Stephan Lowis - VP, IR Bernhard Gunther - CFO

Vincent Gilles - Credit Suisse Deepa Venkateswaran - Bernstein Peter Bisztyga - Bank of America Merrill Lynch Bobby Chada - Morgan Stanley Lueder Schumacher - Societe Generale Deborah Wilkins - Goldman Sachs Peter Crampton - Macquarie Nathalie Casali - JPMorgan Jutta Unmuessig - Barclays John Musk - RBC Capital Andreas Thielen - MainFirst Tanja Markloff - Commerzbank Christian Schuetz - PIMCO Richard Alderman - Macquarie

Welcome to the RWE conference call. Bernhard Gunther, CFO of RWE AG will inform you about the developments in the first three quarters of fiscal 2015. I will now hand over to Stephan Lowis.

Yes, thank you and good morning also from my side to everyone on the phone and to those who are joining us via webcast. I'm joined here by Bernhard Gunther, who will now lead you through our first nine months' results. And Bernhard, it's yours.

Yes, thank you Stephan. Good morning from me as well. Let me come straight to the main topics. The financial performance in the first nine months of the year are in line with expectations and followed the same earnings strength observed in H1. Deteriorating realized margins and the conventional generation business was the main reason for the decline in profitability. However, we can confirm the 2015 Group outlook. First let me give you an update on the most important points regarding the discussion around nuclear liability. As you know, the whole debate on nuclear liability is split into three phases. The first phase concluded with the publication of the results of the so-called stress test on October 10. The most important result is that the nuclear provisions fully reflect obligations and are more than sufficient compared to other European countries. Although this result has not been a surprise and has been communicated many times, it was seen as very positive by the capital markets. Furthermore, it provides a solid foundation for the second phase of the process that has recently started with the establishment of a commission for the review of the financing of the nuclear phase out. This commission will provide proposals by the beginning of next year. One of the options considered is the establishment of a foundation financed by energy utilities. Just to be clear here, these proposals will have to be seen as non-binding recommendations and decisions will be made in the political process that follows afterwards which we have called phase three. As mentioned at our credit day in September it is important to see that the German government follows the aim to maintain the economic performance of utilities in the context of the nuclear phase out and its subsequent costs. It was outlined by the German cabinet in the Principles for Successful Implementation of the Energy Transition which was published on July 1, 2015 and has been reiterated several times by statements by the German Minister for Economic Affairs and Energy. Second, on October 23 the German Ministry for Economic Affairs and Energy announced the framework for the so-called standby capacity that contributes to the German climate protection targets. Between 2017 and 2019 RWE will gradually transfer five lignite power plant units, with a total capacity of 1.5 gigawatt, into standby, for four years, each, before being shut down. The last one in 2023. The solution provides clarity with respect to the remuneration for the Companies and therefore reduces commodity exposure for the lignite plants affected. On top of that positive news came at the end of September from the northern Westphalian government with a publication of an official draft document detailing the future role of lignite in our home area. This would give us, if finally approved, the possibility to optimize all of our lignite mines for a time horizon beyond 2030. Third, we are successfully growing our renewables business further. As you know, we do this currently primarily in the form of strategic partnerships. In line with this strategy, at the end of October, RWE Energy formed a consortium for the Galloper offshore wind parks with three partners, UK Green Investment Bank, Siemens Financial Services and Macquarie Capital. Construction has recently been started and we expect the wind farm to go online in 2018. Slide 3 shows the development of the operating result. In the first nine months it fell short of the previous year's numbers by 9%. As expected, the biggest effect is the decline in conventional power generation, mainly driven by a further deterioration of realized generation spreads. With respect to our trading business we have lower results this year in comparison to the very good result in 2014. The earnings development in our Supply UK division has decreased by €156 million to minus €66 million. This is mainly a result of process and system related problems with private customer billing. Besides the operational problems, lower energy consumption of customers, the shift from standard to non-standard rate tariff and high customer losses are also factors for the lower result. The new management team is currently focusing on solving the operational and process issues. All in all and a change to our expectations in H1, we now assume to close the year with a medium double-digit million euro loss. However, there are still risks attached to this number and an in depth investigation which is currently underway, will look into all areas and provide a full picture with the yearend reporting. On the positive side, the operating result apart of energy has increased significantly. In the first nine months we have recorded an operating result of €280 million which is already €100 million higher than the 2014 full year results. By the end of this year we expect energy to double its operating result compared to 2014. Furthermore the revaluation of the VSE as a result of its full consolidation leads an improvement of the operating result in our CEE/SEE downstream business. Slide 4 shows the development below the operating result line down to adjusted net income. As you can see, our financial result improved by €267 million, mainly because of the sale of securities and approved interest accretion to long-term provisions. The tax rate for reported net income in the first nine months is still high at 42%. This is due to the same reason we explained in our H1 conference call. We currently can't capitalize tax loss carry forwards for fiscal year 2015, according to IFRS, in our German tax group. In H1 we announced that we are merging most of our German fully-owned subsidiaries in 2016 and 2017. This will enhance efficiency, reduce administration cost and, as also mentioned in the H1 conference call, have impacts on the tax side. The latter comes as a side-effect and is not the driver of the merger. As a consequence we now expect a tax rate in the low 30 range for the full year. The minority interest increased strongly, mainly as participations in our German supply and distributions networks division benefited from the one-off income from the sale of securities. For the first nine months our adjusted net income amounts to €545 million. Slide five shows the development of our cash flows from operating activities. It comes down by €2.6 billion to €2.2 billion, mainly due to changes in working capital. First, as explained in our last analyst calls, our most significant working capital effect is a result of a revised purchasing policy for the required CO2 emission certificates. This had a corresponding positive effect on our cash flows in 2014. Second, in 2014 we had a positive weather effect in our working capital. This was mainly due to the mild weather which led to relatively low energy consumption in 2014, to a large extent lower than the basis for the advanced payments we received for our customer. As a result, in 2015 we see a counter effect as final billing for the year 2014 shows lower amounts than the cash flows we received in 2014. Furthermore, it is also important to recognize that in Q3 2014 a temporary repayment of the nuclear fuel tax of approximately €0.5 billion was considered which was based on behalf of fiscal court decision. However, this money had to be paid back in Q4, 2014 until a final decision is made. Latest indications suggest that a final decision concerning the nuclear fuel tax is scheduled for 2016. The development of our net debt is shown on slide 6. It came down by €5.2 billion, mainly driven by the disposal of RWE Dea. Compared to H1 our cash balance has improved by 50% from minus €1.4 billion to minus €0.7 billion. Net debt was reduced by €0.3 billion due to the change in pension provisions. Rising interest rates have decreased our pension provisions by approximately €0.9 billion since the end of 2014. The current rates are 2.3% for the German and 3.8% for the UK pension provisions. However, there were offsetting effects like regular service costs that increased our pension provisions by 0.6%. Due to the regular interest accretion nuclear provisions increased by approximately €0.2 billion, so that the net effect in our provision is currently minus €0.1 billion. On to chart 7, we can confirm our 2015 outlook for the Group. Let me take the opportunity to anticipate one of your obvious questions, do we see further impairment risks for our 2015 numbers? In principle we do our regular goodwill impairment tests in the third quarter and as you can see from today's publication, we don’t report any goodwill impairments in our third quarter accounts. On the asset side, as part of our midterm planning which we typically conduct in the fourth quarter, we will challenge our asset book values. Therefore we cannot exclude impairments in the context of our full year accounting. However, we have had to make two adjustments, on slide 8, with respect to our divisional outlook. First we have to change the outlook for trading/gas midstream to significantly below 2014, among others due to a weaker trading business performance than expected. On the positive side, we have changed our outlook for Central, Eastern and South Eastern Europe, to significantly above 2014. As previously mentioned, this is a result of the revaluation to the full consolidation of the VSE Group and better business conditions in the CEE/SEE countries than originally expected. With this let me hand over to Stephan for the Q&A.

Yes, thank you, Bernhard and as you all know, let's stick to our rules, two questions only and with that I would like to hand over to the operator.

[Operator Instructions]. The first question comes from Vincent Gilles, Credit Suisse.

Two very simple questions, the first one is on the non-operating level. A big swing with January/June 2015. We had minus 447. The number is different. I think it's 170 this time, but if you can help us bridge between the end of June and the end of September, is there [indiscernible] back? Is there any provisions for Dana Gas, a story that gets people very excited? Just explain to us, if you could. And the second thing is the net functional debt, with all the change in hybrid accounting can you help us bridge how we will get from the net debt at the end of September to the net debt you expect at the end of the year? Thank you very much.

First, your question on the non-operating result. The move you observed, there are no underlying structural effects. It's due to the derivative impact of mark to market accounting. You know that we put it there for those derivatives which are not part of our hedge accounting. Therefore there's no reading on any structural warranted from that. On net financial debt, looking out or looking forward to the year end, we expect it to be in the same order of magnitude as at the end of Q3.

The next question comes from Deepa Venkateswaran, Bernstein.

I have two questions. The first one is on the tax guidance which has been moving around quite a lot. Could you give some more clarity on what has changed your view now for FY '15 and what is the read across for the future? I think most people are now assuming more than a 35% tax rate, going forward, so, any lead across for the future year is helpful. Secondly, in terms of the trading and midstream division could you help explain the headwinds facing this business in FY ‘15 in more detail? And especially, again, help us understand if there's something one-off or something that will continue on an ongoing basis? And again, I think consensus and also modeling can reflect €250 million per annum income for your trading division, going forward. So is that still something that you think is a sustainable level? Thank you.

On the tax numbers I think the overall forces at work affecting our tax group, our tax rates in the Group, as we explained in the H1 call, they are still valid, so it's - and I just reiterate briefly, that this is an IFRS effect due to our expectation that we can't use our tax loss carry forward. We can't reproduce in the German tax group over the next five years and therefore we can't capitalize them under IFRS. This is structurally unchanged. What has changed in the full year also already, in the Q3 numbers for 2015 is that we had positive one-off effects which basically drove the tax rate down and this is the VSE effect you’ve read and there's also a run up to our restructuring of the Group that we merge subsidiary, 100% subsidiary companies into the mother company. There has also been revaluations which created non-taxable income and therefore the tax rate for this year has been helped by such one-offs. We don’t give a precise guidance for the tax rate in future years which will be driven by many aspects we can't be analyzing in our midterm plan, but it is a work in progress, but generally the forces at work can be expected to also affect future years. On our trading business I think it's very important to state that there are no operational problems in the trading business. There is nothing going wrong there. It's just not as good a trading year as the last one was. So and please bear in mind that amalgamated in these numbers are the burdens from gas storage, yes which is currently not a real profit maker.

The next question comes from Peter Bisztyga, Bank of America Merrill Lynch.

Two questions please. Firstly, I was wondering if you could provide some insight into what your current methodology is when you value your power generation assets. So for example, do you look at forward curves or do you use some alternative assumptions when you do your impairment tests? And also, could you indicate roughly what your current fixed assets are in conventional power generation?

Sorry, just - we're looking to each other here. What do you mean by the last question? The book value or--

Yes, the book value. The book value, please.

Let me start with the first question on the methodology and if we, for example, run an impairment test, yes, at the shorter end of the forward curve we take market prices into account, but as you know, these are only liquid for the next two, three, maximum four years and beyond that of course it is driven by assumptions on how prices will develop beyond that and given the longevity of the generation assets, for example, that we have, any sort of [indiscernible] is strongly driven by your long-term expectations. And on the question for the book values of the generation assets, we don’t disclose book values by division.

The next question comes from Bobby Chada, Morgan Stanley.

So my first question is on the nuclear process from here. What input, if any, do you expect either RWE or the industry to have in coming to some form of, hopefully, long-term solution? And then the second question is around the impairment issue again. If you can't disclose the book value by division, are you able to just confirm that there is still a meaningful amount of book value in that business? I just added up the last, I think, eight or nine power plants that you built which had a total investment of €12 billion or €13 billion. I'm pretty sure that's still largely unimpaired. So can you give us some feel for, if not the size, just order of magnitude of that book value?

Nice try on the second question. I think you're right, of course, because generally the newly constructed power plants are not, generally not fully depreciated yet. We have, with the recent impairments we have done in years before, eliminated all goodwill in our generation division, yes, so there's nothing left there and yes, there are some - There's still, yes, a significant asset base in power generation. Yes order of magnitude, it's clearly below €10 billion.

I think the first question was on the nuclear political--

Yes, sorry, the first question, yes, was on what input can the industry deliver on this process, going forward around nuclear provisioning and funding? As you know, we are not members of this commission that I mentioned, but we will - we have been invited to participate in some sessions of that commission, as the industry, so the four large utilities in Germany will clearly be part of that process, in terms of, yes, placing our ideas and answering to questions from the commission.

The next question comes from Lueder Schumacher, SocGen.

Two questions for me, the first one is on the €185 million one-off gain you have on VAT. What exactly is that? What is the one-off item there? And the second one is more on the UK business. You seem to be hinting that the process is not yet completed and there could be more coming to light in the fourth quarter. Is that correct or are you confident that you've dealt with the vast majority of the issues and need for write offs with npower?

The first question, the €185 million is the revaluation due to full consolidation, so it’s a technical effect that happens when - that can happen, at least, when you switch from equity accounting to full IFRS consolidation. On UK, the investigations, yes, you're right. We have said that we will have completed the full investigation by year end and by then we will have the full picture on what needs to be done there and how this is reflected in the numbers.

Just following up on your first answer, if it's just a revaluation why is it in the operating result?

This will also be depreciated over time under IFRS and the depreciations will also be in operating result. There's also some, if you're interested in more detail and maybe you haven't spotted it yet, I think on page 34 of our report for the first three quarters you'll find a bit more back up to the VSE full consolidation. And we have done similar things before, for example in 2011 with [indiscernible], a West German energy supply company that was also put into full consolidation via operating result.

The next question comes from Deborah Wilkins, Goldman Sachs.

Two follow ups from me, first of all, can you help us understand what is getting worse in the UK? It looks like the outlook has deteriorated. Can you help us understand what's triggered that? And also, can you give us some feel, the €185 million gain that you're booking in now also is reflected in your recurrent net income forecast for the full year. Does that mean that with that you'll be ending up at the higher end of your range or does that also signal that on an underlying basis the outlook has deteriorated by about that much?

On the second question it's the latter interpretation which is more correct. It's, yes, so including €185 million we still expect to come out at the lower end of the range. What's getting worse in the UK? I think, well, if you look at Q3 there are no additional one-offs that we accounted there, so it's just a further erosion of the operating business, so the issues we have on customer churn and both through lower price products or completely switching suppliers, have continued beyond what was there in H1 and with the full year outlook we are also anticipating, as I mentioned before, that the full investigation for the turnaround of npower will be completed and that there might be further one-offs.

The next question comes from Peter Crampton, Macquarie.

Two questions, please. First, I was wondering if any further process have been made on asset disposals since what you told us at the credit day a month ago, and then secondly, on the UK division, what are your expectations for the 2016 operating results. Are you expecting it to be worse that 2015 or are we going to see an improvement next year? Thank you.

And first on the UK side, I mean as you know, we try to be very disciplined and not giving any specific guidance or any general guidance for 2016, and although I clearly would not expect these versions of the - the turnaround, yes. And on asset disposals, we discussed at credit day, there is no - considering seriously, I mean there is this - if you want, but I think it would regard in asset disposal, you know, we have diluted our share of [indiscernible] and part of forming the new consortium but this is also driven by the other considerations that you know, just tracing the balance sheet. And apart from that, I mean, of course there are still many options. And this is the flip side of the asset.

The next question comes from Nathalie Casali, JPMorgan.

Firstly, I just wanted to follow up on Deborah question on the guidance for this year. And so you said you only just met the low end of the guidance. And despite the 185 [indiscernible] which impact the books, but then you said about a medium double-digit million loss in the UK versus I think, previously, it was about zero. So what is the rest of the underlying degeneration in Q3, please? And then the second question is on the compensation for the midnight plants that will enter the reserves, in the reports, I think you say that you have agreed the amount with the government and have you disclosed this? Thank you.

Yes, I'm actually - you mean the amount we received?

The amount that you will get for the midnight plants that will go into the reverse?

No, we have not disclosed what we will get as RWE and so I don’t, on the guidance, I won’t give you any more details beyond what we have shown, I think you see our segmental or divisional guidance on the last page of the presentation. And you can see that apart from the trading in Eastern Europe, there are no changes in the guidance that we have provided and I won’t go into further details beyond that. Sorry.

The next question comes from Jutta Unmuessig, Barclays.

Two questions. On your Lignite IMF [ph] Conversion project. First is do you have any insights regarding when to expect an if you state a decision now that you got referred to phase 2 of the investigation earlier this year. And then secondly, do you think that the cancellation of the climate change levy exception in the UK has impacted the - diffused view or also your view regarding the commercial appeal of the project? Thank you.

Sorry, Jutta, can you just repeat the second one because there was a bad line and we didn’t get that fully. Sorry.

Yes, sure. So the second question was whether you think that the cancellation of the climate change levy exemption in the UK, or do you think that his changed the EC View or your view on the commerciality of the project?

So, I read correctly or understand correctly that you are referring to Lignite, yes?

Yes, please.

So on the timing, we don’t give any specific guidance there, I think we would rather see - more clarity sooner than later but it is notoriously difficult to making these perhaps on let me get clarity or clearing from the EU side on the lets as far as I am informed, this does not affect the Lignite project. So it doesn’t change our view non the commercial or financial [indiscernible]. Okay.

The next question comes from Deepa Venkateswaran, Bernstein.

And I was wondering if I could steal an extra question from John Musk as well, but in any case, two questions. One is on the nuclear provisions, your inflation assumptions, is that something that you could disclose, EON [ph] disclosed in the last few years inflation assumptions yesterday, and second question is on dividend, I think, you have not commented on dividend and in your video, you basically said that there are too many uncertainties around which it makes it worthwhile for waiting longer. So I was just trying to understand what are the uncertainties that you are dealing with presently which will resolve by March next year given that both the nuclear stress test and the Lignite reserve uncertainties being resolved now. Thank you.

Yes, so on nuclear provisions, it is 4.6% discount rate at 3.7% cost escalation rate that we applied. And on our reasons for not being more precise on the dividend, we still do think there are quite some uncertainties around threshold title outcome of the nuclear funding debate where you get more clarity over the next couple of months and this also applies to the second item or Lignite that I mentioned so not the standby reserves but the mining concessions that we have were - has been authorized by the state government and kicked off the process recently for the third so called master plan around lignite which will give us more clarity on the lifetime of the mines.

Can you just talk a little bit more about what exactly this means? Does it mean closure of existing or is this new mines?

No, it's the existing mines. It is the - you know, it's the outer year so we basically - the end of the economic lifetime of the existing mines. And then currently, out of the three mines we have, there is just one which is being debated in this process where a change is proposed in terms of broadening the lifetime but regards to other mine the Hambach and the Inden mine are not subject to [indiscernible] at least at the proposal and on regards to other mines, something that would only affect us in the very outer years of the mining period.

What would be an outer year, so 2030 or 2050?

Anything well beyond 2030.

The next question comes from Andreas Thielen, MainFirst.

Two questions, firstly, again on this issue on lignite RWE - sorry not on Australia mining, how can we link this to the statements of Mr. Schmitz asking for government support and I don’t know really how to put it, but it sounded like RWE might have difficulties to basically fulfill the reorganization obligations on their own and I'm not quite sure if I understand that correctly And sorry, and secondly, on the outlook for next year, I understand that there are many uncertainties with respect to the tax position but could you give any kind of indication if the re-organization in the German business leads to a constant change in the tax rate or is it just one offs impacting the current year and pushing down the rate for Q3 and Q4? Thank you.

So, year-on-year, maybe I start with your second question on 2016 and tax rate and reorganization in 2016 and tax rate and reorganization of our business, and I will only refer - I am only more precise on 2015 where the effects - due to the reorganization, they are one off nature. So we don’t give any more precise guidance on any specific line items beyond 2015. On lignite, I think there has been at least I observed yesterday, a bit of traffic in the German press or - in their channels on some statements of Rolf Schmitz around, you know, lignite and RWE calling for a lignite foundation and just in the same - along the same lines as we have the hard coal foundation, [indiscernible] in Germany. This is - in this quarter, we have to be very precise so there is no statement from RWE that we are not able to cover our obligations whether in lignite once the mines run out and we have not been - anything like state aid or that we need a foundation to master those challenges.

The next question comes from Tanja Markloff, Commerzbank.

Tanja Markloff here, I would like to ask you or if you could specify in the trading the midstream division, to what extent that decline related to trading and to what extent to the midstream gas business? And in light of the negative gas price trends, how we could expect the gas midstream business develop further this year and next year?

Yes, so generally, in the decline of the trading business, yes, I said before, there - it also included the failing gas storage business. So this is part of the numbers and it is part of the general trading commercial trading activities as a part and we don’t give you some more precise to that. On the general let us say forces at work in threshold gas midstream business, you can't differentiate between the long term gas supply contracts and the gas storage contracts that we owned there. Gas storage is still struggling with low levels of profitability and because the summer-winter spreads are still in historical lows, on the long-term gas supply contracts, we have said before that with the exception of the one contract that we have with Gazprom, all the others have been put on a mark to market level so they are not ongoing losses there.

The next question comes from Vincent Giles, Credit Suisse.

Yes, me again. Basically, two questions. The first one is on the debt. In light of the recent S&P statement on the counting of the hybrid and in general, concerns about our debt level. Can you abate us on your latest contacts with S&P or any of the credit rating agencies and how you think that you are positioned for next year. In line also of the deterioration of your earnings profile. The second question is on pension provisions. Coming back to the slides where you give us the bridge on the debt, you refer to other percentages if you could help us understand what exactly the other changes were and I guess the change in the discount rates applied in Q3, not with the full year so what type of pension provision levels should we expect for the end of the year.

Yes, okay. On the issue of debt, hybrids, S&P recent announcement which came as a full surprise to us and others affected. We are working with them on a solution so I think it has - despite you know, us not making or not mincing our words that we have been very negatively surprised and disappointed by this sudden change of methodology has been preceded by S&P, we are still on working - we are on talking terms and we don’t regard it as a kind of hostile attack from S&P towards those companies affected. So we are trying to solve it, and we are pretty confident that we will be able to solve it. On the pension provisions, they are above the general expectation for the rest of the year is the discount rate to cost - discount rate we applied now in the quarter, yes, so everything else would be I think pretty counter-intuitive and so of course, we know that until year end, the interest rate debt and probably will change again, but nobody knows exactly in what direction. But our best guess for the year end in that respect, and--

Okay, other changes that--

The other changes, yes is what I mentioned in my initial presentation, the regular service costs that are also, of course affecting the debt and provisions.

The next question comes from Deborah Wilkens, Goldman Sachs.

Can you help us understand how the mining concession debate in Northern Australia impacts the 2015 dividend decision? And then separately, can you just also confirm the nuclear tax paid so far in 2015 and if there would be any remaining tax paid in the fourth quarter?

Yes, as far as I know, for the fourth quarter, there are no tax payments expected and so all kinds of - rebuilding of the nuclear containers has been done in the previous three quarters, that is one of the reason for the symmetry in the tax rate between the quarters, by the way. And on mining, [indiscernible] the mining debate in Northern Australia affected 2015 dividend, that is the kind of generic logic that we have established with our new dividend policy that the dividend policies are not adjusted and looking to the rear window of the car but also to the front window in terms of what we are seeing ahead of us. So if you have more clarity on how the future of lignite is, this clearly affects our profitability levels going forward and this is something in line with the stable dividend policy and we would like to include in our considerations.

Something that you didn’t mention but could I check, is the nuclear tax case in Germany were to go in your favor, would that impact the dividend or not?

It would affect the adjusted income because the nuclear tax was paid out of the recurrent income as well but as we said, adjusted net income is just one factor affecting the dividend going forward.

The next question comes from Christian Schuetz, PIMCO.

Just two questions, one is a follow up to Deborah's question. Can you just confirm how much nuclear tax was paid in 2015 so far? And the second one, more on the forward looking basis, could you update us where you stand on your journey to get the structure in neutral cash generation particularly in 2015, your pre-working capital cash just barely cover CapEx. Thank you.

Yes, so on the nuclear fuel tax, for the first months and therefore also for the full year, it is around 300m. And on our efforts to - to take your question directly, Christian on making generation cash break even, we are - it is just a kind of moving target, yes. So we are increasing and redoubling our efforts in just as we see power prices and [indiscernible] spreads decline. So what has been an ambitious target for generation at the beginning of the year has already been overtaken by - at the end of targets for cash improvement and are being propped up is the general logic of how it works. They are fully aware that they can't afford to be cash loss producing as a business on a structural basis.

I was referring to the - on a group-wide basis you guided in the past but you are targeting a - is there anything offsetting the generation pressure still?

You mean you are referring to the cash balance or the household statistic as we call it?

Yes, the household statistic would be the--

I mean for 2015, I think we were already from - at the beginning of the year when we did our initial guidance, it was clear that the cash balance for 2015 would be significantly below 2014 and most likely would be negative because in 2014, we had lots of positive one offs such as for example, the CO2 effect that I mentioned such as the impact of the mild weather which boosted our cash flows in 2014 and artificially, beyond the kind of structural underlying profit which is now being caught up in 2015. And of course, we fully stick to our aspiration and ambition and going forward, our cash balance is supposed to be positive.

The next question comes from Andreas Thielen, MainFirst.

You mentioned that impairment testing on intangibles and goodwill has already been carried out and I just - wonder if could help us to understand if I look on these values for the units, Netherlands, Belgium and the UK, seeing that they are - ready to be similar level and looking at the profitability of these two units which is materially different, obviously in the current year but from what I understand, should remain so going forward. And just why is the book value in the UK still valid?

And so I mean, as I said, during my presentation, the regular goodwill has been done in Q3 and this has been based on the planning numbers as of the beginning of this year and we see with the uptick of the planning numbers and only those updates which we are currently producing in the 2015 planning process that the structure, the generation of the profitability of the UK business, this might be a trigger to retest the goodwill there. So there is a big advertising that is what I'm saying [indiscernible] in Q4 and for that segment also in the plan of what the UK turnaround will look like and there will be any lasting impact.

The next question comes from Bobby Chada, Morgan Stanley.

It's really a question about the way that you assess the generation portfolio. And so my understanding is that over the last few years, you have regularly, every quarter, I think, looked at the fleet to assess whether any plants were cash negative or expected to be significantly cash negative and you would then close them. We are not in a position where power prices in Germany have been below €30 for quite some time and on an unhedged basis, I think most people would estimate that the operating result from your generation fleet will be negative at that level. Do you think it is still right to look at this on a cash basis given the - from a stock price perspective, the earnings power of RWE is also pretty critical? And would it perhaps make sense to think of it on an earnings basis and shut more capacity to try and avoid some of the negatives that you are going to run into as the hedges roll off?

So I do understand the breadth of your question and - but I'm not sure I understand the economic logic of your question, Bobby. I mean what you are suggesting is that we might shut down power plants which are maybe still cash positive but have a negative earnings contribution. I do believe the - for our decision making, managerial decision making on our portfolio, it is the cash perspective is the right one and of course, when we are looking at the cash perspective, it is not just, you know, the current cash situation of the power plant but also the way forward that we expect and applying for the prices for the next calendar years and also our activations on how prices might develop if there are more shutdowns. So this feedback mechanism is built into our considerations.

So you are saying that you already think about the impact on the overall portfolio whenever you think of a closure decision?

Yes.

The next question comes from Richard Alderman, Macquarie.

Just one follow up question to the disposal question from earlier on. I appreciate you haven't yet presented the new three-year business plan to the supervisory board but in the discussions around that plan, are the many options that you mentioned earlier on disposals also looking at possible part disposal of stakes in the wireless business? And if so, could you just elaborate a bit more on what your discussions are around that whether it's a viable option?

Well, I won’t disclose anything on the content of our business plan and the discussion, the forthcoming discussions with the supervisory board, as everybody knows, of course, there are some assets in our portfolio which could attract relatively high valuations if we were to decide to somehow monetize them.

Okay. I won’t ask again if there is somebody queuing up. So operator? Is there somebody there?

No, there are no further questions.

Okay. And then thanks to all of you and yes, and speak to you soon.

Ladies and gentlemen, thank you for your attendance, this call has been concluded. You may now disconnect.