Stephan Lowis - Leiter Investor Relations Peter Terium - Chief Executive Officer Bernhard Gunther - Chief Financial Officer

Patrick Hummel - UBS Bobby Chada - Morgan Stanley Deepa Venkateswaran - Sanford Bernstein Deborah Wilkens - Goldman Sachs Peter Crampton - Macquarie Benjamin Leyre - Exane BNP Paribas Ian Mitchell - JP Morgan

Welcome to the RWE Conference Call. Peter Terium and Bernhard Gunther will inform you about the development in the first half of fiscal 2014. I will now hand over to Stephan Lowis.

Yes, thank you. And good afternoon to everyone who has joined us today, via telephone or webcast for our results presentation for the first half of 2014. I'm joined here by Peter Terium and Bernhard Gunther. Peter will first discuss related development, he will then present our recent efforts into generation business and share our thoughts no the trends in the retail market. Bernhard will then update you on our financial performance during the first half of the year. And I would like now -- I would hand over now to Peter.

Yes, thank you Stephan and good morning, sorry good afternoon from me as well. As always let me start with the key developments of the first six months of the year. Other data is now reported as a discontinued operation and is therefore not included in our key earnings figures anymore. Bernhard will talk about the financials in a minute. We still expect to close of the day transaction by year-end and have already we see clearance from the European commission. But before, we going to my view point I would like to point out that the financial performance in the first half of the year is inline with our expectations and we confirm our good outlook for 2014. Let me be a bit more explosive on what this means, it means for me that our operational performance and our improvement actions are well in control. I remind you that this guidance that we are now confirming was first time published in November of last year then confirmed in May of this year and reconfirmed right now. Despite that in the meantime we have had a very well winter and various other facts which accounting wise to care of in the first half of this year. Nevertheless all those effects we are confident I might even say more confident without changing our guidance on the numbers as we are despite effects as I mentioned them. There we are in our press work occasionally a bit more bearish has to do with the political landscape and the fact that we're still negotiating with labor contracts and therefore should not create any overly optimism which we will need for improvement in next years to come. We will have the numbers that is our feel and my specific point in that one. Now, let me get back to my report. At the end of June we expanded our supply activities in Central Eastern Europe to include Romania. We have been active in the country since 2011, but only in the region near the Hungarian border. We will now expand our activities to cover the entire Romanian electricity market and will focus on the industrial and commercial customers. This market entry supports our strategy of exploring growth opportunities with limited capital expenditure. In Germany the new renewable energy act took effect on 1st of August. Intention to strengthen the market integration of renewables is certainly a step in the right direction. The prolongation of the current subsidy scheme for offshore rent is also positive. In July, S&P confirmed our rating of BBB+. The decision is a reflection of our efforts to tackle our leverage and balance sheet situation. Now, before I move on to discuss our recent operational efforts, let me take a moment to review what we have achieved in the past 18 months to improve our leverage situation. First, our efficiency program which we announced in March last year is right on track and we are confident that we will deliver on our accelerated target of improving our operating results by at least EUR 1.5 billion by the end of 2016. We will update you on our current program in March next year, when we will also present our new wave of efficiency measures. Second, we reduced our capital expenditure considerably. Our future CapEx levels will mainly be driven by maintaining our power plant fleet and fulfilling regulatory requirements in our grid businesses. In addition, we will also allocate some funds to our renewables business. The ambition for the time being is however that new growth projects will be financed debt neutral, for instance by taking partners on-board or selling stakes in assets. Mid-term, we expect our annual CapEx to be in the order of EUR 2 billion. For 2014, it will still amount to about EUR 3.5 billion, little more a EUR 1 billion is dedicated to our grid business. Another important portion is being spent on a completion of our hardcore power plants in Germany and in Netherlands and our offshore wind farms Nordsee Ost and Gwynt y Môr. Third, our disposal program. In 2013, we completed disposals with a total volume of EUR 2.7 billion of which the sale of that for gas was the largest one. This year, the completion of our EUR 5.1 billion sale of RWE Dea will be the most important transaction. In addition, we are still working on disposal of Urenco which we do not expect to materialize before next year. Our fourth measure has been the implementation of our adjusted EBITDA policy with which we aim to better reflect our financial constraints. In this context, let me remind you of our target to become free cash flow positive post dividends in 2015. We remain confident of being able to deliver on this target as well. Once we have succeeded, we will be able to decide each year how to make use of the excess cash take into account our overall leverage situation. For issue of excess cash, we will have the choice of either investing in new growth projects or reducing our net financial debt or increasing our dividend. We will carefully consider the most attractive option when the time comes. And we exited the serious market deterioration; it took a number of measures in our generation portfolio. Slide six provides an update of our capacity measures. As you can see, we took decisions on some more power plants. The trigger points for deciding on capacity measures are events such as maintenance requirements which go hand in hand with investments or expiry dates of long-term contracts. We investigate thoroughly the economics of potential, maintenance investments and the extension of contracts and decide on a case-by-case basis but our market conditions allowed the operation to be continued comfortably. The latest analysis showed that required investments in three older coal plants would be uneconomical hence we decided the decommissioning of these coal plants. They have a combined capacity of 1,000 megawatt by 2017. And in addition further contracts with a total capacity of some 470 megawatt will expire by the end of this year. We will continue and we did it on an ongoing basis to review our portfolio and we’ll take further decisions if and when required and appropriate. We thought it might be helpful to look at the impact of the capacity measures on the development of our conventional power plant portfolio. It’s important to bear in mind that [multiple] power plants do not influence the actual size of our portfolio. The reason is that these plants are still connected to the grid. They can therefore be ramped again at a later point in time if economics become more favorable. Taking into account this iteration for closures due to regulatory requirements as well as capacity additions, our installed capacity will decrease to about 40 gigawatt by 2017. After a drop in 2014 due to the termination of almost 2.5 gigawatt of contracts, we will see an increase in capacity in 2015 due to the commissioning of our hard coal-fire power-stations in Hamm and in Eemshaven. These are our last two thermal power plant project in the pipeline from 2016 onwards, we will start to see net capacity reductions in our conventional generation portfolio. Our efforts to improve performance are not restricted to the generation business, we are also taking initiatives in our retail business to strengthen our competencies and enable best practice transfer. In this regard we set up RW Retail at the beginning of this year. It serves as a platform to functionally steer our retail activities across all our regional markets. RW Retail has the above responsibility for the group wide retail business, which includes setting targets for our regional retail businesses. RW Retail is setup as a virtual business unit but its board member fulfilling his new duties in addition to its existing run in a national retail organization. This allows for efficient communication and fast best practice transfer across the national organizations. The emphasis will be on growth and innovation with a strong focus on customer service, each board member is responsible for a field to which he must develop joint approaches which will be applied to our entire retail business. During the first six months, we launched pilots with some promising results, in retention management for example, we performed a churn trigger analysis to better understand the reasons for customer switching supplier. On the back of this analysis, we have developed individual measures for each country to improve our customer attention. These measures connect with the customers at crucial moments in the customer journey with RWE. Since it costs more to acquire the new customer than to the paying one, these initiatives provide the important cost saving potential. Another example is to move to digital customer platforms. In the Netherlands, we have been able to significantly increase number of customers who receive and review that builds online enabling us to reduce spending costs and increase much customer satisfaction. We are now working on the rollout in our other retail markets. Let me now spend some time on the trends in retail market, where we believe the energy market transition is really happening. Our retail business is of growing importance with the combined annual contribution of almost EUR 1 billion to the groups operating results. In today's market, we sell our power and gas products to about 23 million customers in Europe, it is a highly competitive business in most regions especially to commodity part of the business. However, we strongly believe energy retail markets will fundamentally change due to new customer requirements and more efficient technology. Customers will play a considerably more active part in the energy business in the future. They will be able to buy, to store and to save and to produce electricity and they will be able to manage it all by themselves. The growing amount of household customers in Germany already produce electricity with solar panels on their rooftops. However, most of the electricity is produced by household solar panels is fed into the grid year-to-date in the future customers will increasingly be able to decide whether to consume it themselves or to sell excess energy to third-party. In addition, more efficient devices and energy saving measures to just home automation will help them to reduce their energy consumption. Similar trends can be observed in the business sector, we have an increasing number of customers will produce and consume self-generated energy and will actively manage it. We consider the change in retail market as an opportunity for us, broader benefit to develop new innovative products and new business models to go with these trends will be key. Innovation is therefore a key priority on my agenda. We already escort some success in this respect with our cooperation with [NEXT] in UK and the RWE home power solar and storage products in Germany. And in Netherlands, we offered an energy trading platform for multi cultural customers enabling them to manage and optimize the energy costs and revenues themselves based on customer preferences and market opportunities. We believe that new technologies offer plenty more opportunities [we now have to] embrace them, we need to equip ourselves with the necessary tools and prepare ourselves to look at our business differently. We have already started this journey and will share more details with you next March. And now, I would like to hand over to Bernhard.

Yes. Thank you, Peter. And good afternoon from me as well. Due to the positive feedback we received for our streamline Q1 presentation, we have decided to stick to that format, hence I will only refer to the key facts and some topics which need some additional explanation. All the other details can be found in the Back Up section and our interim report that we published this morning. As Peter already mentioned, the key performance indicators for our operational business are in line with our expectations. And as you can see from slide 11, they show a mix trend. On the one hand, earnings have declined significantly, on the other hand cash flows from operating activities of continuing operations increased 79%. Before I explain these drivers, this is next slide let me point out a special effect in the development of our recurrent net income which relates to the treatment of Dea. The sale agreement with signed with the LetterOne group is a so called Locked Fox deal. This means that the acquirer of RWE Dea is entitled to its earnings from 1st of January 2014 on. As a consequence the recurrent net income of RWE Dea is still included in the Group's recurrent net income for 2013, but not for 2014. In 2014, we will include the interest payment on the purchase price in the recurrent net income as soon as the transaction is closed. Until closing nothing will be included in the recurrent net income, hence the earnings decline you see for the first six months is over stated. If you adjust the recurrent net income of Dea in the previous year, similar to the treatment of EBITDA and operating results, we have an earnings decline by 59% instead of 62%. Net debt is still in the order of magnitude we had at the end of last year. It will come down significantly, once we have closed the Dea transaction which we expect to happen later this year. Slide 12 shows the earning development in the individual divisions. All in all we see a decline of approximately €1.5 billion. By far the biggest effect is the absence of the one off payment from the Gazprom arbitration ruling last year. This accounts for approximately €1 billion. In our Central South Eastern division the operating results held by some €240 million. This is mainly due to the deconsolidation NET4GAS which contributed €151 million to earnings in H1, 2013. Furthermore the significant earnings decline in our supply Netherlands/Belgium division, is especially driven by the weather effect and a positive one off in the previous year. Nevertheless the general trend of declining earnings in our Conventional Power Generation division was mitigated in the second quarter of this year. Last year we had the addition to provision for our impending losses from an electricity purchase contract. This was not the case this year. For more details on the individual value drivers, I would like to refer you to the Back Up section and our interim report. Let’s have a closer look at our cash flow from operating activities on slide 13, which show a much different trend than our earnings. While EBITDA is down by about €1.6 billion, cash flows have increased by €0.9 billion. This discrepancy is mainly due to three reasons. Firstly our earnings and FFO in 2013 already reflected the approximately €1 billion one-off payment from the Gazprom arbitration ruling. This is not the case with our cash flows from operating activities, while the FFO include this effect in 2013 it is offset by the same amount in working capital as the cash payment only came in Q3 2013. Secondly, the repayment of nuclear fuel tax of approximately €0.5 billion. After the end of our fiscal quarter, decided in April now favor we were refunded the tax that we had paid for our Emsland nuclear power plant. This is only cash flow relevant as within our P&L. We have to build the provision from the nuclear fuel tax until we have the final Court decision on the legality of the tax. We received a decision for our Grundremmingen power plant in our favor for the Fiscal Court in Munich at the end of July so this is not yet reflected in our cash flow statement. Thirdly, cash flows improved due to high advance payments in the retail business as a result of price adjustments. Looking further and the difference between the development of FFO and change in working capital besides the effect from the Gazprom payment I just explained, we have a second significant effect from the switch to the new CO2 compliance period in our accounts. Typically, the certificates for the previous year have to be handed to the relevant emission authority in April of the following year, i.e. in 2013 we submitted the certificates for 2012 and in April this year, the certificates for 2013. With the change to the new regulatory regime in 2013 and thereby the full auctioning our certificates, the number of relevant certificates has increased substantially. In the cash flow statement, it is reflected negatively in FFO due to the use of provisions. Nevertheless, working capital improved by the same amount as CO2 inventories are also coming down. Slide 14 shows the development of our net debt, both numbers still includes RWE Dea. According to the IFRS rules for discontinued operations, the balance sheet is not adjusted retrospectively. Hence, the same applies to net debt. However, as of 30th of June, 2014 RWE Dea is stated in separate line under net debt from discontinued operations. This amounts to about EUR 1 billion. The rise of total net debt by EUR 0.8 billion is mainly due to an increase in provision, the most important driver was the adjustment of discount rates for pension provisions from 3.5% to 3.0% in Germany and from 4.3% to 4.1% in the UK. This brings me to our outlook. Slide 15 repeats the outlook for the Group which we provided in May; it is still valid. Slide 16 gives the divisional outlook. The trend of the individual divisions we gave in May can be confirmed with one exception. In our renewables division, we now expect earnings to be significantly below 2013. In May, we still expected the division to close this fiscal year modestly above 2013. Reasons for the low expectation are the impairment of our Markinch project and the low utilization of our German run-of-river power stations in the first six months. With this let me hand over to Stephen to start the Q&A part.

Yes, thank you Bernhard and thank you Peter. With this I would remind you as always to our question rule. And I would like to start the Q&A session, I guess with [Vincent]. Operator, please.

The first question comes from [Vincent Gilles], Credit Suisse. Your line is now open. Please go ahead.

Hi, guys. Thank you very much. Good afternoon, everyone. I’ll focus my two questions on power prices. The first question is Peter you just said that sometimes you have to put a different emphasis depending on who you talk to regarding future developments. Talking to this crowd analysts here, what can you tell us on power prices in the next two to three years? We obviously -- or looking at the forward curve, it may not be correct and some of your competitors have sounded slightly [chiller] in the last two months and in the past. So interesting to hear from you guys. And the second is following the announcement of further capacity cuts from you today, when do you think these capacity cuts will actually trigger something on the current market or should we continue to expect more and more capacity cuts until a long period of time before something happens?

Thank you. Let me start with the first point. It's not that we’re telling different stories to different audiences; it’s very clear that the emphasis is occasionally somewhat different. This has to do with the amount of information and level of detail that mostly the analysts have. They are very close and close to the issue as most of the public press. And as most of public is concerned and a lot of politicians, they haven't yet really understood how modest the situation is. So therefore you have to continue to explain that this company has gone through a real downturn. That is the action. And the emphasis, it is very much focused on the actual numbers whereas the discussion with the analysts is much more forward-looking. The actual that we see today all of you had already in your models a year or year and half ago. Public press and politicians do not have that. And even if we said a year and half ago which going to get disastrous for us, they didn't believe it until now but you disclosed the numbers and therefore you have to make your point. It's unfortunate that is then being seen as being barrage in total because that’s not what we are. The other issue is towards labor unions. We are negotiating the contracts for the next two years and how successful we are on that on the basis of how much we need it and all of you know how much we need t is something that also sets the tone in the communication into that direction. And all of that is on the basis that power prices are bottoming out as we're seeing that they are bottoming out. And it is for the first since second quarter, so the forward prices have not deteriorated any further. And I think that's one thing to be noticed. Our individual talks also indicate that there is to my view a kind of discrepancy in the power price at this moment in time. If you look at forward prices, its backwardation which is not very normal or logical on a longer term for commodity prices. The forward prices normally have a kind of contango in there as they do risk that you buy but getting security for the next year and the year thereafter needs to be priced. And that's not the case at this moment in time. And I expect it somewhere in future the market will lead to realize the risk which is still there in forward market, that's what I expect. The second aspect is we are seeing physically that the spot prices, when they occasionally turn out at a higher level us to forward price for the next day, which means the physicality is just not able to the follow the mood of the market is also for me an indication that there is risk in the system. When is that going to come? capacity cut certainly have an aspect on that, but the power price in the market do not only react to physicality, but also to the emotions which are there. If that picks up and you have seen already in the first half of this year at least on one day 4 hours continuously quarterly prices at above EUR 1,000 and occasionally above EUR 2,000 and that's the indication of the stretch in the market and as soon as the market picks it up, this could happen very quickly. Talking to my view about euros and not about tens of euros, I mean I need to also manage our expectations very clearly on that one, because there is still is a continuous high supply of solar and wind energy into the system.

And one addition Phil, you referred to what other players say of course we can't comment this, but as you know we have modified our hedging policy from the standard reference hedge pass in a direction which suggests that also we believe in some fundamental under valuation in power prices. The second question I think you had was on capacity cuts. If we expect an immediate effect on power prices, I mean most of the power plants of course that are taken us the system are the ones who has the fewest running hours. So the effect won't be that big, although you’ve now realized that at this time it was about half coal and lignite, so it was not power plants which were entirely off the system more or less except a few hours like it was with old gas one year ago for example. So, gradually we think it will be proved. It’s always difficult to get what people already priced in, and I would also say that probably you will see an effect on the aspect that Peter mentioned on the security of supply. So, the margin the reserve margin just becomes tighter and this is at least as important as the immediate effect on power prices if you see increasing number of our hours where we have CBS system tightness and then somebody probably will want to react.

Thank you very much.

Okay. Thank you. Then next question please.

The next question comes from Patrick Hummel, UBS. Please go ahead. Patrick Hummel - UBS: Yes, hello everybody. Thank you. My first question refers to the slides on the supply business, the reorganization and the change in the landscape that you described. I wonder do you see these changes which are quite structural in nature or do you see this as a net opportunity to your supply business in the sense that on the one hand you will probably be losing volumes in the traditional supply business on the other hand there might be opportunities for some more value add solutions for end customers? And if you see that as a net opportunity can you just have quantifying how big of an opportunity that could be let’s say over the five year time horizon? And the second question and I apologize for getting back to this trust discussion. I am just wondering now that you have more than 80% of your base load hedges for next year in the pocket, would you still subscribe to your previous statement that 2014 will be the trust or the new norm in earnings and it won’t get any worse in the coming years?

Yes Patrick, let me start with retail, surely and I’ve have been one of the architects of driving retails towards more European setup I think both on margin as well as on volume we can deliver value to the company by this setup. I think the retail market has not matured to an extent that you see it in other markets, be it fast moving consumer goods or any other competitive market and there is more value in that, that will be a tough battle because we always will have low price competitors we always will have other companies that move into the same sector, but I think we are moving first and we are moving with a attitude and an intention which haven’t seen in the market so far. So there is value into that I think there is also a defensive aspect to that, if we don’t occupy that space then we will see the nests of these world, the Googles of this world occupying that space for us. So in order by doing this we’re just preventing that all of happening the balance of that must be a positive impact but I hope you forgive me that I am not giving any five year guidance on the development of this kind of business. Patrick Hummel - UBS: Okay.

Hi Patrick this is Bernhard. To the trust question the infamous one we expect that that sooner or later it would come. So I think it’s a nice try from your side as you will remember we have always said that the trust statement was originally given then prevailing commodity prices so back then in November, and since then quite a lot has happened. It’s clear that the commodity side has not helped but there are also other things which had happened specially those which are under our own control that Peter mentioned but we are making very good progress on our operational improvement programs, and that this is not just hollow words you can see in our 2014 guidance which we kept constant despite for example the mild weather hitting our P&L and this was obviously compensated by positive operational development. We are currently putting together or start putting together now our mid-term plan in autumn this year and as announced earlier, we will update you on what this means for future years guidance in March 2015.

Okay. Thank you very much.

Thank you. And next question please.

The next question comes from (inaudible) BNP Paribas. Please go ahead.

Yes, thank and good afternoon. First question please on the German electricity consumption, I wonder what is your estimate of the real electricity consumption trend in Germany at the moment, they took slightly BW may under estimate the auto production. I wonder if you have an estimate which is a key that's for this impact. And the second question is on your 2014 guidance, where you expect when will you indicate to be even more confident and before to which it. I wondered it implies that we expect to be a very high end or the (inaudible) even or cost of both or said otherwise what would make you reach or either low end of your guidance for 2014? Thank you.

Let me start with last one as I have initiated have discussion. We are, as I said more confident that we will end-up within the bandwidth as we have. As you give the guidance is always some risks and I would think that some risks has been reduced, but is not an indication of where we land within the bandwidth, I do not think it is appropriate with still having 5 months ahead of us, 5.5 months ahead of us to be that accurate in that extend. But there is as I said the more months you have behind you to less months you have to go the variance of deviation becomes smaller and I think we've done a good job despite as Bernhard said the aspect which we have against us that makes me [comfortable] that for the rest of the year, we are going to be in line with our guidance for the total year. Then you’ve asked about electricity consumption development in Germany, that's not changing drastically overnight, but in our mid-term planning we are forecasting a slight decrease and that's a bound of various things. I think is industrial consumption mainly which is one aspect. It is some energy savings, on the other hand with seeded further electrification of society going on to barrels of oil that you would say is a slight decrease of energy consumption.

Thank you.

Okay. Thank you. The next question please? Hello? Operator?

The next question comes from [Alex Ronix], Deutsche Bank. Please go ahead.

Yes. Hi. Thanks for taking the question. First one is, you have cut your energy outlook back. For me (inaudible) will be some call it one off or anomalies for this year like hydro and the write down, but is there anything that you see that could affect your 2016 target of let’s say softly around 400 million to 450 million EBIT? And the second question is if we just look at your cash flow conversion not year on year but quarter-over-quarter so let’s say single-digit in Q1. It was 115% or 110% if you strip out the one off from the receipt of the nuclear fuel tax. Could you help me understand of where this pretty violent swings come from? Thank you very much.

Let me first answer please your question to the energy outlook. You're right. Operationally in terms of the assets that are already in operation. The business is running fine, we had this adverse weather effect in the first half, especially on German hydro that you mentioned and the one-offs. So all in all the operational development is in line with our expectation and this would also extended to the future or more precise statements about further years’ outlook would come with the March 2015 update. This regards to the cash flow conversion on a quarterly basis, this is an analysis which we have not offered so far and it's difficult to comment on the quarterly cash flow as you know cash flows from operating activities, they contain with the net working capital development, a one factor which is highly influenced by cut-off date effect. So, this creates tremendous volatility which is economically irrelevant but analytically pretty mind-bubbling at times. So, just an example cash flow of book revenue can be received a few weeks later and therefore you would have corresponding swings in the net working capital although over a longer period of time. There is no issue about cash conversion. So that's all we can say at this point in time.

We are not concerned in any way that something happening out yearly or annualized cash numbers which we would not understand or which is somewhat irritating.

If I might add one sentence to the energy outlook at just looks on first glance domestic if you form slightly a better go to significantly less good. But if you look at the absolute numbers, I mean in this year energy was not forecasting a very high number, so any one-off of a smaller double-digit amount immediately has a big impact on our wording on the outlook. But overall on the long-term for energy and on the [other grid] numbers, it is really insignificant.

No that is very clear, I just wanted to check. And thank you very much for pointing that out. Again, I just wanted to check whether it’s something like the cutback in the renewable space in Spain of lower hydro price or lower prices for hydro et cetera a bit of maybe a big projects Gwynt y Môr et cetera could have an effect on the future there. Thanks very much.

Okay. Thanks Alex. Then we move on to the next question please.

The next question comes from Bobby Chada, Morgan Stanley. Please go ahead. Bobby Chada - Morgan Stanley: Thank you. So, two questions please, the first on the weather impact. I mean you’ve talked a fair bit about the 2014 headwinds from weather. Can you quantify those, any bit of detail perhaps versus a normal year or year-on-year? And then secondly just to touch again on the renewables business. I mean I guess if I understand correctly, your point is that the headwinds in 2014 have been either one-off or weather related in nature. But it is the latest and the reasonably long line of impairments or disappointments in the renewables business. Can you walk through some of the improvements you’re trying to make in delivering projects if you are but I assume there is some focus given some big project still to come over the next two, three years?

Hi Bobby, this is Bernhard. So the weather impact year-on-year, we compare a cold 2013 to a warm 2014 is around EUR 300 million and it’s of course exaggerated in the sense that both of those years were not normal and in an adverse way for the 2014 numbers. If you would normalize it, the effect of 2014 against a more normal year would be in the order of magnitude of roughly EUR 150 million plus, minus. So and this is what we mean when we talk about the guidance for example, yes? So on renewables other examples for us, actually delivering it on our promises against our expectations. There is certainly no denying that we have been paying some tributes to us entering this field of business relatively fast. And but I think we have gone through a steep learning curve. If you look at the most recent projects like Nordsee Ost and Gwynt y Môr operationally in terms of the project engineering, they are now all on track and Peter mentioned this morning that for example in Gwynt y Môr, we now have all the turbines installed. The delays we have for example in Nordsee Ost are the ones due to the problematic situation on German quick regulation and transformer substations not being delivered by OEMs. And we are still claiming compensation against it. So we clearly see a pretty broad silver lining on the clouds of our renewables business.

If I may add to that Bobby, what gives you the reassurance that it is getting any better because of our track record. Most of the things that we have to impair with things where we did it first time, either a first time we went into that kind of business or the first time we went in that kind of country, or the first time we went into that kind of technical challenge. What we are doing right now is working off that pipeline. I think that's more or less through. And looking forward, we are doing more evolutionary developments, more of the same and expanding that. So there is much less risks, technical risk et cetera to that. Some of those things have not only because by us but have been caused by suppliers. Naturally, we'll see whether we can get our position recovered from them, that's not accounted for. We count and we won’t calculate or disclose at this moment in time but we're getting from a risk position into something that maybe has some upside for the future. Bobby Chada - Morgan Stanley: Great. Thank you.

Okay, thank you. Then next question please.

The next question comes from Deepa Venkateswaran, Sanford Bernstein. Please go ahead. Deepa Venkateswaran - Sanford Bernstein: Thank you. I had two questions, the first one is on the capacity market discussions in Germany. So first, I wanted to understand whether you thought that the energy only market two point or that is talked about, how practical is that and what other practical limitations you see getting to this perfect energy only market? And secondly, on the -- related to the same point. If you could just talk about your preferred solution which is the decentralized capacity market, how you think that would not end up distorting the energy market? And my second question is on your CapEx of 3.5 this year. If you could just help understand, how much of that is day-to-day, I mean you’ve mentioned that 1 billion is grid CapEx. Is the rest all your growth projects or if you can just give a further breakdown into how much of this is sort of day-to-day maintenance maybe, non-grid also? Thank you.

Yes, let me start with the first one. I try to keep that in an answer which doesn't run out of the rest of the session because that's -- a lot of discussions going on. We are clearly in fair of a decentralized capacity market, as we think that the energy only market is not giving the right guidance, the right stability in time and it will lead to a volatility in pricing and price peaks which will be politically and socially at the end of day not acceptable. Therefore, the decentralized capacity market will give that stability that can be done in a market setup as it said, it's a de-central capacity market. But we need to be very clear on the rules for that. They need to be technology neutral, they need to be market driven, they need to be non-discriminatory and there is a very good proposal for that which is done by the energy association BDEW which we very much support. And I think even on their website, I’m not sure whether it’s available in English, otherwise we can supply that to you. There is a lot of detailed material, how that setup could work. Now, last line to that. The Ministry of Economic Affairs and Energy has ordered quite a few studies and came up with the conclusions out of the studies. Unfortunately, the press picked only out that the energy only market could do the job or would be better. If you look at in a bit more detail, it says, it can do it but under a few quite risky assumptions and it also says the decentralized capacity market is a very good second choice. If you then look at the difference in cost of a decentralized capacity market versus energy only market, they were talking about EUR 100 million a year that is EUR 1 per household in Germany per year which is a very low price to get energy superiority for because the energy only market will as Dave said, lead to increased distortions and increased number of failures in the network. But that is socially and politically acceptable, I have my doubts as well. That is why we have come to the very clear preference of over a decentralized capacity market. There is a third reason for that which is we are not alone in the world, here in Germany. If you look around us, France has already decided to introduce capacity markets, Belgium is doing their first auctions and we therefore have to adapt to the markets around us otherwise, we'll get distortions within the European Electricity system.

Yes, hello. Your second question refer to the composition of our CapEx of the EUR 3.5 billion you would expect for this year. You could say that roughly EUR 2 billion out of it is day to day CapEx in the broader sense, because all the grid CapEx we do is defined by us as day to day and this even includes grid CapEx which increases the regulated asset base and therefore is accretive to future profits. The rest is the big projects in conventional and renewable power generation.

Okay, Deepa? Deepa Venkateswaran - Sanford Bernstein: Yes.

Okay. Thanks. Then next question please?

The next question comes from Deborah Wilkens Goldman Sachs. Please go ahead. Deborah Wilkens - Goldman Sachs: Yes. Thank you. Just two questions, did you reduce your power price hedge further in the second quarter, and then also when we look at your divisional results, the other division seems to have increased in terms of expenses, which is a little bit contrary based on your all your cost and your efforts. Can you help us understand the churn there and also the outlook for the rest of the year and beyond?

Yes. Let me start with your question around the decelerating of our hedging. You are right. We have reduced it even further or we have increased the deceleration even further and therefore reduced the hedging for those reasons that I mentioned earlier. And with regards to the (inaudible) division which is not a division but the line item others, this is mainly driven by internal consolidation effects so it’s not a structural development and it includes a few one-off and group level as well. Deborah Wilkens - Goldman Sachs: And then are you able to comment on the outlook for the full year for that and also on the decelerating of those hedging.

Yes. On a normalized level for the full year you would -- could estimate that it’s twice the half year value. Deborah Wilkens - Goldman Sachs: And on the hedging, are you able to comment if it spreads are outright?

Well you can see from the charts we have provided already earlier that it’s on both aspects, although to varying degrees and the main thrust of the deceleration is on spread hedging. Deborah Wilkens - Goldman Sachs: Thank you.

Okay, thank you. Then next question please.

The next question comes from Peter Crampton, Macquarie. Please go ahead. Peter Crampton - Macquarie: Hello, this is Peter Crampton from Macquarie. I have two questions. First, if you could give us any more color on Germany’s probe into your data transaction when we can expect a decision there? And then the second question on nuclear court case whether there have been any new developments there?

First on the data approval I have to ask for understanding that we are not commenting all procedures that we’re running with the German government and give you some general headline to that. The all information that was asked for and required has been submitted. So we think we have really filed a case, there is normally a two months period that they have as a minimum period to take account of that and I am pretty sure that they will thoroughly review that which is pretty diligent to do, but then they will come at a very just and smart answer on that one. We having analyzed it are still confident I mean both the bias behind that one group are published that is mentioning the persons to be sanctioned and the activities that we have of there are not sanctionable Peter, I mean the sanction is maybe clearly talk about technical equipment for oil exploration and production to be exported to Russia or we are just selling shares we do not have E&P activities in Russia and that they are not selling any equipment into that direction. That makes me I would cautiously confident but as it’s called over until the fat lady sings and we are still waiting for her to sing her song. On nuclear court cases, there is one thing which is the claim for damage repair on the moratorium in Biblis that is ending we are doing the valuation on that one and I think somewhere next week we will have that work done and probably via the court circuit there will be some publicity or some openers around that. For the time being there is nothing further to say on that one and as far as I know also no further development on any of the other court cases. Peter Crampton - Macquarie: Okay, perfect. Thank you.

Okay, thank you. Then the next question please?

The next question comes from Peter [Fiscina], Bank of America Merrill Lynch. Please go ahead.

Hi there, just a couple of follow-up questions one on Dea I am just wondering whether the display result needs to clear any other hurdles than simply German government approval and also is there any risks that in position of sanctions could derail the deal. And then just a small broad question on developments in the retail business. Do you see any risks that customers in Germany or your other markets could disconnect from the distribution grades all together in the future and what sort of implication that might have to your all business?

Again -- I can only repeat what I've said before. As far as we can see right now the sanctions have no impact and actually cannot speculate but sanctions might come up in three or six months or there are any changes or additions or whatever is related to that therefore. I'm happy to confirm that we expect to close the deal before the end of the year and further we proceed in time less of remaining (inaudible) end of the year so the risk is going to be reduced on that sense. On the other hurdles and the approval is necessary yes, there are a few, they are on a country level, occasionally they are hard of technical other are connected to the German approval that's why that one so important and we hope to get that in due time to come. On retail, I have only limited nervousness as far as disconnecting customers from the grid. The two reasons for that, if you look at the moment at Photovoltaic, the utilization of the Photovoltaic is something like 40%. Even if you put a battery in your cell, you can maybe increase to 50% or 60%, it still means that is a significant portion of time of electricity consumption which you cannot cover from your own Photovoltaic grid. Therefore customers completely disconnecting I think that would not be very logical for the time being and looking forward. Secondly, I think if that would happen in the ground scale then the regulator and the (inaudible) fee structure will properly react to that. Because I think it's not socially acceptable that the people who can afford a Photovoltaic panel will disconnect from the obligation to pay for keeping the whole infrastructure system in place and to leave that to the socially and frankly less well equipped people. So, therefore I would think that then you get something like maybe what we have in broadband that kind of a fixed connection or something like that. That speculation is nothing at all at this moment in time but all of that makes me feel not as nervous as you would might have indicated.

Okay. Thank you. So just on quick follow up on the Dea thing. Are any of the country approvals that you need from North African and Middle Eastern countries?

Very sorry but we do not comment on details of the commercial transaction to that aspect so I have to leave you into dark on that one.

Okay. Thank you.

Okay. Then the next question please?

The next question comes from (inaudible), Raymond James. Please go ahead.

Hello. Thank you for taking my questions. I have two questions. First, I want to know if the capacity (inaudible) an end today we will involve additional cost savings to your ongoing plan and you shift to what extent? And second question, I wanted to know the positive cash impact that you expect from the positive decision of (inaudible). Thank you.

Yes, hello. So, on cost savings, what we’ve said, we are currently well underway in terms of delivering the programs we have already announced. And as we said before that all further efficiency enhancement and profit improvement measures will be taken into account when we now compile our mid-term plan in the fall this year and it will be part of our March 2015 communication for the future outlook on our numbers. The second question with regards to the cash impact of the combined Munich and Hamburg cases it's at the two of them up what’s either in 14. So, also the months still to come it amounts to some EUR1.3 billion.

Okay. Thank you very much.

Okay. Thank you. And then next question please?

Your next question comes from Benjamin Leyre, Exane BNP Paribas. Please go ahead. Benjamin Leyre - Exane BNP Paribas: Yes, thank you. Just a couple of thought. First on Urenco, I wonder if you could update us on the dispotential disposal it has been any progress made over the last few months as from the outside it does not appear like a very high priority for the government involved? And the second point of the nuclear tax gain, following the Munich Court decision, I wonder when exactly you expect to cash in the EUR532 million that you mentioned in the report? Thank you.

Let me start with Urenco and the progress we're making there. It's difficult for me to disclose out of individual meetings and talks and conversations we've had with the various governments. I mean we've always said, we're not going to close that before the the end of next year or in next year. The reason for that is we’re talking with at least three governments that are directly involved, there is some further involvement of the EU Commission to French Government and the U.S. Government, but that’s only second tier, but the first layer of government that have an say in this UK, Dutch and the German government we are making constructive progress. But the way that we have now set up for coming to a closing includes various hurdles, including legislative hurdles. And therefore it takes some time to get off and execute it but the people involved have set up the right steps and I think we’re now just walking that part to the next months until into further into next year. That’s where we are and that’s why even with increased knowledge about where we are we are confirming the fact that we think we will close that before the end of next year.

Yes. To your second question on when do we expect to cash in, the cash from the Munich Court ruling we received at the end of July. It’s always difficult to forecast a precise date but we clearly expect it to have it this year most likely in Q3 and our experience from the Hamburg Court case was that the cash arrived relatively quickly after the Court decision. Benjamin Leyre - Exane BNP Paribas: Thank you.

Okay, thank you. Then next question please.

The next question comes from Ian Mitchell JP Morgan. Please go ahead. Ian Mitchell - JP Morgan: Hi guys. Just a quick question going back to Peter’s original comments which said growth CapEx debt reduction higher dividends could all be possible when RWE becomes free cash flow positive, just to look at those clearly you’ve cut CapEx quite significantly on the growth side. I mean would something need to change in terms of power prices and spreads in order to consider higher growth CapEx on that front or is there other areas you can spend on? In terms of debt reduction, clearly post Dea, assuming that all goes through as planned, your financial debt is then very low. Does that make much difference in the rating agencies if this financial debt goes even lower? And then finally on dividends, would you consider buybacks as well as high dividends and is it possible to raise payouts or buybacks at the same time as higher, I am sorry a difficult cost savings which could be announced in March of next year?

Yes. So let me start with my comment on being free cash flow positive. Any of you who’ve met in person will know that I am pretty ambitious to come up with projects on which I can convince but it is best to put the trust and the money in my or our hands to make more value for you than you can do with having a dividend and putting it somewhere else. But that’s up to me is a challenge and I have lot of fantasy in that area, I have lot of concrete ideas but I don’t have concrete projects at this moment in time. Part of that will be dependent on power price development surely, but not only. I think there is outside of the generation area, a lot of things going on. And specifically the area around the customers and the residential homes is one where I see a lot of things looming at the moment and there is lot of potential there. The downside on that is that is all relative low margin business, the upside of it is that is all business which is not very capital intensive. And in that respect, I think it’s something that we really have to keep on the radar screen because that can strengthen our position in the downstream area and even further expanded.

Yes. So, I’ll take the second and third aspect of your question, the one on debt reduction as a possible usage for cash surpluses. You are certainly right, if you extrapolate into the future, you will see that the cash surpluses would lead us to position where we have almost nil net financial debt. And thereafter of course it's a good question, if piling up cash against non-financial debt makes much sense from an economic perspective. So that’s something we will clearly take into consideration, but it's just -- it's a point where we still have to get. With regards to dividends, you mentioned also some other instruments on how to return money to shareholders. We would of course have a close look which instrument in a specific case would be most appropriate, but for example, the share buybacks you mentioned, I think is something which makes sense in very specific circumstances which I do not foresee at this point in time.

Ion, is that okay? Ian Mitchell - JP Morgan: Yes, thank you. Just the final point about whether is it politically possible to increase shareholder returns at the same time as additional cost measures?

Yes. It’s certainly politically possible, yes. There might be some people who do not like it. But clearly, it is something which is possible, because we have also cut the dividend as you know with our announcements in September last year.

Don't forget that we have a large base of local communal shareholders for whom the dividend is a very important household component. And those communal shareholders are backed up by at least the regional government or the country government and have very good connections to the federal government as well. So I think this sufficiently supports to understand that a dividend policy is important. Ian Mitchell - JP Morgan: Okay. Thank you very much.

Okay. Thank you. Then next question if there are any?

There are currently no further questions.

Okay, thank you. Then yes, thanks for dialing in and listening to our call. And we hope to see all of you in the next couple of weeks in various places across the world. Thanks. Bye, bye.

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