NRG Energy Earnings Call Nuggets: EBITDA Breakdown and Market Structure
Neil Mehta – Goldman Sachs: Do you have a breakdown of I think the number you said was negative $60 million of EBITDA of non-recurring items between STP, South Central and commercial optimization in the quarter and specifically can you explain in a bit more detail what happened with commercial optimization?
David Crane – President and CEO: Kirk why don’t you start.
Kirkland Andrews – EVP and CFO: Sure. In terms of the breakdown, approximately $28 million was from commercial optimization activities. The STP outage during the quarter resulted in about $25 million and the remainder of that was from the whole transport cost.
David Crane – President and CEO: Mauricio do you want to or Chris, do you want to or not want to give more…
Christopher S. Moser – Chairman, CEO, and President: Neil apologies, but we haven’t had a history and we don’t intend to now discuss any specific strategies or tools that we use on that side. So, I’m going to leave it there.
Neil Mehta – Goldman Sachs: Then my second question was around capital allocation. Are you more likely to grow organically or via acquisition in your view from here? Should we think of Gregory has the flavor of M&A from here one-off acquisitions are tactical and opportunistic or fleet of assets still in regards?
David Crane – President and CEO: Well, just because I like to answer questions literally and accurately. Your questions are shifted from the beginning to the end. I mean on the organic versus inorganic, one of the things that I always liked about this company is that we are constantly having our own opportunities to grow the business from within and those required capital, historically less capital, less assume than obviously acquisitions, but it’s nice to have an organic growth strategy and we have that both on our conventional side and on our renewable side. In terms of acquisitions, I don’t think that you can really sense a pattern from Gregory. I know from previous comments, we’ve always said that we feel that we have more of a competitive advantage in terms of acquisitions on bigger transactions rather than fewer in large part because they’re just fewer buyers on the bigger stuff and we can get sort of more cost synergies out of bigger things and certainly some of the financial buyers. So Gregory was, I can’t remember when was the last time we were successful in one asset acquisition, but we were pleased with the price we paid and we’re very pleased with the asset. On the generation side, where we are looking at across the single asset portfolio company size, the only thing that would cause Gregory to be more of the future than bigger deals is there is just fewer bigger things out there that maybe available to us and maybe appealing to us.
Brandon Blossman – Tudor: I’m going to try to rephrase this question and avoid commercially sensitive territory, but Mauricio on the extensive captured Q1. Was there a structural change in the market or is this just kind of normal quarter to quarter volatility in that capture ratio or rate?
Mauricio Gutierrez – EVP and COO: That’s a good observation. You can have quarter on quarter change of that not ultimately reflects the overall profitability of the positions that we take. I think that was – that is the case in a lot of the optimization strategies that we utilize to fully stock their value of the portfolio.
Brandon Blossman – Tudor: Then Mauricio just following on that ’14 gas hedges you did take some incremental down perhaps that would be a wish that you took even more down. Is there any embedded gas view and how much use of gas for ’14 on the gas side?
Mauricio Gutierrez – EVP and COO: Keep in mind that 2014, we actually layering significant amount of hedges, but if you can appreciate with gas prices moving up, so our economic generation, so the move from 59% last quarter to 66% is everything else would have being constant and it would have been higher. Keep in mind that we just had more generation I guess in the money. And it is consistent with our strategic hedging program and our fundamental view, when we saw the price increase in the first quarter, we felt that it was a good opportunity to locking additional hedges and as I said close dark spread that we initiated early in the year, where we saw an opportunity to buy incremental coal, and we did it. We believe that we are going to have additional opportunities to do that throughout the year.
Christopher S. Moser – Chairman, CEO, and President: Brandon, this is Chris Moser and just to add to that I would mentioned that if you are comparing how many – how much it take for us to move from 59% to 66% today versus this time last year it’s a much bigger, we have to sell a lot more to get there and I will not quite double, what we were before, so not to mention the fact that gas is moving up and doubles were moving up entire to move the portfolio 5% to 7% is also just a much bigger outright sale that has to happen, so, just to give you that perspective as well.
Brandon Blossman – Tudor: That is all useful and I do, yeah, that’s important to understand that total number there is increase year-over-year.
A Closer Look: NRG Energy Earnings Cheat Sheet>>