Welcome to the Dynegy 2010 annual and first quarter financial results teleconference. (Operator Instructions) I would now like to turn the conference over to Ms. Norelle Lundy, Vice President of Investor and Public Relations. Ma'am, you may begin.

Good morning, everyone and welcome to Dynegy's investor conference call and webcast covering the company's first quarter 2010 results. As is our customary practice before we begin this morning, I would like to remind you that our call will include statements reflecting assumptions, expectations, projections, intentions or beliefs about future events particularly with respect to 2010 financial estimates and views of long-term market dynamics. These and other statements not relating strictly to historical or current facts are intended as forward-looking statements. Actual results though may vary materially from those expressed or implied in any forward-looking statement. For a description of the factors that may cause such a variance I would direct you to the forward-looking statements legend contained in today's news release and in our SEC filings which are available free of charge through our website at Dynegy.com. With that I will now turn it over to our Chairman, President and CEO, Bruce Williamson.

Good morning and thank you for joining us. With me this morning is Holli Nichols, our Chief Financial Officer, along with several other members of the management team. Let's now turn to the agenda for the call which is highlighted on slide three for those of you who are following along online via the Webcast. I will begin today with our first quarter highlights. Holli will then provide first quarter financial results, discuss regional performance drivers for the quarter and given an update on commercial strategies. She will also discuss 2010 guidance which we are reaffirming today. I will then wrap up by providing some market observations, discussing our strategic outlook and then we will go to Q&A. Please turn to slide 4. During the first quarter we saw the continuation of low power prices and this market factor weighed on our results. While economic and market factors may be beyond our control we continue to demonstrate our commitment to operating and commercializing well during the quarter. Our natural gas and coal fired power plants maintained strong reliability levels during the quarter with our base load fleet delivering end-market availability of 93%. Volumes for the fleet were down 16% period over period from 11 million megawatt hours for the first quarter of 2009 to 9.3 million megawatt hours for the first quarter of 2010. While Holli will describe our business segment results in more detail I would like to point out that coal volumes increased period over period primarily due to fewer outages while combined cycle volumes were down primarily as a result of compressed spark spreads. As we have covered previously our commercial strategy remains significantly open in 2012 and beyond to capture potential upside associated with an improving U.S. economy and energy market conditions. Turning to our performance…

Thanks Bruce. Before starting I would like to point out that these materials do contain non-GAAP measures that are reconciled in the Appendix of this presentation for your reference. Now let’s turn to slide 6 for a look at our first quarter highlights. Adjusted EBITDA decreased by 24% from $199 million in the first quarter of 2009 to $152 million in the first quarter of 2010. As Bruce noted this was primarily due to lower energy margins driven by lower realized prices. On a GAAP basis we reported net income of $145 million for the first quarter of 2010 which includes after-tax mark-to-market gains of $152 million. This compares to a net loss of $335 million for 2009 which includes after-tax impairment charges of $436 million partially offset by $105 million of after-tax mark-to-market gains. Moving on to capital and liquidity, as of March 31, 2010 Dynegy had net debt and other obligations of $3.8 billion and collateral postings of $524 million. At the end of the quarter liquidity was approximately $2.3 billion with just over $800 million of cash on hand and marketable securities. This includes a working capital cash inflow of about $320 million received during the first quarter of 2010. This increase in cash on hand reflects cash inflows from the company’s collateral clearing agent primarily due to changes in value of financial positions which were significantly impacted by lower power prices. However, as prices and contracted positions change you could see a reversal of this trend. Please turn to slide 7 for a discussion of our performance drivers for the quarter by region. Starting with the Midwest, adjusted EBITDA decreased to 24% period over period. Energy margins from the coal-fired facilities was primarily impacted by reduced contributions from hedging activities. Energy margins from combined cycle facilities…

Thanks Holli. Please turn to slide 11. We will begin this slide by taking a near-term look at the industry. Next we will demonstrate how industry dynamics are expected to change and lastly consider the longer-term effects of change in the electricity sector. Let’s start with where we are now. The electricity sector is currently at or near the bottom of its business cycle. Today we are faced with a combination of low power prices, compressed spark spreads, low capacity prices and higher reserve margins. In addition, the sector was negatively influenced by reduced commercial and industrial demand as manufacturers drew down inventory and in many cases laid off workers and reduced factories. These external factors have forced many electricity sector participants to hunker down and focus on cost controls and having ample liquidity to weather conditions and bridge to a more normal market environment. Now consider how the dynamics are expected to change. While we don’t know for sure it is a logical bet to assume that more stringent environmental rules will result in higher costs for the power generation industry. Older, dirtier coal plants would likely be required to make investments in bag houses, scrubbers and other technologies. However, it is unlikely that all will. Projects that fail to achieve the required rates of return that most investors seek will result in some of these plants being removed from service. Our consent decree program should put our fleet of coal plants well ahead of others that have not already acted to clean up their plants. When older dirtier plants are shut down we would then expect to see more run time from our cleaned up, efficient plants as well as our portfolio of combined cycle gas plants which is the second largest portfolio of CCGTs amongst the IBPs.…

(Operator Instructions) The first question comes from the line of Lasan Johong – RBC Capital Markets.

If you believe what you just said, and I agree with you, that forward-looking prospects are better, given the current M&A scenario with Calpine and POM and Reliance [Mirin] and Allegheny and First Energy, it sounds like you are the last man standing so to speak. Do you have any thoughts, plans or expectations…do you have opportunities to make acquisitions? Do you want to make acquisitions? Can you give us an overall view?

I think what we are finally starting to see here is some thawing in the M&A environment. It started with Allegheny/First Energy and as we have talked on calls and on investor conferences M&A has always made sense. What we have seen over the last two years with the market being down is the amount of tightness or how closed the financial markets have been was probably the biggest limiting factor to M&A. We are starting to see that open up. We think we are well positioned to participate on that. We focus on the fact that a low cost, cleaned up coal portfolio is markedly different than a coal portfolio that is exposed to Appalachian coal and is not cleaned up and also that our gas fleet is well positioned being the second largest fleet of CCGTs. So I think for our investors I think we are well positioned. We will see what the future holds in terms of M&A.

What option is Dynegy selling and what are the risks and rewards for those options?

We do different types of option activity. I will ask Chuck to expand on that a little bit. What we attempt to do from a high level is protect ourselves from downside risk and you can do that in several ways. While there is certainly going to be some uncertainty around a strategy like that you are certainly mitigating risk and at the same time trying to leave yourselves some of the upside associated with the market movement going forward and it will include the buying and selling, obviously using puts and calls as a strategy and we have probably a little bit different strategy from region to region given that the assets we operate and how they are positioned in the market. I would let Chuck…is there anything else you would…

I think that is a great overview. When we think about hedging our power production we do that not only with swaps but also with options. We purchase puts and sell calls on the power side. When we sell our power we also buy our fuel, or arrange for volumes of our fuel. We do that and we use options as well. We do that in the gas world when we are thinking about our requirements for us on a forward basis to produce with respect to gas-fired power plants and it is a good thing.

So this is typical hedging activity? I thought it was something more exotic like selling an option on a power plant or something like that.

It is really more, as Holli and Chuck have covered, it is really more rather than selling it fixed at an individual price it is more setting a collar around things so that we have some protection to the downside. But then we also have participation in the upside by selling the call on the other side.

Just because you are 100% hedge this year doesn’t mean that you can’t realize volume upside if C&I activity accelerates or there is a particular plant that goes down, obviously not yours but somebody else’s, etc., etc. Correct?

That is exactly right. If spark spreads improve because of the guidance we have out there and the volumes the team has contracted is only what the forward markets would tell us would be in the money, that can change, to your point, depending on weather, depending on demand and the impact that has on spreads.

The next question comes from the line of Brian Russo – Ladenburg Thalmann.

Could you quantify the option impact in the first quarter?

Sure. It is easier to think about it on a region basis. In the Midwest and Northeast not a tremendous amount of activity. Less than $10 million in either of those. Probably closer to $5 million in each of those regions. In the West we were more active in the first quarter but still less than $20 million of net premiums.

In terms of your full-year guidance, should we expect additional option sales for the remainder of the year?

We will continue to be active but I think all of it is baked into the guidance range we have out there right now.

Could you run through some of the sensitivities again? Obviously gas is down but it looks like the basis differential has narrowed quite a bit from where it was a year ago which should be a benefit. Just maybe comment on the volumes you expect.

We can start with basis. That is a good point. When you have these lower commodity prices the basis impact will be less on us. So we have something probably less than $3 I think in basis built into our forecast we have out there and guidance right now. We will verify that because I am getting a couple of eyebrow raises here in the room but I think that is where we are at right now. That may have been the first quarter number I am thinking of. So that number may be a little higher for the balance of the year, maybe closer to $5. When we think about the other factors that can impact our guidance that is going to be some things that are out of our control like outages. We certainly have all of the planned outages built into that but if we have unplanned outages we have taken that into account in our guidance range. Certainly the heat rates and as we just talked about we are really looking more at how we see the balance of the year playing out and with volatility levels being fairly low there is not a lot of value embedded in the future forecast for those assets to become more in the money. Then one of the other major factors is going to be capacity prices and the impact that can have on any sort of capacity volumes we haven’t sold forward yet primarily in the Midwest but again that is not a significant sensitivity in and of itself. It is the combination of all of these things that leads to the guidance range.

So given the first quarter results, are you still comfortable with the midpoint of your range or what do you see for the remainder of the year that might drive you to the higher or the lower end?

This will sound like an obvious answer and I don’t mean to over-simplify it but if basis comes in significantly and we see a lot more volatility in commodity prices that allow us to capture more value in our trades. I don’t think capacity is having a big impact one way or another so I still think clearly there is still some upside in weather and things like that. Again on the downside what takes you to the bottom of that range is having more outages than we would plan for, continued low volatility in commodity prices, weakness in capacity markets, basis actually expanding. So it is those sorts of things and depending on the degree of each of those you could certainly land anywhere within that guidance range.

The next question comes from the line of Julien Dumoulin-Smith – UBS.

A clarification on the options front. Could you perhaps provide a little bit more granularity on which years you were looking at putting in those options? Specifically if I look at your hedge chart here you have increased your hedges for 2011 by about 10%. Is that kind of the right way to think about that?

When we enter into options activity and again it is swaps options and all of those things is focused on 2010 and 2011. As we progress through this year we will certainly do more activity in 2012 as well but that is the timeframe we are working within.

Could you provide perhaps a little more granularity around the strike price on the upside there for the options?

No because it is such a big portfolio that is difficult to get into and you have different locations and all of that. Without getting into opening up the whole trading book it is difficult to do that. You have too many locations in too many different regions and things like that.

On the Kendall toll, would you mind explaining who approached who or what happened with the early termination and any kind of context there might have been around that?

I think it is just at this point a confidential transaction between the two parties so I don’t think we can really get into the details.

On Plum Point, any develop as far as the negotiations? I noticed back in the K some talk about having a March deadline. Any developments on that?

Not at this time. What it really comes down to is operationally the plant continues to move along towards its expected COD date in roughly August. In terms of restructuring the debt and all of that it continues to be worked with the bank group on a separate path. Things continue to be funded and continue to move along in terms of the construction.

The next question comes from the line of Angie Storozynski – Macquarie.

First on the guidance you reaffirmed your guidance but any more comments on regional splits given the West being strong and the Midwest seems like it is probably slightly below your expectations or at least below mine. Any comments?

I would say everything on a regional basis is within the original range we would have expected. Some of the things that were maybe, when you think about the West being strong part of that is because when you think about Arlington and Griffith plants we sold in the fourth quarter we had that anticipated and those are not strong plants. In the first quarter we weren’t expecting much in the way when you think about the implications of those plants falling off. I would say in general we look at things on a regional basis and there is weakness across the fleet but I wouldn’t say there is anything that is turning out or playing out dramatically different than how we would have expected. So the regional breakdowns were still within the ranges of what we think is reasonable.

The selling of options is this something you anticipated when issuing guidance for 2010? I am curious on your slide the way you describe selling options it seems like you treat it separately from your hedging disclosure? Just purely looking at bullets. How should we think about it? Is it just another method to hedge your output or just realize the earnings from your power plants?

That’s the right way.

It is really, as we discussed on one of the earlier questions, it is really just an alternative to selling it at a fixed price. It is more putting in place a collar structure and purchasing protection for the downside and selling away some of the upside but still having a collar in place to participate.

We anticipate, when you think about gas assets in particular and how different relationships between commodity prices will change over time, these are at-the-money assets and so there is additional value so when you think about intrinsic and extrinsic value we anticipate being able to capture that extrinsic value associated with our fleet when we do our guidance. So this is all the activity we would have anticipated transacting on. Now, volatility has been less than we certainly saw in 2009. So the opportunities to capture that in 2010 have deteriorated. But it is clearly something we plan on. Not only does it help provide some predictability to our earnings it is also value that we feel responsible for capturing.

Any comments about the future of your California plans with regards to the [ones you are calling] rolling in [the state] and CapEx discussions as far as you have already discussed this issue?

No. Not at this time. We haven’t discussed it on this call and right now the rules and timing for that are so far out there is really no anticipated capital anywhere on the screen. Lynn, Moss is down for something around 2016 or 2017?

The rules have cleared another administrative hurdle last week and we are looking through those rules. So it is a little bit too early to add any real conclusions at this point.

The next question comes from the line of Brian [Inaudible] – Unidentified Company. Brian [Inaudible]: Sticking on the environmental front, with the EPA proposals out on fly ash, I am curious on your thoughts on the two proposals and any initial take on the amount you need to spend in order to convert some of your fly ash [components]?

First off that is another one that is a ways out. You are referring to the Sub part C versus B?

The EPA just put out a proposed rule last week. The proposed rule was over 500 pages long. It outlines two different alternatives as to how you might deal with regulation around these materials. In doing that, the EPA posed a number of questions. It is going to be awhile before we get to anything that looks like a final rule. We have been active in discussions to date and we would expect to continue to be active as those discussions go on over the next year or so. Whatever rule becomes final there will be some implementation period, some phase-in of that, of what the EPA is suggesting now is around five years. We will see where all of that ends up. At this point we have just gotten a lot of information and we are trying to go through that. Given there is not really anything definitive there and there is several different directions the rules might go while perhaps we have narrowed the field to get rid of some of the rank speculation there is still a pretty wide degree of variability in those rules. We are just going to have to watch this as the things unfold over the next few years.

The only thing I would add is during that time we are going to have gas handling facilities that are going to reach their full capacity during that time period. They are going to have been closed and then you would be implementing anything around a new facility.

We will certainly be mindful of the rules as they unfold.

At this point I would tell you I don’t think it is as severe as some people have put out. Brian [Inaudible]: It seems like under either scenario the wet fly ash [inaudible] would either have to be retrofitted or shut down and new lined ones opened up? Just from your experience with these [inaudible] do you get a sense of what it would cost to open a new [inaudible] or anything along those lines?

A couple of comments there. First of all we don’t really know which direction the EPA is going to go as far as hazardous or non-hazardous. They have two different variations under the non-hazardous option. We already employ what we think are good practices with respect to handling all of those materials. They may end up with a set of rules that are in line with what we already do and we wouldn’t expect any material to our CapEx projections around them. As Bruce said, these are investments we make on a periodic basis as we need to and those reflect the best information we had at that time. At this point as I said there is still a pretty big range of where we might end up and it is a little bit early to try to pinpoint things too much. Brian [Inaudible]: Did the deconsolidation of Plum Point have any impact on your financial covenants?

No it does not. Brian [Inaudible]: On the termination of the Kendall toll, how much was the payment received associated with that termination in the quarter?

Around $20 million.

I am showing no further questions.

I know we have one other power company with their conference going now. So for those of you who dialed in here we appreciate your interest in Dynegy. Our annual meeting is coming up in a couple of weeks. We look forward to seeing many of you then. Thank you.

Thank you. This does conclude today’s conference. Thank you for participating. You may disconnect at this time.