NRG Energy, Inc. (NYSE:NRG) Q1 2015 Earnings Conference Call Transcript
May 08, 2015 • 09:30 am ET
Good day, ladies and gentlemen, and welcome to the NRG Energy First Quarter 2015 Earnings Conference 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, this call is being recorded.
I would now like to introduce your host for today's conference, Matthew Orendorff, Managing Director of Investor Relations. Please go ahead.
Thank you, Danielle. Good morning, and welcome to NRG Energy's first quarter 2015 earnings call. This morning's call is being broadcast live over the phone and via webcast, which can be located on the IR 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 question.
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. (Forward-Looking Cautionary Statements)
And with that, I will now turn the call over to David Crane, NRG's President and CEO.
David Whipple Crane
Thank you, Matt. Good morning, everyone, and thank you for joining us.
As always, joining me today and participating in the presentation are Kirk Andrews, our CFO, and Mauricio Gutierrez, our COO and President of NRG Business. Additionally, and available for questions are Chris Moser, who heads our Commercial Operations; Elizabeth Killinger, who's the head of Home Retail; and Kelcy Pegler, Jr., who's the head of Home Solar. Somewhat unusually, we're actually communicating with you from multiple locations, so if we run into some technological issues, please bear with us.
We've got a lot of great news to update you on today, and I realize we're starting slightly later than normal and during market hours, so we're going to get right into it and try and get through it as quickly as we can, give you all of the information you need.
Starting on slide three of the presentation, the story of NRG's first quarter 2015 is quite simple; record financial performance, $840 million of adjusted EBITDA, breaking our previous record which was set just last year. This achievement is truly remarkable given that previous high in 2014 had received a substantial boost from the polar vortex which occurred in January of that year. But what's even more remarkable is that we beat the existing record in the face of very, very soft wholesale pricing in our core markets.
Average on-peak prices in PJM in the first quarter of 2015 were just 50% of what they were in the first quarter of 2014. In ERCOT, in the first quarter, the average on-peak prices were just 40% of what they were last year. In my mind and hopefully in yours, this is proof positive of the superiority of our integrated wholesale/retail business model.
But of course, the right business model only gets you to the starting line. Our record first quarter performance is entirely attributable to