Good day, ladies and gentlemen, and welcome to the NRG Energy Fourth Quarter and Year End 2008 Earnings Results Conference Call. As a reminder, this conference is being recorded today February 12, 2009. At this time, I would like to turn the meeting over to Ms. Nahla Azmy. Please go ahead.

Thank you, [Salvi]. Good morning, and welcome to our fourth quarter and year-end 2008 earnings call. This call is being broadcast live over the phone and from our website at www.nrgenergy.com. You can access the call presentation and press release furnished with the SEC through a link on the Investor Relations page of our website. A replaying podcast of the call will be posted 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. And now for the obligatory Safe Harbor Statements. During the course of this morning's presentation, management will reiterate forward-looking statements made 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 12, 2009 and any forward-looking statements that 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 those figures, please refer to today's press release and this presentation. In addition, we will be discussing Exelon Corporation’s outstanding exchange offer and the solicitation of proxy for 2009 annual meeting. Today’s discussion does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of proxy of any stockholder of NRG Energy, Inc. nor is it a substitute for the exchange offer documents currently on file with the SEC or the proxy materials to be filed with the SEC. Now, with that I would like to turn it over to David Crane, NRG’s President and Chief Executive Officer.

Thank you, Nahla, and good morning everyone. Thank you for joining us for our year-end 2008 conference call. Today, I am joined by Bob Flexon, our Chief Operating Officer and Clint Freeland, our Chief Financial Officer who will be giving part of presentation. I also have with me Mauricio Gutierrez, who runs our Commercial Operations Group and who will be available to answer questions. And I guess in the sign of the times also by our General Counsel, Drew Murphy, in case we get any legal questions. In a moment, I will be turning the call over to Bob and Clint to review our operational and financial results for the fourth quarter and the full year 2008. As you saw from our release, 2008 was a record year for NRG, which was all the more remarkable given the unprecedented economic turmoil that confronted all of us in the second half of the year. But we recognize that this call must be about much more than our year-end results, however good they might be. This call more plainly than many others must address NRG’s long-term future in light of the Exelon offer, and the other potential alternatives available to us. Since September of 2008, NRG’s management and Board of Directors have expanded in an enormous amount of time, energy and care considering Exelon's unsolicited exchange offer of 0.485. With the February 25th deadline for their second straw poll now looming many of you again will have a chance to consider their offer and undoubtedly again, Exelon will be exhorting you to tender your shares on that date in order to send a message to NRG’s management. Let me explain to you why, come February 25, you should send Exelon a message by not tendering. Bluntly put, the Exelon offers a lowball…

Good morning. Thank you, David. NRG continued its strong operating and commercial performance throughout the fourth quarter resulting in 2008 being the best and safest year for NRG operations since our beginning in December of 2003. Slide seven, highlights the few of the accomplishments achieved in 2008. NRG’s safety performance continued its positive improvement trend in 2008, as it has for each of the last five years. NRG posted a low 0.84 OSHA recordable rate in 2008, nearly a 50% improvement versus 2007. Our environmental performance, similar to safety improved dramatically over 2007. During 2008, the key environmental performance measures across the fleet improved by 41%. Our Engineering, Procurement and Construction group successfully completed several re-powering and environment projects during 2008, their most recent achievement being the construction of the Huntley baghouses in December 2008 and January 2009. Both baghouses are our operating as designed and meet our New York State environmental requirements. Baghouses for our four units at the Dunkirk facility are under construction, and are expected to be completed later this year. The Cedar Bayou 4 combined cycle re-powering project although not highlighted on the slide is well on track with the completion date currently expected in June 2009. In 2008, coal plant availability and reliability improve significantly across all regions. The average Equivalent Availability Factor or EAF of our coal fleet in 2008 was 91.1%, a 4-percentage point increase over 2007 that resulted in approximately $2 million megawatt hours of additional available generation. Baseload availability was a primary factor behind NRG’s solid financial performance in 2008, as Clint will cover shortly and we will continue driving EAF improvement across the fleet in 2009. Nuclear operations at STP were flawless in 2008 with no forced outages or maintenance outages during the year. In fact, with its latest fall…

Thank you, Bob. As we look back at 2008, NRG like most other companies faced unprecedented challenges during the year. However, our steadfast commitment to financial prudence and operational excellence enabled NRG to deliver what many of those other companies happen. Record full year financial results and record liquidity as shown on slide 14. Adjusted EBITDA for 2008 topped $2.29 billion, a $50 million improvement over 2007, which was previously the company’s best year. At the same time, NRG boosted its available liquidity to $3.36 billion, its highest point ever, as cash from operations, asset sale proceeds, and active management of our collateral program drove cash balances higher and freed up significant letter of credit capacity. As we look forward to 2009, we expect financial market and general economic conditions to remain challenging. However, considering our hedge profile that Bob just covered, we are able to maintain our guidance for the year at $2.2 billion for adjusted EBITDA and $1.5 billion for cash from operations. Slide 15, provides both the fourth quarter and annual comparison of 2008 versus 2007. As you can see quarterly adjusted EBITDA was down 20% to $403 million primarily due to several distinct events in our Texas and Northeast regions, which accounted for the bulk of the period's variance. In December 2007, NRG received a $39 million reimbursement of development expenses from our partner in the STP 3, and 4 projects, which positively impacted last year’s results in Texas and led to a negative variance this year. Further, results were negatively impacted in 2008 by two additional planned outages at baseload facilities, as compared to 2007. A 31-day refueling outage at STP Unit 2 resulting in a loss of 431,000 megawatt hours of low cost generation and an additional 21 outage days that our Huntley facility…

Thank you, Clint. I am turning to slide 20. Our industry operates, as all of you on the phone know in an environment that is very dynamic and oft changing perhaps more than other sector. As a capital-intensive cyclical commodity driven industry, I’ve always felt that the role of management in this industry is to sift through the haze that obscures visibility at any point in time in order to understand and respond to the tectonic shifts that will shape the industry overtime, and they help to find, which companies by acting forcefully in response in those shifts will put themselves in the best possible position to succeed, and which companies by doing nothing will risk failure. What has changed most obviously since the last time we got together is the prospect of the immediate government involvement in our industry as a result of the economic recession. The way that this will manifest itself in our sector in the near term at the very least, but at almost certainly for the foreseeable future as well, is that the government is going to rely much more on the carrot of the investment tax credits, production tax credits and federal loan guarantees to further its environmental and energy agenda rather than resorting to the stick of federal climate change legislation that would impose a significant cost on carbon emissions, a cost which ultimately would have to born by the hard pressed American consumer. This situation represents a tremendous opportunity for companies, which stand ready with environmentally friendly, shovel ready, energy infrastructure projects. We are in a very strong position today in this regard because we have been developing a wide range of such low and no carbon projects across all of our regions, since we announced our repowering NRG in our echo…

Certainly sir. (Operator Instructions). Our first question will be from the John Kiani of Deutsche Bank. Please go ahead.

Good morning

Good morning, John.

It looks like NRG made some positive announcements and continues to make good progress on the development of STP nuclear units 3 and 4 and also heard you make some interesting comments on carbon and the uncertainty in timing surrounding it’s implementation, can you please talk a little bit about the thought process and benefits behind building your nuclear in Texas with this view on CO2?

Well, John I would say that the main driver that makes nuclear power in Texas a strong economic proposition is gas prices. It has nothing to do with carbon. I mean obviously the current price of gas right now is nothing that would cause you to build a nuclear power plant, but if you look at the forward curve, if you take a long run view of gas in even in the $6 range but $7, $8, $9. A nuclear plant in Texas makes good money even before you get the carbon. Obviously as a huge baseload generator any sort of carbon-driven uplift in the price of power in Texas, will be a further benefit to the nuclear plant. Let me say, our view on carbon legislation, which has actually being consistent from before the recession to now, is we are supporter of federal carbon legislation like a lot of corporations that support carbon legislation, we have always been concerned that the pace and the style, which it’s implemented in the early years. So nothing I’ve said in my comments indicate that we don't support carbon legislation or we don't believe that the carbon legislation might not be passed in 2009 or 2010. But we think those in Congress who will pass it will be very mindful of particularly the near-term impact. So any carbon legislation will be mild in the early years and have a long runway, in terms of, allocation versus auction.

Okay thanks David.

Thanks John.

Thank you. Our next question will be from Chris Taylor of Evergreen Investments

Thanks, can you tell us what your open EBITDA would be, unhedged EBITDA or would have been for 2008 and more importantly what it would be for 2009 in your guidance?

Yeah Chris in all honesty given that the commodity prices have reversed the way that they have, we haven’t recalculated an open EBITDA. I think what you are seeing though is that the true value of the hedging program that we have in place, as Bob spoke about in his comments.

But what we have in there, in the value of the hedges themselves [Inaudible] we could back that out…

Well, the value of the hedges at the end of the year, the fair value was an uplift of $1 billion, but that's over the term of our hedging that goes out to 2014

Right, that is a present value of the entire program.

How much would the uplift have been in 2008?

We may have to get back to you, we don't have that number at our fingertips and we would rather not sort of speculate. So we’ll…

For me it's hard to imagine do you have a sense of your underlying profitability…

Well to us I mean first of all, our profitability – the hedge is real. We operate on a point of view of cash not theory. And so, we've never been a big fan of open EBITDA as a concept and our hedges are performing, they are producing cash for the company that is cash that we put in the bank that’s why we have $3.4 billion of liquidity $1.5 billion of cash. So, to us that’s the world we live in, is were we focus on cash not theory.

Well, but the world we live in true economics of power significantly below the hedged economics. It’s the hedged EBITDA is not a guidance to valuation in today's its not.

The only thing I'd add to it, Chris, is just to say that we continually hedge around volatility and that’s our business model. We don’t leave prompt years open. We hedged rolling out five years. So, I wouldn’t say that today’s forward curve is also just an underlying view of the company, because you've got volatility that’s quite. Quite large in this market we will continue to hedge as we go forward and pivot off that volatility.

Well, let me ask question in a different way. How many hedges have you put down in the last three or six month, or have you not been putting on hedges…

I would only quantify it this way, Chris, I mean we did 48 terawatt hours hedges during 2008 going forward. The vast majority of that called as 41 of that within the first half of the year. In the second half of the year, the hedges that we tended to put on were heat rates flatten out the heat rates position as we went forward. So, there it was more just converting the gas hedges to pure power at that point in time. But we haven’t done anything on the power – nothing significant on the power side, but this is the opportunity, when you are in this market to actually hedge out the coal. So, we been focusing more on the coal side in this environment and we will continue to do so.

If the power markets don’t rebound over the next 12 months. Will you start extending your hedging program or will you see hedging electricity price until the power markets rebound?

Well, for 2010 we’re pretty well hedged as well. So we’ve got time to decide what we want to do in the out years, and even if you look at 2011 on our hedge profile, it’s pretty well hedged in ‘11 as well so. We’ve got time to make those decisions. So we’re not here going to rush into anything. We’ve got plenty of time to make those decisions.

Thank you.

Thank you. Our next question will be from Lasan Johong of RBC Capital Markets.

Thank you. Few questions very quickly I will just rattle them off and I will let you take your time answering them. Would you consider an alternative transaction to what Excelon's proposing i.e., would you exchange, for example, STP for all of Exelon's non-nuclear IPP portfolio along with NINA? Second, if you believe in the hedge cheap rate story going forward why you reducing or why you engaging in more heat rate hedges going forward, it seems kind of opposite of your beliefs. And then very quickly on the STP situation last time, you had given some guidance on STP unit cost to build 3 and 4, it was around $3800 KW, wondering if that has changed. And lastly what are your intentions with $1.5 billion in cash, I mean that seems a little excessive in terms of balance on your balance sheet.

Well okay, you are really testing the limit of the single question rule. Let’s go…

Sorry, about that.

No, I’m going to answer questions one and three then Bob is going answer question two. No I'm going to answer the questions one and three then I may give a first part question four and then Clint is going to follow on to that and then Bob you can come back in for question two. So, that’s all clear.

[Inaudible]

Yeah, You can go and Bob you can go back so, question one would we consider some swap arrangement nuclear for something of Exelon’s. We haven’t look at that in any great detail. We see tremendous value in the nuclear program we think particularly the nuclear development program, its value that only going to increase overtime. Its nuclear is absolutely the key to the decarbonizing of NRG overtime, so it's pretty fundamental to us we ascribe quite a high value to it. And then technically, I have to tell you because of the nature of the partnership arrangement with San Antonio and Austin. It’s very difficult for us to unilaterally sort of carve out the nuclear from NRG it can’t really be done without the consent of the two partners. So, that’s one of the reasons why we haven’t spent a lot of time evaluating, but second to the fact that. We put a lot of value on nuclear. The answer to your third question, you said that our last estimates for STP was $3800 for KW I'm not aware of NINA putting that number out the number I'm remember for NINA is the 3200 for KW number, which is an overnight number without interest during construction. Our view and this number like everyone’s number fluctuates a lots with exchange, with currency fluctuations and the like. But if anything we think that number, which we felt was conservative at the time we gave it. We think its obviously more conservative now that we can comment within that number. But I am not sure we’re ready to put out a new number relative to the $3200 per KW number. In terms of the $1.5 billion of cash, Clint mentioned obviously that we hope at some point to be able to return a portion of that to our shareholders. We obviously have a cash [sweep] on the debt coming. But I can say, this is a target rich environment for companies that have cash in terms of what’s out there and prices at which key things can be obtained.

Yes so…

And so, we certainly would hope to be able to put some of that money to what we are absolutely convinced, you would find to be very good use. So, Clint do you want to add to that and then Bob, we can come back in for question two.

No, David. I would just echo what you just said. I mean right now in these markets, cash is king and liquidity is critical and obviously there are number of opportunities out there, that having that liquidity. Give us the ability to take a look at. But one thing to keep in mind [with honest] just looking at our capital allocation program, we’re in the process probably in the next couple of months of offering almost $200 million to our first lean lenders. We have our CSF II maturity coming out toward the end of the year, that’s $180 million as principle plus accrued interest. And then we also have the share repurchase call it 330 million that we would still like to execute when we’re actually legally able to do that. So between all of those things you are talking about call it $700 million worth of capital allocation exercises that we would like to look at throughout the year. So, what we do have call it $1.5 billion in cash, part of that is we would like to deploy in the capital allocation program to the extent we can. And so it may not be as excessive as you think. Bob.

First, on the heat rate question, basically the way we’re approaching the portfolios that during the next 24 months calling it 2009 and 2010, we’re really just trying to make sure, we’ve got the portfolio protected given the economic circumstance that exists. So our heat rates hedges have been focused on certainly for 2009 as you could see the sensitivity on the page 10, points out that it’s just quite low at this point in time, but we are very open on heat rates when you are looking at 2012 and 2013. We’re not looking to do anything at this point in time on 12 and 13. We’ve done a little bit, since the last call on ’11, but remain largely open 11 as well so. We’re still bullish on the back-end of the curve and right now it’s just been more about protecting our cash flows primarily in ‘09 and in 2010.

Thank you for your indulgence.

Thank you Lasan.

Thank you Lasan.

Thank you. Our next question will now come from Neel Mitra of Simmons & Company.

Hi, thanks. In regards to the Exelon offer, can you discuss your concerns over Exelon gaining more control on the NRG Board and the implementation risk of trying to restructure or reverse merger or other vehicle in order to not trip your change of control covenants and has Exelon indicated any willingness to increase exchange offer, if they able to avoid triggering change of control on your bonds?

Well, I mean in terms of has Exelon indicated any willingness to increase their exchange offer, we are pretty much believe what we’ve heard what they have said in public about their prices, their prices, their price and they’ve hinted at various times that they have one sort of bump in them, but when I have met with John Rowe in January, he made it very clear that bump would not be a meaningful number. And that’s their own words. So, I'm not sure there is anything out there that would prompt Exelon at this point to make a significant increase. But that’s really a question that is better posed for them. On where they stand with their board packing scheme, or whatever you call it, it seems obviously that this change control issue is, it's an important issue. Obviously it seems what Exelon is trying to do with the nature of their board packing scheme is to get effective control of NRG without triggering the legal change of control. But we take the risk that that change of control could be triggered inadvertently, very seriously. What happen, if the board became a 10/9 or 9/8 or something like that, if at any point thereafter an incumbent NRG director resigns, that triggers the change of control. You will see that we have identified that as a risk in our 10-K. So, our Board is looking at that issue but I can't tell you, I mean, all I can tell you is that certainly our board thinks an inadvertent change of control of the company at a time, when the capital markets are still pretty seized up would have the potential to be a very serious value destructive event for our NRG's equity. And so our Board is obviously taking has a concern about that. But no decision has been made.

Okay. Thank you.

Thank you. Our next question will be from Michael Lapides of Goldman Sachs. Please go ahead.

Hey guys you referenced the 10-K filings, just a handful of high level items. You have given '09 CapEx. Any insight you can give on CapEx beyond 2009 and other major cash requirement cash outflows beyond 2009?

Clint?

Michael I think on the CapEx front beyond 2009 really the CapEx would be more focused toward STP 3 and 4. When you look at what our CapEx requirements are for 2009 mostly when finishing up the Cedar Bayou 4 project. We also have some level CapEx related to GenConn and obviously that would continue into 2009, but that’s probably not a significant amount within the scope of NRG going forward and certainly shouldn't be beyond 2010. As far as environmental CapEx, I think as we go out beyond 2009 for call it 10, 11 and 12 think about environmental CapEx being in the call it $200 to $300 million range each year and then trailing off by 2013. And then beyond that I think those are kind of the major cash requirements for the company.

And when you think about the environmental CapEx. What is the discretion in terms of timing meaning when do you have to have kind of back end controls at both Indian River and Big Cajun how much differential is there in the time in the timing requirement.

Michael on the environmental CapEx the 2009 we need to be complete up in New York State and that is Dunkirk. So that's for western New York for Indian River we got to be complete by 2012. So, when you see the CapEx spend for environmental in the Northeast when you look at 10 and 11 that's largely in the Indian River related, and then for South Central our CapEx there is more back end loaded more towards the 12 and 13 timeframe, and there we're trying to work that around with what's happening with legislation CAIR and the like so. We're being a little bit more flexible with that one until we understand what rules are out there so we can make sure that we match up with the rules since relying on the federal rules there, as compared to the Northeast where you've got state agreements. So in New York you got a consent decree. In Delaware they have state requirements that we have to comply with so. South Central is the one that is a little bit more variable because the federal rules are not clear on where they are going right now.

Got it. Okay, thank you guys much appreciated.

Thank you. In the interest of time, our last question will be from Jeff Coviello of Duquesne Capital. Please go ahead.

Hi, good morning guys. How are you?

Good morning, Jeffrey.

I just had two follow-up questions on the heat rate hedging you guys did I presume that took place mostly in ERCOT. I just wanted to check that and I think the way you would do it is just rolling out of the gas hedges into power. And again I wanted to see if that’s logistically how you did it and then detailed question, if you guys seemed to slightly change the equally probable move in heat rate versus the move in gas. I'm just wondering if that was from the variability in heat rate increasing relative to gas over the last few months, that wouldn’t cost?

Jeffrey, Mauricio is going to answer those questions for you.

Sure. And I guess also [Inaudible] did you do it during the course of the year. Is it mostly on the fourth quarter or?

Basically, you see if Mauricio answers that question. Go ahead Mauriciro.

Hi, good morning Jeff. With respect to the heat rate hedging that we have gone quarter-on-quarter, it was primarily 2009, 2010. A little bit in 11 we were unfortunately think about it in terms of liquidity and some price or heat rates spikes that we saw particularly in early January, as you say the heat residuals evolving our gas hedges into power. Just to remind you we manage the price risk of our basal portfolio on the natural gas equivalent basis and then on heat rate basis. So, we could just rolling some of those gas hedges into power.

And on the probability question, what we do each quarter so we just want to we go back and look historical volatility and just want to ensure that when you look at the probability of the gas change of dollar, we just calibrate that to the same level of probability for heat range change. So, the reason we just change or it is to sync up the two disclosures on the slide.

Got it. Okay and that was just - heat rate just got a little bit more volatile and that is what drove the change.

That’s right

Great. Okay, thanks a lot guys. I appreciate it.

Okay, thanks Jeff. I think that concludes this call. We appreciate everyone participating and we appreciate your support and we look forward to talking to you in the weeks to come. Thank you very much.

Thank you sir. Ladies and gentlemen, this does conclude your conference call for today. Once again thank you for participating. And at this time, we ask that you please disconnect your lines. Have yourselves a great day.