Exelon Earnings Call Nuggets: Target Expectation and Hedge Positions
Exelon Corp (NYSE:EXC) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.
Greg Gordon – ISI Group: I think this is – a good quarter by the way and we are happy to see that pricing is starting to cooperate with your thesis. Few questions on those fronts and on cash flow, so the power of new business to go anniversary the mark-t-market hedges and the open gross margin is it fair to presume that you’ve lowered again your expectations for margins and/or volumes given that in ’13, ’14 and ’15 just given the persistently low level of pricing and low level of volatility as it relates to competitive energy supply?
Christopher M. Crane – President and CEO: Ken will address that and we’ll circle back if you have a cash flow question. Ken you want to.
Kenneth W. Cornew – SVP and President, Exelon Power Team: That’s not the case actually in 2013 we have reduced our target expectation for power new business to go essentially because we got defensive on natural gas prices early in the quarter and hedge the portfolio tightly and missed an opportunity to gain some upside from spot prices in the first quarter. In 2014 and 2015 it’s actually a very different story. We have actually achieved new business targets as or better than expected in those years and when we do achieve those targets, what we do is we reduce the Power New Business/To Go online and it rolls into the mark-to-market of hedges. So our hedging position that we’ve had on, that’s associated with taking advantage of upside in the power markets is benefiting us in those two years. You have follow-up on free cash?
Greg Gordon – ISI Group: Yes. So when I look at Page 18 where you show the buildup to your consolidated cash flow outlook, there’s a lot of, what I would call relatively small changes, but the two big ones are the $225 million reduction in expected CFO from ExGen, but then also a $325 million decline in expected other cash flows. Can you dig a little bit deeper into those two items?