Good morning. My name is Krystal and I will be your conference operator today. At this time, I would like to welcome everyone to the Exelon Corporation fourth quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. (Operator Instructions) I would now like to turn the call over to Ms. Karie Anderson, Vice President of Investor Relations. Please go ahead.

Thank you, Krystal. Good morning. Welcome to Exelon's fourth 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. Before we begin today’s discussion, let me remind you that the earnings release and other matters we discuss in today’s call contain forward-looking statements and estimates that are subject to various risks and uncertainties, as well as adjusted non-GAAP operating earnings. Please refer to today’s 8-K or other filings for discussions of factors that may cause results to differ from management’s projections, forecasts and expectations and for a reconciliation of operating to GAAP earnings. 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.

Thank you, Karie. Good morning everyone and happy new year. As you already saw in our news release, we reported operating earnings of $0.92 per diluted share for the quarter and $4.12 per diluted share for full year 2009. These earnings are well within our original guidance range of $4 to $4.30 per share and they are above our revised 2009 earnings guidance range of $4 to $4.10 per share. We believe the fourth quarter was a very good one, it reflected both, a little better luck on the weather and even better results from our cost management effort than we had expected. We are very pleased with the end of 2009, we believe it bodes well for 2010 and we are very confident that we will be able to deliver earnings in 2010 that are well within the earnings range we have given you. We have a lot of time left in 2010 to keep working on both the resident side and the cost side and we will do so. I know from the behavior of our stock this morning and from some of the calls you have already made to Karie and her IR group that some of you are concerned about implications for the first quarter and what the first quarter means for the whole year. Matt will try to take you through those details. The point I want to make is that we see the fourth quarter as nothing but good news for what we can do for you in 2010 and we are hard at work doing just that. Our 2009 performance reflects continued success in our generation fleet. Our nuclear performance capacity factor for 2009 was 93.6% and our fossil availability factor was 93.7%. Our hedging program in Exelon generation held on our average…

Thank you, John, and good morning everyone. I will start on slides 4 and 5 with an overview of my key messages for this morning and details on the fourth quarter and full year results. As John mentioned, Exelon delivered operating results of $0.92 per share for the fourth quarter and $4.12 per share for the full year of 2009. We are very pleased to have achieved earnings above our revised range for the year, largely a result of digging deep to find cost savings across the business. We realized O&M savings of about $200 million from 2008 to 2009, which helped us offset year-over-year changes in operating earnings from negative market condition to generation and unfavorable load in weather at our two utilities and in the face of those headwinds we also generated cash from operations in 2009 of close to 5.8 billion, boosted in part by benefits we realized from bonus depreciation on capital investments allowed under the Federal Stimulus Act. While we don’t expect those one-time benefits to cash to continue, we are projecting cash from operations in 2010 of $4.25 billion. Let me turn now to our individual operating company results and financial drivers and then I will spend some more time on our pension and OPEB expense and discuss how our 2009 cost reduction effort has positioned us for continued cost containment in 2010. Exelon Generation's quarterly earnings drivers are shown on slide six. We continue to have strong operational performance across the fleet and completed four refueling outages during the quarter. You’ll see that our refueling outage days for the quarter are higher than last year, which is a result of the refueling outage at Three Mile Island that we started in late October. We used the time when the plant was down for…

Krystal, we are now ready to take questions.

(Operator instructions). Your first question comes from the line of Jonathan Arnold with Deutsche Bank.

I had a quick question on the change in the way you disclose your south region hedging and specifically taking the capacity payments on legacy contracts and out of the hedge disclosures and into gross margin. Can you give us any sense of what the tenure or the life span of those contracts is, it sounds like we weren’t going to see them in the hedges anymore.

Ken Cornew?

First of all, as you know in the south, we do have long-term purchase power agreements out of combined cycle and peaking plants and the tenure of those purchase power agreements as you also may know are very long, many of which go through this decade. And in the past couple of years, we have worked to find opportunities to actually sell a similar kind of product that we purchased from those plants to other counterparties, so these contracts look like purchases that have a big capacity payment and then we dispatch the generation essentially at the cost of producing the energy at the time. So what we have done is sold light contracts with the capacity payment to a purchaser and then give the rights to dispatch that energy to those purchasers under long-term agreement. We think that adds good value to our portfolio in the south. With that being said, those capacity payments for what we had bought were always in the open gross margin calculation and for what we sell, we had in the past as Matt indicated put them in the estimated or any effective realized energy price. We made the change to move the sales we make, the capacity element of the sales we make also into the open gross margin to be a) more consistent with the other regions, all of our capacity revenues are in an estimated open gross margin and also to allow you to really compare a shorter-term energy price in the south with our shorter-term hedging activity and make that comparison. That's essentially the change we made. As Matt said no impact on the ultimate calculation of our estimated gross margins, but we think a better way to reflect our hedge disclosure given that we have entered into these kinds of long-term sale.

But does the majority of the margin associated with those contracts, have about kind of through this decade, life span or is that more the…?

Yes, Jonathan, further more the vast majority of the margin we get will be in the capacity payment itself, not in the energy component.

If I may ask one on a different topic on the cost savings and you talked about holding the line in 2010 and that will involve finding new savings. Is it possible to give us some color on how much you’ll have to be going after new savings and how much will be sustaining some of the $200 million saved in '09 as you look at the components of keeping the number to 4.35?

Chris, can amplify this, but I believe we have about $100 billion new budget challenge to keep our number down to that $4.35 billion and that is because there are some things like the pension and OPEB that we have to cope with it, it’s not just sustaining the old one, but Chris would you like to amplify that?

No, that’s right. It’s around a $100 million challenge remaining to hold the 4.35 and we are in a process of solidifying the plans to set the target at the business unit levels that we would be able to trend over the year, we anticipate being able to do it, but it’s going to be over a 100 different spending accounts versus one or two.

So, that means you have to hold the line on the 200 and find another 100, am I reading that right?

That’s correct.

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

I had a question regarding an external development earlier this month, the New Jersey Department of Environmental Protection issued a draft order discharge permit for your Oyster Creek plant, that would require the construction of a cooling tower at the site. You all have said that that would be uneconomic and cause you to close the unit if the requirement were maintained. If I got my numbers right, at 625 megawatt unit, it probably produces $5 million megawatt hours a year and contributes something like $200 million annually to your gross margin. So its loss I estimate would be maybe a $0.15 hit to earnings, something of that order of magnitude. Can you bring us up-to-date on where that stands and why you believe that it will not be necessary to put in cooling towers at this time?

Yes, Hugh, we will be happy to do that. Bill Von Hoene is ready with that information.

We do not believe that cooling towers are likely to be required and that's based on a couple of factors. It's an issue that is being considered on past occasions by the New Jersey [DET] when they were reviewing the water discharge permit for Oyster Creek and in each instance that occurred they ultimately concluded the towers were not required. There is no legal or scientific basis in our view for the towers. The draft permit that was issued earlier contemplates a long process by its terms because of the complexity of the issue where there will be ample discourse on this and as I know you are also working on that, Christi [ph] has indicated to initiate a stakeholder process separate apart from the permit review process to review all the impacts on the bay there on a holistic basis. And as those various factors are coalesced over the period of time. We think there are a variety of ways that this could go including a withdrawal of the draft and a deferral of action by postponing the comment period. the conduct of the hearings, but no formal action. But our view is ultimately that if we do not believe, it is likely that permits will be issued which required the cooling towers. The timetable for action on this would typically be about 12 months on the permit, consideration and the draft permits contemplates a seven year compliance period with the ultimate permit requirements. We think that’s probably going to be extended even without regard to the Christi [ph] stakeholder process. With regard to the earnings impact, Hugh, in the event that we were required to install cooling towers at the condition of continuing to operate Oyster Creek at the expiration of that timetable I just talked about and obviously the impact depends on the number of years of continued operations but we don’t believe the impact would be significant. It is our smallest nuclear unit with high cost structure relative to our more efficient two unit plants. We would be able to reduce capital maintenance spend in the shorter operating life and we performed a discounted cash flow analysis comparing it at net present value of continued operations with cooling towers to a range of operating life without it and we've concluded that we would be in a better condition financially to shut it down rather than to install the cooling towers.

Thanks. That’s very thorough. What was the compliance period you said after the permit was issued.

Seven years after the finalization of the permit, normally it takes about a year to finalize the permit. In this case the draft permit itself contemplates a much more complicated process. So we think all-in-all if this ran its course as I said again without the stakeholder process you'd be looking at 2019 for the ultimate compliance to be required.

Okay, and just a quickie for Matt. I believe it's correct to say that your estimate of cash flow from operations for 2010 has been reduced slightly from what it was back in November at EEI. I think something like $225 million. Could you perhaps comment on that?

I think at EEI what we had shown was that we were going I think 2010 have a starting cash balance of about $700 million and then were going to end the year with about $75 million. We’ve revised that. You'll see that on slide I think it's 16 in the deck that we actually are starting the year with a $1 billion of cash. So the $300 million above what we had at EEI is made up of really two components. About $200 million is just timing, things that we expected to spend in December got pushed to January and so it's just timing. There was about $100 million that we had in lower CapEx spending related to kind of growth CapEx to utilities and you'll see that kind of close down to the bottom line in terms of cash ending balance but our expectations for cash and how we expect to use it aren’t different at all from what we've explained at EEI and since then.

Your next question comes from the line of Dan Eggers with Credit Suisse.

Just on the O&M cuts, not to dwell on this too long, but if the demand outlook for 2010 is better than you guys expect, how does that O&M number look? Is it one of these things you can avoid the cost if things are slow but as they pick up, the cost ratably return and how much of the savings that the 200 extra in '09 and the next 110, how much of that you think is going to be permanent versus responsive to the market? Chris Crane The load returning or market prices returning won't have an effect on our planned O&M spend so they are not connected. They may have a potential effect on our capital spend if we saw the requirements for new business to come back in. So that would be the connection on use of cash but we would have to trend that over the year to compare the two. The actual sustainable savings in 2010 we said was about 50% and that is because we took compensation actions in 2010 due to our lower earnings where we reduced our incentive and froze salaries and actions like that throughout the periods. So, we have given in the EI deck the guidance of what we think 11 will inflate off of 10 and that is baked into that number also.

That numbers still holds, you know you guys are ahead of plans as far as what overall O&M savings are?

Right.

Okay. And John, I guess one other question you said in your comments that you are going you know, you are just getting, you started to work on cost savings and on ways to improve revenues in 2010, make sure I heard you correctly and if so given the heads positions where you see opportunities to improve revenues this year?

Well, we continue to find things in both delivery companies where we are more efficient about catching lost revenues. We do have the open positions that you are all familiar with and somehow it's been my experience that as the course of the year comes on, you keep finding something you can do, some deal you can make, some transaction on both the cost side and the revenue side that don't add tens of millions but add a penny at a time, that's kind of what management is all about both here and every other good company. And so it’s no particular magic, it’s just that the big difference between making a plan and going out and making it work. You all would find some good things to do and I am kind of optimistic that we haven't hit the bottom of the barrel on either side.

Your next question comes from the line of Steve Fleischman with Bank of America. Steve Fleischman - Bank of America Yeah. Hi John, two questions. In the release, your last call talked about evaluating and pursuing appropriate growth opportunities for the long-term, is that just kind of a reference to the nuclear uprates and things like that, just curious kind of what was maybe meant by that?

No Steve. You know in this jungle we are hyenas, I mean we are constantly looking for something dead on the plains, I'm trying to be funny, but people think we have this mad passion to do major merger, and I would think we would have proven long since that that we'd like to grow that way if we can do it, in a way that makes you money. We look at those things, we look at transmission investments, we look at our nuclear uprates, we look at how we can make money on investing in our regulated delivery systems and there is no magic anywhere. It's all a matter of being very, very hard-headed, very opportunistic and constantly looking for something that will deliver additional value to you, and I'm absolutely convinced that if we just maintain the financial discipline that allows us to walk away even if it's a little embarrassing for me or little infuriating for Chris, it was still resentful. As long as we have that discipline in chaotic times like we face, there are going to be some opportunities out there. And I don’t know what they are, I am not trying to hide some secret plan. Its just we are very much oriented to looking for value where it comes and that’s true in analyzing our internal things like nuclear uprates and it's true in Ian's new transmission company. No magic, just hard headed. Steve Fleischman - Bank of America Yeah. One other question, I think Matt mentioned energy efficiency impacts, for residential, for both ComEd and PECO kind of residential sales, flat to down, when both those utilities look at their peak demand forecast going forward now given energy efficiency, what are they expecting for peak demand growth going forward, is the energy efficiency already kind of embedded in there, when they look at that or?

Well, we have tried to embed as best we can, I am going to ask Denis O’Brien to tell you about PECO first and then Anne Pramaggiore to tell you about ComEd. They'll answer your question directly. They'll also tell you a little bit about what we are seeing from industrial customers. So Denis, will you take the first shot? Denis O’Brien: Yeah, John. In terms of our energy efficiency programs, if you look at the profile that we are looking at for 2010, we are seeing overall a 1.5% decrease in load. When you look behind that at the residential piece of it, we see the year starting up slow and coming back somewhat in the second half of it. If we took energy efficiency out, we'd see load growth in residential probably somewhere just shy of 1%. When we overlay our energy efficiency programs which primarily impacts the residential market, that takes the load growth down to 1.3% negative growth. When we estimate peak, we generally keep it pretty close to what our energy forecast is. So if you think there is a negative 1.3% growth or weather corrected peak, if you have a weather corrected peak, it would probably follow that same thing. Interestingly, our last peak was August of 2006, so we have not had a peak year since then and given these energy decreases, I am not sure we would see a new peak this year.

Directly to answer the question, our programs take about 0.5% spread out over all our classes but predominantly in residential for 2010. They ramp up to 2% in the 2013 time frame. It is built into our load projections as they stand today. Our peak situation is similar to Denis', you know we track it in much the same way, we are looking at roughly a flat peak for 2010. Our last peak was in 2006. So, we are looking much the same as PECO. I think in general our load projections as John I think alluded to how we are looking at this. Obviously, we use our forecast in our model for ComEd, we are looking at about a 0.8% increase for 2010, but we try to get behind that a little bit because I think all of the forecast and just that 2010 is a turning point or a transition year, so trying to get behind that little bit, we have been doing a quarterly annual survey of our largest customers somewhere between 80 and 100 customers just to get a handle anecdotally on what’s gong on out there. And I think what we are seeing is tracking fairly closely to what our models are suggesting. Our up tick for 2010 is based on movement in the C&I ranks, not in residential, very little in small C&I, predominantly large C&I and our survey would suggest, if you looked at rough numbers of the 85 large customers, you know half are looking at flat load, 40% are looking at an increase, of what magnitude I think yet to be seen. But we are seeing a little bit of optimism, we have also talked to our trade associations out there and again a glimmer of optimism but I think it is too early to tell. In terms of sectors I think we are seeing auto and transportation stabilizing a bit, seeing the new shifts come on and I think steel and metal works, similarly there is some indication that we may see some increase in load for 2010. So, those are the -- to give you sort of lay of the land at what we are looking out on the load.

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

Yeah, actually I have two questions. One, this may be a Ken Cornew question. Can you talk about, kind of annually how much wind capacity you expect to come online that can dispatch into NiHub and what are the factors that could make that a bigger or smaller number when you look out over the next three to five years?

(inaudible) but Ken will give you the answer.

Hey, Michael, to the first question, at EEI we talked about by 2012 seeing an incremental 3,000 megawatts approximately of wind coming online. We still think that’s about the right number. It stays ahead of the requirements when you add them up by state and seems to be, what we're seeing in the near term happening. So that, from a near term perspective, that’s what we're looking at. The factors that drive it, I think John probably jumped in there on one of them but obviously the regulatory climate and associated rules by state and if some federal elements come into play, they would be drivers obviously for more or less wind investment if they did come to pass. But really the economics are the key issue. You currently still have power prices and cost structures for development that are disjointed and the wind developers are facing that challenge of trying to find ways to get their plant developed in for someone to take the economic risk of the plants in the marketplace. So, you really have what we see as a relatively slow development process right now getting to about 3,000 megawatts in the next three years and what would change that would be much better economics, higher prices, obviously in the longer-term more robust transmission or a more legislative or regulatory drivers that help the process. Was that what you were looking at?

Yeah, that’s fine. Thank you very much. Financial question, just looking at the balance sheet, there’s a little bit over $2 billion of goodwill still there. Can you talk about A, where that goodwill, effectively where the most of it is allocated to, and B, the timing and the potential for a goodwill write down given just what's happened asset valuations across the power sector?

Michael, this is Matthew Hilzinger. It's all sitting at ComEd, and we've had, historically had a few write-offs although it's probably been three years since we had a write-off. We do take a look at it on a regular basis. We take a look at it and go through a very formal review every November. We did that this time and we passed the test substantially, meaning we passed by somewhere around $700 million. So there is a fair amount of cushion and there is all sorts of factors that go into it which include kind of the valuation of the utilities, what discount rates are, what projected capital spends are going to be and what expected returns are going to be. So we take a look at it all the time. There is no way to really predict when there is going to be a write-off but I would suspect with a recovery in the ComEd that will add value to the two utilities and the two utilities continue to improve and particularly ComEd continuously is improving its return on its earned equity, and I think that will add value and help in terms of our ability to pass the test. So we take a look at it all the time. It's hard to predict but as you realize too, it's non cash. It just won’t have any impact in the balance sheet at all.

Understood. Last one, what are the kind of the returns on, given where forward prices are in the Midwest, what are the kind of returns on capital you expect from some of the nuclear uprates in that part of your effective area?

Chris, we have a range, and I am not sure if we publicize the range and the return on capitals of those individual projects, I am looking at Karie to see …yeah, the uprates.

On the uprates in our EEI deck, the three categories of projects will be giving you a range of returns, and we'll be happy to walk anyone through those slides.

Michael, before we turn it over to the next individual, I just thought I might take a moment to have everybody on the phone and just describe a little bit about our first quarter earnings and what’s happening there because I think that that is a point of thought with everybody out in the street. We spend a lot of time in our planning process going through and evaluating what our quarterly earnings ought to be and we tie it directly to the business operations and so, when we did and put together our 2010 plan, we were very specific and deliberate in how we spread our earnings and our guidance for the first quarter clearly reflects that. When you look at last year's earnings, they were, I would say unproportionally high in comparison to how we normally run the business, and 2009 had the first half was probably more front loaded than what've traditionally seen in terms of our earning pattern here at Exelon and so I think 2010 will be kind of a more traditional earnings pattern. And when we look at the first quarter, this year compared to last year, one of the big things is, we have fewer outages in 2008 than we expect to have in 2009 That will impact both the revenue and the O&M line. And then some of the other key drivers that we've outlined at EEI and are in the slides, today we expect -- we also expect to see in terms of kind of lower revenue, higher depreciation, higher CTC, higher nuclear fuel, and these are all things that we know and we calculated. And so the earnings that we put out, the earnings guidance we put out is not new to us. I mean it's what we have been expecting since we put our plan together and we are very, very confident in our ability to meet our earnings guidance for the year. And so the first quarter earnings guidance here should not be considered a red flag. We are very confident, it's what we expect and what we have planned on.

Karie?

Krystal, we will now go to closing remarks. John?

Thank you, Karie. And thank you everybody. For anybody who didn’t get their questions in, Karie will be happy to get you the answers. I just want to say at the end that we all know that 2009 has been a tough year and none of us know exactly where the economy is going in 2010. We all have access to the same professional opinions. I just want to provide a little context. In the 26 years I have been doing this, and I have seen a lot of ups and a lot of downs. I can still remember in 2007, early in 2008, when it looked like there was no limit to the amount of money you could make on unregulated generations. I can remember later in 2008, when it looked like the best thing to be would be to be a fully regulated integrated. Well, the fact of the matter is commodity booms don’t last forever. Commodity buzz don’t last forever and rate cases have their own challenges that you have seen for several very good companies in the last few months. What we can do during these cycles is manage the basics really, really well. We did that at Exelon during 2009 and I think we can do that again in 2010, and as for long-term value creation, as customer demand recovers, Exelon benefits. As natural gas prices and coal comes back, which in due course they will, Exelon will benefit. As reserve margins tighten and capacity prices rise, Exelon stands to benefit. As the world puts a premium in one way or another on being lower carbon, Exelon stands to benefit. As there is more intense 3P regulation of other companies, Exelon stands to benefit. A lot of companies benefit from one or two of these factors, I respectfully submit that only Exelon benefits from them all, and we will work like hell in the meantime. Thanks a lot.

Thank you. That concludes our call.

And this concludes today's conference call. You may now disconnect.