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NRG Energy, Inc. (NYSE: NRG ) Q3 2015 Earnings Call November 04, 2015 9:00 am ET Executives Chad S. Plotkin – Vice President-Investor Relations David Whipple Crane – President, Chief Executive Officer & Director Mauricio Gutierrez – Chief Operating Officer, Director & Executive VP Kirkland B. Andrews – Chief Financial Officer, Director & Executive VP Christopher S. Moser – Senior Vice President-Commercial Operations Elizabeth Killinger – SVP & President, NRG Retail, NRG Energy, Inc. Kelcy Pegler – President-NRG Home Solar Analysts Stephen Calder Byrd – Morgan Stanley & Co. LLC Daniel Eggers – Credit Suisse Securities (NYSE: USA ) LLC (Broker) Greg Gordon – Evercore ISI Julien Dumoulin-Smith – UBS Securities LLC Jonathan P. Arnold – Deutsche Bank Securities, Inc. Neel Mitra – Tudor, Pickering, Holt & Co. Securities, Inc. Operator Good day, ladies and gentlemen, and welcome to the NRG Energy Incorporated Q3 2015 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, today’s conference is being recorded. I would now like to introduce your host for today’s conference Mr. Chad Plotkin, Vice President of Investor Relations. Sir, please begin. Chad S. Plotkin – Vice President-Investor Relations Thank you, Liz. Good morning, and welcome to NRG Energy’s third quarter 2015 earnings call. This morning’s call is being broadcast live over the phone and via webcast, which can be located on the Investors section of our website at www.nrg.com under Presentations & Webcasts. Because this call will be limited to one hour, we ask that you limit yourself to only one question with one follow-up. As this is the earnings call for NRG Energy, any statements made on this call that may pertain to NRG Yield will be provided from NRG’s perspective. Please note that today’s discussion may contain forward-looking statements, which are based on assumptions that we believe to be reasonable as of this date. Such statements are subject to risks and uncertainties that could cause actual results to differ materially. We urge everyone to review the Safe Harbor statement provided in today’s presentation as well as the risk factors contained in our SEC filings. We undertake no obligation to update these statements as a result of future events, except as required by law. During this morning’s call, we will also refer to both GAAP and non-GAAP financial measures of the company’s operating and financial results. For information regarding our non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures, please refer to today’s press release and this presentation. And with that, I will turn the call over to David Crane, NRG’s President and Chief Executive Officer. David Whipple Crane – President, Chief Executive Officer & Director Thank you, Chad, and good morning, everyone. And thank you for joining us on this, our third quarter call. Today joining me are Mauricio Gutierrez, the company’s Chief Operating Officer, and Kirk Andrews, the company’s Chief Financial Officer, and both of them will be participating in the presentation. We also have available to answer any specific questions you have in their areas Chris Moser, who runs the company’s Commercial Operations business; Kelcy Pegler, who runs our Home Solar business; and Elizabeth Killinger, who runs the company’s retail business. So with just over six weeks passed since we hosted the NRG Reset call, we’re going to do our best to be brief so that we can provide you with ample time to ask the questions that you have. However, with the unabated selloff in our stock and across the entire sector during the quarter, I want to begin by acknowledging how difficult a time it has been for you, our shareholders. In truth, in this market environment, I don’t know that I can predict what exactly will cause the stock to turn around and recover to some level that approximates fair value, but I can tell you that NRG’s operational and financial performance has been strong and solidly within expectations, that our current liquidity is as strong it has ever been at over $4 billion, and that our Reset program has passed through the planning stage into implementation with every aspect of it well on track, albeit still in the early going. It is certainly our hope and expectation that’s a gradual accomplishment of various aspects of the reset, the cost-cutting, the freeing up of committed capital through various measures, the allocation of capital particularly to the reduction of debt, all will provide a continuous impetus to the recovery of our share price. And after that preliminary comment, let’s move on to discuss how our business has performed through the third quarter of 2015. Turning to slide three in the business update, I’m pleased to report today that we are narrowing our 2015 full year adjusted EBITDA guidance to $3.25 billion to $3.35 billion, solidly in the middle of the original guidance range. Our financial performance in the ever-important third quarter was just tremendous, and demonstrated once again the resilience of having a matched retail-wholesale platform. In a period of subdued wholesale power prices, our retail business, alongside our outstanding commercial operations team, excel. Indeed, our retail business delivered its best quarterly result since 2010, with $225 million in adjusted EBITDA for the quarter. Regarding our conventional wholesale business, which by the way turned in another strong operational quarter, probably the most noteworthy event during the quarter has been the extensive commentary in the financial community questioning the medium- to long-term prospects for power plant fleets like ours. My reaction to this point, based on the many commodity price cycles I have live through in this industry, is that you can’t ignore the underlying reliability value of locationally advantaged assets in competitive markets. Our 48,000 megawatt fleet has a key competitive advantage in each of our three regional markets. First, in Texas, our generation portfolio’s footprint closely matches and complements our thriving Texas retail business. Second, in the East, our portfolio has been shaped to focus on providing and being compensated for reliable capacity, as demonstrated by the enhanced value in earnings to NRG as a result of the recent capacity performance auction, and the importance of which has been underlined by the recent announcement of Entergy with respect to the closure of the FitzPatrick plant. And third in the West, our portfolio features a heavily contracted Fast-Start gas capability tailored to a market moving towards 50% renewables. In all three of our regional markets, the steady and stable operations of our generation remains critical, not only to the enterprise, but to the grid in general. Moving on to other signs of successful execution of our business plan, I’m pleased to announce today that just yesterday, we closed our most recent drop-downed NRG yield, which delivered $210 million in cash back to NRG, which as you know we will be utilizing as part of our efforts to strengthen the balance sheet as we discussed on our last call. I’m also pleased to report that, as we announced on September 22, we successfully executed on the $251 million share repurchase program, which in combination with all shares repurchased year-to-date brings the total shares acquired this year to 7% of our outstanding shares. And as we will discuss in more detail in a bit, we are now shifting our immediate capital allocation focus to debt reduction, as we indicated would be the case on our NRG Reset call, as a way not only to further strengthen our balance sheet but also to unlock shareholder value. Lastly, our Home Solar business remains well on track, as we outlined six weeks ago, driven by tremendous top line growth with over 6,300 net bookings in the quarter, and we believe one of the highest, if not the highest growth rate of the major players in the sector. This volume places us in a fight for third with Sunrun and not that far off from Vivint in the number two position. With respect to our installations for the quarter, which numbered 1,900, or now a total of approximately 80 megawatts, we are making progress in our concerted effort to reduce the backlog going into and through the early months of 2016. For those tracking Home Solar’s negative EBITDA contribution projected for full-year 2015 continues to track within the negative $175 million disclosed on the second quarter call. So, let’s move on to discuss progress on the NRG Reset and drivers behind our 2016 financial guidance, turning to slide 4. Let me start with components of the Reset which are fully within our control. We are well into the implementation phase of our companywide cost reduction program of $150 million across G&A, marketing and development expense. In addition, and Mauricio will provide more details on this, I’m also pleased to announce today that we have identified and are implementing an additional $100 million in O&M spending reductions across all of our businesses, all of which can be done in a manner that does not sacrifice the reliability of our portfolio. So when combined with the initial NRG Reset cost reduction plan, our cost reduction efforts now bring, on an annual basis, a total cost savings target of $250 million to be achieved in 2016 and recurring thereafter. On the asset rebalancing component of the program, we remain focused on and highly confident in our ability to unlock, in combination with the cost reduction program, over $1 billion in capital for allocation to reduce the balance sheet. The modifications of our plans at Portland and Avon Lake Unit 9 are complete, reducing or eliminating additional capital spend at those plants, and we are actively marketing select assets for disposition. Given the high level of interest in these assets expressed during our preliminary marketing phase over the past few weeks, we are moving forward at a pace and in a manner that we believe will lead to an optimization of value for NRG shareholders. You should expect in all likelihood a series of such transaction announcements over the weeks and months to come. Regarding the GreenCo business, the $125 million GreenCo runway around NRG Home Solar, the C&I business at NRG Renew, and eVgo is established, and ready to commence on January 1, 2016. As it relates to the process around the securing of a strategic or financial partner in GreenCo, through the initial phase of our efforts we are quite pleased with the interest we are seeing. We continue to be in the market discovery process and remain focused on selling a majority interest in GreenCo with the goal of financial deconsolidation and simplification at the parent company level. However, and not unlike our approach to asset dispositions on the conventional side, our approach with respect to GreenCo is value first and speed of execution second. The choice of partner in at GreenCo is an important one and we are focused on both optimizing current value and positioning the business, which NRG will continue to own a significant stake in for future success. We will provide you with more material updates as the process allows. So as we look at all the actions we are taking, and importantly marry this with the ongoing benefit of our integrated platform, we are introducing 2016 financial guidance of $3 billion to $3.2 billion in adjusted EBITDA and $1 billion to $1.2 billion in free cash flow before growth on a consolidated basis. As an additional item and something Kirk will provide more detail around, in response to many of the questions we are receiving from investors pertaining to the complexity of our capital structure, for the first time we are now providing our expectation for free cash flow before growth at the NRG level. What this represents is the free cash flow generation excluding non-recourse subsidiaries such as GenOn, NRG Yield, and the primary NRG ROFO assets. Our hope is that providing this to you, we will eliminate at least part of the concern about the geography of our cash flows. Now turning to slide five, I would like to touch upon capital allocation. We have repeatedly stated over the past few months that our focus over the coming year is on shrinking the balance sheet, so for the avoidance of doubt, let me put our thinking in this regard into some historical context. For many years now, indeed for almost my entire time as CEO of NRG, our focus has been to establish a diversified business platform that reduces our company’s exposure to near-term fluctuations in natural gas and power prices, amongst other potentially concentrated risks. Specifically, our goal always has been to minimize commodity price impact on free cash flow, while maintaining the upside that occurs when the commodity markets move in a positive direction. Our key tool in this regard, in addition to hedging, has been asset and business diversification. Our diversification commenced in earnest when we entered the retail business six years ago through the acquisition of Reliant, followed with our strong move into contracted generation targeted around renewables, our redevelopment efforts that are locationally advantaged Brownfield sites, and most recently our asset management program aimed at maximizing our economic advantage in capacity markets like PJM. This quarter’s performance, especially with our outstanding retail performance, and next year’s guidance, coming as they do at a time of historically low natural gas prices, speaks to the effectiveness of our business diversification as a financial buffer. But of course, this diversification becomes a moot point if market concerns around the balance sheet persist. It is our strongly held belief that NRG’s equity investors will benefit from an absolute reduction in our debt, most notably at the NRG level, but also across our entire capital structure. As Kirk will outline, that is the focus of our capital allocation program now. At this slide five describes, as a result of our recent efforts, we aim to free up roughly $1.6 billion in total over the next 14 months to apply to balance sheet shrinking, and particularly to debt reduction. Further, as we look out beyond the next 14 months, our efforts around reducing maintenance CapEx and the material completion of our capital expenditure program will provide further capital allocation flexibility. Our overriding goal that animates this entire effort is to put to rest the question of whether NRG is carrying an excessive level of debt, so that all of us can be on the same plane where we can focus on the cash generative power of the NRG businesses and how that cash can be put to its best use for the benefits of NRG shareholders. And with that, I will turn it over to Mauricio. Mauricio Gutierrez – Chief Operating Officer, Director & Executive VP Thank you, David, and good morning, everyone. Our integrated platform continued to perform extremely well during the third quarter. Our wholesale business mitigated the impact of lower power prices through active hedging and good commercial execution, while our retail business benefited from lower supply costs, highlighting once again the strength of our wholesale-retail platform. During the quarter, we continued to take steps on repositioning our portfolio to optimize and improve economics and returns. First, our asset optimization effort in the Northeast, which focuses on capacity revenues, was validated by the recent PJM capacity performance auction resource (15:07). Second, we continue to reduce spend across the fleet, which I will discuss in more detail in a later slide. And finally, we have taken the necessary steps to hedge our portfolio in the short term to protect from further downside. All of these efforts are in addition to the business diversification strategy that David already mentioned in his remarks. So let’s start with a review of our operational performance on slide seven. We have another quarter of top-quartile safety performance, with 147 out of 168 facilities that finished the quarter without a single recordable injury. We’re mindful that our portfolio is going through some changes and we need to stay vigilant and redouble our efforts to ensure that safety is and remains always first. Our total generation was up 5% for the quarter, driven primarily by higher generation in the Gulf and the West. The East was relatively unchanged, with slightly lower coal generation offset by higher gas runs. Our coal and nuclear plants improved their availability and reliability metrics. I want to congratulate STP, Parish, and Dunkirk for almost perfect runs this summer. Our gas units continue to be called on more frequently in the market, as you can see in the bottom right chart. We continue to maintain a remarkable 99% starting reliability on our gas (16:27). Turning to slide eight, our retail business continued its trend of exceptional performance, delivering $225 million of adjusted EBITDA, the highest third quarter since 2010 and $58 million more than last year. During the quarter, we captured value from lower cost to serve, effective margin management, and expansion of our product offering. We have also sustained our strong momentum in customer acquisition and retention that led to 5,000 customer account growth, despite the continued expiration of acquired Dominion customers’ contracts in the East, where we continued to see better than expected retention levels. Excluding the Dominion acquisition, our customer growth was 26,000. As we have stated in the past six years, the ongoing success of our retail business continues to demonstrate the value of our integrated wholesale-retail platform, and most importantly provides NRG diversification in earnings through all phases of the commodity cycle. Turning to slide nine. Let me share a few comments on the gas market. We have experienced pretty mild weather this past year, a warm winter followed by a mild summer. This weather combination most likely will lead to a new record storage number in the coming weeks, at or near 4 TcF. Combined with the expectation of an El Niño weather forecast, and you’ve got a market with only bearish news and falling prices. It’s worth noting that El Niño is typically associated with a warmer upper Midwest winter and a colder Gulf Coast one. As a diversified energy company with assets in both areas, we could do well in such a scenario. I want to remind everyone that we’re very well hedged through 2016 and about 50% in 2017, giving us some nice runway to what we see as a more bullish future. Make no mistake, where we see plenty of upside if gas prices were to rise, but have protected significantly the downside through hedging and business diversification. Regardless of current sentiment, in our view, long term natural gas price fundamentals look strong. The first half of this decade was dominated by supply growth outstripping demand. We expect the second half to reverse that trend with demand growth outstripping supply. Natural gas production has been stagnant since late last year, in part because of lower rig counts and low prices. In the meantime we see growing LNG exports, increasing exports to Mexico, higher industrial production, and greater demand from the power sector. As an example, our fuel conversions of new gas flow from Joliet and Shawville alone will increase our summer peak day gas consumption by 0.5 BCF/day. The gas demand from new builds and conversions is real and is coming. Simply put, we are well positioned to weather the short-term low prices and remain open to benefit from bullish long-term fundamentals. Turning to slide 10, on our power market update, and starting with ERCOT. As we have discussed for several years now, market changes are needed to better reflect scarcity conditions like the ones we experienced this summer. During August, we saw our first real test of the operating reserve demand curve mechanism, and sadly, we watched it fail. Scarcity conditions were right for a few days, during which a new record peak was set. But aside from one $350 day head clear (19:56), the week was mostly disappointing. A combination of scarcity conditions and low prices caught both market participants’ and the PUCT’s attention. ORDC is expected to be a major topic of conversation at the open meeting tomorrow. Discussions are now underway to examine potential changes that can be made to the ORDC parameters to make it more effective in reflecting true scarcity on the system. We’re supportive of that effort and will actively participate in the discussion. Otherwise fundamentals remain strong, with load growing by 2.7% on a weather-normalized basis so far this year, despite low oil prices. Combined with the risk of additional retirements, current forward prices look too low and present an upside to our low-cost and environmentally controlled coal portfolio. As for the Northeast, we have been repositioning our portfolio from providing base-load energy to providing reliability as a capacity resource. The recent results in PJM and New England, which we just covered in our recent call, validate our commercial strategy. In the past couple of weeks, we’ve heard news of additional nuclear retirements. It would seem that smaller nuclear plants are struggling to cover cost and may lead the way to further tightening in the market. Turning to our hedging disclosure on a slide 11, and as I mentioned earlier today, we’re pretty well hedged for the next two years. As the chart in the upper left of the slide shows, we’re very well hedged against our expected production for 2016 and almost 50% hedged for 2017. We are evaluating further entry points to increase our coal hedges, and are comfortable with current inventory levels as we head into the winter months. We like the remaining open position for the back half of 2017 and beyond, given our more constructive view of gas and power. Finally, on slide 12 I want to provide more details on our expanded cost reduction program across the company, and more specifically the $100 million reduction in O&M savings that David mentioned. As you likely have assumed, most of these will be executed on the wholesale business, where we continue our work on evaluating and prioritizing every actionable spend decision on an asset-by-asset basis. Key drivers of the overall reduction relate to the asset optimization efforts that we announced around Portland and Huntley respectively, changes in the way we’re managing operational risks and further cost reductions on units that have lower capacity factors. Of course, we will not make any O&M reductions that jeopardize the safe and efficient operations of our fleet. In addition to the $100 million reduction just announced, we’re introducing the fourth iteration of NRG’s continuous business improvement program, called FORNRG. This program is driven by employee ideas and innovation to enhance each department’s bottom line. The FOR stands for focus on return, and is rooted in ensuring all employees are empowered to find better, more cost-effective ways on doing our jobs. Our goal is to achieve $150 million of cumulative EBITDA over the next three years. Just as we have done in the past, we remain committed to our continuous improvement program that has yielded so many benefits for NRG and its shareholders. With that, I will turn it over to Kirk. Kirkland B. Andrews – Chief Financial Officer, Director & Executive VP Thank you, Mauricio. And beginning with the financial summary on slide 14, NRG delivered a total of $1.145 billion in adjusted EBITDA for the third quarter, and over $2.7 billion for the nine months ended September 30. Our third quarter results were highlighted by $225 million in adjusted EBITDA from Home Retail, a 35% year-over-year increase, again highlighting the success of NRG’s integrated business model as results improved largely due to favorable supply cost. Business and Renew combined for $722 million in EBITDA for the quarter, while NRG Yield contributed $198 million. Despite the subdued summer power prices, our strong Home Retail performance combined with effective wholesale hedging allows us to narrow our adjusted EBITDA guidance range to $3.25 billion to $3.35 billion, still in line with the midpoint of our original 2015 guidance. Looking to the business segment components of adjusted EBITDA guidance, the increase in guidance for NRG Yield reflects the full-year impact of the closing of the wind portfolio drop down as required under GAAP, with an equal reduction in Business and Renew guidance, which previously included the EBITDA associated with the equity stake now held by Yield. Based on the strong retail performance for the quarter, we are also increasing the retail component of 2015 EBITDA guidance, which offsets the modest reduction in expected 2015 wholesale results. Finally, we’re also narrowing guidance for 2015 free cash flow to $1.125 billion to $1.225 billion. Turning to other highlights, and focusing first on our progress on NRG Yield drop downs, we’re pleased to announce we’ve now closed the previously announced sale of a 75% interest in a portfolio of 12 wind projects to NRG Yield for $210 million in cash. The remaining 25% interest continues to be part of the drop down pipeline remaining under the expanded right of first offer agreement. NRG intends to complete the balance of the $100 million in commercial distributed solar projects and $150 million in residential solar leases under our existing partnerships with NRG Yield over the balance of 2015 and into early 2016. As we’ve indicated in previous quarters, NRG also intends to offer its remaining stake in CBSR to NRG Yield in late 2015, which makes up the balance of the $600 million in expected drop down offers to Yield during 2015, as originally announced on our first quarter earnings call. Turning to share repurchases, NRG completed the purchase of $251 million of its common stock during September and October of 2015, which when combined with our previously completed share repurchases and annualized dividend leads to a total of approximately $630 million in capital returned to NRG common stockholders in 2015, and a 7% reduction in common shares outstanding. Turning to 2016 guidance on slide 15, we’re initiating 2016 guidance ranges with adjusted EBITDA of $3 billion and $3.2 billion, consisting of business and utility-scale renewable adjusted EBITDA of $1.545 billion to $1.67 billion, retail adjusted EBITDA of $650 million to $725 million, which is a $50 million increase over our initial 2015 retail guidance. And finally, NRG Yield adjusted EBITDA of $805 million, which includes the recently closed wind drop downs. Our free cash flow before growth guidance, which is net of maintenance and environmental capital, is expected to be a robust $1 billion to $1.2 billion. Our 2016 guidance excludes the impact of the GreenCo businesses as identified during our Reset call on September 18, for which NRG’s total cash committed is limited to $125 million, which will be managed through an intercompany revolving credit facility as part of NRG 2016 capital allocation, which I will review in greater detail shortly. As David mentioned earlier, to further clarify the cash flow and capital available at the NRG level, we are also initiating guidance for the portion of our total free cash flow before growth guidance, which is available at the NRG level, which for 2016 we expect to be $750 million to $950 million. This range is based on deducting the portion of our total free cash flow guidance expected to be generated at NRG’s non-guarantor subsidiaries, which consist primarily of GenOn, NRG Yield and the remaining ROFO assets. And then finally, adding back the expected cash distributions and dividends from these subsidiaries makes up the adjustment to arrive at NRG level free cash flow before growth. Turning to slide 16, and continuing the theme of clarifying and enhancing our disclosures, in light of increasing questions and focus from our investors on leverage levels at NRG, I have provided here a deconstructed view of the consolidated balance sheet, as well as the derivation of the NRG corporate debt to corporate EBITDA ratio, which is the cornerstone of our targeted prudent balance sheet metrics. As you recall, we target this ratio at 4.25 times, which is consistent with our targeted BB credit metrics, recently reaffirmed by S&P. Based on the midpoint of our 2016 guidance and previously committed debt reduction from 2015, we are in line with that target. As shown on the left of the slide, although NRG’s consolidated debt balance as of the quarter end is approximately $20 billion, over $11 billion of that debt resides at our excluded project subsidiaries, which consist primarily of NRG Yield and the remaining ROFO assets, most of the debt at which is fully amortized and consistent with the contract durations, with the remaining non-recourse debt residing at GenOn. This debt is non-recourse to NRG and is not counted in our corporate credit metrics, including the debt-to-EBITDA ratio prescribed by our credit facilities, which contain thresholds governing our ability to purchase shares and pay dividends. Only the remaining $8.8 billion of debt consisting of our senior unsecured notes and term loan facility is recourse to NRG and counts toward this ratio. On the right of the slide, after adjusting for the $500 million in 2015 capital already allocated to NRG-level debt reduction, which we expect to augment using 2016 capital, we anticipate corporate debt, or the numerator of the ratio, to be less than $8.3 billion in 2016. Turning to corporate EBITDA, or the denominator of the targeted ratio, we began with the midpoint of our 2016 adjusted EBITDA guidance. As only cash distributions from our excluded project subsidiaries count as EBITDA for ratio purposes, we next deduct the midpoint 2016 EBITDA from these subsidiaries, and then add back these cash distributions, which include our share of dividends from NRG Yield and distributions and payments from the remaining nonrecourse subsidiaries, primarily the remaining ROFO assets. The final adjustment is an add-back of non-cash components of corporate level expenses, which we’re deducting in arriving at our EBITDA guidance. What results is $1.95 billion of corporate-level EBITDA, which basically represents EBITDA from assets and businesses from our recourse subsidiaries, plus the cash distributions and payments from nonrecourse subs. Based on the midpoint of our 2016 guidance, our expected corporate debt-to-EBITDA is no greater than 4.26 times, in line with our long-term target for this ratio and significantly below both our restricted payment and default ratios. As I mentioned earlier, we expect to augment our 2015 allocation of capital to debt reduction, with additional debt reduction using 2016 capital driving this ratio even lower and providing additional balance sheet strengthening as we move into 2017. We remain committed to shrinking the NRG balance sheet as part of the NRG Reset, and leaving no doubt as to the strength and integrity of NRG credit ratios as we move into 2016 and beyond. Turning to slide 17, having initiated 2016 guidance, I’d like to next review NRG-level capital available for allocation for 2016. We are focused here on capital allocation at the NRG level, which excludes NRG Yield excess cash as well as GenOn excess cash reserve for liquidity and the completion of our asset optimization project at GenOn. Moving from left to right, we have now allocated all remaining 2015 capital towards debt reduction, which we expect to execute over the balance of 2015 into 2016, totaling $500 million in discretionary debt reduction at NRG. This balance consists of $200 million, which is one-third of the targeted 2015 NRG Yield drop down proceeds, plus $300 million of remaining capital also announced as part of the NRG Reset in September, which we are now committing to debt reduction as well. Turning to 2016, incremental NRG level capital for allocation begins with the midpoint of our NRG-level free cash flow guidance of $850 million. Total 2016 committed capital at NRG is approximately $600 million, as shown in the red bar, and is comprised of the $125 million GreenCo runway revolver; growth investments of $250 million, primarily our PH Robinson peaker project, Carbon 360, and the eVgo California settlement; with the balance allocated to NRG-level corporate debt amortization and our common stock dividend. The remaining free cash flow balance of $250 million, combined with $500 million of 2015 capital remaining to be deployed towards debt reduction, leads to $750 million in capital available at the NRG level through 2016, which we expect to further supplement through the execution of the remainder of the NRG Reset initiatives. These initiatives include non-recourse project financing, through which we expect to fund approximately $250 million of environmental CapEx at Midwest generation, thereby increasing capital available to NRG. Having now completed the rating process and documentation for this financing, we are prepared to launch when market conditions are more favorable. Targeted asset sale proceeds from the NRG Reset totaling at least $500 million are expected to further augment excess capital for consolidated balance sheet reduction. Finally, and potentially supplemental to the $1.1 billion in Reset capital, any proceeds from the GreenCo sell down and future NRG yield drop downs, located currently by equity market recovery, which serve to further expand NRG level capital for allocation. By way of reference, in the upper right corner of the page I have provided a walk, beginning with the remaining 2016 excess NRG-level free cash flow through the other components of the NRG Reset, which combined now total $1.1 billion in consolidated 2016 capital to be deployed toward shrinking the balance sheet. Finally, turning to slide to 18, I’d like to briefly review and update our expectations for significant reductions in maintenance, environmental, and growth capital from 2016 to 2017. Our revised 2016 capital expenditures reflect reductions in growth CapEx, stemming primarily from the $100 million in reduced spend on fuel conversions at GenOn as well as GreenCo-related growth CapEx, which is now capped at $125 million based on the runway amount. Turning to 2017, due to incremental reductions in expected 2017 growth capital expenditures, including the elimination of distributed-generation solar and residential solar, we now expect a year-over-year reduction of over $550 million in consolidated CapEx in 2017 versus 2016, with approximately $350 million of this reduction occurring at the NRG level. These substantial year-over-year reductions in expected capital expenditures provide a significant cushion against continued softness in commodity prices and a potential uplift in available capital in 2017, which may be allocated to further balance sheet reductions, including debt reduction and return of shareholder capital. With that, I’ll turn it back to David. David Whipple Crane – President, Chief Executive Officer & Director Thank you, Kirk. And if we turn to our closing slide, which is slide 20, we end by quantifying a point previously made, which is that NRG’s financial results in 2016 are not nearly as exposed to fluctuating gas prices as the market seems to be suggesting. We have successfully mitigated the downward exposure of falling natural gas prices through our hedging program and through our asset diversification. In the ultra-low commodity price environment that currently grips our market, this strategy is what has enabled us today to guide to a healthy adjusted EBITDA and free cash flow level for 2016, and which, together with the substantially increased capital flexibility arising out of the steps listed on the right side of this page, should enable us to implement a substantial capital allocation program over the months ahead. Our goal in all this is to make NRG a simpler, less leveraged company over the duration of the Reset program. NRG is not just an IPP. As we have demonstrated on this call, NRG’s unique advantage is that our balanced wholesale-retail business mitigates the financial impact of low energy commodity prices, which enables us to profitably serve our retail customers with a growing mix of products and services. This is essential during the current low commodity price cycle, when the value pendulum in the sector clearly has swung to serving the end-use energy customer. As I said, this wholesale-retail balance is NRG’s unique advantage, and all of us at NRG are excited about the opportunities we have in front of us to maximize the value of this advantage for the benefit of NRG shareholders. And with that, Liz, we are happy to take people’s questions. Question-and-Answer Session Operator Our first question comes from the line of Stephen Byrd with Morgan Stanley. Your line is now open. Stephen Calder Byrd – Morgan Stanley & Co. LLC Hi, good morning. David Whipple Crane – President, Chief Executive Officer & Director Hi, Stephen. Stephen Calder Byrd – Morgan Stanley & Co. LLC Thanks for the enhanced disclosure, it’s extremely helpful, very well done. Just on, hit on the couple topics on, first on just coal supply, Just given the very low commodity environment we’re in, very low gas and power prices, could you talk a little bit further to just what you’re seeing in terms of potential ability, whether it’d be on transport or the commodity itself – what are the dynamics, in terms of being able to continue to improve your position in terms of your coal costs? David Whipple Crane – President, Chief Executive Officer & Director Stephen, you want to tell us the two questions, so – and then we’ll answer them. So we’re tipped off and we can prepare an answer to the second? Stephen Calder Byrd – Morgan Stanley & Co. LLC Sure thing. My other question is just on competitive dynamics in retail. And I was curious whether you’re seeing overall any competitive dynamic changes in that business, and then more specifically whether you see a potential for some of your retail competitors to try to get into solar, as you’ve been doing? David Whipple Crane – President, Chief Executive Officer & Director Into solar, not into — not IPPs getting into retail, but you’re interested in … Stephen Calder Byrd – Morgan Stanley & Co. LLC In retailer to solar. David Whipple Crane – President, Chief Executive Officer & Director Yeah. Stephen Calder Byrd – Morgan Stanley & Co. LLC That’s right. David Whipple Crane – President, Chief Executive Officer & Director Well, let me start by answering the last part of that question, and then Chris Moser’s going to answer your coal question, and Elizabeth, as soon as Chris finishes, you answer the question about competitive dynamics in retail. But I would say, Stephen, given the market’s reception to us getting into distributor – so I don’t think that’s going to encourage other IPPs to get into that area. But, so – but in terms of the other IPPs getting into retail, which is something that I’ve sort of been expecting for a long time, maybe Elizabeth can talk about that in terms of the context of competitive dynamics. But – but Chris, why don’t you start with talking about the coal dynamics, and Elizabeth, you take over from Chris. Christopher S. Moser – Senior Vice President-Commercial Operations Sure. I would characterize it like this, Stephen. I think we’re working with our whole coal supply chain and the partners in it to make sure we’ve got reliable and competitively priced fuel. There’s really two pieces to that. There’s the rail piece and then the commodity piece. I mean on the commodity side, if you’ve been watching over the past couple of weeks, we’ve seen a pretty decent jog down in the prices, specifically PRB, but NAZ (40:36) as well, and so that will obviously help us next year. And then on the transportation side, without getting into too much specifics, I would say that our transportation partners have been good partners with us and want to make sure that the coal continues to flow. So, I think that’s how I would answer that. Elizabeth Killinger – SVP & President, NRG Retail, NRG Energy, Inc. And Stephen, regarding the competitive dynamics in the retail business, I think we continue to see intense competitive markets with – we’re 50 players in Texas, and it varies by market in the East, but anywhere from kind of 15 to 30-something competitors. So, lots of competitive activity. We are seeing competitors extend their product offerings to include more products than simply retail electricity, and that takes the form of energy management solutions, natural gas, some home-control type features; as you noticed, home solar, and otherwise. So, we expect that to continue, which is why we continue to lead the market in evaluating what consumers want, and making sure we’re delivering the best of it to them. Stephen Calder Byrd – Morgan Stanley & Co. LLC Thanks very much – sorry, David. David Whipple Crane – President, Chief Executive Officer & Director Well, Steve, I just, I guess my reaction on your people going into solar, response a little flippant about IPPs; what I think – and look, no one can predict the future, but I think the period ahead in home solar is going to be focused on consolidation around what I think is going to emerge as the four main players, the Solar Cities, the Vivints, the Sunruns, and ourselves. I don’t expect another IPP to come into that space anytime soon, but I would actually be surprised, since – and, I’m – I subscribe to the view that home solar is a mortal threat to the utility business model. I would be surprised if, within the next 18 to 24 months, some big utility doesn’t try and buy their way into this space, but that’s just my speculation. Stephen Calder Byrd – Morgan Stanley & Co. LLC Great. Thank you very much. Operator Our next question comes from the line of Dan Eggers with Credit Suisse. Your line is now open. Daniel Eggers – Credit Suisse Securities ( USA ) LLC (Broker) Hey, good morning, guys. Just on that update to the balance sheet, what target metrics do you guys want to get to at the corporate NRG balance sheet perspective, and of the $1.6 billion that you are expecting between now and the end of the next year for debt reduction? Is that all NRG-specific debt, or is that going to include some GenOn and some other pieces in that number? Kirkland B. Andrews – Chief Financial Officer, Director & Executive VP Sure, Dan. It’s Kirk. I’ll take that in reverse order. The $1.6 billion is really a consolidated look at uplift in capital for allocation. As you know, in particular, $500 million of that is what is part of the NRG Reset in asset sales, and depending on the mix of those asset sales – some of which we expect to be at the GenOn level, because we’re focused on the Northeast – that, more than anything else, would govern the proportion of the allocation of capital toward debt reduction at GenOn versus NRG. As to the targeted metric, we continue to target, as I’d said, 4.25 times corporate debt to corporate EBITDA. We also focused on FFO to debt, keeping that number below the – at or below the high-teens level. And I’d say that the tertiary component of that is, we look to stay around 50% debt-to-capital, though that is a book ratio. Certainly something that we focused on, the rating agencies focused on, but I think it’s probably certainly tertiary to those first two. And so – and part of the reason why we focused on that 4.25 is, as I said, it comports with what, based on our ongoing conversations with the rating agencies, support those BB credit metrics. It also gives us a significant cushion against the thresholds in our credit facility, above which we’re no longer permitted to pay dividends or buy back stock. So we’ve got a significant cushion there, and obviously even further cushioned below the default ratio. So those are the reasons that go into those target metrics. Daniel Eggers – Credit Suisse Securities ( USA ) LLC (Broker) I guess just on capital allocation, can you remind us, with all the resets, what growth CapEx commitments you guys have beyond 2015? And then maybe along those capital allocation lines, how you think about, is there going to be room for buy-backs next year, or is this all going to be debt related? Kirkland B. Andrews – Chief Financial Officer, Director & Executive VP Well, to answer the first part of that question, in terms of committed growth capital, as I think we’ve laid out, as we move into 2016, what we’re seeing in terms of the growth capital on a consolidated basis is primarily the completion of the GenOn repowerings, as well as the – and beyond 2017, the beginning of the capital allocated to our Carlsbad and Mandalay projects, and the balance of that capital in 2016 and a little bit further into 2017 is just, A, the remainder of the Carbon 360 project, which has about $150 million of capital left to go in about equal parts between 2016 and 2017, and the eVgo California settlement, which in both 2016 and 2017 is at or about $20 million in each year. That is really the bulk; that is all of the remaining growth capital that we have or expect to allocate at this point. As to the allocation of capital toward the balance sheet and your comment about share repurchases, what I would say is, as I’d mentioned, we’re continuing to focus on finding opportunities to return capital to shareholders. Certainly our dividend is something we’re committed to, and certainly we look to supplement that with share repurchases, but at the present time we are going to focus in swinging the pendulum towards the debt side of the balance sheet. In particular to leave no doubt, and to ensure not only that ratio is improved in 2016, but we are confident in our ability to maintain that ratio through 2017. I think that more than anything else will determine our focus in the near term on debt reduction, and ultimately arriving at that ratio through that debt reduction will govern the proportion of our capital allocation which would later go to share repurchases. Daniel Eggers – Credit Suisse Securities ( USA ) LLC (Broker) Great. Thank you. Operator Our next question comes from the line of Greg Gordon with Evercore ISI. Your line is now open. Greg Gordon – Evercore ISI Thanks. Good morning. David Whipple Crane – President, Chief Executive Officer & Director Morning, Greg. Greg Gordon – Evercore ISI Yeah. So if I’m looking at slide 17, just to be clear, thinking about the capital allocation beyond the $500 million, since the CapEx savings is coming at GenOn and a portion of the asset sales will probably be at GenOn, we should think about sort of $250 million, maybe plus or minus – plus whatever portion of the asset sales are non-GenOn, as being pointed at debt reduction at the parent, incremental to the $500 million in 2016, is that correct? Kirkland B. Andrews – Chief Financial Officer, Director & Executive VP I think the way you’ve categorized that, Greg, is right, although certainly we – as I’ve said, we’re focused near-term in allocating that capital towards debt reduction. So I’d be hesitant to say prescriptively all of it, but for right now that’s certainly where we are definitely focused. And the way you describe that in terms of the geography, yes, $100 million of that CapEx savings all resides at GenOn. The $250 million in the non-recourse financing we expect to be at the NRG level, offsetting what would otherwise be NRG capital allocation or CapEx towards the completion of that environmental spend at Midwest Gen. And then the asset sales, depending on the outcome, will be a blend in terms of proceeds between NRG and GenOn. So the way you summarized that is accurate, yes. Greg Gordon – Evercore ISI Right. And then the first – your primary focus is debt reduction. And when we get into 2017, you’re looking at, presumably, if we could keep the EBITDA from bleeding too much, an incremental $350 million improvement in cash available for capital allocation at the parent? Kirkland B. Andrews – Chief Financial Officer, Director & Executive VP Yes. That’s correct. Greg Gordon – Evercore ISI Okay. Kirkland B. Andrews – Chief Financial Officer, Director & Executive VP Which is – and as I said, that does not include, at least in that calculation, any anticipated proceeds from the GreenCo process or further NRG Yield drop downs, which would obviously supplement that $350 million. Greg Gordon – Evercore ISI Got you. And then my follow-up question, when I look at the buildup on page 16, the GenOn EBITDA of $335 million, that’s net of the shared services payments. So if I was looking at a simple EBITDA just on asset performance, you’re projecting it to be about $530 million in 2016? Kirkland B. Andrews – Chief Financial Officer, Director & Executive VP That’s right. You’d add back that roughly $200 million to get to that sort of asset-level performance as you said, correct. Greg Gordon – Evercore ISI Okay. Thanks guys. David Whipple Crane – President, Chief Executive Officer & Director Thanks, Greg. Operator Our next question comes from the line of Julien Dumoulin-Smith with UBS. Your line is now open. Julien Dumoulin-Smith – UBS Securities LLC Hey, guys, good morning. First quick easy question for you. I wanted to focus on the $100 million cost savings, just what that comprises of, and also more importantly, I see a FORNRG statement here of a cumulative 180. Just wanted to understand – or 150 through 2018. Can you comment how the two jive? What should we expect in 2017 and 2018 in terms of run-rate increments? David Whipple Crane – President, Chief Executive Officer & Director Mauricio? Mauricio Gutierrez – Chief Operating Officer, Director & Executive VP Hey, good morning, Julien. So, I mean, the first one is the operating expenses. And I would – I mean, I listed some of the main drivers of that, but I will say the first gives you the impact of the decisions, the asset optimization decisions that we made at Portland, the suspension of Portland and the retirement of Huntley. The second one is, we’ve gone through a line-by-line review of every single asset, particularly those that are in more challenging market conditions, and we have right-sized the cost structure to comport with those market dynamics. And then the third one is, as we have a portfolio of close to 50,000 megawatts, allow us to optimize the management of forced outage risk, and what I call the contingency money that we know we’re going to have to spend, we just don’t know where. So if you have a single asset you have to budget for the forced outage, the probability of forced outage. But when you have 50,000 megawatts, then you can optimize across the entire portfolio. So that is the step one. Step two is the FORNRG portfolio, and this is a target. You’re familiar with the FORNRG, because we show the fourth iteration of this. We are looking at, company-wide, how can we do the things are we’re doing today, better in a more cost effective way. So think of this as contract renegotiations, rail renegotiations, property tax renegotiations. So, I mean it is the host of things that we can do, that is very difficult to pinpoint today, but we’ve been very effective and we’ve been very successful in achieving, in the past, these cost savings, which they will flow directly to the bottom line. David Whipple Crane – President, Chief Executive Officer & Director And that’s all, in every part of the company. Mauricio Gutierrez – Chief Operating Officer, Director & Executive VP That is, everywhere in the company, including retail, just across the company. Julien Dumoulin-Smith – UBS Securities LLC Got it. So perhaps just a quick follow up there. Some of your assets seem to generate negative cash flow in Texas. I’d be curious how that might fit into that puzzle? And then perhaps to boot with that, a more strategic question, coming back to perhaps the, what you alluded to earlier Dave, about yourselves being in those top four residential players, how is the strategic review proceeding? And perhaps, if you can answer one question, what is it that you need to “fix” your retail solar – your solar efforts more broadly? Is it an installation platform, or what are you kind of ending up in the strategic process thus far? David Whipple Crane – President, Chief Executive Officer & Director Okay. Do I… Mauricio Gutierrez – Chief Operating Officer, Director & Executive VP I mean, I’ll – Julien, I’ll go first about your… David Whipple Crane – President, Chief Executive Officer & Director Yeah, I’ll probably go on the second part of the question. I forgot what the first was. Mauricio Gutierrez – Chief Operating Officer, Director & Executive VP I will take the first one, David. So, I think you are alluding to – I don’t know what particular asset you are saying, but what I can tell you, Julien is I think we’ve demonstrated financial discipline when we have an asset that, number one, is in negative free cash flow; number two, the prospects of a recovery in that market are such that we cannot justify the continuing operation of that plant; and then number three, which I think is significantly important in Texas, is the prospect in terms of additional environmental CapEx to comply with upcoming rules. We will evaluate, and if needed retire, just like we did in Huntley. What I can tell you is that we’re not in such conditions right now in Texas. I have said in the past that our coal portfolio is a low cost, environmentally controlled portfolio, and I would expect that coal plants that actually have a much dire forecast in terms of environmental CapEx, we’ll have to make that decision before – so I’ll just leave it at that, but make no mistake, I mean, we will continue with the financial discipline that we have shown over the years. David Whipple Crane – President, Chief Executive Officer & Director Okay. Good. And Julien, I shall break your part of the question that I’m going to answer into, itself into two parts. So it was, sort of how is the strategic process going with GreenCo, I think particularly as it applies with a focus on Home Solar. And then you say, what you need to do to fix the sort of issues within Home Solar? So – and Kelsey is on the phone, and Kelsey if you have anything to add after I finish, go ahead, particularly obviously on the second part of that question. So, on the strategic process, what I would tell you, Julien, is we’ve been through the sort of preliminary discussion stage, out there talking to multiple people who are interested, and I think specifically road-testing the idea that what we’re looking to do is sell a majority stake to someone who is sort of strategically aligned with our thinking about the prospects for the business, but maintaining a substantial minority stake so that we can maintain the business connection with the rest of the company, and also have a second bite at the apple in terms of value realization. And it’s early days yet, what I would tell you, I mean it’s relatively easy for people to express interest before they have to write down a number on a piece of paper, but I would say in the early going, there is quite a lot of interest in it, and no problems with the structure we’re proposing. So that’s what I would tell you about where we are now on the strategic process. With respect to the issues in the Home Solar, what I would tell you is there are operational issues, basic blocking and tackling, that sort of come with running a business that has complex logistics and is growing at an annualized triple-digit rate. And so you get the sales engine revved up and then the installation and the deployment have to follow, and getting that exact balance right, as I think other players in the industry have demonstrated, is a constant work in progress. But I would say there’s an enormous amount of attention on it, particularly the productivity of our installation crews right now I think is double what it was just a couple of months ago. And then there’s the paper work from going from installation to deployment, which is – which is obviously, in terms of getting the right software and just making the process much more efficient. Kelcy, is there anything that you would want to add to that? Kelcy Pegler – President-NRG Home Solar No, I think that’s pretty good, David. I would just say we’re working on the cohesiveness. We’re satisfied with both our sales and installation increase in Q3. Most notably what was important to us was we were able to sell and install more systems without adding significant head count. In fact, we ended Q3, almost exactly flat from a head count perspective. So without adding cost. And Julien, I think what we’ve done is, we’ve really focused and we’re determined to achieve that 90 day from signature to energization of the solar system. And we’ve identified with this theme of an excess backlog, which is any job that exceeds that 90-day timeline. And then the optimal backlog, which is all the jobs being executed within that timeline, and we believe we’re poised to be executing all of our backlog and all of our bookings to energization in the first half of 2016 within 90 days. And so that’s what I would tell you. Julien Dumoulin-Smith – UBS Securities LLC Great. Thank you. David Whipple Crane – President, Chief Executive Officer & Director Thanks, Julien. Operator Our next question comes from the line of Jonathan Arnold with Deutsche Bank. Your line is now open. Jonathan P. Arnold – Deutsche Bank Securities, Inc. Good morning, guys. David Whipple Crane – President, Chief Executive Officer & Director Good morning. Kirkland B. Andrews – Chief Financial Officer, Director & Executive VP Good morning. Jonathan P. Arnold – Deutsche Bank Securities, Inc. Just picking up on the question about the GreenCo process. I was curious, David, you made the statement in your prepared remarks – I think it was the prepared remarks – that you wouldn’t be surprised to see utilities wanting to buy into this business. Are you suggesting that among the parties you’re talking to, there may be some utilities? Can you just give us any color, or is that sort of more further out in time? David Whipple Crane – President, Chief Executive Officer & Director Well, no – well, I didn’t say it in my prepared remarks, just for accuracy’s sake. I would not say that that’s the main body of – I mean, if you – I guess Jonathan, what I would say in simpler terms, if you divided the people that are interested – or if you categorized the people interested in GreenCo into financial partners and strategic partners, there are significantly more financial partners than there are potential strategic partners. Jonathan P. Arnold – Deutsche Bank Securities, Inc. Okay. I mean, that’s helpful. And then I guess, I mean like, when you announced the Reset, you were talking much more broadly about potential structures, majority, minority, and the like, and it now seems to be – you have enough visibility that you are pretty confident that you can do a majority deal. Is that what we should take away from the shift in the language? David Whipple Crane – President, Chief Executive Officer & Director I think what you should take away is that, through the preliminary phase, we got a significant amount of encouragement on that, but I think what you should really take away is the point that was made in the prepared remarks, that first and foremost it’s value that we’re looking for so. So, again, it’s – I’m just commenting, I mean, people have not put numbers down on a piece of paper. So there’s a significant amount of flexibility that remains around the GreenCo process, and we won’t – I don’t want to give any sort of final answer until we see numbers on paper, and then we might modify accordingly, but definitely in the non-quantified stage, there is a lot of encouragement around that structure. Jonathan P. Arnold – Deutsche Bank Securities, Inc. Okay. Thank you. And you, can you just give us any sense of when, what do you think the likely timing for this to play out? I heard you say you prioritized value over speed. David Whipple Crane – President, Chief Executive Officer & Director Well, I mean, I don’t remember if we said it in our prepared remarks on September 17, but I think we did, which was that, we thought the whole process would be concluded within six months to nine months, and I continue to be highly confident in that timeframe. I mean, I know that some questions have happened, would be able to give people sort of more of an update by the end of the year. And I just can’t make a call on that, because usually right when you’re in the middle – I mean, we will clearly know more by the end of the year, but whether we share with you – usually you don’t talk about things when you’re in the middle of an active discussion. So I can’t really help you, other than say, Jonathan, we’re confident that it’ll all be done within the original six month to nine month timeframe. Jonathan P. Arnold – Deutsche Bank Securities, Inc. Okay. Thank you very much, David. David Whipple Crane – President, Chief Executive Officer & Director Liz, I’m sorry, and I’m sorry for the people who want to continue to get in the queue, but we – since we have an NRG Yield call in a relatively few minutes, we’re going to take one more question, and then for the others in the queue, again, I’m sorry, and please call in and we’ll answer any questions that you have. Operator Our last question comes from the line of Neel Mitra with Tudor Pickering. Your line is now open. Neel Mitra – Tudor, Pickering, Holt & Co. Securities, Inc. Hi, good morning. Could you just kind of give us the timeframe for the cost cuts? So it’s the $100 million, is that for the full 2016 or is it a partial year? And then the remaining $150 million, when does is that fully kick in? David Whipple Crane – President, Chief Executive Officer & Director Neel, it’s a good question. I’m glad you asked it, because I mean, I would say within the prioritization of time, within the, all the various initiatives that make up the Reset, our immediate focus, and something that’s taken an enormous amount of time of management team and across the organization, has been cost-cutting. And that’s precisely so that we could give you the answer I’m about to give you, which is we’re – we’re working so hard so quickly, because we want full year 2016 effect, both with respect to the G&A cost program, which internally goes under the name DOP, for doing our part, and then on the O&M cost saving portion. And Mauricio, do you have anything to add to that or… Mauricio Gutierrez – Chief Operating Officer, Director & Executive VP No. David Whipple Crane – President, Chief Executive Officer & Director I don’t think so. Yes. Anyway, Neel, did you have any follow-up question, and then we’ll call it a day, Liz. Neel Mitra – Tudor, Pickering, Holt & Co. Securities, Inc. Yeah, just had one quick question. So, with gas prices where they are, how are Parish and Limestone in Texas running now? Are you seeing some displacement from gas assets, or what do those capacity factors look like? Mauricio Gutierrez – Chief Operating Officer, Director & Executive VP Yeah, Neel. So, I mean I think the statistics that we’re providing on the third quarter were pretty representative of the – how competitive those two assets are. I mean, we increased our generation in Texas for our baseload fleet, that includes nuclear and coal. As we go into the shorter months, we always see a reduction in capacity factors, but that’s just normal seasonality. I can’t tell you that we’re seeing an increasing coal to gas switching that we haven’t seen in previous months, so. Neel Mitra – Tudor, Pickering, Holt & Co. Securities, Inc. Okay. David Whipple Crane – President, Chief Executive Officer & Director Neel, thank you for the question. David Whipple Crane – President, Chief Executive Officer & Director And I just want to thank everyone for participating, and we’ll keep you updated in the weeks and months to come. Thank you. Operator Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the program and you many now disconnect. Everyone have a great day.