At this time, I would like to welcome everyone to the Exelon First Quarter Earnings Conference Call. (Operator Instructions). Thank you. I would now like to turn the conference over to Karie Anderson, Vice President of Investor Relations. You may begin your conference.

Welcome to Exelon's first quarter 2009 earnings review and conference call update. Thank you for joining us today. We issued our earnings release this morning. If you haven't received it, the release is available on the Exelon website, at www.exeloncorp.com, or you can call [Deloris Mungia] at 312-394-5222, and she will fax or email the release to you. Before we begin today's discussion, let me remind you that the earnings release and other matters that we discuss in today's call contain forward-looking statements and estimates that are subject to various risk and uncertainty as well as adjusted non-GAAP operating earnings. Please refer to today's 8-K and our other SEC filings for discussions of factors that may cause results to differ from management's projections, forecasts, and expectations and for a reconciliation of operating earnings to GAAP earnings. In addition during the call, we will be discussing Exelon's exchange offer to acquire NRG and Exelon's intention to solicit proxies for meetings of NRG and Exelon shareholders. Today's discussion does not constitute an offer to exchange or a solicitation of an offer to exchange NRG shares and it is not a substitute for the exchange offer documents or the proxy statements that we have filed with the SEC. For important additional information regarding the offer in the proxy statement, please refer to the earnings release AND today's 8-K. Leading the call today are John Rowe, Exelon's Chairman and Chief Executive Officer, and Matthew Hilzinger, Exelon's Senior Vice President and Chief Financial Officer. They are joined by other members of Exelon's senior management team who will be available to answer your questions. We have scheduled 60 minutes for this call. I will now turn the call over to John Rowe, Exelon's CEO.

This morning I'll offer my perspective on our first quarter results, briefly comment on our hedging disclosure program, and also on the proposed NRG acquisition. I will close with revisiting Exelon's long-term value proposition. I know you've all heard it before, but it would be easy to forget in these turbulent times. Many of you have heard me describe Exelon's sustainable advantage using the diagram included on slide three of today's presentation. Every day we look at these four areas, finance, operations, energy markets and regulatory structures, and we constantly focus on keeping these four together because that is where performance lies. Today's call is largely focused on finance and I will address all four pieces because that's where our competitive advantage is. As you saw in this morning's release, we reported operating earnings of $1.20 per share, which is at the high end of the guidance range we provided you earlier. This includes $0.06 per share associated with a tax ruling that I mentioned on March 10. It happened to come all in the first quarter, but we think of it as helping us offset higher pension and OPEB expenses throughout the first year. In other words, don't include that $0.06 when you are multiplying by 4. Our first quarter results also reflect three fewer nuclear refueling outages quarter-over-quarter, 13 fewer nuclear non-refueling outage days, best-ever availability of our fossil fleet and an effective hedging program. Our first quarter earnings are a significant accomplishment in this environment. I am very proud of both the management team and our larger group of employees for performing so well in such a distracting and troublesome time. With these earnings, we are on track for the year, which allows me to reaffirm our 2009 operating earnings guidance range of $4.00 to $4.30 a…

As highlighted, my key messages this morning are on slide four, so I would like to start there. We provided a significant amount of detail regarding our results in our earnings release and the accompanying tables. Therefore, I'll spend my time this morning discussing our results for the quarter and updating our 2009 outlook. Beginning with our current quarter results on slide five, we recorded operating earnings of $1.20 per share in the first quarter of 2009 as compared to $0.93 per share in the first quarter of 2008. Our first quarter results were largely driven by higher earnings at Exelon Generation and ComEd and a slight increase in earnings at PECO. I will start by mentioning one item that affects quarter-over-quarter results at both Exelon Generation and ComEd. In February, the Illinois Supreme Court ruled that for purposes of the Illinois Replacement Tax, both ComEd and Exelon Generation were eligible for an investment tax credit related to investments in Illinois property. As a result of this ruling, Exelon recognized the benefit of $0.06 per share in the first quarter of 2009. The majority of this benefit of $0.05 was recognized at ComEd and the remaining benefit at Exelon Generation. Even without this tax item, our quarterly results are very solid, driven by our strong nuclear performance and higher distribution revenues at ComEd. Turning to slide six, you will see the key drivers for Exelon Generation's quarter-over-quarter increase in operating earnings. First, our nuclear group continued their exceptional operational performance this quarter with higher nuclear volumes driven by less refueling outage days, benefiting quarter-over-quarter results by $0.07 per share. Additionally, excluding its owned output from the Salem Generating Station, Exelon Nuclear achieved a capacity factor of 96.2% in the first quarter of 2009, which is much higher than the 89%…

(Operator Instructions). Your first question comes from the line of Greg Gordon with Citi.

I had two questions. The first is you inferred that you have the baseline assumptions in your guidance relative to load, which you did put in your presentation and you gave us sensitivities that would result from changes off that baseline. What do you think the bias is right now as we go into second and third quarter, because when we look at the data here we saw that, in particular, March was a particularly big drop-off in demand in almost every region of the country on an economic basis? I'm wondering as we look at what's happened so far in April whether we are seeing a continuing deceleration of demand or whether things have stabilized?

We see exactly what you see and we would call the bias exactly the way you call it. I think our view of the downside at ComEd and PECO is something like a penny a share each. As you know, the ricochet effect on Genco is larger at ComEd than it is at PECO because the Genco-PECO contract is still below market. So you get a bit of recovery in Genco and PECO that you don't get on ComEd.

That's because you get to resell the power in the market at a rate that's actually pretty good relative to your obligation at the retail level, right?

Yes. Given where power prices are right now, that's fairly de minimis in terms of the impact. It does work that way, Greg.

My second question is with regard to the procurement auctions that are coming up, and it sort of goes to the market dynamics right now. We're hearing that all the commodity markets, not just power, are trading extremely thin. Do you see these procurement auctions as sort of pretty critical liquidity events for the company? Do you think the bias will be to prices sort of rising to a more economically rational level as these liquidity events happen, or do you think they might actually put downward pressure on the market as excess generation goes to try to find load?

I'm going to give you a short answer, and then defer to Ken and Ian to give you a better answer. My view is we are pleased at how well the auctions have sustained themselves so far. Our bias, like your question implies, is that the next ones are likely to be a bit lower, and we're glad we're hedged as much as we are for the rest of this year and through 2010. Ian, do you want to pick that up or Ken?

I think you said it just about right. I would expect that they are good liquidity events for us. I think that they are competitively priced. I do believe that there is a slight sort of risk premium people are adding to their prices now because of the difficulties in obtaining funding. So, overall, I think they fairly reflect the marketplace and we do look at them as a good liquidity opportunity for us and we look forward to participating in them.

Your next question comes from the line of Hugh Wynne with Sanford Bernstein.

I had a question regarding the impact of wind on the value of base load generation assets in Texas, such as the NRG assets that you plan to acquire, and also the impact on base load generation assets in the Midwest, like Exelon's Illinois fleet. I understand that wind capacity in Texas has gotten up in excess of 7 gigawatts, which is almost equivalent to a third of the night time demand, and that the power prices in West Texas as a result have been driven down to zero and in some cases even below zero during the night time hours. I guess, the first part of my question goes to what will be the impact of that wind power once it's connected to load centers in the East through the ERCOT transmission expansion on the off-peak earnings power of the NRG fleet. I guess, parallel to that, we've seen a tremendous increase in 2008 in wind capacity in Iowa. My question was what impact have you seen or do you expect to see on all fleet power prices in Illinois?

In both cases we see the impact of wind as negative for off-peak power prices. Question is always whether we have modeled enough. I think our base case on the NRG acquisition, I think we are looking at 12,000 megawatts. The more transmission that gets built to move the wind, it has kind of a perverse effect because the wind tends to cost the customer more, but at the same time it hurts our power prices. Ian or Chris or Ken, would one of you pick up on this and expand please? Ken?

Hugh, John is absolutely correct. It's a good question and John hit it right on the head. We are modeling increases in wind generation in the Midwest and in Texas. John was right. We are modeling 12,000 and other sensitivities to wind and looking at transmission investment that would get it into the marketplace. Obviously, the wind is one component, the other components being what demand growth does when we come out of this economy and what other generation supply response you see, either retirement or new constructing. Clearly, as you know, it's not as simple as just wind and transmission. Its wind transmission, demand and other generation assets that make the system work. We are very confident that we've modeled those scenarios in both markets.

Can you comment on the Midwest? Have you seen an impact on power prices in the Midwest?

Yes. We have seen some lower spot prices in the Midwest, Hugh. Some of that you could attribute to some new wind coming from the West into Western PJM. There have been some congestion issues that are more short term in nature given transmission and unit outages that have also impacted demand, short term demand as an impact and short-term prices, spot prices for the commodities that drive electricity price are all impacting. I think the transmission grid can handle a good amount of wind and allow it to move East. I think if we saw a very large amount of wind, we probably need to expand the transmission grid to appropriately move that energy East from where it is now in the Midwest.

Hugh, Bob Dylan was an aspiring singer and not much of a utility executive, but he wasn't far off when he said the answer is "Blowing in the Wind." Our Exelon 2020 work says that the cost of adding all of this wind to society is between $50 and $80 per ton of avoided carbon dioxide. This is not as cheap a way for our customers to deal with the CO2 problem as everybody wants to believe it is. Nonetheless, it is very clear that the politics are with building wind. We're going to keep seeing more of it and we're trying very hard to stay on top of its effects. We're certainly trying to model it in the NRG acquisition. I might say as a snide aside, it seems to concern us more than it concerns NRG, but that's not a helpful comment.

Matt, could you comment quickly on how close we are to impairment levels on the ComEd goodwill given the further decline and utility valuations in the first quarter?

We do take a look at it on a regular basis. In fact, we took a look at it this particular quarter. We obviously didn't have an impairment or we would have reported it, but you are right that the values of T&D companies have come down from where they are before. I think when we look at the profitability of ComEd in terms of the revenue increase and the cost reductions that they are going through, it does provide a healthy level of cash flows that supports that goodwill. We'll continue to take a look at it. We do have kind of a formal time that we have to take a look at it in the fourth quarter. We have taken a look at it in the past and we'll take a look at it again in the fourth quarter.

Matt, just to expand on that, and you are the one to do this rather than me, but as I remembered there were positives as well as negatives. Will you expand a little bit, were there more positives or more negatives this time?

I would say that the level of value that we evaluate the goodwill on has come down year-over-year. I do think when we get down to do the specific analysis, it's really the cost cutting initiatives that provided a big positive to why we didn't impair it. So, I think when we do the analysis that was a big consideration in terms of how we do the valuation.

Brother Clark and his team have new religion. It's fun watching Frank become a cost cutter, amazing what a good man can do when he has to.

That's very good to hear.

Your next question comes from the line of Jonathan Arnold with Merrill Lynch. Jonathan Arnold - Bank of America/Merrill Lynch: I had a detail question on the costs within ComEd in the quarter. You showed us higher pay on slide seven, higher pension and OPEB expense offset by cost saving initiatives. It was negative a penny overall. Can you break that apart a little for us, give us a sense of how much cost savings was achieved? I think you also said we'd start to see cost savings accelerate like into the back part of the year. So is it possible those numbers start swinging positive later in the year?

The short answer is yes. That number should get positive as we move to the backend of the year. Bob, can you give them a more detailed breakdown?

Compared to the first quarter of last year, excluding the impacts, the increase in tension and OPEB costs, we were about $3 million better after-tax in O&M compared to the first quarter of last year. You are absolutely right. We are transitioning into our various cost cutting initiatives, expected to see some of the benefit of those initiatives in March and did see that in March. We expect to see more of that as we proceed through April and through the remainder of the year. We have cost cutting initiatives that should get us to over $70 million in the reduction on O&M compared to where we were last year at this point. While we are still executing all those initiatives, we think we're on track. Jonathan Arnold - Bank of America/Merrill Lynch: If I may just ask a broader question on this, John, I think in the intro you talked about having been in a cost cutting mode for several years when the market was last weak, and then having had a following wind, I think you were suggesting more of a cost cutting focus going forward and we've seen a lot at ComEd so far. Are you looking and how broadly are you looking across the rest of the company and what are the possibilities of similar scale to activities in other businesses?

Chris has developed programs in Genco that in Nuclear go as far as I think we dare go, and he is now in conjunction with Ruth Ann and Ian taking a very hard look at the holding company and its costs. Chris, would you like to expand on that?

Yes. We're not at the point of giving a number, but we've got a roadmap laid out to look at our governance and oversight structure versus what the future on the commodity market is. We would expect in the third quarter to be able to roll out our plan. We would desire to do most of our structural adjustments in the third quarter that would start to reflect in fourth quarter accelerated savings, and they will be sustainable into next year. Jonathan Arnold - Bank of America/Merrill Lynch: Should we be seeing this as what you originally talked about in the year as an offset, the weakness elsewhere in the business, or is this a business in itself?

No. You should see it just the way you said it. What we're looking at is that portion of 10 which wasn't covered by prior hedges is likely to be in a softer commodity market, and we're going to do our very best to offset that with further cost reductions.

Your next question comes from the line of Michael Lapides with Goldman Sachs.

Let's just kind of assume current pension rules, can you talk a little bit about your A), cash investment and pension; and B), your outlook for your balance sheet and uses of your balance sheet over the next couple of years?

I think I would start with kind of the overall way that we're looking at the balance sheet. When we look at kind of our credit metrics, so you start with FFO to debt, we're projecting at yearend to be at about 34%. That is clearly within the range of what S&P considers to be strong investment grade. When we look at all of the scenarios out there and we've provided a number at EEI, and then I think we updated it again at the March 10 conference, we take a look at the stress scenarios there. We've talked to S&P in detail about this that we're still well within strong credit metrics. So the first thing is I just want to make sure that people understand that we're watching it, we're looking at it, we're going to fund it because we need to fund it, but we don't see a detrimental impact either in the short term or the long term in terms of our ability to stay investment grade. With that being said, we continue to watch the market. We are about 60% funded right now on the big pension plan. The first quarter we saw the assets come down substantially, probably around 10% to 11%. They recovered a little bit in April. We're going to continue to watch it as it goes through the rest of the year like everybody else is, and we're committed to make the contributions that we need to make. Right now what we've tried to do is give you and the shareholders and the bondholders a way to go through, at least, get a sense of the magnitude of what we need to contribute over the next few years. I think the treasury rules that I referred to in my opening remarks are a positive thing. They're going to reduce our current funding this year by 90. Everything we can tell there's going to be forthcoming regulations that should provide some additional relief as we get to '10. Even without that relief again, our balance sheet is in good shape. We'll just watch and continue to make the funding that we need to make. Does that answer your question, Mike?

Let me just expand a little, Michael. Matt, correct me if I'm misremembering this number, I think as of March 31 the unfunded requirement was about $4.3 billion. That is what I have on my notes. The question obviously is, one, how fast do we have to refund it? The federal government is going to have to be rethinking that issue for a whole lot of folks and that may give us some additional options. The second question is, how fast do we want to refund it, because on the one hand if you have confidence in market recovery you might like to have a little more money in there earlier, on the other hand we have lots of other uses for the cash too. I asked somebody for a sensitivity, 1000-point improvement in the Dow, whenever you think that might happen, would reduce that total funding requirement by $0.5 billion. So we, like a whole lot of other people, are going to be looking at both what we need to do and what we choose to do. Right now, our basic position is to fund it as we have to, but if we change that course of action because we think it might be beneficial to do more sooner, we'll let you know.

That helps a ton. What I was trying to think about was excluding the NRG acquisition, whether what's happening with pension and what's happened with forward power prices would have an impact on your ability. It obviously has to, but does it put you in a situation where you are not contemplating share buybacks in the longer term given your existing asset base and pension requirements, or is that really so tied up in terms of what Uncle Sam does that it's hard to make that call?

First, it is tied up in what Uncle Sam does. Second, it's tied up on what S&P thinks. They've been fairly stern with us that they let us do more than we think we should. Given the NRG acquisition and their view that we have to either sell a bunch of stuff or raise some equity to make the NRG acquisition work, pretty clear that our view of shareholder value add right now does not include additional buybacks in the foreseeable future.

Your next question comes from the line of Kit Konolige with Soleil.

Two unrelated questions. I think, John, you were talking about the good outcomes from a shareholder's viewpoint of the auctions at public service and PPL. What did you think of the Allegheny auction?

I think its par for the course. The difference in pricing is largely driven by things like the product definitions that each of these companies is looking to procure. Also, there is a big implication on basis or congestion in the prices. Again, as Ian and John iterated, we like when buyers are in the market as well as sellers. The opportunities seem to be fairly priced and much of the pressure on price is because of base load energy and other components of the load following products. Prices are either holding up pretty well or actually going up. So, we haven't seen anything inconsistent from that in these auctions recently in Pennsylvania.

Actually this is a tad different from what I might have implied, but that's okay. You guys can handle anything anyway. When I look at NYMEX forwards for power and gas and so on, gas can be a fairly robust market. Power, I think, in a lot of the hubs, people have a lot of questions. I think it was mentioned somewhere either by you guys or one of the questioners that these are pretty thin markets. That said, if you were to believe them, by '11 and '12 gas and power are going to be a lot higher than they are now without anybody actually knowing. Obviously, those things could change. We have a pretty steep curve going on there. Given that there is CO2 coming around the bend and so on, are those forward prices somewhat believable even though nobody really trades at them?

The short answer is so clear. Yes, the market projections and forwards are somewhat believable. I can meet that standard with grave confidence. We try to spend a lot of time looking at gas prices. We are doing a major presentation with our Board on it shortly. It's obviously very important to our hopes that gas prices get back in the $6 to $7 range. Ken, do you want to just expand on what you think is the most credible outlook on gas?

Yes, John, I think the forwards are believable, as you said. When you look at the cost of new gas, there are a lot of moving parts to it, but it could be somewhere in that $6 to $8 range for gas overtime. A lot of pricing in the '11, '12, '13 time period is obviously dependent on that gas price, and it's also dependent on what happens with the economy and some of the other fundamentals on the demand side in particular as well as supply. The way we look at the market right now, we think that prices are believable. Some of the power products are traded relatively thinly and are implying a bit of spot price in them actually from my perspective. So, short answer from me is yes, they are at least believable.

It occurs to me that if we're going to have CO2 burdens on coal plants, then people are going to be using more gas for electricity. Is it likely in your thinking by '11, '12, '13, is there likely to be enough more gas being used for electricity that that alone is going to affect the price of gas?

The short answer to that is yes. We are seeing first stress in the short run on gas price downward that comes from a weaker economy and the development of the new shale-squeezing operations which seem to have a lower cost than people would have thought a few years back. In the long run, you have a dance that goes back and forth between how costly are new shale fields and how many of them will environmental pressures allowed to be opened driving gas prices down? Obviously, driving gas prices up, the fact that that's the only popular form of new reliable capacity and you need more gas to backup all of that wind. In the longer run, we like your questions imply, tend to be relatively bullish on gas. That said, it's a trade-off. Let me just try to wrap this up. There is a joke that goes a fellow calls his friend and says how are things, as Kit asked. The answer was, well, not so good, not so bad. Exelon's prospects are not so good as they looked a year ago when all was rosy and gas was at $13. Exelon's prospects are a lot better than most other folks in this economy. We're terribly proud of the first quarter. We're quite confident in our ability to sustain our earnings range for the year. We're working very hard on trying to make next year another good year. That's about all we can say at the moment, but that's not so bad.

Thank you, operator. That concludes our call.

This concludes today's conference call. You may now disconnect.