Supply Side Outlook
Dan Eggers – Credit Suisse Securities: Just on the Supply side of the business, can we maybe talk kind of beyond 2014? I know on the last call you guys suggested that ’14 will represent the trough, but can you may be shed light on where hedging is right now for ’15 and beyond and maybe kind of what pricing trends you are seeing in those numbers to give confident and a better outlook there?
William H. Spence – Chairman, President and CEO: Sure. I’ll make a couple of comments, then I’ll turn it over to Dave DeCampli who is President of our Supply business. Clearly, 2014 prices (and) ’15 have improved over the last few months along with heat rates, but I think overall our view of the four power fundamentals remains pretty much as it has been which was we continue to see upside of $3 to $5 per megawatt hour in the ’15-’16 timeframe mostly driven by MATS compliance costs as well as retirements that are expected to begin in that type of timeframe. I think overall, we continue to see the strength that’s shown itself a little bit here in the quarter, but I don’t think quarterly movements are all that indicative per se, I think we still rely predominantly on our fundamental views. With that being said, Dave, do you want to provide any other color commentary?
David G. DeCampli – President, PPL Energy Supply: Sure. Dan, on the hedging strategy, our target range for 2015 is to be between zero and 30% hedged. We’re sitting between 10% and 20% right now. We’ve been a bit – we’re on the lower end of that actually. So that’s where we sit today. Bill’s comments on forward prices, we’re still viewing the market as being having $3 to $5 upside in it for 2015 at this point. That’s what our fundamentals are dictating.
Dan Eggers – Credit Suisse Securities: I guess just with RPM closing in, what are your expectations as you guys look out at the market today?
David G. DeCampli – President, PPL Energy Supply: Now, although all the parameters are out now, so we are viewing that as – we’re sticking to our assumption that it will come in lower than the previous auction. Parameters have not yielded any material changes in our opinion on that, so we’re seeing the 16, 17 auction being a bit lower than the previous one.
Dan Eggers – Credit Suisse Securities: And I guess Bill, can you just share your thoughts on your dividend policy with the cut back in the DRIP and that sort of thing, the decision to embrace loss equity rather than maybe put more of that money towards a dividend increase on a sustainable basis?
William H. Spence – Chairman, President and CEO: I really don’t think that decision has any impact on our ability to grow the dividend. I think we are still very comfortable with growing the dividend as we grow the Regulated segment earnings.
Dan Eggers – Credit Suisse Securities: So when do you guys expect it. If you sit down with the Board and talk about the strategy of when you revisit, what is the next plan where that discussion comes up and what do you think the Board needs to see as there is a level of confidence in the U.K. outlook with the RIIO process that has to get done before they feel like the growth trajectory is fully confident to cement in the dividend?
Paul A. Farr – EVP and CFO: Yeah, Dan this is Paul, we normally — the Board normally entertains the annual dividend adjustment early in the year. So we just went through that process and the January type timeframe so the April 1 increase and everybody has kind of seen that. What we have said is there are large commitments to grow from a regulated rate base perspective and so as we look forward as Bill indicated I wouldn’t look at the 100 million new issuance reduction as impacting what we can do from a dividend perspective. It’s really the capital call on the capital that we got and our ability to massage the balance sheet. So I would still expect that we’ll be able to deliver modest dividend increases as we make our way through the medias part of the CapEx rate base growth plan primarily in transmission in Pennsylvania and the environmental investments in Kentucky, those as you can see on our five year CapEx slide that’s in the deck those really start to trail off after the ’13, ’14, ’15 type timeframe and that will provide more flexibility starting in ’16 and beyond as it relates to dividend.
Average Share Counts
Julien Dumoulin-Smith – UBS Securities LLC: So, first quick question here and I apologize, what are the projected new average share counts, if you will, especially for ’13 here, has that changed or I imagine it has obviously?
Paul A. Farr – EVP and CFO: There is right in the front of my comment in the deck on the Page…
William H. Spence – Chairman, President and CEO: Slide 9.
Paul A. Farr – EVP and CFO: Slide 9, there — 615 million weighted average for ’13 to 655, 2014 is unchanged, 670 old forecast, 670 revised and for 2015, the original was 680 million shares and now it’s down to 670 million shares. So, really after the — we get the full weighted average effects from the forward, that settles in Q2 there is no change in the share count going forward.
Julien Dumoulin-Smith – UBS Securities LLC: I presume the ’15 changed is just because the lower equity issuance comments earlier?
Paul A. Farr – EVP and CFO: That’s correct that the cumulative effect of basically 300 million in lower issuances, 100 million each of ’13, ’14 and ’15.
Julien Dumoulin-Smith – UBS Securities LLC: Second here in RIIO you alluded to potential fast track, is there a potential for the individual utilities get fast track or will this be all in nothing kind of thing?
Paul A. Farr – EVP and CFO: It would be the individual DNOs where each have the opportunity to be fast track. So, considerably we and hopefully, we get have all four of the DNOs fast tracked.
Julien Dumoulin-Smith – UBS Securities LLC: Then moving back to the Supply segment for quick second, you alluded to your fundamental view on upside, but obviously, dark spreads have really improved here, what is your view on coal obviously, you haven’t locked in too much from what I can tell. How do you think about those pricing trends from here?
William H. Spence – Chairman, President and CEO: Dave do you want to take a shot at that?
David G. DeCampli – President, PPL Energy Supply: I would say overall if I look at where the coal market has been it’s been relatively soft here in the short-term. I would expect with the retirements it’s going to continue to be somewhat challenged and so we have not taken a lot of steps to hedge forward beyond ’14 and we are still pretty heavily hedged in ’13 and ’14. But I think we are waiting to see how things settle out on the forward coal price side. But I wouldn’t expect that our forward view on coal markets would have changed that much. I haven’t looked at it lately, but I think we are pretty much in the same ballpark as where we were previously.
William H. Spence – Chairman, President and CEO: Yeah and in the shortest term, we’ve seen material improvement within the quarter from a dispatched perspective on both coal-fired and our combined cycle units. So we saw strong performance in Susquehanna about a 20% increase in the capacity factors for the coal and very strong performance from the gas units, as well.
Julien Dumoulin-Smith – UBS Securities LLC: And then just a little nuance here when you talk about ’14 being the trough is that really based on your market view or your fundamental view?
William H. Spence – Chairman, President and CEO: Well right now because we are well over 60% hedged in 2014, so it’s a combination of ’14 of where we are already hedged as well as our kind of mark-to-market view of where the forwards are today. When get out of the ’15 I think the mark-to-market is less relevant for us and we really switch over — begin switching over in ’15 to more of a fundamental view.
Julien Dumoulin-Smith – UBS Securities LLC: But still on a mark-to-market basis you would still be higher at ’15 versus ’14 correct?
David G. DeCampli – President, PPL Energy Supply: I think it will be closer to flat ’14 to ’15, if you looked on a mark-to-market only basis.
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