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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.I will now turn the call over to John Rowe, Exelon's CEO. John Rowe Thank you, Stacie. Good morning, everyone. As you all know from our press release, our second quarter performance exceeded both our own earlier expectations and your estimates. Exelon turned in operating earnings of $0.99 per share compared to our earlier estimates at $0.80 to $0.90 per share. Matt will explain how we were able to do this in more detail, but constant attention to operating performance across all of our business units were a big part of the story, and so we're improving power market conditions. The weather also helped. We've had so much heat in Philadelphia, almost twice the normal level, Denis O'Brien, who is a bit of a skeptic looked at me the other day and said, "John, if this stays up, I'm going to believe that climate problem you've been working on is real." It is, and we might be even be seeing it. As a result of our strong first half, we are raising our operating earnings estimate for the year to $3.80 to $4.10 per share. Now normally, on these calls, I spend most of my time talking about the highlights of the quarter. I'm going to leave that to Matt Hilzinger today and talk about the subject that most of you are asking us to address. That is our longer-term earnings potential. Most of you tell us that you respect our operating performance. We appreciate that, I think we deserve it. Most of you described our assets as a solid foundation for future earnings growth. That's true too. Most of you recognized that we have some upside next year, as the full requirements contract expires between Exelon Generation and PECO.
But you'll likely question how two, three, four years from now, we will be able to prosper in a world of low gas prices and dimming prospects for carbon legislation. That is precisely what I want to address this morning. Put simply, we expect some drop in 2012 earnings. But we believe by that time that the trough in our revenues will be nearing its end. This morning, I'm going to cover three reasons why we believe that.First, EPA regulations will affect both capacity and energy markets and we'll do so sooner than many think. Second, there are already tangible signs that power markets are recovering. And third, Exelon's investments and rate cases over the next few years give us further opportunities for income enhancement. Exelon is not a passive beneficiary of changing circumstances. Our confidence in the long-run value of our property and our operations is a product of envisioning a cleaner energy future and acting on that vision since we formed Exelon 10 years ago. These actions include forming Exelon Generation as a separate company, thereby, giving our shareholders the upside; selling the ComEd fossil fleet; continuously upgrading our nuclear fleet and most recently, planning the retirement of fossil units at our Eddystone and Cromby stations. Our approach is laid out in Exelon 2020, our path to a low-carbon future. While it is an advocacy piece, it is not just an advocacy piece. It is a way of capitalizing on Exelon's nuclear fleet and a way of positioning our investments to add value for our investors in a world that demands cleaner power. Now let me start with what we see from EPA regulation. Slide 3 of our deck illustrates in a simplified form the welter of regulations that are coming to the nation's coal-fired generation fleet over the next few years. You all know, you're going to make your own estimates of how much Exelon could benefit from climate change legislation, and you all know that, that is not very likely in the near term. But EPA regulation of traditional pollutants, regulations that are now being issued, regulations that are required by existing statutes and court decisions are far more imminent and far more certain, and carry similar positive benefits to Exelon over the next few years. Read the rest of this transcript for free on seekingalpha.com