costs  that  currently  can  be
reasonably  estimated.  This reserve included $90 million for MGP  investigation
and  remediation.   ComEd  is  currently  experiencing  delays  in  the  ongoing
remediation of an MGP site in Oak Park,  Illinois,  and is evaluating the impact
of those delays on the cost to complete the project. The impact of the delays is
currently uncertain, but could increase the environmental reserve in the future.

         PECO had accrued $34 million  (undiscounted)  as of June 30, 2002,  for
environmental   investigation  and  remediation  costs  that  currently  can  be
reasonably   estimated,   including  $25  million  for  MGP   investigation  and
remediation.

         Generation had accrued $9 million  (undiscounted)  as of June 30, 2002,
for  environmental  investigation and remediation cost, none of which relates to
MGP investigation and remediation.

         Exelon,  ComEd,  PECO and Generation cannot predict the extent to which
they will incur other significant  liabilities for additional  investigation and
remediation  costs at these or  additional  sites  identified  by  environmental
agencies or others, or whether such costs may be recoverable from third parties.





                                       26
<PAGE>

Energy Commitments

         Exelon and  Generation  had long-term  commitments  relating to the net
purchase and sale of energy,  capacity and transmission rights from unaffiliated
utilities,  including Midwest Generation LLC (Midwest  Generation),  and others,
including AmerGen, as expressed in the following table:

<TABLE>
<CAPTION>
                                                                        Power Only Purchases from
                                Net Capacity        Power Only          -------------------------      Transmission
                               Purchases (1)             Sales           AmerGen   Non-Affiliates  Rights Purchases
----------------------------------------------------------------------------------------------------------------------
<S>                              <C>               <C>               <C>              <C>               <C>
2002                             $       634       $     2,111       $       127      $     1,659       $        72
2003                                     692             1,491               247              588               108
2004                                     859               822               301              200                89
2005                                     389               244               227               78                83
2006                                     352               120               227               66                 2
Thereafter                             4,120                23             2,045              272                --
----------------------------------------------------------------------------------------------------------------------
Total                            $     7,046       $     4,811       $     3,174      $     2,863       $       354
======================================================================================================================
<FN>
(1)  Net Capacity Purchases  includes Midwest Generation  commitments as of July
     1, 2002. On July 1, 2002,  Generation  notified  Midwest  Generation of the
     exercise of its call options  under the existing Coal  Generation  Purchase
     Power Agreement.  Generation exercised options on 1,265 MWs of capacity and
     did not exercise options on 2,684 MWs of capacity. In 2003, Generation will
     take  1,696 MWs of  non-option  capacity  and 1,265 MWs of option  capacity
     under the existing contract.  Net Capacity Purchases also includes capacity
     sales to TXU under the purchase power agreement  entered into in connection
     with the purchase of two generating plants in April 2002, which states that
     TXU will  purchase  the plant output from May through  September  from 2002
     through 2006. The combined capacity of the two plants is 2,334 MWs.
</FN>
</TABLE>

         In connection with the 2001 corporate restructuring, ComEd entered into
a purchase power  agreement (PPA) with  Generation.  Under the terms of the PPA,
Generation has agreed to supply all of ComEd's load  requirements  through 2004.
Prices  for  this  energy  vary  depending  upon  the  time of day and  month of
delivery.  During 2005 and 2006, ComEd's PPA is a partial requirements agreement
under which ComEd will  purchase  all of its required  energy and capacity  from
Generation,  up to the  available  capacity  of the  nuclear  generating  plants
formerly owned by ComEd and  transferred  to Generation.  Under the terms of the
PPA, Generation is responsible for obtaining any required  transmission service.
The PPA also  specifies that prior to 2005,  ComEd and  Generation  will jointly
determine and agree on a market-based  price for energy  delivered under the PPA
for 2005 and 2006.  In the event that the parties  cannot agree to  market-based
prices  for  2005 and  2006  prior to July 1,  2004,  ComEd  has the  option  of
terminating  the  PPA  effective  December  31,  2004.  ComEd  will  obtain  any
additional  supply required from market sources in 2005 and 2006, and subsequent
to 2006, will obtain all of its supply from market sources,  which could include
Generation.

         In connection with the 2001 corporate restructuring,  PECO entered into
a PPA with  Generation.  Under the terms of the PPA, PECO obtains  substantially
all of its  electric  supply  from  Generation  through  2010.  Also,  under the
restructuring,  PECO assigned its rights and obligations  under various PPAs and
fuel supply agreements to Generation. Generation supplies power to PECO from the
transferred generation assets, assigned PPAs and other market sources.



                                       27
<PAGE>

         Under  terms of the  2001  corporate  restructuring,  ComEd  remits  to
Generation any amounts  collected  from  customers for nuclear  decommissioning.
Under an agreement  effective  September  2001,  PECO remits to  Generation  any
amounts collected from customers for nuclear decommissioning.

Litigation
Exelon

         Securities Litigation.  Between May 8 and June 14, 2002, a total of six
nearly  identical class action lawsuits were filed in the Federal District Court
in Chicago  asserting  securities  claims on behalf of Exelon  investors  during
April to September  2001. The  complaints  allege that Exelon  violated  Federal
securities  laws  by  issuing  a  series  of  materially  false  and  misleading
statements  relating to its 2001 earnings  expectations during the Class Period.
On May 30 and July 2, 2002, the Court granted  Exelon's  agreed-upon  motions to
consolidate   the  pending  cases  into  one  lawsuit,   and  stayed   discovery
indefinitely.  A lead  plaintiff  has not been  selected.  Exelon  believes  the
lawsuit is without merit and is vigorously contesting this matter.

ComEd

         Chicago Franchise.  In March 1999, ComEd reached a settlement agreement
with the City of Chicago  (Chicago) to end the  arbitration  proceeding  between
ComEd and Chicago regarding the January 1, 1992 franchise agreement.  As part of
the settlement  agreement,  ComEd and Chicago agreed to a revised combination of
ongoing work under the franchise  agreement and new initiatives that will result
in  defined  transmission  and  distribution  expenditures  by ComEd to  improve
electric services in Chicago. The settlement agreement provides that ComEd would
be subject to  liquidated  damages if the projects are not  completed by various
dates,  unless it was prevented  from doing so by events  beyond its  reasonable
control.  In addition,  ComEd and Chicago  established an Energy Reliability and
Capacity  Account,  into which ComEd  deposited  $25 million  during each of the
years 1999 through 2001 and has  conditionally  agreed to deposit $25 million at
the end of 2002,  to help ensure an adequate  and reliable  electric  supply for
Chicago.

         FERC Municipal Request for Refund. Three of ComEd's wholesale municipal
customers  filed a complaint  and request for refund with the FERC alleging that
ComEd  failed to properly  adjust its rates,  as provided for under the terms of
the electric service contracts with the municipal customers and to track certain
refunds made to ComEd's retail  customers in the years 1992 through 1994. In the
third  quarter of 1998,  FERC granted the complaint and directed that refunds be
made,  with interest.  ComEd filed a request for  rehearing.  On April 30, 2001,
FERC issued an order  granting  rehearing in which it  determined  that its 1998
order  had been  erroneous  and  that no  refunds  were  due  from  ComEd to the
municipal  customers.  On June 29, 2001, FERC denied the customers' requests for
rehearing of the order  granting  rehearing.  In August 2001,  each of the three
wholesale  municipal  customers  appealed  the April 30,  2001 FERC order to the
Federal  circuit  court,  which  consolidated  the appeals  for the  purposes of
briefing and decision.  In November 2001, the court suspended  briefing  pending
court-initiated settlement discussions.

         Retail Rate Law. In 1996, several developers of non-utility  generating
facilities filed litigation against various Illinois officials claiming that the
enforcement  against  those  facilities of an amendment to Illinois law removing
the entitlement of those facilities to state-subsidized payments for electricity



                                       28
<PAGE>

sold to ComEd after March 15, 1996  violated  their rights under the Federal and
state  constitutions.  The  developers  also  filed  suit  against  ComEd  for a
declaratory judgment that their rights under their contracts with ComEd were not
affected by the amendment.  On August 4, 1999, the Illinois Appellate Court held
that the developers'  claims against the state were premature,  and the Illinois
Supreme Court denied leave to appeal that ruling.  Developers of both facilities
have since filed  amended  complaints  repeating  their  allegations  that ComEd
breached  the  contracts  in  question  and  requesting  damages for such breach
reflecting the  state-subsidized  rate to which the  developers  claim they were
entitled  under  their  contracts.  These  matters are in the  discovery  phase.
Certain of the plaintiffs have produced an expert report claiming  approximately
$175 million in damages, a quantification ComEd vigorously  disputes.  Virtually
all parties have filed motions for summary  judgment.  ComEd is contesting  each
case and has filed its motion for summary  judgment arguing that, as a matter of
law, it did not breach any of the contracts.

         Service Interruptions. In August 1999, three class action lawsuits were
filed against ComEd, and subsequently consolidated, in the Circuit Court of Cook
County,  Illinois  seeking  damages for personal  injuries,  property damage and
economic  losses related to a series of service  interruptions  that occurred in
the summer of 1999. The combined effect of these interruptions  resulted in over
168,000  customers  losing service for more than four hours.  Conditional  class
certification  was  approved  by the court  for the sole  purpose  of  exploring
settlement talks.  ComEd filed a motion to dismiss the complaints.  On April 24,
2001, the court dismissed four of the five counts of the consolidated  complaint
without prejudice and the sole remaining count was dismissed in part. On June 1,
2001, the plaintiffs filed a second amended consolidated complaint and ComEd has
filed an  answer.  A portion  of any  settlement  or  verdict  may be covered by
insurance; discussions with the carrier are ongoing.

         Enron. As a result of Enron Corp.'s  bankruptcy  proceeding,  ComEd has
potential monetary exposure for 366 of its customer accounts that were served by
Enron Energy  Services (EES) as a billing agent.  EES has rejected its contracts
with these accounts,  with the exception of approximately 100 accounts for which
EES retains its billing  agency.  ComEd is working to ensure that customers know
what  amounts  are owed to ComEd on accounts  for which EES has been  removed as
billing agent,  and has obtained  updated billing  addresses for these accounts.
With regard to the  accounts for which EES retains its billing  agency,  ComEd's
total amount  outstanding is not material.  Because that amount is owed to ComEd
by individual customers,  it is not part of the bankrupt Enron's estate. The ICC
has rescinded EES's authority to act as an alternative retail energy supplier in
Illinois.  However,  EES never  served as a  supplier,  as  opposed to a billing
agent, to any of ComEd's retail accounts.

ComEd and Generation

         Godley Park  District  Litigation.  On April 18, 2001,  the Godley Park
District  filed suit in Will County  Circuit Court against ComEd and  Generation
alleging  that oil  spills  at  Braidwood  Station  have  contaminated  the Park
District's water supply.  The complaint sought actual damages,  punitive damages
of $100 million and statutory penalties.  The court dismissed all counts seeking
punitive damages and statutory penalties, and the plaintiff has filed an amended
complaint  before  the court.  The  amended  complaint  added  counts  under the
Illinois  Public Utility Act (PUA),  which provides for statutory  penalties and
allows recovery of attorneys fees. On April 20, 2002, the Court denied ComEd and
Generation's  motion to dismiss the  additional  counts under the PUA. ComEd and
Generation are contesting the liability and damages sought by the plaintiff.


                                       29
<PAGE>

Generation

         Cotter  Corporation  Litigation.  During  1989 and 1991,  actions  were
brought  in  Federal  and  state  courts  in  Colorado  against  ComEd  and  its
subsidiary,   Cotter  Corporation  (Cotter),  seeking  unspecified  damages  and
injunctive  relief based on allegations  that Cotter  permitted  radioactive and
other  hazardous  material  to be  released  from its mill into  areas  owned or
occupied by the plaintiffs,  resulting in property damage and potential  adverse
health effects. In 1994, a Federal jury returned nominal dollar verdicts against
Cotter on eight plaintiffs' claims in the 1989 cases, which verdicts were upheld
on appeal.  The remaining  claims in the 1989 actions were settled or dismissed.
In 1998,  a jury  verdict  was  rendered  against  Cotter  in favor of 14 of the
plaintiffs in the 1991 cases, totaling  approximately $6 million in compensatory
and punitive  damages,  interest and medical  monitoring.  On appeal,  the Tenth
Circuit Court of Appeals  reversed the jury  verdict,  and remanded the case for
new trial.  These  plaintiffs'  cases were  consolidated  with the  remaining 26
plaintiffs'  cases,  which  had not  been  tried.  The  consolidated  trial  was
completed  on June 28,  2001.  The jury  returned a verdict  against  Cotter and
awarded $16.3  million in various  damages.  On November 20, 2001,  the District
Court  entered  an  amended  final  judgment  that  included  an  award  of both
pre-judgment and post-judgment interests, costs, and medical monitoring expenses
that total $43.3  million.  This matter is being appealed by Cotter in the Tenth
Circuit Court of Appeals. Cotter will vigorously contest the award.

         In November 2000,  another trial  involving a separate  sub-group of 13
plaintiffs,  seeking $19  million in damages  plus  interest  was  completed  in
federal district court in Denver. The jury awarded nominal damages of $42,500 to
11 of 13  plaintiffs,  but awarded no damages for any personal  injury or health
claims,  other than requiring Cotter to perform  periodic medical  monitoring at
minimal cost.  Cotter and the plaintiffs  both appealed the verdict to the Tenth
Circuit Court of Appeals.

         On February 18, 2000, ComEd sold Cotter to an unaffiliated third party.
As part of the sale, ComEd agreed to indemnify Cotter for any liability incurred
by Cotter as a result of these  actions,  as well as any  liability  arising  in
connection  with the West Lake  Landfill  discussed  in the next  paragraph.  In
connection with Exelon's 2001 corporate  restructuring,  the  responsibility  to
indemnify  Cotter for any liability  related to these matters was transferred by
ComEd to Generation.

         The United  States  Environmental  Protection  Agency (EPA) has advised
Cotter  that  it  is  potentially   liable  in  connection   with   radiological
contamination  at a site known as the West Lake Landfill in Missouri.  Cotter is
alleged to have disposed of approximately  39,000 tons of soils mixed with 8,700
tons of leached  barium  sulfate  at the site.  Cotter,  along with three  other
companies  identified by the EPA as potentially  responsible  parties (PRPs), is
reviewing a draft feasibility  study that recommends  capping the site. The PRPs
are also  engaged in  discussions  with the State of Missouri  and the EPA.  The
estimated costs of remediation for the site are $10 to $15 million. Once a final
feasibility  study is complete and a remedy  selected,  it is expected  that the



                                       30
<PAGE>

PRPs will agree on an  allocation  of  responsibility  for the  costs.  Until an
agreement is reached, Exelon cannot predict its share of the costs.

         Real  Estate  Tax  Appeals.  Generation  is  involved  in  tax  appeals
regarding  a number  of its  nuclear  facilities,  Limerick  Generating  Station
(Montgomery  County,  PA), Peach Bottom Atomic Power Station (York County,  PA),
Quad Cities Station (Rock Island County,  IL), and one of its fossil facilities,
Eddystone  (Delaware County,  PA). Generation is also involved in the tax appeal
for Three Mile Island (Dauphin County, PA) through AmerGen.  Generation does not
believe  the outcome of these  matters  will have a material  adverse  effect on
Generation's results of operations or financial condition.

General

         Exelon,  ComEd,  PECO and  Generation  are  involved  in various  other
litigation matters. The ultimate outcome of such matters, as well as the matters
discussed above,  while  uncertain,  are not expected to have a material adverse
effect on its respective financial condition or results of operations.


10.  MERGER-RELATED COSTS (Exelon and Generation)

         In association  with the Merger,  Exelon recorded  certain reserves for
restructuring  costs. The reserves associated with PECO were charged to expense,
while  the  reserves  associated  with  Unicom  were  recorded  as  part  of the
application of purchase accounting and did not affect results of operations.

         Merger-related  costs  charged to  expense  in 2000 were $276  million,
consisting  of $124 million for PECO  employee  costs and $152 million of direct
incremental   costs.   Direct  incremental  costs  represent  expenses  directly
associated with completing the Merger,  including  professional fees, regulatory
approval and  settlement  costs,  and settlement of  compensation  arrangements.
Employee   costs   represent   estimated   severance   costs  and   pension  and
postretirement  benefits  provided under Exelon's  merger  separation  plans for
eligible  employees  who are  expected  to be  involuntarily  terminated  before
December 2002 due to integration activities of the merged companies.

         The  purchase  price  allocation  as of December  31,  2000  included a
liability  of  $307  million  for  Unicom  employee  costs  and  liabilities  of
approximately  $39  million  for  estimated  costs of exiting  various  business
activities  of  former  Unicom  activities  that  were not  compatible  with the
strategic business direction of Exelon.



                                       31
<PAGE>

         During 2001, Exelon finalized its plans for consolidation of functions,
including  negotiation  of an agreement  with the  International  Brotherhood of
Electrical Workers Local 15 regarding  severance benefits to union employees and
recorded adjustments to the purchase price allocation as follows:

<TABLE>
<CAPTION>
                                                                        Original             2001          Adjusted
                                                                        Estimate      Adjustments       Liabilities
--------------------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>              <C>               <C>
Employee severance payments                                            $     128        $      33         $     161 (a)
Relocation and other benefits                                                 21                9                30 (a)
--------------------------------------------------------------------------------------------------------------------------
Employee severance payments and relocation and other benefits                149               42               191
Actuarially determined pension and postretirement costs                      158              (11)              147 (b)
--------------------------------------------------------------------------------------------------------------------------
Total Unicom - Employee Cost                                           $     307        $      31         $     338
==========================================================================================================================
<FN>
(a)  The  increase  is a  result  of the  identification  in 2001 of  additional
     positions to be eliminated.
(b)  The  reduction  results from lower  estimated  pension and post  retirement
     welfare benefits reflecting revised actuarial estimates.
</FN>
</TABLE>

         The  following  table  provides a  reconciliation  of the  reserve  for
employee severance and relocation costs associated with the merger:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                      <C>
Employee severance and relocation reserve as of October 20, 2000                                          $     149
Additional reserve                                                                                               42
--------------------------------------------------------------------------------------------------------------------------
Adjusted employee severance and relocation reserve                                                              191
Payments to employees (October 2000-March 2002)                                                                 (92)
Payments to employees (April 2002-June 2002)                                                                    (33)
--------------------------------------------------------------------------------------------------------------------------
Employee severance and relocation reserve as of June 30, 2002                                             $      66
==========================================================================================================================
</TABLE>

         Additional employee severance costs of $48 million primarily related to
PECO employees were charged to expense in 2001. Exelon  anticipates that a total
of $281 million of employee costs will be funded from pension and postretirement
benefit plans.

         As part of the January 2001  corporate  restructuring,  portions of the
employee  severance and  restructuring  reserve were  transferred  from ComEd to
Generation,   Enterprises   and  Exelon   Business   Services   Company   (BSC).
Approximately  $37  million  and  $15  million  of the  employee  severance  and
relocation  reserve  as of June  30,  2002  relates  to  ComEd  and  Generation,
respectively,  and is  reflected  on the  Consolidated  Balance  Sheets of those
entities.

         Approximately  3,300 Unicom and PECO positions have been  identified to
be eliminated as a result of the merger.  Exelon has terminated  2,255 employees
as of June 30, 2002 of which 510 were  terminated in the second quarter of 2002.
The remaining positions are expected to be eliminated by the end of 2002.


11.  LONG-TERM DEBT (Exelon)

         On June 13, 2002,  ComEd  issued $200  million of 6.15% First  Mortgage
Bonds,  due March 15, 2012.  The $200 million bond issuance was a refinancing of
the $200  million of 8.5% First  Mortgage  Bonds  redeemed on July 15, 2002 at a
redemption price of 103.915% of the principal amount.


                                       32
<PAGE>

         In connection  with the issuance of the $200 million of First  Mortgage
Bonds,  ComEd  settled a forward  starting  interest  rate swap in the  notional
amount  of  $75  million  resulting  in a $1  million  loss  recorded  in  other
comprehensive  income, which is being amortized over the expected remaining life
of the related debt.

         On April 15, 2002,  ComEd  issued $100 million of Illinois  Development
Finance  Authority  floating-rate  Pollution  Control Revenue  Refunding  Bonds,
Series 2002.  The $100 million bond  issuance was used to redeem $100 million of
7.25% Illinois Development Finance Authority Pollution Control Revenue Refunding
Bonds, Series 1991.

         On March 13, 2002,  ComEd  issued $400 million of 6.15% First  Mortgage
Bonds,  due March 15, 2012.  This $400 million bond  issuance  refinanced  other
First Mortgage  Bonds.  In connection with the issuance of $400 million of First
Mortgage  Bonds,  ComEd  settled  forward  starting  interest  rate swaps in the
aggregate  notional  amount  of $375  million  resulting  in a $9  million  loss
recorded  in other  comprehensive  income,  which is  being  amortized  over the
expected remaining life of the related debt.

         On March 21, 2002, ComEd redeemed $200 million of 8.625% First Mortgage
Bonds at the redemption  price of 103.84% of the principal  amount.  These bonds
had a maturity date of February 1, 2022.

         During the six months ended June 30, 2002,  ComEd  recorded  prepayment
premiums of $9 million, partially offset by net unamortized premiums,  discounts
and debt issuance  expenses of $2 million,  associated with the early retirement
of debt in 2002 that have been deferred by ComEd in  regulatory  assets and will
be amortized to interest  expense over the life of the related new debt issuance
consistent with regulatory recovery.


12.  SALE OF ACCOUNTS RECEIVABLE  (Exelon)

         PECO is party to an agreement,  which expires in November 2005,  with a
financial  institution  under which it can sell or finance with limited recourse
an undivided  interest,  adjusted  daily,  in up to $225  million of  designated
accounts receivable.  As of June 30, 2002, PECO had sold a $225 million interest
in  accounts  receivable,  consisting  of a $170  million  interest  in accounts
receivable that PECO accounted for as a sale under SFAS No. 140, "Accounting for
Transfers and Servicing of Financial Assets and  Extinguishments of Liabilities,
a  Replacement  of  FASB  Statement  No.  125"  and a $55  million  interest  in
special-agreement  accounts  receivable  which were accounted for as a long-term
note payable.  PECO retains the servicing  responsibility for these receivables.
The agreement requires PECO to maintain the $225 million interest, which, if not
met,  requires  cash,  which  would  otherwise  be  received  by PECO under this
program,  to be held in escrow until the  requirement  is met. At June 30, 2002,
PECO met this requirement.



                                       33
<PAGE>


13.  RELATED-PARTY TRANSACTIONS (Exelon and Generation)

      Exelon and Generation

         In February 2002,  Generation entered into an agreement to loan AmerGen
up to $75 million at an  interest  rate equal to the  1-month  London  Interbank
Offering  Rate plus 2.25%.  As of June 30, 2002,  $75 million had been loaned to
AmerGen.  In July 2002,  the loan  agreement and the loan were increased to $100
million and the maturity date was extended to July 1, 2003.

         Generation  has entered into PPAs dated  December 18, 2001 and November
22, 1999 with  AmerGen.  Under the 2001 PPA,  Generation  has agreed to purchase
from AmerGen all the energy from Unit No. 1 at Three Mile Island Nuclear Station
from January 1, 2002 through December 31, 2014.  Under the 1999 PPA,  Generation
has agreed to purchase  from  AmerGen all of the  residual  energy from  Clinton
Nuclear Power  Station  (Clinton),  through  December 31, 2002.  Currently,  the
residual output  approximates 25% of the total output of Clinton.  For the three
months ended June 30, 2002 and 2001,  and for the six months ended June 30, 2002
and 2001, the amount of purchased  power recorded in Purchased Power in Exelon's
and Generation's  Consolidated  Statements of Income and Comprehensive Income is
$60 million and $12 million and $116 million and $22 million,  respectively.  As
of June 30, 2002 and December 31, 2001,  Generation had a payable of $27 million
and $3 million, respectively, resulting from these PPAs.

         Under a service  agreement  dated  March 1, 1999,  Generation  provides
AmerGen with certain  operation and support  services to the nuclear  facilities
owned by AmerGen.  This  service  agreement  has an  indefinite  term and may be
terminated by Generation or AmerGen on 90 days notice. Generation is compensated
for these  services in an amount agreed to in the work order,  but not less than
the higher of fully  allocated  costs for  performing the services or the market
price.  For the three months ended June 30, 2002 and 2001, the amount charged to
AmerGen for these  services was $16  million.  For the six months ended June 30,
2002 and 2001,  the amount charged to AmerGen for these services was $30 million
and $32  million,  respectively.  As of June 30,  2002 and  December  31,  2001,
Generation  had a  receivable  of $61  million  and $47  million,  respectively,
resulting from these services.

Generation

         Generation had a short-term  receivable of $59 million at June 30, 2002
and  December  31,  2001,  and a long-term  receivable  of $260 million and $291
million  at June 30,  2002 and  December  31,  2001,  respectively,  from  ComEd
primarily  representing  ComEd's  legal  requirements  to remit  collections  of
nuclear  decommissioning  costs from customers to Generation  resulting from the
restructuring.  These receivables from ComEd were included in Current Assets and
Deferred Debits and Other Assets,  respectively,  on  Generation's  Consolidated
Balance Sheets.

         Effective January 1, 2001,  Generation entered into PPAs with ComEd and
PECO.  Intercompany  power sales pursuant to the PPAs for the three months ended
June 30, 2002 and 2001 were $893 million,  including  decommissioning revenue of
$3 million, and $849 million,  including  decommissioning revenue of $3 million,
respectively.  For the six months  ended June 30,  2002 and June 30,  2001 these
intercompany power sales were $1,728 million,  including decommissioning revenue
of $6  million,  and $1,701  million,  including  decommissioning  revenue of $6
million,  respectively. At June 30, 2002 and December 31, 2001, there was a $351




                                       34
<PAGE>

million and $273 million receivable, respectively, for the PPAs as well as other
services   provided  which  is  included  in  Current  Assets  on   Generation's
Consolidated Balance Sheets.

         Generation  sells  power to Exelon  Energy.  Power  sales for the three
months  ended  June  30,  2002  and  2001  were  $60  million  and $57  million,
respectively,  and for the six  months  ended  June 30,  2002 and 2001 were $117
million and $118 million,  respectively. At June 30, 2002 and December 31, 2001,
there was a $21 million and $15 million receivable, respectively.

         Generation  purchases power from AmerGen under PPAs as discussed in the
Exelon and Generation section of this note.  Additionally,  Generation purchases
power from PECO for  Generation's  own use,  buys back excess  power from Exelon
Energy and  purchases  transmission  and ancillary  services  from ComEd.  These
purchases,  including AmerGen, for the three months ended June 30, 2002 and 2001
were $75 million and $42  million,  respectively,  and for the six months  ended
June 30, 2002 and 2001 were $147 million and $60 million,  respectively. At June
30, 2002 and December 31, 2001, there was a payable for these power purchases of
$35 million and $26 million, respectively.

         Generation  receives a variety of corporate  support services from BSC,
including legal, human resources, financial and information technology services.
Such services,  provided at cost including  applicable  overhead,  for the three
months  ended June 30, 2002 and June 30, 2001 were $16 million and $22  million,
respectively,  and $30 million and $35 million for the six months ended June 30,
2002  and June 30,  2001,  respectively,  and were  included  in  Operating  and
Maintenance (O&M) expense on Generation's  Consolidated Statements of Income and
Comprehensive  Income.  At June 30, 2002 and December 31, 2001,  there was an $8
million and an $18 million payable,  respectively,  to BSC for services provided
which is included in Current  Liabilities on Generation's  Consolidated  Balance
Sheets.

         In order to facilitate  payment  processing,  ComEd  processes  certain
invoice payments on behalf of Generation and BSC.  Payables at June 30, 2002 and
December 31, 2001 to ComEd for such services totaled $8 million and $21 million,
respectively,   and  were  included  in  Current   Liabilities  on  Generation's
Consolidated Balance Sheets.

         In relation to the  acquisition  of two  generating  plants from TXU in
April of 2002, Generation had a $331 million payable to Exelon at June 30, 2002.
Interest expense related to this payable was $1 million for the three months and
six months ended June 30, 2002.

         In relation to the  December  18,  2001  acquisition  of 49.9% of Sithe
common stock,  Generation had a $700 million payable to Exelon, which was repaid
in the second quarter of 2001.  Interest expense related to this payable for the
three  and six  months  ended  June 30,  2001 was $8  million  and $23  million,
respectively.


14.  NEW ACCOUNTING PRONOUNCEMENTS (Exelon and  Generation)

         In  June  2001,  the  FASB  issued  SFAS  No.  143,  "Asset  Retirement
Obligations"  (SFAS No.  143).  In April  2002,  the FASB issued SFAS No. 145, "


                                       35
<PAGE>

Rescission of FASB Statements No. 4, 44 and 64,  Amendment of FASB Statement No.
13, and Technical  Corrections"  (SFAS No. 145).  In July 2002,  the FASB issued
SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities"
(SFAS No. 146).

         SFAS  No.  143  provides   accounting   requirements   for   retirement
obligations  associated with tangible long-lived assets. Exelon expects to adopt
SFAS  No.  143 on  January  1,  2003.  Retirement  obligations  associated  with
long-lived  assets included within the scope of SFAS No. 143 are those for which
there is a legal  obligation to settle under  existing or enacted law,  statute,
written  or oral  contract  or by  legal  construction  under  the  doctrine  of
promissory estoppel. Adoption of SFAS No. 143 will change the accounting for the
decommissioning  of Exelon's nuclear  generating plants as well as certain other
long-lived assets.

         Currently,   Generation  records  the  obligation  for  decommissioning
ratably over the lives of the plants.  The January 1, 2003  adoption of SFAS No.
143 will require a cumulative effect  adjustment  effective the date of adoption
to adjust plant assets and decommissioning  liabilities to the values they would
have been had this  standard  been  employed  from the  in-service  dates of the
plants.

         As it relates to nuclear decommissioning, the effect of this cumulative
adjustment will be to change the  decommissioning  liability to reflect the fair
value of the decommissioning obligation at the balance sheet date. Additionally,
the standard will require the accrual of an asset related to the decommissioning
obligation,  which will be amortized over the remaining lives of the plants. The
net  difference  between the asset  recognized  and the liability  recorded upon
adoption  of SFAS No.  143 will be  charged  to  earnings  and  recognized  as a
cumulative  effect, net of expected  regulatory  recovery.  The  decommissioning
liability to be recorded represents an obligation for the future decommissioning
of the  plants,  and as a  result  accretion  expense  will be  accrued  on this
liability until such time as the obligation is satisfied.

         Exelon, ComEd, PECO and Generation are in the process of evaluating the
impact of SFAS No. 143 on their financial  statements,  and cannot determine the
ultimate impact of adoption at this time,  however,  the cumulative effect could
be material to earnings.  Additionally,  although over the life of the plant the
charges to earnings  for the  depreciation  of the asset and the interest on the
liability will be equal to the amounts currently  recognized as  decommissioning
expense,  the timing of those  charges will change and in the  near-term  period
subsequent to adoption,  the  depreciation  of the asset and the interest on the
liability could result in an increase in expense.

         SFAS No. 145  eliminates  SFAS No. 4  "Reporting  Gains and Losses from
Extinguishment  of Debt"  (SFAS No. 4) and thus  allows for only those  gains or
losses on the  extinguishment  of debt that meet the  criteria of  extraordinary
items to be  treated  as such in the  financial  statements.  SFAS No.  145 also
amends  Statement of Financial  Accounting  Standards  No. 13,  "Accounting  for
Leases"  (SFAS No. 13) to require  sale-leaseback  accounting  for certain lease
modifications  that have  economic  effects  that are similar to  sale-leaseback
transactions.  The  provisions of this  statement  relating to the rescission of
SFAS No. 4 are  effective  for fiscal years  beginning  after May 15, 2002,  the
provisions  of this  statement  relating  to the  amendment  of SFAS No.  13 are
effective  for  transactions  occurring  after  May  15,  2002,  and  all  other



                                       36
<PAGE>

provisions of this Statement are effective for financial statements issued on or
after May 15, 2002.  Exelon,  ComEd,  PECO and  Generation are in the process of
evaluating the impact of SFAS No. 145 on their financial statements,  and do not
expect the impact to be material.

         SFAS No. 146 requires that the liability for costs associated with exit
or disposal activities be recognized when incurred, rather than at the date of a
commitment  to an  exit  or  disposal  plan.  SFAS  No.  146  is  to be  applied
prospectively to exit or disposal activities initiated after December 31, 2002.


15.  CHANGE IN ACCOUNTING ESTIMATE (Exelon and Generation)

         Effective April 1, 2001,  Generation  changed its accounting  estimates
related to the depreciation and decommissioning of certain generating  stations.
The  estimated  service  lives  were  extended  by 20 years  for  three  nuclear
stations,  by periods of up to 20 years for certain  fossil  stations  and by 50
years for a pumped  storage  station.  Effective  July 1,  2001,  the  estimated
service lives were extended by 20 years for the remainder of Exelon's  operating
nuclear  stations.   These  changes  were  based  on  engineering  and  economic
feasibility  studies  performed by Generation  considering,  among other things,
future capital and maintenance  expenditures at these plants. As a result of the
change,  net income for the three  months  and six  months  ended June 30,  2002
increased  $25 million ($16  million,  net of income taxes) and $60 million ($36
million, net of income taxes), respectively.

         Effective April 1, 2002, ComEd changed its accounting  estimate related
to the  allowance  for  uncollectible  accounts.  This  change  was  based on an
independently  prepared  evaluation  of the risk  profile  of  ComEd's  customer
accounts  receivable.  As a result  of the new  evaluation,  the  allowance  for
uncollectible  accounts reserve was reduced by $11 million in the second quarter
of 2002.


16.  SUBSEQUENT EVENTS

         On July 1, 2002, Exelon Generation  notified Midwest  Generation of the
exercise of its call options under the existing Coal  Generation  Purchase Power
Agreement.  Exelon Generation exercised options on 1,265 MWs of capacity and did
not exercise options on 2,684 MWs of capacity.  In 2003,  Exelon Generation will
take 1,696 MWs of non-option capacity and 1,265 MWs of option capacity under the
existing contract.




                                       37
<PAGE>

PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits:

         99.1 -   Certification  Pursuant to Section 1350 of Chapter 63 of Title
                  18 United States Code (Sarbanes - Oxley Act of 2002) as to the
                  Quarterly  Report on Form 10-Q for the quarterly  period ended
                  June 30, 2002, by John W. Rowe for Exelon Corporation.

         99.2 -   Certification  Pursuant to Section 1350 of Chapter 63 of Title
                  18 United States Code (Sarbanes - Oxley Act of 2002) as to the
                  Quarterly  Report on Form 10-Q for the quarterly  period ended
                  June 30, 2002, by Ruth Ann M. Gillis for Exelon Corporation.

         99.3 -   Certification  Pursuant to Section 1350 of Chapter 63 of Title
                  18 United States Code (Sarbanes - Oxley Act of 2002) as to the
                  Quarterly  Report on Form 10-Q for the quarterly  period ended
                  June 30, 2002,  by Oliver D.  Kingsley  for Exelon  Generation
                  Company, LLC.

         99.4 -   Certification  Pursuant to Section 1350 of Chapter 63 of Title
                  18 United States Code (Sarbanes - Oxley Act of 2002) as to the
                  Quarterly  Report on Form 10-Q for the quarterly  period ended
                  June 30,  2002,  by Ruth Ann M.  Gillis for Exelon  Generation
                  Company, LLC.

         99.5 -   Management's  Discussion  and Analysis of Financial  Condition
                  and Results of Operations and Index to Financial Statements of
                  Exelon  Generation  Company,  LLC, filed by Exelon  Generation
                  Company,  LLC with the Securities Exchange Commission on April
                  24,  2002  on  Registration   Statement  Form  S-4  (File  No.
                  333-85496).




                                       38
<PAGE>

(b)      Reports on Form 8-K:

         Exelon filed Current  Reports on Form 8-K during the three months ended
June 30, 2002 regarding the following items:

<TABLE>
<CAPTION>
         Date of Earliest
         Event Reported             Description of Item Reported
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>
         April 2, 2002              "ITEM 5. OTHER EVENTS"  regarding an interim order in Commonwealth  Edison's  Delivery  Services
                                    Rate Case.

         April 4, 2002              "ITEM 5. OTHER EVENTS"  regarding the announcement  that an indirect  subsidiary of Exelon filed
                                    for protection under Chapter 11 of the Bankruptcy Code.

         April 10, 2002             "ITEM 9. REGULATION FD DISCLOSURE"  regarding a presentation by  representatives  of Power Team,
                                    Generation's Power Marketing Organization,  to Capital Group Companies. The exhibit includes the
                                    slides used during the presentation.

         April 19, 2002             "ITEM 5. OTHER EVENTS and REGULATION FD DISCLOSURE"  regarding the announcement that Ruth Ann M.
                                    Gillis, Senior Vice President and Chief Financial Officer, will become Senior Vice President and
                                    President, Exelon Business Services Company.

         April 22, 2002             "ITEM 5. OTHER EVENTS"  reporting  Exelon's  first quarter 2002  earnings  results.  Exelon also
                                    announced  that  Nicholas  DeBenedictis  was  elected  to  the  board  of  directors  of  Exelon
                                    Corporation. "ITEM 9. REGULATION FD DISCLOSURE" regarding highlights of the Exelon First Quarter
                                    Earnings Conference Call.

         May 2, 2002                "ITEM 5. OTHER EVENTS"  regarding the  announcement of the completion of the purchase of two TXU
                                    Corp. power plants.

         May 14, 2002               "ITEM 9. REGULATION FD DISCLOSURE"  regarding a presentation by Ruth Ann M. Gillis,  Senior Vice
                                    President  and CFO of Exelon  Corporation,  to  investors  at the Salomon  Smith  Barney Power &
                                    Merchant  Energy  2002  Conference.  The  exhibits  include  the  slides  used and copies of the
                                    materials made available to investors attending the conference.

         May 17, 2002               "ITEM 5. OTHER EVENTS" regarding Commonwealth Edison's resolution of a FERC reporting issue with
                                    Illinois Regulators.



                                                                 39
<PAGE>

         May 22, 2002               "ITEM 5. OTHER EVENTS" regarding  Exelon's  affirmation of Power Team's  delivery-based  trading
                                    strategy.

         May 22, 2002               "ITEM 9. REGULATION FD DISCLOSURE"  representatives  of Exelon  Corporation  attended the Edison
                                    Electric Institute's International Finance Conference held in New York. The exhibits include the
                                    materials made available at the conference.

         May 23, 2002               "ITEM 5. OTHER EVENTS" regarding Exelon's response to FERC that Power Team did not engage in any
                                    of the strategies put forth in the Enron Corp. (Enron) memos referred to in FERC's data request.
                                    A copy of Exelon's response to the FERC data request was included as an exhibit.

         June 10, 2002              "ITEM 5. OTHER EVENTS" regarding  Exelon's  reaffirmation of the company's  earnings outlook for
                                    2002 and the announcement that it will host an investor conference.

         June 12, 2002              "ITEM  9.  REGULATION  FD  DISCLOSURE"  John  W.  Rowe,  President  and  CEO of  Exelon,  made a
                                    presentation  to investors  at the Deutsche  Bank  Electric and Power  Conference.  The exhibits
                                    include the presentation slides and other materials made available at the conference.

         June 20, 2002              "ITEM 9. REGULATION FD DISCLOSURE"  senior officers of Exelon made  presentations  at the Exelon
                                    Investor  Conference in New York City. The exhibits  include the  presentation  slides and other
                                    materials made available at the conference.

         June 20, 2002              "ITEM 9. REGULATION FD DISCLOSURE" regarding additional  information  management provided during
                                    Exelon's Investor Conference in New York on June 20, 2002.

         June 27, 2002              "ITEM 5. OTHER EVENTS" a note to Exelon's  financial  community  regarding  Exelon  Generation's
                                    agreement to purchase Sithe New England Holdings, LLC.

------------------------------------------------------------------------------------------------------------------------------------


         Generation  filed  Current  Reports on Form 8-K during the three months
ended June 30, 2002 regarding the following items:

         Date of Earliest
         Event Reported             Description of Item Reported
------------------------------------------------------------------------------------------------------------------------------------
         May 2, 2002                "ITEM 5. OTHER EVENTS"  regarding the  announcement of the completion of the purchase of two TXU
                                    Corp. power plants.



                                                                 40
<PAGE>

         May 14, 2002               "ITEM 9. REGULATION FD DISCLOSURE"  regarding a presentation by Ruth Ann M. Gillis,  Senior Vice
                                    President  and CFO of Exelon  Corporation,  to  investors  at the Salomon  Smith  Barney Power &
                                    Merchant  Energy  2002  Conference.  The  exhibits  include  the  slides  used and copies of the
                                    materials made available to investors attending the conference.

         May 22, 2002               "ITEM 5. OTHER EVENTS" regarding  Exelon's  affirmation of Power Team's  delivery-based  trading
                                    strategy.

         May 22, 2002               "ITEM 9. REGULATION FD DISCLOSURE"  representatives  of Exelon  Corporation  attended the Edison
                                    Electric Institute's International Finance Conference held in New York. The exhibits include the
                                    materials made available at the conference.

         May 23, 2002               "ITEM 5. OTHER EVENTS" regarding Exelon's response to FERC that Power Team did not engage in any
                                    of the  strategies  put forth in the Enron memos  referred to in FERC's data request.  A copy of
                                    Exelon's response to the FERC data request was included as an exhibit.

         June 12, 2002              "ITEM  9.  REGULATION  FD  DISCLOSURE"  John  W.  Rowe,  President  and  CEO of  Exelon,  made a
                                    presentation  to investors  at the Deutsche  Bank  Electric and Power  Conference.  The exhibits
                                    include the presentation slides and other materials made available at the conference.

         June 20, 2002              "ITEM 9. REGULATION FD DISCLOSURE"  senior officers of Exelon made  presentations  at the Exelon
                                    Investor  Conference in New York City. The exhibits  include the  presentation  slides and other
                                    materials made available at the conference.

         June 20, 2002              "ITEM 9. REGULATION FD DISCLOSURE" regarding additional  information  management provided during
                                    Exelon's Investor Conference in New York on June 20, 2002.

         June 27, 2002              "ITEM 5. OTHER EVENTS" a note to Exelon's  financial  community  regarding  Exelon  Generation's
                                    agreement to purchase Sithe New England Holdings, LLC.

------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                                                 41


<PAGE>

                                   SIGNATURES

         Pursuant to  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                              EXELON CORPORATION


                               /s/ John W. Rowe
                               ---------------------------------
                               JOHN W. ROWE
                               Chairman of the Board and Chief Executive Officer

                               /s/ Ruth Ann M. Gillis
                               ---------------------------------
                               RUTH ANN M. GILLIS
                               Senior Vice President and Chief Financial Officer


                               /s/ Matthew F. Hilzinger
                               ---------------------------------
                               MATTHEW F. HILZINGER
                               Vice President and Corporate Controller
                              (Principal Accounting Officer)



October 30, 2002



                                       42
<PAGE>

                                   SIGNATURES

         Pursuant to  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                              EXELON GENERATION COMPANY, LLC


                              /s/ Oliver D. Kingsley Jr.
                              ---------------------------------
                              OLIVER D. KINGSLEY JR.
                              CEO and President


                              /s/ Ruth Ann M. Gillis
                              ---------------------------------
                              RUTH ANN M. GILLIS
                              Senior Vice President and Chief Financial Officer
                              Exelon Corporation
                              (Principal Financial Officer)


October 30, 2002









                                       43
<PAGE>



                                 CERTIFICATIONS
-------------------------------------------------------------------------------

     Certification Pursuant to Rule 13a-14 and 15d-14 of the Securities and
                              Exchange Act of 1934


I, John W. Rowe certify that:


1. I have  reviewed  this  amended  quarterly  report  on Form  10-Q/A of Exelon
Corporation;


2. Based on my  knowledge,  this amended  quarterly  report does not contain any
untrue  statement of a material fact or omit to state a material fact  necessary
to make the  statements  made,  in light of the  circumstances  under which such
statements  were made, not misleading with respect to the period covered by this
amended quarterly report;


3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this amended  quarterly  report,  fairly present in all
material respects the financial condition,  results of operations and cash flows
of the  registrant  as of,  and  for,  the  periods  presented  in this  amended
quarterly report;


Date: October 30, 2002


                                /s/ John W. Rowe
                      -----------------------------------
                                  John W. Rowe
                Chairman of the Board and Chief Executive Officer





                                       44
<PAGE>


     Certification Pursuant to Rule 13a-14 and 15d-14 of the Securities and
                              Exchange Act of 1934
-------------------------------------------------------------------------------



I, Ruth Ann M. Gillis certify that:


1. I have  reviewed  this  amended  quarterly  report  on Form  10-Q/A of Exelon
Corporation;


2. Based on my  knowledge,  this amended  quarterly  report does not contain any
untrue  statement of a material fact or omit to state a material fact  necessary
to make the  statements  made,  in light of the  circumstances  under which such
statements  were made, not misleading with respect to the period covered by this
amended quarterly report;


3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this amended  quarterly  report,  fairly present in all
material respects the financial condition,  results of operations and cash flows
of the  registrant  as of,  and  for,  the  periods  presented  in this  amended
quarterly report;


Date: October 30, 2002


                             /s/ Ruth Ann M. Gillis
                      -----------------------------------
                               Ruth Ann M. Gillis
                Senior Vice President and Chief Financial Officer





                                       45
<PAGE>




     Certification Pursuant to Rule 13a-14 and 15d-14 of the Securities and
                              Exchange Act of 1934
-------------------------------------------------------------------------------




I, Oliver D. Kingsley Jr. certify that:


1. I have  reviewed  this  amended  quarterly  report  on Form  10-Q/A of Exelon
Generation Company, LLC;


2. Based on my  knowledge,  this amended  quarterly  report does not contain any
untrue  statement of a material fact or omit to state a material fact  necessary
to make the  statements  made,  in light of the  circumstances  under which such
statements  were made, not misleading with respect to the period covered by this
amended quarterly report;


3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this amended  quarterly  report,  fairly present in all
material respects the financial condition,  results of operations and cash flows
of the  registrant  as of,  and  for,  the  periods  presented  in this  amended
quarterly report;


Date: October 30, 2002

                           /s/ Oliver D. Kingsley Jr.
                       -----------------------------------
                             Oliver D. Kingsley Jr.
                      Chief Executive Officer and President



                                       46
<PAGE>

     Certification Pursuant to Rule 13a-14 and 15d-14 of the Securities and
                              Exchange Act of 1934
-------------------------------------------------------------------------------


I, Ruth Ann M. Gillis certify that:


1. I have  reviewed  this  amended  quarterly  report  on Form  10-Q/A of Exelon
Generation Company, LLC;


2. Based on my  knowledge,  this amended  quarterly  report does not contain any
untrue  statement of a material fact or omit to state a material fact  necessary
to make the  statements  made,  in light of the  circumstances  under which such
statements  were made, not misleading with respect to the period covered by this
amended quarterly report;


3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this amended  quarterly  report,  fairly present in all
material respects the financial condition,  results of operations and cash flows
of the  registrant  as of,  and  for,  the  periods  presented  in this  amended
quarterly report;


Date: October 30, 2002

                             /s/ Ruth Ann M. Gillis
                       -----------------------------------
                               Ruth Ann M. Gillis
                Senior Vice President and Chief Financial Officer
                               Exelon Corporation



                                       47