Thank you, Ian. Good morning and welcome to the Exelon First Quarter Earnings Review and Update Conference Call. Thank you for joining us this morning. You should have received a copy of our earnings release. If you haven't received it, the release is available on the Exelon website at www.exeloncorp.com or you can call Mary Snyder at 312-394-5222 and she will fax or e-mail the release to you. This call is being recorded and will be available through May 10th by dialing 877-519-4471. The international call-in number is 973-341-3080. The confirmation code is 722-7985. In addition, the call will be archived on our website. Before we begin today's discussion, let me remind you that the earnings release and other matters we may discuss in today's call will contain forward-looking statements and estimates that are subject to various risks and uncertainties. Please refer to our SEC filings for discussions of factors that may cause results to differ from management's projections, forecasts and expectations. In our press release and during this call, we will discuss adjusted non-GAAP operating earnings that exclude mark-to-market adjustments from hedging activities, the expected contribution from our synthetic fuel facilities, significant impairments of intangible assets, certain severance costs, certain merger-related costs, potential and new accounting pronouncements and other items we view as unusual. We believe these adjusted operating earnings are representative of the underlying operational results of the company. In today's earnings release, which is available on our website, we provide a reconciliation between reported GAAP earnings and adjusted non-GAAP operating earnings. With me today are John Rowe, Chairman, President and CEO; John Young, Executive Vice President, Vice President Financial Markets and CFO and other members of Exelon's senior management team who are available to answer your questions. Today's call will focus on first quarter 2006 results and the outlook for the balance of 2006. We scheduled an hour for this call. John Young will begin with a discussion of our financial results.

Thank you, Joyce. Good morning. Exelon Corporation announced first quarter adjusted non-GAAP operating earnings of $420 million or $0.62 per diluted share compared with earnings of $452 million or $0.67 per diluted share in the first quarter of 2005. On a GAAP basis, Exelon reported net income of $400 million or $0.59 per diluted share for the first quarter of 2006. This reported GAAP number includes several after-tax items; $0.02 per share of mark-to-market losses related to hedging activities, $0.01 per share of certain integration costs related to the proposed merger with PSEG, $0.01 per share of costs associated with the tax settlement related to our previous investment in Sithe Energies and severance costs reported during the quarter and lastly, $0.01 per share of earnings from investments in synthetic fuel producing facilities. These four items are excluded from our operating earnings of $0.62 per share as represented on page 6 of the table that accompany the earnings release. As I mentioned during last quarter's earnings call, we have changed our current and historical segment presentation from the Exelon Energy Delivery to separate reporting for ComEd and PECO. The major driver of the year-over-year decrease in operating earnings per share in the first quarter were lower sales volumes at ComEd and PECO due to unfavorable weather compared with last year's first quarter. Weather cost us about $0.03 of earnings at PECO and $0.01 at ComEd despite healthy core growth at both utilities. Increased operating and maintenance expenses, including costs associated with the recognition of stock compensation expenses related to the adoption of a new accounting standard, higher operating costs and nuclear refueling expenses, higher pension and other post retirement benefits and higher bad debt expense. Increased depreciation amortization expense, including the scheduled increase in CTC amortization at PECO as expected and…

Thank you, John. As John has described and as the numbers show from an earnings perspective, our first quarter can best be described as lackluster. We are of course disappointed in that and what I want to do next is to try to show you what is going on and why it is that we continue to have confidence that we will be able to perform within our guidance range of $3.0 to $3.30 for the entire year. And we base that estimate and projection on some very detailed work that we have done with our entire management in assessing the implications of the first quarter. First, our Nuclear performance led by Chris Crane continues to be very good indeed. The nuclear fleet achieved a capacity factor of 91% in the first quarter compared with 89.9% for the first quarter of 2005. Refueling outages were completed at Clinton, LaSalle 1 and Limerick 1 with an average of 24 days duration. LaSalle 1 set a world record for longest continued run among light water reactors at 739 days online prior to the start of its refueling outage. Limerick 1 completed its sixth consecutive under 20 day refueling outage for the site. I am told that is more than any other site in the United States. I believe and these numbers support the proposition that Chris and his team are running one of the finest nuclear operations in the United States. We have showed tangible improvement in the work that Chris's team is doing for PSEG at the Salem/Hope Creek site. That site is being managed by Exelon Generation under the nuclear operating services agreement. It had a combined generation in the first quarter of more than 7.2 million megawatt hours with a capacity factor of about 100%. In fact, I believe…

Thanks. First, a couple questions for John Young and then one for John Rowe. John, you mentioned timing-related items having impacted the quarter in the release. You didn't specifically address how much of the earnings pressure was just related to shift in timing of expenses in the quarter and the O&M numbers were up quite substantially quarter-over-quarter. Was a lot of that timing or are we seeing pressure on O&M that we should be systematically thinking about rolling through the numbers?

No, remember the earnings guidance we gave you back in January Greg and we stayed firmly committed to that and about $0.03 of that number was timing related and the rest, the $0.04 of weather. Those were the two big impacts.

Okay. So $0.03 of general cost pressures were timing related?

That's correct.

Then on the O&M, is there any incremental O&M impact versus what you guys thought you would spend over the course of the year due to the Nuclear fleet inspection program that has been implemented after the tritium leaks?

Very, very, very, very small. Yes, there will be some, but right now, and Chris, you might want to comment on this, we may be talking $1 million or $2 million or some number like that.

Okay. And for John Rowe --

Let me just pick up, or Chris. I don't think we can put a number on the total cleanup costs. The inspection cost, as John said, is not that high, but we have quantified what we could so far in the numbers you have seen, but I don't want you to think the cleanup will only be $1 million or $2 million. You are talking about at least $0.01 a share and maybe several pennies over time.

And Greg you should remember that we did reserve at the end of '05, I think the number was $7 million or $8 million to address some of what John is talking about.

Yeah, it was $7 million was in the K.

Yeah. And so I was responding to your question about the inspection and if the inspection shows other things, obviously there will be additional cleanup costs.

Okay. Thank you. That's clear. Two sort of strategic questions, one was related to the standalone '07 outlook. You guys have a financial hedging strategy that you have articulated fairly clearly. At this point in time in any given fiscal year, how much of your financial risk on the commodity side of the business would you in the normal course of business have already hedged for the following fiscal year?

I would like Ian McLean to answer that please.

Yeah. What we do, as you probably remember is that we set ourselves a target as we go into the fiscal year. So, in other words, at December 31, '05 going into '06, we would like to be about 90% financially hedged. And we do that on a fairly consistent basis over the months leading up to that or over the year leading up to that. We really don't hold back and then suddenly hedge 40%. But we do have some leeway within which we hedge. So, if you look for '07, the difference this year, the kind of slug that is different if you like is the auction. And so, we have made some assumptions around the auction, but we are on track very consistently right now to be nicely hedged at 90% going into '07.

Thanks. And the final question for John Rowe is you make a statement in the release, you said in your comments you are firmly committed to the merger. In the release, the language around that says as long as it continues to make economic sense. If anything were to change to make the deal not make economic sense versus the outlook you had when you announced it in '04, what would the key issues be that might cause it to not make economic sense?

Well, there are I think only two and they would have to be reviewed in the context of the merger agreement itself. In other words, we pledged and Peggy (phonetic) pledged to do a deal and there are only a couple of exceptions to that in the agreement and it would be better if Randy Mehrberg described them specifically rather than that I do, but at the present time, we believe that the deal can be done and those exceptions will not be triggered. One of those exceptions related to having to sell nuclear capacity. Another one is a typical material change position. The point I am trying to make is that, at the present time, we believe we can get the deal done. We believe we will get it done in a way that will add value to our shareholders. We are unequivocal about that. PSEG is unequivocal about that. But we recognize and they recognized that demands of the state of New Jersey and whatever the DoJ ultimately may require may be different than we initially proposed. Each of us will do what our fiduciary duties require and take a last look at the package when we finally know what all those conditions are. That is what we're trying to say is that we will be honorable, we will be careful, we will be prudent. But I don't want to sound like in any way I am flinching on our belief that this deal remains doable and remains a good deal for shareholders. You'll find no equivocation from me on that at all and I think you'll get none from Jim Ferland either.

Okay thank you gentlemen.

Our next question comes from Leslie Rich with Columbia Management. Please go ahead.

Hi, you mentioned in terms of the Synfuel that significant asset impairment might be possible. I wonder if you could walk through what the scenario would be and the magnitude? Is that a physical plant or previously taken tax credits or?

No, it's a non-cash charge. We have on our books in accounting --

This is c, our Controller.

We have on our books in accounting terms contractual rights to receive tax benefits, which is an intangible asset. We also have a contractual obligation to pay for part of those rights and the accounting requires us to assess the viability of that intangible asset and based on a full phase-out we'll have to write it off. It's about $125 million or about $0.11. In the future, we will take a look at the non recourse debt that we have that we may potentially not have to pay that and we have a gain upon the extinguishment of that debt. They may certainly occur sometime later on in the future.

And Leslie, just a reminder, all this will be in our non-operating earnings guidance.

And on a cash basis, it is important that understanding accounting is different than cash. On a cash basis, a full phase out besides losing the tax credits going forward, we believe it will have a de minimus impact on our cash position.

Okay, thank you. A – John Rowe: Operator, before we continue, I just want to remind people on the line to limit yourself to one question. We let Greg get away with it because we weren't on top of our game there, but a lot of people queued up, so we would like to limit each questioner to one.

Thank you. Our next question comes from Paul Fremont with Jefferies. A – John Rowe: Hi Paul.

Good morning I am trying to understand, there was a significant increase in PPO sales at ComEd and I guess other providers have sort of experienced a lot of shopping customers sort of returning to polar. This seems to be going almost in the opposite direction. Is that -- are other retail providers in the Chicago area sort of disappearing from the scene? What is causing that significant pickup?

This is Bob McDonald. I don't think it is a matter of providers disappearing from the scene at all. I think there is just the dynamic cause between the market prices and what is available to some customers and bundled tariffs. We have a situation in Illinois where if the CTCs go to zero for some customers, they no longer have the option of the PPO price. And so they are in a position of needing to make decisions between bundled tariffs and the different supplier. But at the moment, I think it is just that the PPO offering price was attractive compared to market.

This is Anne Pramaggiore. I would just add on the issue of whether we're seeing retail suppliers leave no, in fact, what we're seeing is more interest in retail suppliers. We have had a couple of certifications for retailers who are interested in serving the residential market. So if anything, we're seeing growth in that area.

Thank you.

Our next question comes from Josh Levin with Lord Abbett.

Good morning. A: Good morning.

Regarding a global settlement in Illinois regarding market-based rates, could you update us as to where you are in the settlement process? Are you currently holding settlement talks? What is your expectation for a settlement?

Anne, go ahead.

There is a number of things that are going on the front of resolving the post '06 issues in their entirety. One John referred to, and that is the mitigation and plans that we have been talking about for quite a while and that we recently filed at the commission. We filed in our DST case. The commission staff came back and has asked us to set that up in a separate docket, which we will be doing probably in the next several weeks. And that will provide a forum for parties to come in and comment on what we have and also share their thoughts. Additionally, we continue to have conversations with parties. We have been doing that for some time and we will do that. Obviously, the thinking that has been part of these discussions will become more public as the docket opens at the commission and you get more parties having a debate around that. But the conversations are happening and we would expect the dialog to accelerate as the docket opens at the commission.

Is your expectation that you are going to reach a settlement with all the parties, or this ends up going through the court system and that is you how you get the final outcome here?

I think our interest is in resolving this through a settlement. That is what we're looking to do and that is the path we're moving down.

Let me just add to that. You don't have a settlement, whether it is Anne's work in Illinois or what Betsy and Ralph is or are doing in New Jersey until you have a settlement. And projecting when people will agree is right up there with grading romance movies. But I want to add a bit of explanation to this as a process that is, why is New Jersey hard? Why is Illinois hard? Well, the answer is really very simple. Wholesale prices are going up and they are going up substantially. That is on the whole very good news for Exelon Generation. It is very good news for PSEG Power. It is very good news for the value of the two companies put together. It is very good news for the wonderful work that Chris and Bill Levis and their team have done at Salem and Hope Creek. But rising prices that need to be passed through to customers put a great deal of pressure on regulators and on regulatory consensus and regulatory deal. The reason we have had a whole lot of issues in Illinois is that prices are going up and it is difficult for regulators and politicians to handle. The reason New Jersey is so difficult is at least partly the fact that prices have gone up substantially in New Jersey. I heard some people say that is all the reason why Exelon would be better standalone. I have heard other people say that is all the reason why PSEG would be better standalone. Our view of the matter is that investors simply need to understand that these competitive structures require nurturing, they require very diligent legal and political protection and they require an understanding that consumers cannot be expected to tolerate too much in the way of rate pressures or one will find oneself trying to protect legal rights in ways that aren't any fun. We were forced to tell you all last August that if the letter from the Governor of Illinois were implemented, it would cause ComEd to go bankrupt. You don't write 8-Ks about things like that lightly. Anne and Bob McDonald, Barry Mitchell, Frank Clark, who spent the last seven months creating a much higher level of confidence that that won't happen. But it took a lot of hard work and it has taken things like the rate mitigation proposal that Anne has made. Likewise, we're seeing these pressures in New Jersey. What is going on in the wholesale power market is very good news for Exelon, for PSEG, for the merger between the two companies. I do caution you not to make your most optimistic forecast and then just assume that it all happens neatly because it requires some work and some concessions to hold all these things together.

Thank you.

Our next question comes from Dan Jenkins with State of Wisconsin.

Good morning.

Good morning.

I have questions on the rate case process in Illinois. You mentioned in your statement that hearings in the case concluded earlier this month. I was wondering if you could update us kind of on what your position is as far as the amount of rate increase versus say the staff and the major interveners like CUB and AG.

Anne or Bob MacDonald can do that.

I'll start. Just to give you an update on timing, we finished hearings and filed our initial brief yesterday. There will be another brief in early May and then the Administrative Law Judge will issue his opinion. June 8 is the date as it's set now. There may be some flexibility around that date, but it is roughly in that time frame. The Commission will make an ultimate decision by July 27. We have asked for about $316 million in additional revenue requirement over our previous DST case. The staff has taken a position based on looking at a number of different components that would not give us that increase and I think we see CUB and the Cook County State's Attorney office and their coalition somewhere in the middle giving us about half of the requested increase. The major issues that are under debate are capital structure. That tends to drive a large portion of it. Some of the debate is around allocation, business service company allocation and there is also a debate around ROE and the recovery of our pension assets. Those are really the primary issues. We will see how the ALJ comes out on June 6. I don't think we were surprised, or June 8 excuse me, surprised to get some strong challenges to a rate increase given the environment that we are in right now, but we also believe we took on a very strong case on the merits and we will see what the ALJ says in June, but those are the primary issues that are under debate and the primary drivers around the big dollars in the case.

What was the amount you said of staff proposed increase?

There is no increase in there.

So there's zero?

Correct. And then CUB and Cook County are about $150 million increase. That is the 316 that we requested.

And then do you know, is there any timetable for the mitigation, the deferral of the increases? You say that has been put in a separate case or is there a timetable for when that procedure will go forward?

There is no timetable. The docket itself will likely be opened, we're looking at sometime between now and mid-May and then the Commission will set a schedule or the Administrative Law Judge who oversees the case will set a schedule for testimony and hearings. It will be run like any other docket. We will see testimony filed. There will be public hearings at the Commission and so at this point, it is hard to speculate at what sort of timetable will be laid out. Typically, the parties have the ability to share their opinions with the Administrative Law Judge on what kind of schedule should be set and then a consensus schedule is devised, but that hasn't happened yet.

So you could potentially have an increase, but not know how it would be mitigated or?

I'm sorry, but we need to move onto the next question please.

Okay.

Thank you for your question.

Our next question comes from Paul Patterson with Glenrock Associates.

Good morning guys.

Hi Paul.

I was wondering if you could just tell us what is going on with DoJ. Why they're taking so long? What their concerns are? If you could just elaborate a little bit more what specifically is holding them up.

The answer is no, no and no. We cannot tell you because we are in discussions with them as we speak and there is an understanding that we won't talk about those discussions until we know the result. We continue to believe that we can get to an acceptable answer, but we don't have one worked out yet.

Okay. Can I ask?

Literally by virtue of the state of Betsy Moler's negotiations with the Justice Department, they have agreed and we can say that we are trying to develop a mutually acceptable approach to address their concerns regarding the competitive effects of the transaction and beyond that, we are not supposed to say anything.

Okay. Can you just tell me, you mentioned that you thought New Jersey was going to take, it will be a little bit slow. Can you give us an idea about the time frame that these guys or the discussions that Betsy's having with DoJ might be resolved or any sense?

Paul, I think we have gone as far as we can go.

I can't tell you anymore except that I did tell you I hope that we would have everything done in the third quarter and I can't do better than that. Obviously I'm shooting for earlier than that, but I can't tell you anything more specifically. A negotiation is not like a gestation period. It doesn't have a defined due date.

I appreciate it. Thank you.

Thank you, Paul.

Our next question comes from Steve Fleischman with Merrill Lynch.

Hi, can you hear me?

Hi Steve.

Hi, with respect to the issue of the comment does the merger make economic sense, is that something that you basically decide on June 20 at the time that the merger agreement expires?

Well, we are getting kind of fancy here and I guess I do need Randy to tell you what conditions in the merger agreement are, but we made and PSEG made the basic decision that this was a good deal when we made the deal. And neither of us are entirely free to remake that deal. Now, the existing term expires on June 20, but there is provision for its extension. There are also certain outs related to things like regulatory conditions that might cause a material adverse change and our board will look at them, their board will look at them in good faith when we finally have deals upon which we have permission to close. But I don't want to try to make this -- I am not sending signals here. We believe in what we are doing, but we will also do what it is our duty to do to look at our rights in the agreement and so will PSEG. There is no difference between us on this. Not one whit. So Randy, would you just like to remind people what that all says?

Sure, John. There is a burdensome order provision in the merger agreement, which essentially would be an out or either side if a burdensome order is entered in connection with the merger and in summary, a burdensome order is defined as one of four things. One, something that created a material adverse effect, two, that we would be required to divest nuclear assets, three, that we would be required to divest more than 2,600 megawatts in the virtual auction and four, relating to the extent of the divestiture on the powerful side.

But just to clarify, after June 20, that goes if not that burdensome effect is no longer in place?

If the agreement is not extended, that would no longer be in place. That's correct.

Okay. So it really comes down to the regulatory outcomes that we see in these remaining issues?

Yes.

Okay, thank you. A – John Rowe: I think we have time for one more question, operator.

Our next question comes from Daniele Seitz with Dahlman Rose.

Thank you. Just a question that relates to the one just before. Do you need the okay of the DoJ before or at least does the New Jersey Commission makes it condition to their agreeing to anything?

I believe the most favorable outcomes would require a settlement with justice before a final settlement with the New Jersey BPU. I can think, Randy can think as fell over as Peggy can think of scenarios in which it might go the other way. But, my best judgment is that New Jersey wants to know that justice has been satisfied before it makes its final deal.

Great. And the other question is, I was wondering can you separate what is especially the O&M, that related only to the first quarter and what is recurring through the year? Is there a way of separating those items? Or there is no way you can do that? I mean the major one obviously.

Other than what we've already said -- if you would call back into Joyce's office, they will take you through that, okay?

All right.

Thank you operator. That concludes our call.

Thank you everybody.

Thank you. This does conclude today's Exelon Corporation’s conference call. You may now disconnect your lines and have a wonderful day.