Question-and-Answer Session
Operator
Thank you. (Operator instructions) And our first question today comes from Neel Mitra with Simmons & Company.
Neel Mitra – Simmons & Company
Hi. I wanted to get a better understanding on your thought of capital allocation going forward, about 2 billion in cash, how are you looking at Brownfield development, distressed asset acquisitions or share debt repurchases and at this time, do you have any preferences towards allocating that cash among those buckets or timing regarding that?
Ed Muller
Well, good morning, Neel.
Neel Mitra – Simmons & Company
Good morning.
Ed Muller
We first have to look at how much cash we need in the business and we do that on the same basis that we have previously said we do, so looking at the outlook for the business, preserving our credit profile, maintaining adequate liquidity including for capital expenditures and maintaining sufficient working capital. And I think that has always been our view and it will continue to be our view and of course in the current environment, I think it’s very important that we continue to appear to this criteria rigorously which we do. And as to how we would use excess capital, your question is a good one, it is theoretical and it depends on what we see as the options in front of us and valuing each, and I can’t just grab and I don’t think it would be appropriate to grab and say, we prefer one to the other. We prefer to deliver the most value to the owners of this company and there we will make our decision.
Neel Mitra – Simmons & Company
Okay. And I also wanted to ask a general question on your thoughts on M&A in general. What do you see as some of the pros and cons of an IPP entering into a transaction at this point in creating value with the weak commodity in credit environment as well as the financing cost associated with change of control covenants on debt?
Ed Muller
Well, that’s a mouthful. I think overall that this is a sector in which there can be real benefit from consolidation and the reason for that is that the G&A will run each of the players [ph] in this sector is substantial, and so each of the players in this business could scale up its business without meaningfully increasing its G&A. So that tells you just a simple fact that if you have consolidation, you could have substantial G&A savings, so there is some value to be created there. And that’s on the positive side. There also would be operational synergies I am sure.
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