NRG Energy Inc (NRG) 2009 Q4 法說會逐字稿

Good day, ladies and gentlemen, welcome to the NRG Energy quarter four and year-end 2009 earnings conference call.

My name is Gina, and I will be your operator for today.

At this time, all participants are in listen-only mode.

Later, we will conduct a question-and-answer session.

(Operator Instructions).

I would now like to turn the presentation over to your host for today's call, Nahla Azmy, Senior Vice President-Investor Relations.

Please proceed.

Thank you, Gina.

Good morning and welcome to our fourth-quarter and year-end 2009 earnings call.

This call is being broadcast live over the phone and from our website at www.NRG.com.

You can access the call, presentation and press release through a link on the Investor Relations page of our website.

A replay of the call will also be available on our website.

This call, including the formal presentation and question-and-answer session, will be limited to one hour.

In the interest of time, we ask that you please limit yourself to one question with just one follow-up.

Now, for the obligatory Safe Harbor statement -- during the course of this morning's presentation, management will reiterate forward-looking statements made to in today's press release regarding future events and financial performance.

These forward-looking statements are subject to material risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements.

We caution you to consider the important risk factors contained in our press release and other filings with the SEC that could cause actual results to differ materially from those in the forward-looking statements, in the press release and this conference call.

In addition, please note that the date of this conference call is February 23, 2010, and any forward-looking statements we make today are based on assumptions that we believe to be reasonable as of this date.

We undertake no obligation to update these statements as a result of future events, except as required by law.

During this morning's call, we will refer to both GAAP and non-GAAP financial measures of the Company's operating and financial results.

For complete information regarding our non-GAAP financial information to most directly comparable GAAP measures and a quantitative reconciliation of these figures, please refer to today's press release and this presentation.

Now, with that, I would like to turn the call over to David Crane, NRG's President and Chief Executive Officer.

Thank you, Nahla, and good morning, everyone.

With me today is and delivering part of the presentation are John Ragan, our Chief Operating Officer, and Gerry Luterman, our Chief Financial officer.

Also available today to answer any questions that you might have in their respective areas are Mauricio Gutierrez, who runs Commercial operations for the Company, and Jason Few, who runs Reliant.

So today on the 25th quarterly earnings call in the history of the new NRG, we are pleased to report on a financial result for 2009 that was truly historic in its dimension.

The professionals who constitute NRG turned in an extraordinary year in 2009, even though it was the second year of a severe recession, it was a year in which national electricity demand decreased year-on-year for an unprecedented second year in a row, it was a year in which we faced relentlessly declining prices for our key commodities, and it was a year in which the capital markets were still in very early stages of recovery from their near-death experience the previous fall.

In all of that -- and all of that was 2009 -- NRG delivered top quartile performance in safety and plant operations, not withstanding that certain of our coal units were called upon to cycle more frequently; a baseload hedging strategy that insulated the Company's financial performance, making the record financial year possible; effective and efficient integration of Reliant retail into NRG in all phases of business culture and management; and most importantly in mitigating the risk around Reliant's wholesale supply; and savvy and proactive execution across all phases of our balance sheet program, notwithstanding the challenging capital market environment, including completion of a sizable share buyback equating to between 8% and 9% of our market; significant pay down of our current corporate debt; and the sale of two subsidiaries at significant cash gain for the Company.

Finally, in 2009, we achieved significant enhancements to the Company's asset platform -- enhancements like Reliant that made sense financially and presented investors with a business profile for the overall Company that is significantly different and better than the profile of other competitive power generators; enhancements like Bluewater Wind, the leading offshore wind developer in the United States, Blythe the largest operating photovoltaic plant in the United States, and the eSolar development projects.

These are among the first and most visible steps we have taken in preparing our Company for success in the new energy economy.

What it all adds up to, as you look at Slide 5, is a year that was just phenomenal financially.

Indeed, we shattered records on both adjusted EBITDA and cash from operations.

It was a year that also positioned us for further success because, as we move assertively to point our business at the plethora of opportunities we see open to us in the new energy economy, we do so with a $3.8 billion war chest, $2.3 billion of which represents cash on hand.

Now, Gerry is going to talk to you about the 2010 capital allocation plan being launched today, but even with the considerable funds being deployed to pay down debt and return capital to shareholders, we retain a lot of firepower to deploy against these new opportunities.

We are actively looking to deploy that capital where it makes sense economically as well as strategically.

As we have been in the past, we will be transactionally opportunistic but economically disciplined.

So to talk about how we achieved such an impressive result in 2009, I want to turn it over to John Ragan.

Thank you, David.

Good morning, everyone.

NRG operations ended the year with strong fourth-quarter performance and concluded 2009 on very solid footing.

By most performance measures, 2009 was one of our best years, even as NRG faced some of the most challenging operating and commercial conditions since 2004.

Unrelenting focus on safety helped NRG achieve the second-safest year in our history with a 1.16 OSHA incident rate, better than the industry's top quartile level of 1.32.

As we exited the first quarter of 2009 with a recordable rate of 1.47, we increased our focus on daily safety activities and were successful improving our performance during the remaining nine months of the year.

We believe a disciplined approach and emphasis on safety sets our cultural foundation at NRG and provides the catalyst to achieve superior operating results.

In 2009, our baseload equivalent availability, or EAF, the primary measure of plant performance, was 90.5%, also above the industry's top quartile measure.

2009 was also a milestone for our EPC group with a significant increase in projects in scope from a year ago.

We started 2009 by successfully delivering into operations two major air emissions projects at Huntley.

Additionally, we began and completed four more back-end control projects for our units at Dunkirk.

We also successfully completed and delivered Cedar Bayou 4 into operations, our first natural gas fired combined cycle project, which has run at a 63% net capacity factor since its June commission.

On the renewables front, two new projects, the Langford wind project in Texas at our first solar project Blythe Solar in Southern California, entered into service in 2009.

Currently, our EPC group has three projects in progress starting during the last year -- the Connecticut GenCon repowering projects at Devon and Middletown as well as the back-end control project at Indian River 4 in Delaware.

From a commercial operations standpoint, the team also ended the year strong by working with the entire NRG organization to complete the unwind of the Merrill Lynch credit sleeve structure which reduced significant specific collateral obligations for the organization while also continuing to hedge both our wholesale and retail portfolio requirements for 2010.

Now, turning to Slide 8 for more detail on our performance, net generation continued to trend below 2008 levels, although to a lesser extent in the fourth quarter as compared to earlier in the year.

2009 coal generation was lower than 2008 in all regions.

This was caused by reduced electric demand triggering more reserve shutdowns than we have seen in the past and increased baseload plant cycling caused by coal-to-gas displacement as gas became the marginal generation of fuel, especially in the Northeast While our gas and oil plant generation in the fourth quarter was in line with the year-ago period at 1.5 Twh, 2009 performance was below 2008 by 4.8%.

Baseload EAF was below the 2008 levels for the quarter and the year.

During the fourth quarter, this was primarily due to experiencing more planned outages than a year ago and an extended outage for STP unit 1.

The lower EAF for the full year was mostly attributable to an increase in the number of unit trips that related to the higher level of thermal cycling of our coal units.

A couple of operating highlights for the quarter and the year include the 99.8% availability factor for the limestone plant during Q4 and the notable 20% improvement for the year-end EAF at the Huntley plant when compared to 2008 performance.

While we are currently not seeing the level of coal-to-gas displacement that we experienced in 2009, one of the primary focus areas during 2010 is to work with our plant operations team to become more proficient at dealing with the cycling of coal plants.

Two examples of how we plan to improve on our performance include increased monitoring of boiler temperatures during ramping and start-up revolutions and maintaining improved controls over start-up water chemistry.

Our goal will be to minimize the impact on availability if and when we see the same level of cycling that we experienced during the past year.

As for our retail business, the chart on the bottom left of Slide 8 shows customer sales and counts by segment.

Our Q4 sales volumes in the Mass segment showed little impact from weather as temperatures in ERCOT were on average closed in normal over the quarter.

Despite selectively lowering customer prices during Q2, we continued to experience some attrition in the fourth quarter and for the year as competitors took more aggressive pricing actions.

Offsetting this was lower market power prices which drove solid margins for the Mass segment.

Even with lower customer count, our pricing and risk management execution throughout 2009 resulted in financial performance that exceeded our plan.

For the Commercial and Industrial segment, the Group was active in signing and renewing existing contracts during the fourth quarter.

The segment did experience some customer attrition due to lower success in re-signing legacy contracts that were due to expire.

However, on the positive side of the ledger, Reliant improved its performance in winning new customers, such as Continental Airlines and American General Life, and ended the quarter ahead of its internal new customer plan.

This performance is reflective of a changing customer base coupled with the slowing of the segment's growth that occurred during the first four months of 2009 under prior ownership.

As shown on the bottom right chart, the FORNRG 2.0 program, which began in early 2009, is off to a very good start.

The program's goal is to achieve a $150 million improvement return on invested capital by 2012.

At the end of 2009, we had achieved slightly more than half of that goal.

The continued buy-in from our plant operations was very apparent in 2009 based on the number of projects that were identified at the majority of our plant sites, the diligence of each of our plant managers to make sure their peers were aware of the specific projects, and then determining the applicability of these projects to other plants across the NRG fleet.

As with many efficiencies programs, additional improvements will be more challenging to achieve as we move through time.

However, due to our strong start in 2009, we have increased our goal from the previous $70 million to $89 million in 2010.

Turning to Slide 9, you can see that US industrial production, especially in Texas, seems to have turned a corner following the deepest economic contraction since the Great Depression.

Both the Texas and the US indexes are trending in a positive direction with Texas continuing to lead the recovery from a national perspective.

As shown in the chart on the upper left, the Texas region was more resilient during the downturn due to less impact on heavy industry industrial demand, along with continued strength shown in residential and commercial sectors.

This dynamic led to a faster recovery of electricity demand in taxes, relative to the mid-Atlantic region and in general to most other regions throughout the United States.

Texas demand recovered over the course of 2009 and in deed was up an additional 1.3% this past January on a weather normalized basis.

Staying with Texas for a moment, as you can see in the chart on the bottom left, forward rates have remained stable and well supported during the fourth quarter and have increased for all forward years during 2009.

This market dynamic is primarily driven by the expectations around economic expansion and recent load growth, the impact of capital constraints over the past two years that will affect future generation projects, and the uncertainty around future environmental and legislative actions.

In fact, in its December report, ERCOT expects reserve margins will fall to 12.3% in 2014 and 10.2% in 2015, below ERCOT's targeted level of 12.5%.

Turning to natural gas economics, we have continued to see growth in unconventional onshore gas supplies despite a lower commodity price environment.

However, we still expect the market to rebalance during 2010 with gas demand moving higher in the supply stack where full cycle production costs range between $6 and $8.

Additionally, gas prices have been held down this winter due to high storage levels exceeding the five-year average.

Nevertheless, we do expect the storage to continue to fall due to above-normal heating demand.

The storage surplus, which at one point was over 500 Bcf above the five-year average at the beginning of December, is just 53 Bcf as of last week.

As 2010 progresses, gas price fundamentals will continue to be influenced by multiple factors, including further delineation of wellbore productivities in the new shale basins, incremental LNG deliveries, demand changes due to extreme weather variances, recovering industrial demand, and tropical storm activity.

On Slide 10, as you can see from our baseload and retail hedge chart on the top left, we are completely hedged for our baseload portfolio through 2010 and well hedged for 2011.

We are continuing to price load for our retail position by opportunistically matching generation and load, as well as utilizing a variety of other products to manage both price and volumetric risk.

Most of the forward-year hedges for retail load comprised longer-term commercial and industrial transactions, while the Mass portfolio tends to be shorter-dated in nature and will be hedged based on the market fundamentals at the time of contracting.

For our baseload generation, we will continue to look for market opportunities to hedge through years 2011 and beyond.

Concerning our coal and coal transport hedges, baseload coal fleet is well hedged through 2014 from a transportation viewpoint and well hedged from a coal perspective through 2011.

During 2010, we are more than 90% hedged for both the commodity and our transportation requirements for our baseload fleet.

As we have shown in the past, the lower left chart illustrates NRG's sensitivity to gas and heat rate changes for the five-year planning horizon.

In 2010, we have an inverse gas price exposure based on our current hedge position.

This is caused by small changes in expected generation as prices vacillate throughout the quarter.

Currently, expected generation is approximately 4% less than when our hedges were executed.

Therefore, we are slightly over hedged.

We expect this variance will flatten throughout the year.

Additionally, we tend to be more levered to changes in natural gas prices as compared to heat rate changes, as illustrated on the chart.

In closing, I want to summarize our primary goals for 2010 from within the operations organization.

We will continue to maintain our industry-leading safety and operating performance and will strive for top-decile performance in every area of our business.

There is no higher priority for our organization.

We will continue to execute our commercial plan to maximize the value of the wholesale and retail business in 2010 while balancing collateral requirements of the combined portfolio.

Our commercial operations team will continue to keep a keen eye on the market and look for attractive opportunities to hedge the forward portfolio in the most collaterally efficient way.

We expect to meet or exceed our FORNRG 2.0 target for this year.

Finally, our EPC group will focus on completing our traditional fossil construction projects on time and on budget while developing new methods to construct our future renewable projects in the most cost efficient manner.

Now, I will turn it over to Gerry, who will discuss our financial results.

Thank you, John.

Good morning and thank you once again for joining our call today.

Beginning with our 2009 financial summary on Slide 13, the Company delivered strong financial results with a fourth-quarter adjusted EBITDA of $489 million, a 21% increase from a year ago.

As a result, NRG reported record full-year adjusted EBITDA of $2.618 billion, marking a 14% increase over the past year.

Adjusted cash from operations increased 26% to a record $1.862 billion for the full year.

Liquidity for the Company continues to grow with a year-end total of $3.8 billion, including $2.3 billion in cash, excluding funds deposited by counterparties.

Focusing on the 2009 capital allocation plan, I am pleased to say we have successfully completed all of our previous commitments, including a $500 million share repurchase program with 19.3 million shares purchased.

In addition, on December 31, we made an early payment on the 2010 term loan B suite totaling $200 million, which brings the total payment to $429 million for the year.

You cannot close 2009 from a financial and capital allocation viewpoint without noting the significant strides made in our business and development profile, including the purchase of Reliant, the acquisition of Blythe, our move into offshore wind through Bluewater, repowering the Cedar Bayou unit 4, and the development of Langford.

Slide 14 presents the quarter-over-quarter and year-over-year and adjusted EBITDA (inaudible) waterfall slide.

Looking at the year-over-year results, the significant contribution made by Reliant stands out at $642 million in adjusted EBITDA, excluding the $89 million impact related to the credit sleeve unwind.

The Mass and C&I business within retail combined to build 38 Twh.

2009 results benefited from warmer than normal weather in the summer with cooling degree days up about 10%.

Transaction and integration costs for the year totaled $54 million and are excluded from adjusted EBITDA.

Now, quickly looking at the individual regions, the Texas region's results declined by $214 million from $1.543 billion in 2008 to $1.329 billion in 2009, driven largely by lower realized power prices across the fleet.

If you recall, ERCOT experienced congestion prices in May and June of 2008 that led to unusually high prices for the region, in addition to natural gas prices which were more than double those in 2009.

In addition, average energy prices in the Houston zone decreased by nearly 60% year-over-year.

This decline in energy prices, coupled with lower generation of 1.9 million MWh and was driven largely by cycling at the region's coal plants, negatively impacted results on $174 million.

The South Central region had adjusted EBITDA of $81 million in 2009, a decrease of $64 million from the 2008 EBITDA of $145 million.

There were a number of factors that contributed to the decline, including an $80 million decline in contract revenue due to the expiration of a contract with a regional utility.

Although the region had increased merchant sales of approximately 800,000 MWh, a 45% lower year-over-year average merchant sales price reduced merchant revenue sharply.

Of significant note, during peak periods, the average (inaudible) spread declines significantly year-over-year as average gas prices fell 56%.

Finally, 2008 results included unrealized gains related to physical energy sales which did not repeat in 2009.

Our international results were impacted by the sale of MIBRAG in June of 2009.

Although the sale resulted in a gain of $128 million which was excluded from EBITDA, we recognized only six months of equity earnings in 2009 versus a full year of earnings a year earlier.

Finally, although we didn't highlight this, adjusted EBITDA for the Northeast region was $468 million, a decrease of $7 million from a year ago.

Stronger energy margins were offset by higher property taxes due to diminished Empire Zone tax benefits, higher operating expenses including a $12 million write-off at Indian River, which was associated with the planned cancellation of environmental construction work at Unit 3.

Slide 15 outlines the Company's liquidity position as of year end.

Total liquidity, excluding funds deposited by hedge counterparties, stood at $3.8 billion, an increase of $430 million.

The increase in liquidity from year end 2008 was largely driven by the $796 million increase in cash highlighted on the upper right hand portion of the slide.

The drivers of this increase are $1.8 billion from adjusted cash from operations, a $248 million net debt issuance which includes the June issuance of 8.5% senior notes due 2019 with net proceeds of $678 million.

This was offset by the term loan B paydown of approximately $429 million, half of which was related to the early payment I mentioned before.

Thirdly, $284 million in net proceeds from the sale of MIBRAG.

These items were offset by the Reliant acquisition cost of $360 million, $734 million in CapEx, and $500 million in share repurchases.

During 2009, NRG issued letters of credit from both a synthetic and the revolver totaling $372 million, primarily to replace collateral held by counterparties following the Credit Suisse unwind.

Additionally, $59 million was issued in connection with the tax-exempt bonds to help finance environmental CapEx at Dunkirk, with the remainder primarily in support of our commercial operation trade positions.

Our lean structure indicates we certainly have sufficient capacity.

So all in all, we are in a good place with our liquidity position, providing us a strong platform for ongoing operations and growth.

Turning to Slide 16 (technical difficulty) illustrates our full-year 2009 free cash flow position.

Free cash flow from recurring operations came in at $1.579 billion, a 27% increase over 2008 results.

This was driven by the $327 million increase in EBITDA, largely due to the performance of our retail business, with income tax and income payments essentially flat.

Year-over-year, the large offsetting swing in our collateral postings and working capital are linked and driven by the closeout of commercial positions in the first quarter of this year.

Maintenance CapEx rose by $68 million in 2009 and includes $24 million associated with the integration of Reliant energy.

After net environmental and repowering CapEx, our free cash flow increased by $761 million to a record level $1.25 billion.

Now, turning to Slide 17, the results of our 2009 capital allocation plan shows significant accomplishments.

In summary, for the year, we completed the share repurchase of $500 million totaling 19.3 million shares at an average price of $25.88.

Since 2004, the Company has repurchased $2.4 billion of stock totaling 101.3 million shares at an average cost of $23.92.

On October 5, we successfully completed the unwind of our retail credit fleet, which had a net impact of a $157 million increase to our corporate liquidity.

Much of this was discussed in the third-quarter conference call.

Finally, on October 9, we completed a full unwind of the Common Stock Finance II structure, also known as CSF II.

In that context, NRG made a $181 million payment and received 5.4 million shares of the Company borrowed under the share lending agreement and released approximately 9.5 million common shares held as collateral for the CSF II debt.

Now, turning to our 2010 outlook on Slide 18, we are pleased to reaffirm our full-year EBITDA guidance of $2.2 billion and we increased our guidance for free cash flow from recurring operations by $96 million to $1.175 billion.

The increase is being driven by lower income taxes of $75 million and a reduction of maintenance CapEx by $21 million.

Please note free cash flow, however, is being reduced by $344 million as a result of the planned increase in ownership of STP 3 and 4.

This is offset by lower environmental CapEx as a result of the planned cancellation of construction work at Indian River Unit 3.

Looking at our guidance in a slightly different way on Slide 19, based on last night's closing stock price of $23.07 and shares outstanding of 262 million, the free cash flow per share stood at $4.48 while the yield stood at a not inconsiderable 19.4%.

Turning now to Slide 20, the capital allocation plan for 2010, starting with the share repurchase program, the Board of Directors has approved $180 million in share repurchases for the year, in line with our original commitment of 3% of market cap.

Furthermore, the Company will invest $468 million in maintenance and environmental CapEx in existing assets.

In addition to $598 million net in repowering projects, which include STP 3 and 4.

The Company also anticipates making an additional payment to the term loan B facility of approximately $230 million, which could bring the total payments on the 2010 cash flow suite to approximately $430 million.

The paydown of CSF 1 of $248 million is also reflected in our numbers.

Finally, in Slide 21, I'd like to close by taking a moment to briefly review our cap structure and how the Company is positioned to take advantage of the growth initiatives outlined by senior management.

Since 2006, NRG's management has had a continued focus on prudent balance sheet management.

As you can see on the left hand side of the slide, total debt decreased by $400 million while stockholders equity increased 35% to $7.7 billion, including stock buybacks.

Consistent with this, the rating agencies have increased the ratings for the Company and our credit statistics have moved to within targeted range.

In closing, the strength of our balance sheet and strong liquidity positions, coupled with our culture of prudent cash flow management, creates, I believe, a wonderful platform for our anticipated growth.

With that, I will turn it back to David for closing comments and questions.

Well, thank you, Gerry.

Before I make those comments, I want to thank you for those results.

I also want to thank you for pitching in this quarter.

If we stick to our previously announced schedule for hiring a new CFO by the end of the first quarter, which I fully expect that we will, you won't be here to accept my congratulations on the first-quarter call.

So I want to thank you for all that you've done over the last few months.

Now, before we open the telephone line for Q&A, I want to address three important areas of the business which, judging from the questions we have received, have been much on investors' minds over the past several months as they also have been focused on by me and the rest of the NRG organization over the same period of time.

First, Reliant -- obviously Reliant, led by Jason Few and his team, had a spectacular year in 2009.

After such a year, the questions that naturally arise are, are these results sustainable over several years?

Are they susceptible to bad years, given the boom and bust cycle of the Reliant retail business under previous ownership?

Are the indirect costs of running the retail business, in terms of credit requirements, prohibitive?

I am looking at Slide 23.

Reliant achieved the success that it did in 2009 by realizing retail margins almost double the per megawatt hour margin that we expect mid-cycle.

Reliant did experience some customer attrition owing to competition in a lower-price commodity market, but the rate of net attrition reduced substantially over the course of the year from 2.4% in quarter three to 1.6% in quarter four, a 33% improvement over the final months of the year.

That metric continues to trend positive.

Reliant remains the largest C&I provider in the state and during the year maintained the best rated rank with respect to customer complaints on powertochoose.com, which is the Texas electric choice education program website.

As we look forward to 2010, our goal for Reliant is continuing our disciplined, methodical approach to the market so that we can deliver gross margins higher than the $15 base case we presented in November.

We seek to stabilize and then to begin to grow our customer count in Mass business through a variety of targeted marketing campaigns, plus a more extensive rollout of our smart energy programs which are being financially supported by the $20 million stimulus funding received from the DOE.

It is our view that the introduction and greater public acceptance of smart metering equipment will benefit premium service-oriented retail providers like Reliant more than their price-only based competitors.

With respect to the C&I segment, we remain at a comparatively early stage of resurrecting our C&I business, as it was essentially frozen for the better part of a year by our predecessors.

We believe a resurgent C&I business in the current market environment can significantly expand C&I volume at or better than current margins.

The C&I business also is the bridge into some potential brand extension for Reliant through electric vehicle services or other services that are logically related to retail electricity.

We will be looking during 2010 to determine whether there is potential to extend the platform of Reliant as a brand.

Through this approach, we're looking to add topline growth at Reliant even while we are realizing retail margins well above mid-cycle levels.

The financial results of Reliant under NRG ownership tells a compelling story that's even more compelling if you consider what lay underneath it.

Before our acquisition, the collateral requirement for Reliant was huge.

In January 2009, a little bit over a year ago, the collateral requirement was $2 billion, plus a contingent collateral need of 400 Bcfe equivalent of gas.

We knew over the course of the commodity price cycle we could do better than this.

Our plan in general was and continues to be to hedge the retail portfolio in the market when prices are low and hedge the retail portfolio from internal generation when market prices are high, thus mitigating the collateral burden.

Indeed, as demonstrated by the table on the right side of Slide 24, we have reduced the posted collateral supporting the retail business by 70% in just the 10 months that we have owned the business.

I guess it's actually nine months maybe.

What all of this adds up to, to you -- and here on Slide 25 I am repeating the point that we made at our investor conference in November -- is that, given the steps that we've taken to make this a sustainable business, given the steps we've taken to eliminate the wholesale supply risk traditionally associated with this business by running a flat book, given the steps we've taken to mitigate the risk of extraordinary weather events, and above all, given the effective integration of our Texas wholesale and retail businesses, we would encourage you in your sum of the parts the evaluation of NRG to consider all of Texas generation and Reliant as one part and apply one multiple, the multiple you intend to apply to all of NRG to that Texas part.

Now, second, turning to environmental concerns -- and obviously when we are talking about environmental concerns, particularly those that apply to coal-fired power generation, after eight years of hibernation, we have a suddenly resurgent EPA.

While we haven't seen anything particularly concrete or final yet, the power industry and its investors are deeply concerned with what the EPA may due to existing coal-fired generation.

From my perspective, while the focus on the EPA is certainly appropriate and the uncertainty of what they might do and when they might do it is unwelcome to investors and CEOs alike, our point of view is that, right now, we are at the point of maximum uncertainty and everyone is fearing the worst.

Our strongly held view is that the reality of the EPA action, when it comes, will not be nearly as bad as it currently seems to sound.

The EPA won't be in active but, in our opinion, it will be pragmatic.

Indeed, in this regard, I think right now, with respect to potential EPA actions across the range of issues depicted on Slide 26, we and you, the investors, are in a position almost exactly analogous to where we were 12 months ago with expect to carbon legislation.

Back then, among investors, there was tremendous fear of the unknown, fear of a climate change bill that would have a Draconian impact on coal-fired power generation.

What we said to you last year, e say to you again this year.

Don't overreact.

As with Congress and climate change legislation last year, in this fragile economic environment, we don't expect the EPA to act in a precipitous or economically punitive fashion against coal-fired generation.

Insofar as NRG is concerned, when you look at the full range of potential EPA action as illustrated on Slide 26, you will conclude that, relative to other coal generators, we are comparatively well placed.

Our coal units tend to be bigger, younger, and have a lot of back-end controls.

Few of our units depend upon unmitigated once-through cooling and none of our units dispose of their coal residue into ash ponds.

As a result of our proposed agreement with the state of Delaware with respect to Indian River III, our projected environmental CapEx spend presented at the November analyst conference has fallen from roughly $900 million to $800 million over the 2010 to 2015 period, about $180 million a year on average.

Thereafter, we will see -- but even though we don't believe in the worst case, we want to quantify for you the worst-case EPA outcome, which for us would be the application of [mac] on a per unit basis which would require us to scrub some additional units at Parish and Big Cajun II.

Our current estimate is that the worst case, if we had to add back-end controls at all of these units, would be an additional environmental CapEx of roughly $925 million, the bulk of which we would expect would have to be expanded sometime after 2012.

In the case of the expenditure on Because II, which is close to half of that $925 million, the amount expended would be recoverable -- would be largely recoverable under the long-term co-op contract.

To me, the bigger point with respect to coal-fired generation today is that the considerable environmental pressure and economic challenge to coal from natural gas that we anticipated in the late 1990s and which led to the glut of CCGT bills to deplace coal at that time is about to happen again a decade later.

But this time and particularly in some parts of the country, there actually may be some coal retirement, because the 30 to 40-year-old coal plants at risk in the year 2000 are now 40 to 50-year-old coal plants.

What this means for the industry is that, at least in the industrial Midwest through the mid-Atlantic states and up into New England as depicted on Slide 27, I expect, over the next few years, we will see a wave of retirements of older and smaller coal units with the impact being that supply/demand will rebalance itself from the supply side much quicker than is currently anticipated, which will provide upside from present market conditions for all market participants, including coal generators with back-end controls.

What this means for investors is that, while back in mid-2008 when natural gas was approaching $15 per 1 million BTUs, all coal plants were highly profitable and desirable.

In this environmental natural gas price market, all coal units emphatically are not created equally.

We believe that if you look at the coal assets of NRG from both an environmental and an economic perspective, you will agree that we are extremely well positioned.

Now, finally to the third and final issue which is the CPS settlement around STP 3 and 4, I want to talk to you about the situation as it currently exists and recognizing that it is a moving picture.

As you know, last week, our partner CPS announced and we confirmed in agreement and in principle intended to resolve the long-running dispute between CPS and our subsidiary, Nuclear Innovation North America or NINA.

I want to describe that settlement, the rationale that underpins it and the management actions that we intend to engage in over the weeks and months ahead to improve the risk/reward balance around the anticipated cash spend on STP 3 and 4.

But before I do that, I need to emphasize that the agreement announced last week was truly an agreement in principle.

That agreement needs to be properly documented by the lawyers and agreed to by the parties.

The documentation process, which is complicated and holds within it the potential for further business disagreements to arise, is as of today not complete and I cannot give you assurance as to when it may be completed.

But let's talk about the proposed transaction on the assumption that ultimately there is the deal.

There are many ways to look at the proposed deal, and since this is my presentation, starting on Slide 28 and particularly on Slide 29, I want to show you how I look at it.

I apologize.

To me the deal creates a sequence of options.

I'm sorry for the confusion but actually what I would really like you to focus right now is Slide 30.

To me the deal creates a sequence of options that begin quite inexpensively but become increasingly expensive to NRG as the project becomes more certain and consequently more valuable.

At the first stage, we're making a $10 million charitable donation over four years.

This donation, which pencils out to about $8 million net present value on a pretax basis, resolves a situation which has been an obstacle, effectively preventing the project from achieving any of its important milestones, like the DOE loan guarantee or the inclusion of a third-party investor.

These obstacles have now existed blocking the project since last October.

We don't like to pay a hostage value but at least the amount being paid is manageable and the causes that it's being paid to are good.

The second stage option, which in my mind is the absolute crux of the deal, is that if and when a conditional loan guarantee is awarded by the DOE, we will pay CPS $80 million in two installments over six months thereafter.

That's a very significant amount of money.

But in return for that payment, we essentially receive all but 7.625% of the project.

In other words, we receive 42.375% of the project, bringing NINA's total ownership to 92.375% and NRG's effective ownership, taking into account the Toshiba minority interest in NINA, into the low 80% range.

While we and the other partners that we have now or would add in the future would have to assume responsibility for funding 100% of the ongoing project development cost, we would have full management control over the project development going forward.

That $80 million payment gives us a nuclear development project with a critically important and very valuable government guaranteed debt financing assured.

It enables us to push ahead over the course of 2010 to secure the remaining critical elements for project success -- new investors, Japanese cofinancing, the safety and environmental reports due from the Nuclear Regulatory Commission, a worthwhile EPC estimate, and sufficient PPA cover.

We expect to have substantially all these critical elements in place by the end of 2010, which means we can focus 2011 on bringing in additional development partners and securing the combined operating license from the NRC.

The 7.625% interest that CPS retains in the project is indeed valuable and low-risk, but the benefit of it is only realized if and when the plan comes into commercial operation, which is currently scheduled to occur in the 2016 to 2017 timeframe.

In summary, securing an option on 42.375% of a nuclear project with a very valuable conditional federal loan guarantee for $80 million is a great deal if the project goes forward.

If the project does not go forward, it's an unsuccessful doubling down on our bid to lead the nuclear renaissance.

We recognize that our investors are concerned with the potential cash burden of carrying forward with 100% of the project development on our shoulders.

I am sorry; I ask you to flip back to Page 29 to look at this.

I want to give each and every one of you my personal assurance that we are going to be very focused on reducing this cash burden to at or about the same level that we projected last November for the year (technical difficulty) going to do this.

We are going to do this both by bringing in additional partners to the project and by rationalizing the engineering long lead time items and other project costs down to those efforts and items that are absolutely necessary to keep the project on track with the DOE and the Nuclear Regulatory Commission.

We are at an early stage in this rationalization process.

I expect to report back to you in greater detail hopefully with the DOE loan guarantee in hand on our first-quarter call at the end of April.

Finally and in conclusion on the subject of nuclear, thanks to the CPS dispute, the news around the STP 3 and 4 project has been relentlessly negative for the past several months.

You, the investors are well justified in asking questions about the Company's continued commitment to this project.

However, I want to make sure that investors do not lose sight of the nuclear opportunity and how much it has been enhanced over the past several weeks by events that have occurred in Washington or are about to occur.

The award of a loan guarantee the Southern Company proves that, after five long years since the nuclear loan guarantee program was authorized, that the program is for real.

Secondly, the real possibility that the Kerry/Lieberman/Graham effort currently underway is going to result in the bipartisan call for a federal clean energy standard that will encompass nuclear and clean coal as well as traditional renewables, thereby creating compelling long-term demand for new nuclear plants.

Finally, the request by the Obama administration for a total of $54 billion of nuclear loan guarantees, enough money for eight or nine new units, meaning that we are talking about a nuclear renaissance that could easily become a $70 billion market.

It is not every day we have the opportunity to get in on the ground floor of a $70 billion market.

In conclusion and on Page 32, as we have traditionally done early in the year, we have set forth a checklist of some of the more important milestones we have to achieve in the months ahead.

If you look back at milestone checklists from previous first-quarter calls, you will find that our track record of achievement is pretty good.

This year, our goals are ambitious but attainable and all of us at NRG are already hard at work to achieve them.

We look forward to updating you on our progress on our first-quarter call.

So with that, Gina, I think we could open the phone for questions.

I think, since we have taken a long time, if there's questions out there, we will try and answer questions for about 15 minutes.

(Operator Instructions).

Ameet Thakkar, Banc Of America.

Good morning.

Just on the $180 million share repurchase for the 2010 capital allocation program, it looks to me that you guys might have a little bit more cushion under the existing RP (technical difficulty) do a little bit more.

Is that correct?

When would you make that kind of determination if you wanted to upsize that program?

Ameet I will turn it over to Gerry to talk about the size of restricted payments (inaudible) but I would just of course point you to our past practices, that our history has not been won and done when it comes to the share buybacks each year.

In the previous years, we have done more than one in the course of a year.

So we would reserve the right, obviously, to do more as the year progresses.

In terms of the timing of that, I don't think you should think of it as happening on the first-quarter call.

We would tend to space these things.

But Gerry, do you want to talk about the restricted payment there?

I mean, the basket size right now is it stands at about $330 million.

It's got two calls on it, meaning we have a payback on CSF 1 that has to be made and the share buyback.

You are right, Ameet.

There is a little room under it.

I mean, clearly the driving force of this will be our performance.

As the year unfolds, the Board will take a look at it and obviously try to respond to the situation as we see it.

But at this point in time, the 3% commitment is the original commitment that was made.

We want to reinforce that, and it will be dependent on the performance of the Company going forward.

Okay.

Then just looking at the milestones for 2010, I guess one of the things I didn't see was addressing kind of the RP basket.

I mean that was one of the things you guys highlighted at the analyst day.

Have you guys made any headway on that front?

How should we think about that going forward?

Just on the surface, you remember again that there's a 3% commitment that was put in place.

Again, as a result, this is results-driven -- and we have begun discussions with the bondholders.

Obviously, we are trying collectively to find a price that works for both the shareholders and the bondholders at this point in time.

So, we are in discussions at this point in time is a fair way to (multiple speakers).

Ameet, your eagle eye caught that.

It wasn't milestone but I'll tell you that there's actually no significance due to the fact that it's what we said in November and we continue to adhere to.

Anthony Crowdell, Jefferies.

Good morning.

I just had a question.

I guess CPS was stating that they were spending approximately $1 million a day in nuclear development costs when they were a 50% partner in the project.

Now that you guys are picking up 100% of the development costs, is it reasonable to assume that, in 2010, you'll be spending approximately $2 million a day?

Well, I think the numbers get thrown around quite a bit and it had a lot to do with the negotiations around accruals and invoices and things like that.

I would say that, on a steady state, while it can be sort of lumpy depending on what you do in terms of the ordering of long lead time materials on the sort of biggest portion of the spend, which is the engineering, I think the overall number, on average across 12 months, is more like $1 million a day for 100% of the project.

So I think you would say that's the stead -state number that we are focused on, and we are focused on reducing that number by a significant amount.

Great, thank you.

Dan Eggers, Credit Suisse.

David, just on STP, a little bit more kind of your thought process on the willingness to find partners, the interest in finding partners to take down your ownership stake.

What is your new targeted ownership stake, given a bigger pot to choose from?

Realistically, what kind of timeline should we look out for, for better clarity on what you guys are going to end up with?

Dan, I think that you should think of sell-downs of our ownership stake -- first of all, because of the multiple levels of ownership, we've always tended to talk about the ownership of this project more in terms of how many megawatts would you end up owning for your account.

Before, we have sort of indicated to the market that where we were heading towards with -- under the previous ownership structure was around 1000 MW, which was roughly 40% of 2700 MW.

The plant that is going to be built is going to be 3000 MW plant, so if we start with that number -- and I would say that what we are trying to do now in general terms is preserve optionality in terms of our final hold number to be anywhere in the sort of -- in the 1000 MW to 1500 MW range.

In terms of sell-down, I think you should think of sell-down in sort of three stages.

First, we expect to sell down a piece of the project very shortly a after DOE loan guarantee is received if everything stays on the timetable that we are hoping for.

As I indicated in the call, we would hope to have the DOE loan guarantee by the time of our first-quarter call.

So we would have one sell-down there.

As we've indicated, at least in these sell-downs during 2010 we are looking for people who not only will properly value the project opportunity but also add significantly to the project strength and viability.

I think later in 2010, we would look to bring in some more partners in the project in relatively small amounts but that would also be important partners in the success of the project.

When we've gone through that, I would say we would hopefully be down, in terms of our net position, NRG in the sort of 65% to 70%.

That would then leave a gap as to our hold amount, which we would probably fill in the course of 2011.

By 2011, as I indicated, we think the project risk is going to be very substantially reduced.

At that point, we might look at financial buyers or other people that just want to be part of one of the first couple of nuclear power plants in the country.

So that would be possibly more of a financial [settlement].

That's the way we're looking at it right now.

Great, thank you.

I guess just the ancillary to that is how much of the, output either through sell-down of megawatts or long-term supplier agreements do you think you need to make significant capital investment go-forward decisions?

You know, again -- and you are of course right to look at -- I mean off-take and ownership, both are sort of compatible ways of mitigating.

You can do one or the other.

So my answer is not going to be all that different.

I would say that, if you think of us as sort of ending up with a hold amount in megawatts in the 1000 to 1500 MW range, the amount of that that we would like to be contracted -- and I'm saying to outside parties, because there's always a chance, as part of project finance structure, that NRG might take some of the megawatts, but to outside parties I would say, the numbers we would look towards would be at least 50%, more likely around 70% of whatever number we consider to be our hold amount.

I think, as we said in the November investor conference, that we were in active dialogue with about 1600 MW of potential off-takers, load serving entity off-takers.

Great.

Thank you, David.

Lasan Johong, RBC Capital Markets.

Good morning.

David, I am a little confused as to your capital allocation plan.

$2.3 billion of cash less $180 million leaves you -- and then another $1 billion and change in free cash flow leaves you with well over $3 billion in cash by the end of next year.

It seems to me that you could go on a pretty good acquisition binge right now and pay for almost all of it with "OPL", other people's money.

Mirant has $2 billion of cash on its balance sheet; its market cap is barely $1.95 billion.

The line is something like $1.25 billion on its balance sheet and its market cap is $1.7 billion.

So you could use the cash on their balance sheet to buy these two companies, and even if you had to make a big CapEx amount to fix their plants, it seems like it is a pretty damn worthwhile shopping spree, given your view on clean coal plants and natural gas prices.

So what am I thinking about that is completely out of whack here?

Why are you not pursuing these avenues?

Well, Lasan, I'll tell you my father used to tell me people who go on a binge get digestion.

(laughter)

Indigestion?

Yes, yes, that's right, sorry, indigestion.

It shows you how much I listened to him!

(laughter)

Anyway, what I would say to you is certainly having that amount of capital, while it's obviously inefficient and the last thing that this Company's management or this Company's Board of Directors wants to do is to hoard capital on our balance sheet earning almost nothing sitting in the bank and being high cost of capital money.

But I mean what we want to do as we move through 2010 -- clearly we're going to be very actively looking at whether acquisitions can be done that add value as well as if we can work out a deal with the bondholders returning capital to shareholders, so the normal pie chart where we show we have this sort of discretionary capital that we can deploy in a variety of areas.

We are going to continue to pursue that strategy.

The type of acquisitions you're talking about right now, while they have sort of the merits that you talked about, we just right now we haven't seen that the time is really the best for us to be pursuing those at this moment in time.

Okay.

Since Dan got in two questions, I'm going to follow up with another question.

Right now, your natural gas prices are very bullish, it seems.

In the past you have ruled out unwinding your hedges to capture the delta.

Are we still going to assume that unwinding the hedges is not the right move for NRG at this point?

I may not have heard you correctly.

I think you said, "In the past, we have ruled out unwinding some of our hedges." I actually think I said at the investor conference that we always reserve the right to unwind our hedges.

The caution or the reassurance I had given investors was that, while we reserve the right to unwind hedges, the investors never need to worry that they are going to come into a quarterly call and the bar chart of hedging that John Ragan shows everyone is going to go from 70% to 0.

We are not going to change the basic hedging approach of the Company, but we definitely reserve the right to take off the hedges.

I am looking to see if Mauricio Gutierrez wants to add anything to that.

As he's looking down at his shoes, I think he actually doesn't want to say anything whatsoever (laughter) about that topic.

So thank you, Lasan.

We better go on.

We've got I think three more questions and then we're going to call it a day.

Neel Mitra, Simmons & Co.

International.

Good morning.

How do you think the DOE will react to the fact that you plan to sell-down up to 50% of the project after loan guarantee is awarded, as far as who they are going to pick for the second loan guarantee?

You know, we have been -- Neel, I actually thought you were going to ask the question "Well, how do you think the DOE is going to respond to the fact that CPS is no longer a partner?" On that, I was going to -- as people say, who's got questions for my answers?

I was going to say to you that we certainly have been in active dialogue with the DOE and they've been aware of the likely outcome of this dispute and it has not changed their perception of the project.

In terms of sell-down of the project, certainly some sell-down to certain strategic partners I think the DOE would be would be -- I don't think -- I know the DOE will be very, very receptive to.

If the DOE is concerned that we would sell-down the project too extensively, remember that what we're looking to get before the end of the first quarter is a conditional loan guarantee.

They can always put a condition in it, in the loan guarantee, that restricts what we do.

I don't think that they're overly worried on this point, but they certainly have the ability to protect themselves.

There would be absolutely no reason for the DOE to slow down their consideration of our project because -- to wait to see what we do in this regard.

Okay.

Then on your earnings release, you mentioned energy margins in the south-central took a hit (inaudible) load contracts with the utility expiring.

As these contracts roll off through 2014 in this environment, do you expect it to be a net benefit as you put on new contracts, or actually a negative with the current gas price environment and environmental pass-throughs that you have with some of these contracts in place right now?

Neel, I am going to ask Mauricio to talk about whether we think south-central roll offs are a net positive or a net negative relative to the market.

Good morning.

It really depends on the timing of the roll off, which I guess the profitability of those PPAs are tied to the price of natural gas, so for 2009, that had a very different impact than it's going to have in 2013/'14 and beyond where we expect some the other contracts to roll off.

So I think it is difficult to say right now what will be the ultimate impact to the profitability of those PPAs since it's tied to the price of natural gas.

Just really quickly, how would the environmental pass-throughs with the CapEx that you spend on Big Cajun be impacted by the roll offs?

Well, I think, if we have a big environmental CapEx, I mean obviously we'd like to spread it across as many off-take agreements as possible.

It's very hard to predict the specific circumstance.

But obviously, as with everywhere, the rates that retail electricity providers, not-for-profit rural co-ops in Louisiana, charges -- you know, it's a political issue.

So even though we have these contractual rights, of course we have an interest and they have an interest in having the least burden as possible on their retail rates.

So, we would obviously like to have as much co-op contract coverage as possible.

I would say that, even with natural gas price dropping, I think that the co-op -- and this is a trend we've seen, particularly among not-for-profit load serving entities -- co-ops, munis, for all the sort of bearishness that we see and you all see and feel in natural gas prices and all of the talk about natural gas is the power generation fuel of the future, the people we serve are -- still vividly remember the pain they went through when natural gas was $15 per 1 million BTU and the benefit of having a diversified generation mix.

The co-ops in Louisiana had by far the lowest retail rates in Louisiana, relative to Entergy and CLICO because of Big Cajun.

So I don't think they're going to forget that fact.

Great.

Thank you.

Jonathan Arnold, Deutsche Bank.

Good morning.

A quick question on -- you characterized the issues of the holding out of the signing of the settlement with CPS' documentation.

Do you see any scenarios where there is anymore material changes to the terms of the overall deal, or is this really just kind of a little (inaudible)?

The way I describe it being 100% candid is I don't think -- the changes to the financial terms that you've seen that they actually went public with and then we confirmed, I don't see any changes to those terms.

Having said that, there are other legal/business terms that are significant enough that they could hold up or actually derail a settlement that could arise, but you won't -- I don't -- I can't anticipate that you would see any change to the numbers that have been put into the public by both sides.

Thank you.

If I could just follow up with one other related topic?

You have obviously a much lower kind of assumption around financing of your gross growth CapEx.

Is there other scenarios where that financing element could grow during the course of the year as you hit some milestones along the way with the project, or is that really kind of further out in time?

I'm not sure we are following what you are referring to, to be frank.

As we look at your gross -- the growth investments number and then the estimated project funding, so obviously the project funding is down a couple hundred million dollars, whereas you are investing more at the gross level in the cash flow forecast.

Yes.

What are the prospects for that $180 million of project funding that you (inaudible) for 2010 moving up again this year, or is $600 million of net funding requirement pretty much a fixed number at this point?

Yes, I would say one of the problems with doing the free cash flow when it comes to growth CapEx is that the relative success of projects that you would apply that growth CapEx -- again your success in selling down those projects -- it is all pretty speculative.

So about the only thing I can tell you is that this is sort of our best estimate at the time.

It could go up or down, definitely not fixed.

Operator, I actually think will take two more calls quickly or to keep everyone on time today, so.

Michael Lapides, Goldman Sachs.

One question -- looking at the coal plant retirement analysis that you put out, I am just curious.

Do you expect to see coal plant retirements in any of the following three regions -- in Texas, in upstate New York, or in PJM East?

Go ahead, Mauricio.

This is Mauricio.

We don't expect to see anything on Texas.

Most of the analysis that we did, I'm going to say probably about 40 GW to 45 GW are concentrated in the CERT region and MISO.

About 10 to 11 GW are split between PJM New York and New England, and the lion's share of that is going to be PJM.

So that's how I would characterize I guess the split on potential coal retirements.

Now, keep in mind that this is just based on merchant economics.

Depending on the system or grid reliability, you may or may not be able to retire those coal units.

Okay, so when we think about your asset base and your portfolio and what would benefit significantly from a rash of coal plant retirements, it strikes me that maybe Keystone and Conemaugh, because they've already got controls, but your eastern plants would -- what's left of Indian River wouldn't necessarily benefit.

Really then it comes down to gas plant spread in the upper northeast.

Yes, the direct impact probably is going to be primarily Keystone and Conemaugh, our share.

I think you probably are going to see some increasing capacity prices in New York and possibly New England.

Now, the indirect effect is going to depend on power flows, so if you require a significant number of coal in MISO and CERT, how will that change the power flow dynamics?

That could potentially have an indirect impact, but that is going to be primarily on energy, not necessarily on capacity.

Okay, guys.

Thank you, much appreciated.

In the interest of time, we are only able to take one last question.

That is the question from Angie Storozynski, Macquarie Capital.

Thank you.

It's actually Storozynski from Macquarie.

Angie, we know who you are.

I know, but I just wanted to make sure -- (laughter) I keep hearing those different versions of my Company's name so I just needed to finally pronounce it correctly.

Anyway, for 2010, I remember that you (inaudible) potential improvements to your guidance and you are saying that you are working on it.

Could you maybe say, is it cost-cutting?

Is it a certain region where there's upside coming?

Any comments?

Well, the only comment I'd have is it would be all of the above.

We were not happy to put out 2010 guidance that was significantly lower than what we were going to achieve in 2009, so we've been at work on the year on the cost-cutting and also obviously looking where we can improve the performance in terms of more topline performance.

I think that the commodity price environment since we gave the -- I mean, I think we've made actually significant progress, but the commodity price environment since we sort of announced guidance in the first place has not helped.

So the commodity price environment has not helped.

The weather has helped this winter.

So it's definitely too early to say whether we're going to be successful in bringing up 2010.

To be frank, Angie, I would doubt that we are going to change any viewpoint on it on the first-quarter call, but we are working on it.

If the market would give us some breaks, I think we could be successful.

Okay.

Just a question or a statement -- there were some -- there was a question about your M&A activities.

I certainly hope that you are still suffering from the M&A fatigue that you mentioned back in '09.

It was a tough year.

I understand that you have a lot of cash, or you generate a lot of cash and that there are other IPP players out there that may seem to be cheap.

But I just wanted the reassurance from you that you understand your stock is a very cheap currency right now and while maybe others do not look cheap at first glance, that -- or they look cheap at first glance, they are really not that cheap and that's definitely not a focus of your company for this year.

Is that correct?

Angie, I'm glad you got that "is that correct" at the end, because I was sensing, because I am such a smart, perceptive guy, that there was a point of view hidden in that question.

But no, you are completely right.

To Lasan's question -- I mean because Lasan had me focused on the significant cash.

I am glad you prompted me because the fact that our stock, from our perspective, is grossly undervalued and is not a particularly attractive acquisition currency to use at this price is something we are aware of, particularly in terms of the type of transactions that Lasan was talking about.

In our business, as I've often said, if you have a lot of cash, you can sort of try and pick off one asset or a couple of assets.

But when you look at the sort of combination of two IPP companies like the other companies in the industry, no one's ever going to have enough cash to do that, so you have to be using your stock.

Having our stock mired in the trading range it has been mired in, believe me it is absolutely not an inducement to use that stock to buy something.

So --

Thank you so much.

Okay.

Did you have another point of view that you wanted me to express (multiple speakers)?

Well, maybe off-line then.

(laughter)

I know you are never bashful, Angie, and we look forward to your thoughts.

So operator, Gina, I think we're done here.

We appreciate everyone being patient.

Sorry the call went long, but there was a lot to talk about.

We look forward to talking to you on our first-quarter call.

Thank you very much.

Thank you for your participation in today's conference.

This concludes the presentation.

You may now disconnect.

Have a great day.