Edgar Filing: NRG ENERGY, INC.

Definitive Additional Materials

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

(RULE 14a-101)

SCHEDULE 14A INFORMATION

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¨	Definitive Proxy Statement.

x	Definitive Additional Materials.

¨	Soliciting Material Pursuant to §240.14a-12.

NRG ENERGY, INC.

(Name of Registrant as Specified in its Charter)

EXELON CORPORATION

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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(3)

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On July 2, 2009, Exelon Corporation issued the following press release:

LOGO


Contact:	Kathleen Cantillon	FOR IMMEDIATE RELEASE
	Exelon Communications
	312-394-7417

Exelon Increases Offer to Acquire NRG Energy by 12.4 Percent

Company Cites Additional Upside Value Identified Since Initial Offer

Also Shares Details on Financing

CHICAGO (July 2, 2009)—Exelon Corporation (NYSE:EXC) today announced an increase in its offer to acquire all of the outstanding NRG common stock in an all-stock transaction with a fixed exchange ratio of 0.545 of a share of Exelon common stock for each NRG share, a 12.4 percent increase over the initial exchange offer of 0.485. Exelon’s increased offer represents value of over $3 billion to NRG shareholders.

Exelon also filed today with the SEC an investor presentation that will be used as part of the company’s proxy solicitation for the election of nine new, independent directors to the NRG board of directors. In the presentation, Exelon cited approximately $1.5 billion of additional newly identified synergies as the primary reason for the increase. The new offer also reflects the value of NRG’s recent acquisition of the Reliant Energy retail business.

“We listened to NRG investors and balanced their views with the best interests of Exelon shareholders. An exhaustive analysis by our internal team, informed by the best third-party experts, resulted in additional synergies, allowing us to increase our offer to NRG shareholders,” said John Rowe, chairman and chief executive officer of Exelon. “Our track record of the Unicom-PECO merger, cost-cutting initiatives, and fleet optimization proves we can deliver this further value to Exelon and NRG shareholders. This is our best and final offer, and we will use the time leading up to the NRG annual meeting on July 21 to communicate the value of our new offer to NRG shareholders, encouraging them to vote for nine new independent directors who can unlock that value.”

Exelon’s more detailed analysis of NRG’s structure, cost platform and operations assumes that the company would not only absorb NRG but also integrate and transform it. This approach, plant benchmarking, and application of Exelon’s management model to NRG’s assets yielded an estimated present value of $3.6 billion to $4.0 billion in operational synergies from areas including corporate/IT, fossil and nuclear fleet, trading, development, and retail operations. It reflects a 30 percent reduction in NRG’s O&M expense, which is consistent with prior power sector transactions and reflects Exelon’s track record of delivering cost reductions.

In the presentation, Exelon also shared details on its financing plan to maintain its investment grade credit ratings while optimizing long-term shareholder value. Exelon says it is confident, based on discussions with its outside advisors, that the company will be able to meet all financing needs associated with the transaction, including the re-financing of $4.7 billion of NRG’s senior notes and other NRG debt, if necessary, while maintaining investment grade credit ratings.

Exelon says it continues to pursue NRG because of the long-term value that can be created by industry consolidation. Exelon believes that the scope, scale and diversified risk of the combined company will allow it not only to withstand the ever-changing forces of the markets and regulation but also to grow and create more value than each company could on its own.

Exelon says its offer will create immediate value for NRG shareholders and a commensurate value for Exelon shareholders. NRG shareholders will benefit from Exelon’s stronger investment grade balance sheet, low-carbon nuclear fleet, operating excellence, and a $600 million share in the synergies resulting from the combination. Exelon shareholders benefit from NRG’s assets, cash flow, and its own share of the synergies.

“Together, the two companies would become the first national generation company,” said Rowe. “There is no model that can do more for shareholders of both companies than an Exelon-NRG combination.”

Exelon will conduct a conference call with investors to discuss this announcement and presentation at 8 a.m. ET (7 a.m. CT) today. The call-in number in the U.S. and Canada is 800-690-3108, and the international call-in number is 973-935-8753. If requested, the conference ID number is 17092348. Media representatives are invited to participate on a listen-only basis. The call will be web-cast and archived on Exelon’s Web site: www.exeloncorp.com. (Please select the Investor Relations page.) Telephone replays will be available until July 16. The U.S. and Canada call-in number for replays is 800-642-1687, and the international call-in number is 706-645-9291. The conference ID number is 17092348.

Exelon announced on June 17, 2009, that it had filed its definitive proxy materials with the Securities and Exchange Commission to solicit proxies from NRG shareholders at the NRG annual meeting of shareholders scheduled for July 21, 2009. In today’s presentation, Exelon urges all NRG shareholders to use the BLUE proxy card to vote in favor of proposals to expand the NRG Board and elect nine new, independent and experienced directors who will act in shareholders’ best interests to capture the highest shareholder value possible.

Important Information

This press release relates, in part, to the offer (the “Offer”) by Exelon Corporation (“Exelon”) through its direct wholly-owned subsidiary, Exelon Xchange Corporation (“Xchange”), to exchange each issued and outstanding share of common stock (the “NRG shares”) of NRG Energy, Inc. (“NRG”) for 0.545 of a share of Exelon common stock. This press release is for informational purposes only and does not constitute an offer to exchange, or a solicitation of an offer to exchange, NRG shares, nor is it a substitute for the Tender Offer Statement on Schedule TO or the Prospectus/Offer to Exchange included in the Registration Statement on Form S-4 (Reg. No. 333-155278) (including the Letter of Transmittal and related documents and as amended from time to time, the “Exchange Offer Documents”) previously filed by Exelon and Xchange with the Securities and Exchange Commission (the “SEC”). The Offer is made only through the Exchange Offer Documents. Investors and security holders are urged to read these documents and other relevant materials as they become available, because they will contain important information.

Exelon filed a preliminary proxy statement on Schedule 14A with the SEC on April 17, 2009 in connection with its solicitation of proxies (the “Preliminary Exelon Meeting Proxy Statement”) for a meeting of Exelon shareholders (the “Exelon Meeting”) to be called in order to approve the issuance of

shares of Exelon common stock pursuant to the Offer. Exelon expects to file a definitive proxy statement on Schedule 14A with the SEC in connection with the solicitation of proxies for the Exelon Meeting (the “Definitive Exelon Meeting Proxy Statement”). Investors and security holders are urged to read the Preliminary Exelon Meeting Proxy Statement and the Definitive Exelon Meeting Proxy Statement and other relevant materials as they become available, because they will contain important information.

Investors and security holders can obtain copies of the materials described above (and all other related documents filed with the SEC) at no charge on the SEC’s website: www.sec.gov. Copies can also be obtained at no charge by directing a request for such materials to Innisfree M&A Incorporated, 501 Madison Avenue, 20th Floor, New York, New York 10022, toll free at 1-877-750-9501. Investors and security holders may also read and copy any reports, statements and other information filed by Exelon, Xchange or NRG with the SEC, at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or visit the SEC’s website for further information on its public reference room.

Exelon and Xchange will be participants in the solicitation of proxies from Exelon shareholders for the Exelon Meeting or any adjournment or postponement thereof. In addition, certain directors and executive officers of Exelon and Xchange may solicit proxies for the Exelon Meeting. Information about Exelon and Exelon’s directors and executive officers is available in the Preliminary Exelon Meeting Proxy Statement. Information about Xchange and Xchange’s directors and executive officers is available in Schedule II to the Prospectus/Offer to Exchange. Information about any other participants will be included in the Definitive Exelon Meeting Proxy Statement.

Forward Looking Statements

This press release includes forward-looking statements. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements made herein. The factors that could cause actual results to differ materially from these forward-looking statements include Exelon’s ability to achieve the synergies contemplated by the proposed transaction, Exelon’s ability to promptly and effectively integrate the businesses of NRG and Exelon, and the timing to consummate the proposed transaction and obtain required regulatory approvals as well as those discussed in (1) the Exchange Offer Documents; (2) Exelon’s 2008 Annual Report on Form 10-K in (a) ITEM 1A. Risk Factors, (b) ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and (c) ITEM 8. Financial Statements and Supplementary Data: Note 18; (3) Exelon’s First Quarter 2009 Quarterly Report on Form 10-Q in (a) Part II, Other Information, ITEM 1A. Risk Factors and (b) Part I, Financial Information, ITEM 1. Financial Statements: Note 13; and (4) other factors discussed in Exelon’s filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this press release. Exelon does not undertake any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this press release, except as required by law.

Statements made in connection with the Offer are not subject to the safe harbor protections provided to forward-looking statements under the Private Securities Litigation Reform Act of 1995.

All information in this press release concerning NRG, including its business, operations, and financial results, was obtained from public sources. While Exelon has no knowledge that any such information is inaccurate or incomplete, Exelon has not had the opportunity to verify any of that information.

###

Exelon Corporation is one of the nation’s largest electric utilities with nearly $19 billion in annual revenues. The company has one of the industry’s largest portfolios of electricity generation capacity, with a nationwide reach and strong positions in the Midwest and Mid-Atlantic. Exelon distributes electricity to approximately 5.4 million customers in northern Illinois and southeastern Pennsylvania and natural gas to 485,000 customers in the Philadelphia area. Exelon is headquartered in Chicago and trades on the NYSE under the ticker EXC.

On July 2, 2009, Exelon Corporation issued the following notice:

This morning, Exelon Corporation announced an increase in its offer to acquire all of the outstanding NRG common stock in an all-stock transaction with a fixed exchange ratio of 0.545 Exelon shares for each NRG share, a 12.4 percent increase over the initial exchange offer of 0.485.

Attached is the complete news release and materials for today’s conference call. Conference call details are below.

Exelon Corporation will discuss the proposed NRG Energy transaction in a 45-minute conference call scheduled for Thursday, July 2nd, at 7:00 AM Central Time (8:00 AM Eastern Time). The call-in numbers are:

US & Canada Callers: 800-690-3108

International Callers: 973-935-8753

Conference ID # if requested: 17092348

A conference call replay will be available two hours after the call ends through July 16th, 2009. The numbers to dial for the replay are:

US & Canada Callers: 800-642-1687

International Callers: 706-645-9291

Conference ID #: 17092348

You will also be able to listen to a live audio webcast on the Investor Relations page of Exelon’s website (www.exeloncorp.com). The webcast will be archived and available for replay two hours after the conference call ends.

The call details are also included in the attached document. If you have any problems opening the attachment, please contact Martha Chavez at martha.chavez@exeloncorp.com or call her at 312-394-4069.

Exelon Corporation

10 South Dearborn,

Chicago, IL 60603

On July 2, 2009, Exelon Corporation began using the following presentation in discussions with investors:

Exelon’s Offer Is About Value –

Today and Tomorrow

Are EXC and NRG Together, or Is NRG Stand Alone, Better Built to

Add

Value in a Complex and Carbon-Constrained World?

Investor Presentation

July 2009

Important Information

This presentation relates, in part, to the offer (the “Offer”) by Exelon Corporation (“Exelon”) through its direct wholly-owned

subsidiary, Exelon Xchange Corporation (“Xchange”), to exchange each issued and outstanding share of common stock (the “NRG

shares”) of NRG Energy, Inc. (“NRG”) for 0.545 of a share of Exelon common stock. This presentation is for informational purposes

only and does not constitute an offer to exchange, or a solicitation of an offer to exchange, NRG shares, nor is it a substitute for

the Tender Offer Statement on Schedule TO or the Prospectus/Offer to Exchange included in the Registration Statement on Form

S-4 (Reg. No. 333-155278) (including the Letter of Transmittal and related documents and as amended from time to time, the

“Exchange Offer Documents”) previously filed by Exelon and Xchange with the Securities and Exchange Commission (the “SEC”).

The Offer is made only through the Exchange Offer Documents. Investors and security holders are urged to read these

documents and other relevant materials as they become available, because they will contain important information.

Exelon filed a proxy statement on Schedule 14A with the SEC on June 17, 2009 in connection with the solicitation of proxies (the

“NRG Meeting Proxy Statement”) for the 2009 annual meeting of NRG stockholders (the “NRG Meeting”). Exelon will also file a

proxy statement on Schedule 14A and other relevant documents with the SEC in connection with its solicitation of proxies for a

meeting of Exelon shareholders (the “Exelon Meeting”) to be called in order to approve the issuance of shares of Exelon common

stock pursuant to the Offer (the “Exelon Meeting Proxy Statement”). Investors and security holders are urged to read the NRG

Meeting Proxy Statement and the Exelon Meeting Proxy Statement and other relevant materials as they become available,

because they will contain important information.

Investors and security holders can obtain copies of the materials described above (and all other related documents filed with the

SEC) at no charge on the SEC’s website: www.sec.gov. Copies can also be obtained at no charge by directing a request for such

materials to Innisfree M&A Incorporated, 501 Madison Avenue, 20th Floor, New York, New York 10022, toll free at 1-877-750-

9501. Investors and security holders may also read and copy any reports, statements and other information filed by Exelon,

Xchange or NRG with the SEC, at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC

at 1-800-SEC-0330 or visit the SEC’s website for further information on its public reference room.

Exelon, Xchange and the individuals to be nominated by Exelon for election to NRG’s Board of Directors will be participants in the

solicitation of proxies from NRG stockholders for the NRG Meeting or any adjournment or postponement thereof. Exelon and

Xchange will be participants in the solicitation of proxies from Exelon shareholders for the Exelon Meeting or any adjournment or

postponement thereof. In addition, certain directors and executive officers of Exelon and Xchange may solicit proxies for the

Exelon Meeting and the NRG Meeting. Information about Exelon and Exelon’s directors and executive officers is available in

Exelon’s proxy statement, dated March 19, 2009, filed with the SEC in connection with Exelon’s 2009 annual meeting of

shareholders. Information about Xchange and Xchange’s directors and executive officers is available in Schedule II to the

Prospectus/Offer to Exchange. Information about any other participants is included in the NRG Meeting Proxy Statement or the

Exelon Meeting Proxy Statement, as applicable.

Forward-Looking Statements

This presentation includes forward-looking statements. There are a number of risks and

uncertainties that could cause actual results to differ materially from the forward-looking

statements made herein. The factors that could cause actual results to differ materially from

these forward-looking statements include Exelon’s ability to achieve the synergies contemplated

by the proposed transaction, Exelon’s ability to promptly and effectively integrate the businesses

of NRG and Exelon, and the timing to consummate the proposed transaction and obtain required

regulatory approvals as well as those discussed in (1) the Exchange Offer Documents; (2) Exelon’s

2008 Annual Report on Form 10-K in (a) ITEM 1A. Risk Factors, (b) ITEM 7. Management’s

Discussion and Analysis of Financial Condition and Results of Operations and (c) ITEM 8. Financial

Statements and Supplementary Data: Note 18; (3) Exelon’s first quarter 2009 Quarterly Report on

Form 10-Q filed on April 23, 2009 in (a) Part II, Other Information, ITEM 1A. Risk Factors and (b)

Part I, Financial Information, ITEM 1. Financial Statements: Note 13 and (4) other factors discussed

in Exelon’s filings with the SEC. Readers are cautioned not to place undue reliance on these

forward-looking statements, which apply only as of the date of this communication. Exelon does

not

undertake

any

obligation

publicly

release

any

revision

its

forward-looking

statements

reflect events or circumstances after the date of this communication, except as required by law.

Statements made in connection with the exchange offer are not subject to the safe harbor

protections provided to forward-looking statements under the Private Securities Litigation Reform

Act of 1995.

All information in this presentation concerning NRG, including its business, operations, and

financial results, was obtained from public sources. While Exelon has no knowledge that any such

information is inaccurate or incomplete, Exelon has not had the opportunity to verify any of that

information.

Scope, scale and strength to build on Exelon’s proven capacity to…

•

Execute strategic objectives from a solid financial foundation, with ready

access to low-cost capital

•

Realize significant value creation through operational and financial synergies

•

Diversify across power markets, fuel types and regulatory jurisdictions

•

Respond to universally recognized need for industry consolidation

•

Be a significant voice in industry, policy and regulatory discussions

The EXC/NRG combination would be the premier power company in a

complex, dynamic industry

•

Largest

U.S.

power

company

(~48,000

)

with

market

cap

~$40

billion

and investment grade balance sheet

•

Significant presence in five major competitive markets (Illinois,

Pennsylvania, Texas, California and the Northeast) rather than two or three

•

Second lowest carbon emitting intensity in the industry

For NRG and Exelon Shareholders, a

Combination Means:

Includes owned and contracted capacity after giving effect to planned divestitures.

Exelon and NRG market capitalization as of 6/26/09.

For NRG Shareholders, Exelon Means

Participation in a Company with:

•

The largest, best run, lowest cost nuclear fleet in the U.S.

•

A plan to build 1,300-1,500 MW of new nuclear through

uprates

at a fraction of the cost and risk of NRG’s partial

ownership of STP 3&4

•

The largest carbon upside in the industry

•

The opportunity to realize any upside from gas, coal and

capacity prices without the higher risk from downside

commodity cycles facing stand-alone NRG

•

A history of financial discipline and shareholder return

•

Investment

grade

balance

sheet

(BBB/A3/BBB+)

that

enables

consistent access to capital at lower cost

•

Total shareholder return of 124% since 2000, compared with 45% for

the

UTY

and

negative

23%

for

the

S&P

500

Exelon Generation Senior Unsecured credit ratings.

Shareholder return from Exelon inception (10/20/00) through 6/26/09. Total return after reinvesting all dividends back into the

security

the closing price on the day following the relevant ex-dividend date. Includes stock price appreciation with dividend

reinvestment. Excludes taxes and fees.

An EXC/NRG Combination Is Compelling…

•

For NRG shareholders

•

Higher exchange ratio = 0.545

•

Greater growth opportunities than NRG stand-alone, at lower risk and relative

cost

•

~$3.1 billion transaction value

•

For Exelon shareholders

•

$0.6-$2.5 billion transaction value

•

2% -

7% accretion to EPS

•

Improved cash flow

•

Retained investment grade rating

•

~$1.5 billion in additional, bankable synergies ($3.6 to $4.0 billion total)

•

NRG is more vulnerable to low gas prices, high carbon costs and credit

constraints

•

We can get this deal done -

regulatory approvals and financing are on

course

•

Now is the time to move forward quickly: Elect Exelon’s slate of nine

independent candidates for the NRG Board

The Transaction Offers Greater Value

to Shareholders of Both Companies

The Value of the Offer to NRG Shareholders

Has Increased

THEN

NOW

Exchange Ratio

Est. NPV of Synergies

0.485

0.545

(12.4% increase)

$1.5 –

$3.0 B

$3.6 –

$4.0 B

Exelon’s best and final offer

Implied ownership as of 2012 assuming the conversion of $1.1 billion of mandatory convertibles. Immediate ownership percentage upon deal

close is 18.6%.

Includes estimated transaction costs of $654M (pre-tax).

Includes estimated transaction costs of $550M (pre-tax).

Transaction Value to NRG

$2.3 B

$3.1 B

Implied Ownership

16.8%

18.2%

Vote the BLUE Proxy to decide the

outcome of this offer

•

Exelon’s offer has increased NRG’s stock price and decreased Exelon’s stock price

relative to each company’s peer indices

•

Assuming that each company’s stand-alone stock price is halfway between the

comparable company index and current stock price, the premium offered is still 44%

Current

Stock Price

($50.70)

Halfway

Between Index

and Current

($54.03)

Based on

Competitive

Integrated

Index ($57.35)

Current Stock

Price ($23.80)

16%

24%

31%

Halfway Between

Index and Current

($20.50)

35%

44%

52%

Based on IPP

Index ($17.21)

61%

71%

82%

Exelon Stand-Alone Stock Price

NRG

Stand-Alone

Stock Price

Indicative Premium

The world has

changed for

IPPs

–

lower

gas prices, a

weak economy

and likely

carbon

legislation will

translate into

lower IPP

valuations

Best Indicators Suggest Current Exelon Offer

Represents an Implied Premium of 44%

Premium based on 10/17/08 stock prices (last observable stand-alone stock value) is 54% at current offer.

Closing stock prices as of 6/26/09.

EXC implied stock price based on the Competitive Integrateds (AYE, ETR, FPL, PPL, PEG, CEG, EIX, FE) performance from

10/17/08 to 6/26/09.

NRG implied stock price based on the IPP Index (MIR, CPN, DYN, RRI) performance from 10/17/08 to 6/26/09.

Based on These Indicators, Transaction Provides NRG

Shareholders Immediate Value of $3.1 Billion

Share of

Synergies

$0.6B

Plus: EXC Upside

Carbon

Uprates

PECO PPA roll-

off

Based upon implied premium of 44% from previous slide and assumes 277 million NRG fully-diluted shares outstanding.

Share of synergies reflects 18.2% NRG share of synergies (based upon midpoint of $3.6-$4.0B synergies), less NRG share of

$550 million pre-tax total estimated transaction costs.

Implied

Transaction

Value to NRG

Shareholders

of $3.1B

Implied

Premium to

NRG

Shareholders

of $2.5 B

Even at June 26

closing prices, NRG

shareholders will

realize immediate

transaction value of

$1.7 billion

If Exelon’s offer

is withdrawn,

NRG

shareholders

face downside

risk in their share

price

Then

•

Assumed a traditional “integrate”

model

•

Reflected

preliminary

“top-down”

internal

estimate

without assistance from 3

parties

•

Notable assumptions included:

–

40% reduction in NRG’s A&G expense

–

10% reduction in NRG’s O&M expense

Now

•

Assumes

an “absorb-integrate-transform”

model

•

Reflects “bottom-up”

functional

estimate

with

assistance from Booz & Company

•

Assesses discrete operating areas, updates

assumptions and defines desired outcomes

•

Reflects enhanced view of NRG’s operating profile

(plant benchmarking)

•

Recognizes impact of Reliant Retail business to NRG

(A&G)

Upon Detailed Investigation, Exelon Has

Identified Greater Synergies

Exelon will realize these synergies, just as we have in the past

Based on analysis of publicly available

information.

Primarily reflects severance, systems

integration, retention and relocation costs.

Est. Annual Cost Savings:

$180 -

$300 M

% of Combined Expenses:

~3%-5%

Costs

Achieve :

$100

NPV of Est. Synergies: $1,500

$3,000 M

Est. Annual Cost Savings:

$410 -

$475 M

% of Combined Expenses:

~6%-7%

Costs

Achieve :

$200

NPV of Est. Synergies: $3,600

$4,000 M

Synergies reflect a 30% reduction in NRG’s O&M expense, which is consistent with prior

power sector transactions and reflects Exelon’s track record and commitment to delivering

strong

results

–

additional

synergies

possible

Category

Amount ($M)

Commentary

Key Sources of Synergies

Corporate / IT

$225 -

$245

•

Includes

enhanced

corporate

synergies

from

initial

case

based

detailed

assessment and prior transaction experience, minimizing duplicative corporate

support

Fossil

$75 -

$85

•

Based on ~350 employee reduction from Exelon/NRG fleet optimization due to

implementation of Exelon’s management model

Trading

$65 -

$75

•

Absorption of NRG trade book into existing Exelon Power Team operations

•

EXC Power Team is an experienced, multi-state power marketer, enabling

smooth integration and significant labor synergies

Development

$20 -

$30

•

Significant

reduction

redundant

staffing,

without

sacrificing

continuing

growth

and development opportunities

Nuclear

$10 -

$20

•

Integration of STP 1 & 2 into the largest nuclear fleet in the industry (not

assumed until 2011, contingent upon agreement with co-owners)

Retail

$15 -

$20

•

Reflects assumed NRG synergies (since Reliant acquisition was not incorporated

into our initial analysis)

Total

$410 -

$475

243

170

117

Cost Savings

Estimate ($M)

$ 100

117%

Actual Post Merger

Integration Savings ($M)

% Realized of

Estimate

106%

$ 160

$ 180

135%

•

Targeted headcount reduction of ~1,200;

actual ~1,600

•

Disciplined integration planning process

•

Effective use of pre-close period for

integration planning purposes to accelerate

synergy capture

•

Reduction in overall staffing levels through

centralization/leverage of scale

•

Elimination of duplicate corporate and

administrative positions

•

Common company-wide management

processes

Year

2001

2002

2003

$67

$210

$200

2004

$410

2003

$230

$163

Cumulative Cost Savings

Estimate ($M)

Actual Results (Pre Tax -

$M)

(O&M + Capital = Total)

% Realized of

Estimate

100%

129%

$163 + $67 = $230

$339 + $188 = $527

O&M

Capital

Exelon has the experience and management commitment to deliver on its

synergy targets

Exelon Has a Proven Track Record of

Delivering Targeted Synergies

•

Improved capacity factor from 77% in 2004 to

96% in 2006

•

Reduced average refueling days from 80 in

2004 to 26 in 2006

100

1998

2000

2002

2004

2006

2008

PECO

Unicom

PSEG

Exelon

AmerGen

PSEG with NOSC

The Value Of The Offer To Exelon Shareholders

Is Substantial

THEN

NOW

Operating EPS Accretion

to EXC

2% –

10%

2% –

Assumes total asset sale proceeds of ~$1.0B.

Assumes total asset sale proceeds of $1.6 B and a $1.1B mandatory convertible offering.

Includes estimated transaction costs of $654M (pre-tax).

Includes estimated transaction costs of $550M (pre-tax).

Does not include effects of purchase accounting.

Transaction Value to EXC

$1.0 –

$3.0 B

$0.6 –

$2.5 B

Est. NPV of Synergies

$1.5 –

$3.0 B

$3.6 –

$4.0 B

Transaction Will Create Significant Value under

Multiple Scenarios

Value

($B)

Gas Prices

Federal RES

Carbon Year:Price

Post-Recession

Growth

$1.2

$0.6

Merchant Allocation?

2014:$25

$7.00

Low

Yes

2020:$29

$6.80

Stagflation

Yes

2014:$25

$6.90

Yes

Low

Yes

2014:$17

$6.00

Low

$1.1

$2.5

The transaction offers positive value creation of $0.6-$2.5B

2012:$25

$7.90

Moderate

Yes

$1.1

Includes the cost of issuing $1.1 B of mandatory convertibles at a price below Exelon’s long-term value; therefore long-term

value estimates are reduced by $0.1 B to $0.5 B (depending on the scenario).

Gas price is long-term price in 2008 $/MMBtu.

Carbon Year is year in which national cap and trade starts, Carbon Price is in 2014 $/tonne assuming 7% annual escalation.

In $7.90 gas case, 2012 and 2013 carbon prices assumed to be $13/tonne and $14/tonne, respectively.

Merchant Allocation assumes 50% of emissions to merchant coal generators phasing out by 2030.

Federal Renewable Energy Standard (RES) assumes 20% standard.

Low post-recession growth assumes load growth consistent with current forwards followed by ~1% annual load growth,

Moderate post-recession growth assumes load growth consistent with current forwards followed by ~1.5% annual load

growth, Stagflation assumes three years of 7% inflation and five years of no load growth.

Transaction Is Accretive for Exelon

Shareholders

Operating Earnings

New Offer (Now)

Original Offer (Then)

Exelon remains fully committed to delivering value to its own shareholders

10%

2010

2011

2012

2010

2011

2012

2013

Does not include effects of purchase accounting, which may be dilutive to GAAP earnings following transaction closing, depending on market

conditions and other factors.

Exelon Investor Presentation 10/29/08, page 5. Based on I/B/E/S estimates as of 10/21/08. Assumes total asset sale proceeds of ~$1.0 B.

Based on internal Exelon estimates. Assumes total asset sale proceeds of $1.6 B and a $1.1 B mandatory convertible offering.

•

NRG Shareholders

–

12.4% increase in exchange ratio from 0.485 to 0.545 increases

transaction value to $3.1 billion

–

Share in greater total synergies from combined company

–

Greater long-term value creation from Exelon

•

Exelon Shareholders

–

Strategic platform for continued growth

–

Long-term

value

creation

$0.6

–

$2.5

billion

discounted

cash

flow basis, including a share of synergies

–

Accretive

transaction

beginning

Year

•

NRG Bondholders

–

Credit strength from Exelon’s investment grade balance sheet and

prudent risk management

•

Exelon Bondholders

–

Continued commitment to investment grade ratings, as evidenced by

plans to issue equity and realize asset sale proceeds

The Transaction Would Create Value For All

Stakeholders

1. Does not include effects of purchase accounting.

Exelon Offers Greater Growth

at Lower Risk

Exelon Is Built to Last and Consistently

Creates Value

Operational Prowess

Solid Balance Sheet

Consistent Dividends

$10.00

$12.00

$14.00

$16.00

$18.00

$20.00

2003

2004

2005

2006

2007

2008

Exelon

Industry

Nuclear Annual Avg. Production

Cost ($/MWh)

$1.26

$1.60

$1.76

$2.03

$0.50

$1.00

$1.50

$2.00

2004

2005

2006

2007

2008

2009E

$2.50

$2.10

•

Investment Grade Rating (BBB/A3/BBB+)

•

Broad Access To The Deepest Capital Markets:

$4.3 trillion High Grade Bond market

$1.2 trillion Commercial Paper market

•

Lower Cost of Capital:

Offers $250 M in aggregate interest savings over the

next five years relative to non-investment grade debt

pricing

•

Financial and Operational Flexibility:

Ability to negotiate hedging transactions with better

margining terms or avoid incremental credit charges

Exelon Generation Senior Unsecured credit ratings.

Based on internal analysis. Changes in market conditions could impact results.

65%

70%

75%

80%

85%

90%

95%

100%

Operator (# of Reactors)

Range

5-Year Average

Exelon’s Long-Term Value Drivers Generate Post-

Transaction Value for All Shareholders

Carbon

Nuclear

Uprates

Procurement

Cost

Reductions

Long-term fundamentals create value beyond what is currently

reflected in Exelon’s stock price

$1.1

billion

and

growing

annual

upside

Exelon

EBITDA

from

Waxman-Markey legislation

1,300 MW -

1,500 MW in Exelon nuclear uprates

by 2017 increases

the value of the existing fleet

$2,200-2,500/kW overnight cost for uprates

vs. $4,000-4,500/kW

for new build and additional ~$110/kW in annual savings from

lower incremental operating costs from uprates

$100-102/MWh

result

June

PECO

power

procurement

suggests

robust pricing and higher margins at Exelon Generation in 2011 and

beyond

$350 million in announced O&M reductions for 2010, more than half

of which is sustainable

Assumes $15/tonne carbon pricing.

Reflects retail price including line losses and gross receipts tax.

Carbon

Legislation

Coming

–

Who

Can

Better

Navigate a Carbon-Constrained World?

•

Waxman-Markey legislation provides allocations to merchant coal units only if they actually run in any given year –

with this allocation mechanism, merchant coal plants will dispatch more than is economically efficient and fewer

merchant coal plants will retire

•

If merchant coal allocations are granted in a manner that does not change dispatch and retirement incentives,

Exelon’s EBITDA would increase by about $1.5 billion and NRG’s EBITDA would increase by about $150M in Year 1

•

While Exelon has supported merchant coal allocations as part of an overall industry compromise, if no allocations

are granted, Exelon’s EBITDA would increase by $1.5 billion and NRG’s EBITDA will decrease by $150M in Year 1

Note: Dollar values reflect illustrative results based on potential outcomes of climate legislation and should not be interpreted as a forecast for future periods.

$1,100

Exelon

NRG

($M)

Year 1 EBITDA Impact of $15/tonne Carbon With

Waxman-Markey Merchant Coal Allocations

There is no case

where carbon

legislation is

better for NRG

than for Exelon

June

26 ,

the

U.S.

House passed the

Waxman-Markey Bill

by a vote of 219-212

Assuming carbon priced at $15 per tonne, Exelon EBITDA in the first year alone

could grow by ~$1.1 billion

•

Incremental

1,300

–

1,500

MWs

Exelon

uprates

over

2009-2017

exceeds

NRG’s

expected

ownership

STP 3&4

•

Exelon

has

substantial

experience

managing

1,100

MWs

uprate

projects

over

the

past

years

•

Less

Risk:

less

risk

cost

overruns

and

delays;

uprates

can

also

phased

based

market

conditions

which

adds value

•

Lower Cost: Uprates

do not materially increase the O&M of existing plants, saving ~$110/kW in annual costs vs. a

new nuclear plant

Exelon’s Nuclear Uprate

Plan Delivers More MWs

Than NRG New Build -

With Less Risk At Half The Cost

1,170 MW

(44% Equity

Ownership)

Average Overnight Cost

Estimate of U.S.

New Build: $4,000-4,500/kW

Year Uprates

Become Operational

200

400

600

800

1000

1200

1400

1600

1999-

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2009-

2017

MWs

1,100 MWs

1,300 –

1,500 MW

Average Overnight Cost

Estimate: $2,200 -

2,500/kW

Exelon’s Uprate

Plan

NRG’s New Nuclear Plan

at Max Equity Position¹

1. Exelon expects that NRG’s planned equity selldown

would further reduce NRG's net equity interest to

approximately 35%, or 936 MW, and possibly even less

“We are impressed with Exelon's optimistic plans to add up to 1,500 MW from nuclear uprates

over the next eight

years…The returns on these investments should be very attractive, as the company does not anticipate a higher run-

rate of O&M expenses (i.e., O&M/MWh

should decrease).”

Angie Storozynski, Macquarie Securities, June 12, 2009

NRG’s “prediction”

Pennsylvania Procurement Provides Strong

Evidence of the Value of Exelon’s Mid-Atlantic Fleet

“Well,

they

recently

–

another

neighboring

utility,

First

Energy,

announced their auction results as they transitioned to open

market, and in fact that they realized was $61.50 per megawatt

hour, which obviously is a far cry from $107.50. $61.50 obviously is

better than $60, but it’s hardly worth waiting three years for, nor is

it worth foregoing NRG’s own considerable growth prospects”

–

David Crane, Deutsche Bank Conference, May 27, 2009

What Actually Happened

•

Exelon Generation wins commitments in PECO and

Allegheny

auctions

for

than

million

MWhs

attractive pricing

“There had been some suggestions (notably from NRG)

that the recent FE price might presage downside risk in

the PECO auction -

but such fears were clearly not borne

out…and highlights the different market dynamics such as

positive basis to PECO's Philadelphia location.”

Jonathan Arnold, Bank Of America Merrill Lynch, June 17,

2009

Current ExGen

Contract

2011 PECO Price

$100-102/MWh

Current ExGen

Contract

2011+

$60/MWh

NRG Deutsche Bank Securities Energy & Utilities Conference Presentation - 5/27/09.

NRG estimate of energy and capacity excluding transmission.

Estimated retail price (i.e., inclusive of gross receipts tax and adjustment for T&D losses but not Network Transmission Service)

converted from ExGen’s winning offers using Residential Retail Generation Rate Conversion Model at PECO Procurement website

(http://www.pecoprocurement.com/index.cfm?s=supplierInformation&p=rates).

NRG Faces Significant Risks and

Overvalues its Stand-Alone Business

Prospects

NRG Touts Numerous “Growth”

Opportunities,

But A Closer Look Reveals Minimal Value

New Nuclear

(NINA)

•

NRG significantly underestimates both costs and risks

•

Any value estimate is speculative at this point

Reliant

•

Purchase appears accretive, but NRG’s EBITDA projections are

extremely aggressive and suggested EBITDA multiple is unrealistic

•

Net value of ~ $1/share

Padoma

Wind

•

150 MW net ownership (0.7% of NRG existing capacity) of new

wind in Texas scheduled to come on-line by the end of 2009

•

Potential net value in the $0.00-0.10/share range

eSolar

•

184 MW net ownership (0.8% of NRG existing capacity) of new

solar in Southwest scheduled to come on-line in 2011/2012

•

Potential net value in the $0.00-0.25/share range

GenConn

Energy

•

200 MW net ownership (0.9% of NRG existing capacity) of new

peaking in Connecticut scheduled to come on-line in 2010/2011

•

Estimated net value of ~$0.10/share

Upper end of range is based on optimistic net value estimate assuming a 10% profit margin on capital invested.

NRG’s only real growth opportunity is the gas and heat rate upside in its existing 23,000

domestic

fleet

–

Exelon

has

similar

upside

plus

enormous

carbon

upside

well

/kW)

Historical projected and actual costs of

nuclear construction ($/kW)

1974/75

$1,156

$4,410

1976/77

$1,493

$4,008

$560

$1,170

1966/67

% Over Original Estimate

+381%

+269%

+209%

•

success with planned equity selldown

•

Insufficient

DOE

loan

guarantee

funds

support

all

identified projects

•

Even with DOE loan guarantee of $4.6B and $3B in

loan guarantees from Japan (which we see as

aggressive), there is a financing gap of $2.5B -

$5B

that NRG has not secured

•

disclosed details on risk mitigation plan for Toshiba’s first

U.S. nuclear construction project

•

signed

PPAs

because

current

market

fundamentals

not support pricing needed to cover construction costs

Significant Risks Make It Impossible To Ascribe Value At

This Early Stage

Nuclear

new

build

estimates—

Overnight

$/kW

FPL

$3,170-$4,630/kW

Progress (Levy County)

$4,345/kW

Brattle Group

$4,038/kW

Exelon (Victoria County)

$4,148/kW

U.S. Consensus

$4,000-4,500/kW

NRG

$3,200/kW

vs.

Sources:

NEI

Whitepaper

“The

Cost

New

Generating

Capacity

Perspective”

February

2009,

Brattle

Group

IRP

for

Connecticut -

January 2008

, NRG 6/4/09 Presentation at Macquarie Global Infrastructure Conference

Amounts

shown

2008$,

assuming

inflation

over

2007$

for

FPL

and

Progress.

Exelon

estimate

includes

initial

fuel load cost.

NRG Investor Presentation, June 17, 2009

Overnight Cost Growth (1966-1977)

Est:

+167%

Actual:

+243%

NRG

Underestimates the Risks of Being a First Mover

STP 3&4 Is Subject To Project Execution And Cost

Escalation Risks That NRG Shareholders Cannot Ignore

•

U.S.

Supply

chain

and

labor

force

must

re-established

•

Japanese modular construction practices have not been

applied in the U.S.

•

NRG has not announced completion of construction

contract

•

U.S. labor productivity vs. Japanese is unknown

•

Construction proximity to an operating nuclear plant poses

significant risk to construction execution, schedule, and cost

•

Owner’s costs and site development risks are material,

despite the brownfield

site

NRG Is Overvaluing Reliant Retail’s Financial

Impact

Valuation Considerations

Even when assuming a $250 million run rate EBITDA for Reliant Retail, the

financial impact to NRG is less than $1.00 per share

•

Exelon

fully

supports

the

retail

business

model,

and

the

Reliant

acquisition

appears

value-accretive

•

However,

the

suggestion

that

over

billion

equity

value

(or

~$4.50

per

share)

has

been

created

an overstatement

•

Valuation of 4-6x EBITDA is not achievable

–

NRG paid 1.9x to 2.6x

EBITDA in an auction

–

Public markets have not imputed attractive

multiples

to retail businesses in the past

•

No allocation of debt

in NRG’s valuation either in the

form of collateral or increased working capital

•

NRG seems to ignore the higher level of risk

for retail;

implies higher cost of capital

Potential Price Per Share Impact ($ M)

•

$250 million run rate EBITDA appears aggressive

–

Gross margins

($670 M) assume steady mass market

and Commercial & Industrial margins which have been

volatile

–

Aggressive pricing from large competitors

(e.g.,

Centrica, FPL, CEG) will

likely compress margins

–

Requires strong execution

across key disciplines (e.g.,

risk management, customer service)

Earnings Considerations

Low

High

NRG

Management

(as

3/2/09):

Purchase Price

$388

(a)

Original EBITDA Estimate

$200

$150

(b)

Implied EV / EBITDA

1.9x

2.6x

Revised

NRG

Estimates

(as

5/27/09):

(c)

Revised Run-rate EBITDA

$250

(d)

Change

Implied

Synergies

$50

$100

(e)

NRG Purchase Multiple Range (line b)

1.9x

2.6x

1.9x

2.6x

Implied Value Created (d * e)

$95

$130

$190

$260

Est.

Price

Per

Impact

$0.34

$0.47

$0.69

$0.94

NRG Investor presentation - March 2, 2009.

NRG Investor presentation - May 27, 2009.

Assumes 277 million NRG fully-diluted shares outstanding.

100

200

300

400

500

600

700

$800

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Exelon Estimate –

Incremental

CapEx

(High Case)

Exelon Estimate –

Incremental

CapEx

(Low Case)

NRG Form 10-K Disclosure

$1.3-$2.3

billion

incremental

environmental

compliance

costs

could

limit

NRG’s ability to fund its future “growth”

–

particularly in light of its leveraged

balance sheet and non-investment grade ratings

Total

NRG Estimate

$1.15B

Incremental

Cap Ex

$1.3 –

$2.3B

Total

$2.45 –

$3.45B

•

Under the new administration, we anticipate there will be more stringent environmental rules and

regulations,

including

NOX

and

SO2

and

particulate

reductions

under

revised

Clean

Air

Interstate

Rule

(CAIR), an aggressive EPA/DOJ New Source Review enforcement initiative

•

These

regulations

may

result

significant

compliance

costs

for

NRG’s

coal-fired

generation

assets

•

These regulations will have minimal impact on Exelon’s compliance costs given our nuclear portfolio

In its 3/31/09 Form 10-Q, NRG states that it has prepared an environmental capital expenditure plan for numerous pending

regulations but does not disclose the amount of the planned expenditures.

Forecasted amounts shown above are included in transaction analysis.

Environmental Capital Expenditures

Could Severely Limit NRG’s Future Growth

looking closer:

•

NRG claims

that its hedge program insulates it from the current commodity

down-cycle…

•

NRG has sold about 2/3 of its baseload

energy forward for 2011, but at much lower prices

than for 2009 sales

•

As NRG’s above-market hedges roll off, we estimate that NRG’s baseload

energy revenues

could decline by ~$700 million based on current market prices between 2009 and 2011

At Current Forward Prices, ~$700 Million in

NRG Revenue Deterioration From 2009-2011

Based on 2/28/09 market conditions, per Exelon Hedging Disclosures (April 2009).

Percentages sold and average prices in blue as disclosed in NRG’s 2008 Form 10-K. 2010-2011 average prices in

green

are

based on Exelon internal analysis. Average price represents weighted average of TX, NY and PJM baseload

energy sales using market conditions as of 5/29/09.

Between 2009

and 2011,

Exelon

Generation’s

estimated

gross margin

grows by

~$500

million

largely due to

the PECO PPA

roll-off

2009

2010

2011

NRG Baseload

Energy Revenues

5% Sold in Short-

Term Market

95% Sold Forward at

an Average Price of

$61/MWh

21% Remaining Sales at

an Average Price

~$46/MWh Assuming

5/29/09 Market

79% Sold Forward at

an Average Price of

$58/MWh

$700

Million

Decline

33% Remaining Sales at

an Average Price

~$53/MWh Assuming

5/29/09 Market

67% Sold Forward at

an Average Price of

$52/MWh

Regulatory Approval and Financing

Plan Are On Course

Jurisdiction

Status

FERC

Acquisition approved on May 21, 2009

Hart-Scott-Rodino

Statutory waiting period expired April 30, 2009

NRC

Application under review without further information

requests

Texas

Commission

ruled

application

sufficient

hearing

be held on

October 15, 2009

New York

To be decided without evidentiary hearing

Pennsylvania

Hearings scheduled for July 15-17, 2009

California

CPUC accepted application; will be decided without

evidentiary hearing

Regulatory Approvals Are Advancing As

Expected

Completed

In Process

1. As of June 26, 2009.

Note: It is also worth noting that NRG’s lawsuit against Exelon in U.S. District Court, Southern District of New York, was dismissed on

June 22, 2009 and will not be an obstacle to closing.

Exelon Has a Financing Plan That Is Executable, Provides

Investment Grade Metrics and Creates Long-Term Value

“I think Exelon has the

capability to refinance

and close the

exchange offer”

Jonathan Baliff, NRG

Executive Vice

President, Strategy

•

We have modeled varying combinations of debt refinancing, asset divestitures,

equity

equity-linked

issuance

and

accelerated

debt

paydown

maintain

our

investment

grade

credit

ratings

–

with

view

long-term

shareholder

value

•

Our optimal financing plan includes:

Divesting assets of ~$1.6 billion

Issuing ~$1.1 billion of mandatory convertible equity or common equity

Deploying cash on hand of ~$1.7 billion

Financing $4.2 billion in the debt capital markets

•

The plan is

executable

and provides investment grade metrics

•

have

incorporated

“cost”

issuing

equity

equity-linked

securities

into

our

model as we believe EXC’s

long-term value is greater than its current stock price

•

The strategic benefits, long-term value and synergies created by the combination

are

valuable

than

the

“cost”

equity

equity-linked

issuance:

–

Combined

company

will

benefit

from

low-cost,

baseload

generation

positions

PJM and ERCOT which will provide diversification and a platform for future growth

–

Long-term DCF value remains positive at $0.6 -

$2.5 billion, inclusive of cost to

issue

mandatory

convert

$0.1

–

0.5

billion

–

Earnings and cash flow accretive in first full year of operations

Based on relative economics of the two securities and market conditions.

Estimated excess cash balance at NRG reflects Exelon internal projections as of FYE 2009.

Either at or about the time of the transaction or thereafter.

Former investment banker at Credit Suisse testifying under oath in Federal Court on June 1, 2009. NRG Energy. Inc. v. Exelon Corp., et

al., No. 09 Civ. 2448 (S.D.N.Y.).

We Have A Plan To Meet Our Financing Needs

–

The Plan is Flexible and Executable

•

Exelon has many options to

address its financing needs

•

Capital markets

•

Bank financing

•

TopCo

structure

•

Asset sales / Equity issuance

•

Bond waivers

•

Excess NRG cash

•

Capital markets remain strong

•

Over $200 billion in bank

commitments (over $1 billion) in

the last twelve months

•

Over $88 billion in investment

grade bond issues (over $1 billion)

year to date

•

$130 billion in U.S. equity

issuances year to date, of which

over $19 billion is convertible

equity

•

We can finance the transaction at

an ~8% interest rate given current

market conditions

Summary Financing Needs ($ M)

Principal

Bank Debt (Includes TLB and Synthetic LOCs)

$3,114

Senior Notes due '14, '16, and '17 (in aggregate)

4,700

8.500% Senior Notes due 2019

700

3.625% Preferred Stock

250

Other

908

Potential Financing Needs

$9,672

Preliminary Financing Plan

Estimated Excess NRG Cash and Equivalents (as of FYE '09)

$1,700

Equity / Mandatory Convert Issuance

1,100

Asset Sales

1,600

Assumption of 2019 Bonds

700

Assumption of Select Non-Recourse Obligations

379

Debt Capital Markets Financing

4,193

Total Sources

$9,672

Note: Estimated balances based on internal estimates, reported data in NRG’s Form 10-Q as of 3/31/09 and

10-K dated 12/31/08.

Synthetic LOCs

require drawn bridge loan.

Credit Suisse has the option to keep the security outstanding and make fair value adjustments.

Includes estimated fees, net of taxes and other non-recourse obligations.

Excludes CS Notes and preferred interest.

Either at or about the time of the transaction or thereafter.

UBS market data

Assumes divestiture of various assets including Big Cajun and other Louisiana Plants.

•

Elect

each

the

four

independent

candidates

nominated

run

opposition to the incumbent directors up for re-election

•

Expand

the

size

the

NRG

board

directors

•

Elect

each

the

five

independent

candidates

serve

the

expanded board

NRG Shareholders can secure the best transaction possible by taking the following actions:

This approach will allow NRG shareholders to share in the significant value to be

generated from creating the largest, most diversified

power company in the U.S.

This will not

result

in Exelon’s slate

constituting a

majority of the

NRG Board

•

NRG’s Board has been entrenched in its steadfast opposition to a transaction

with Exelon by:

Supporting an entrenched CEO and Senior Management who have sought to

obstruct Exelon’s attempts to obtain regulatory approvals for the

transaction

Consistently ignoring the spoken will of a majority of NRG’s shareholders

and refusing to negotiate with Exelon or allow due diligence

•

We are committed to this transaction but will continue our efforts only as long

as we have shareholder support. The election of only four new directors would

raise a significant question about the level of that support

Voting For Only Four Directors Will Reduce the Likelihood of a Value-Enhancing Transaction

It’s Time to Act to Capture This Value –

Vote the

BLUE Proxy Card to Make the Offer Successful

This Transaction Is Unique

•

Substantial

synergies

fairly

shared

•

Compelling value

•

Catalyst for consolidation

The time is now…the parties are NRG and Exelon…

the price is fair

Appendix

Q2 2009

Q3 2009

Q4 2009

Receive Regulatory

Approvals

10/19:

Announce

Offer

Annual NRG and

Exelon Special

Shareholder

Meetings

11/12:

Exchange

Offer Filed

Make Filings and Work to Secure Regulatory Approvals

(NRC, DOJ/FTC, PUCT, NYPSC, PAPUC, CPUC)

Shareholder Proposal and Proxy Solicitation

8/21:

Exchange

Offer Expires

2/25:

Over

51% of NRG

Tendered

Regulatory approvals are manageable and we expect the

transaction to close in 2009

5/21: FERC

Approval

Expected

Transaction Close

Exelon is Committed to the Combination

Q4 2008

Q1 2009

Discussing regulatory

concerns of an

NRG/Exelon tie-up,

Crane said he did not

expect the bidder to

have any regulatory

problems.–

David

Crane Interview with

Peter Semler

Mergermarket, March

10, 2009

We Also Identified Numerous Sources Of

Additional Upside To Our Synergy Estimates

We may even realize additional synergies post-transaction that are not reflected

in our current estimates

Comments

•

Aggressive

approach

sourcing,

standardization

and

service

contracting

could

increase

savings

opportunity

Supply Chain

•

Further

rationalization

the

acquired

and

legacy

businesses

combined

business

model,

avoidance

incremental

staff-up

and

elimination

of non-value added spend

Retail

•

Extension

the

Exelon

nuclear

management

model

and

capture

economies

scale

STP

Nuclear

•

Opportunity for regional consolidation, resource sharing and contracting

strategy rationalization

Fossil

•

Expanded insight into NRG IT environment will likely yield

opportunities

architecture

and

platforms,

application

conversion

and

plant-level

systems

Exelon’s Track Record of Operational Synergies -

Nuclear Operating Service Contract for PSEG

In addition to a proven track record on financial synergies, Exelon has also proven

its ability to create operational synergies through our Management Model

Salem/Hope Creek

Exelon Nuclear Operating Service Contract

–

Operation of PSEG Salem and Hope

Creek Units

Exelon Fleet

Average Refueling Outage Duration (Days)

2004

2005

2006

2-Year Production Cost ($/MWh)

$5.00

$10.00

$15.00

$20.00

$25.00

2004

2005

2006

# Employees Per Unit

200

400

600

800

2004

2005

2006

Capacity Factor

50%

60%

70%

80%

90%

100%

2004

2005

2006

Wholesale level pricing (excludes adjustments for taxes and transmission and distribution losses); includes cost of Network

Transmission Service (NTS).

Retail level pricing but excluding NTS. Retail price includes cost of Gross Receipts Tax and adjustment for transmission and

distribution (T&D) losses. Retail prices based on distribution company press releases.

Estimated retail price (i.e., inclusive of Gross Receipts Tax and adjustment for T&D losses but not NTS) converted from ExGen’s

winning offers using Residential Retail Generation Rate Conversion Model at PECO Procurement website

(http://www.pecoprocurement.com/index.cfm?s=supplierInformation&p=rates).

•

Exelon Generation’s full requirements power purchase agreement with PECO

Energy expires on December 31, 2010

•

Recent PJM prices for full requirements products:

Procurement

Date

Delivery Period

$/MWh

PSE&G

(NJ BGS)

February 2009

June 1, 2009 -

May 31, 2012

$103.72 Residential and Small

C&I

PPL

April 2009

January 1, 2010 -

December 31, 2010

$86.74 Residential

$87.59 Small C&I

Allegheny

June 2009

Residential: 17-month and 29-month

contracts, both beginning January 1,

2011

Non-residential: 17-month contracts

beginning January 1, 2011

$71.64 Residential

$75.40 Non-residential

PECO

June 2009

17-month and 29-month contracts

beginning January 1, 2011

$100-102 Residential

(approximate)

Pennsylvania Procurement Provides Strong

Evidence of the Value of Exelon’s Mid-Atlantic Fleet

RPM Capacity Auctions in PJM

The results of the recent RPM capacity auction are not anticipated to reflect a new

“norm”

due to an anticipated market response to low clearing prices and rule changes

for demand response bidding

•

The RTO clearing price for 2012/2013 was $16.46 MW-day. The clearing price

for MAAC and Eastern MAAC resources was $133.37 MW-day and $139.73

MW-day respectively.

Exelon offered

12,200

MWs

capacity

the

RTO

region;

1,500

MWs

the

MAAC

region; and 9,600 MWs

of capacity in Eastern MAAC region

•

A market response to the low clearing prices in the RTO region is anticipated

Modified resource bidding behavior

Retirement of costly and less efficient generation

Cancellation of new generation projects

Less Cleared Demand Response (DR)

•

The RPM capacity auction prices for 2012/2013 are the result of increased

generation supply and demand response resources, decreased load PJM wide,

and locational

reliability requirements

•

The 2012/2013 capacity auction was the first time in which Interruptible Load

Resources (ILR) were required to offer into RPM as a capacity resource

The

PJM

tariff

was

interpreted

require

existing

ILR

Resources

bid

•

On June

2009,

PJM

and

its

stakeholders

began

considering

changes

that

would eliminate offer caps on DR

Tariff changes could result in future auctions that better reflect the true market

value of capacity (i.e. the value to end use customers who sell firm power rights)

Scale and Complexity of Nuclear New Build

Introduces a Unique Set of Challenges for NRG

New nuclear build is a high risk proposition for NRG and represents a substantial

portion of the company’s market cap

•

Even with financing support by the U.S. and Japanese governments, NRG is

placing a significant portion of the company’s market cap at risk

•

Exelon’s size and investment grade balance sheet significantly lessens the impact

of this mega-project on the company’s operating and financial risk profile

Total

nuclear

new

build

equity

financing

percentage

market

capitalization

NRG

EXC/NRG

+25%

+50%

+75%

+100%

+125%

+150%

$8.9 billion

$11.2 billion

$13.4 billion

$15.7 billion

$17.9 billion

$20.1 billion

$22.4 billion

12%

16%

19%

22%

25%

28%

31%

10%

15%

20%

25%

30%

35%

40%

$ 4,142

/ kW

$ 5,178

/ kW

$ 6,213

/ kW

$ 7,249

/ kW

$ 8,284

/ kW

$ 9,320

/ kW

$ 10,355

/ kW

New build equity financing percentages are presented for various levels of total nominal project costs per kW, assuming 80% debt

funding and market capitalization as of 6/26/09. The equity financing percentages reflect NINA ownership of STP units 3 and 4 at 40%,

and NRG ownership of NINA at 88%.

Estimate of the total nominal project cost per kW based on the midpoint of the NRG price range for the nominal EPC and owners’

cost from NRG’s 6/4/09 presentation at Macquarie Global Infrastructure Conference, plus estimated interest during construction,

initial fuel load costs, guaranteed loan fees and debt service reserve.

ERCOT Wind:

18 GW of Transmission Approved, Can Sell RECs

Nationally Under Federal RES, and Price Depression

Will Be Absorbed By Texas Alone

Upper Midwest Wind:

Dependent on Not-Yet-Approved Multi-State

Transmission Buildout

and Price Depression

Will be Spread Over A Broad Area

Mid-Atlantic Wind:

Limited Wind Resources, So Will

Purchase RECs

From Other Areas

Federal RES will result in incremental wind build in Texas to support REC

purchases

other

markets

–

depressing

power

prices

ERCOT

Federal RES Will Reduce Prices More in ERCOT

than in Midwest or Mid-Atlantic

Exelon has the liquidity, market access and financial flexibility to manage risk

and pursue sizeable growth initiatives when appropriate

Exelon’s Balance Sheet Can Weather

Volatile Commodity Markets

•

Lower interest rates and lower cost of capital

•

Lower cost of equity capital

•

Ability

source

capital

from

multiple

markets

(e.g.

commercial

paper)

reduces

risk

liquidity crunch

•

Investment grade market more likely to be accessible during challenging business cycles

•

Banks in this environment more willing to lend to large, diversified, highly-rated

companies

–

Over 20 banks committed to Exelon’s facilities providing over $7B in aggregate

commitments

Broad

Access to

Capital

Lower

Cost of

Capital

•

Lower margin and collateral needs

•

Ability to bid competitively on PPAs

and long-term deals since counterparties prefer

investment grade companies

•

Reduced working capital requirements, no prepayments on long-term contracts

Financial

and

Business

Flexibility

Risks Inherent In A Non-investment Grade

Balance Sheet

Though currently re-opened, the non-investment grade market has closed on several occasions in recent

memory, while the high-grade market has been consistently accessible regardless of economic cycles

Erratic access to such a critical source of funding would have significant liquidity

implications for non-investment grade issuers like NRG

High Yield

Market

High Grade

Market

10%

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

20,000

40,000

60,000

80,000

100,000

120,000

140,000

$160,000

Source: SDC, J.P. Morgan

JULI Yield (%)

Monthly

new

issuance

volume

($mm)

10%

11%

12%

13%

14%

15%

16%

17%

18%

19%

20%

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

5,000

10,000

15,000

20,000

25,000

30,000

$35,000

JPMorgan Global HY Index Yield to Worst

Monthly

new

issuance

volume

($mm)

The Transaction Offers Both Companies

Geographically Diverse EBITDA Contribution

Midwest

55%

Mid-Atlantic

45%

Mid-

Atlantic

Other

30%

ERCOT

65%

Exelon

NRG

Pro Forma

Midwest

45%

ERCOT

15%

Other

Mid-Atlantic

35%

1. Represents 2010 EBITDA contribution by region before divestitures.