Q2 2024 NRG Energy Inc Earnings Call

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Operator: Good day, and thank you for standing by. Welcome to the NRG Energy Inc. second quarter 2024 earnings call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the compass over to your first speaker today, Kevin Cole. Head of Treasury and Investor Relations. Please go ahead.

Speaker Change: Good day and thank you for standing by welcome to the NRG Energy, Inc. Second quarter 2024 earnings call.

Speaker Change: At this time all participants are in listen only mode. After the speaker's presentation, there will be a question and answer session.

Speaker Change: To ask a question. During this session you will need to press star one on your telephone you would be in here an automated message advising your hand is raised.

Speaker Change: To withdraw your question. Please press star one again please.

Speaker Change: Please be advised that today's conference is being recorded I would now.

Speaker Change: Now I'd like to hand, the conference over to your first speaker today.

Kevin Cole: Kevin Cole.

Kevin Cole: Head of Treasury and Investor Relations. Please go ahead.

Kevin Cole: Thank you good morning, and welcome to NRG Energy's second quarter 2024 earnings call. This morning's call will be 45 minutes in length is being broadcast live over the phone and via webcast, which can be located in the investors section of our website at www NRG dot com under presentations and Webcasts.

Kevin Cole: Thank you. Good morning, and welcome to NRG Energy's second quarter 2024 earnings call. This morning's call will be 45 minutes in length and will be broadcast live over the phone via webcast, which can be located in the investor section of our website at www.nrg.com under presentations and webcasts. Please note that today's discussion may contain forward-looking statements, which are based upon assumptions that we believe to be reasonable as of this date. However, actual results may differ materially.

Speaker Change: Please note that today's discussion may contain forward looking statements, which are based upon assumptions that we believe to be reasonable as of this date actual results may differ materially.

Kevin Cole: We urge everyone to review the safe harbor in today's presentation, as well as the risk factors in our SEC filings. We undertake no obligation to update these statements as a result of future events, except as required by law. In addition, we will refer to both GAAP and non-GAAP financial measures. For information regarding our non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures, please refer to today's presentation. And with that, I'll now turn the call over to Larry Coben, NRG's Chairman and CEO. Thank you, Kevin.

Speaker Change: We urge everyone to review the Safe Harbor in today's presentation as well as the risk factors in our SEC filings. We undertake undertakes no obligation to update these statements as a result of future events, except as required by law.

Larry Cohen: In addition, we will refer to both GAAP and non-GAAP financial measures for information regarding our non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures. Please refer to today's presentation and with that I'll now turn the call over to Larry Cohen, Nrg's, Chairman and CEO.

Larry Cohen: Thank you Kevin.

Larry Coben: Good morning, everyone. Thank you for your interest in NRG. I'm joined this morning by Bruce Chung, our Chief Financial Officer. We also have members of the management team on the call, and they are all available to answer questions.

Larry Cohen: Everyone. Thank you for your interest in NRG I'm joined this morning by Bruce Chung, Our Chief Financial Officer. We also have members of the management team on the call and they are all available to answer questions.

Larry Coben: First, I just want to express how excited I am to be leading NRG as Chairman, President, and CEO. I'm grateful for the outpouring of support I've received from the investment community, employees, and other stakeholders over the last nine months and again in the last week following the board's announcement of August 1st. We are laser focused on delivering exceptional shareholder value by meeting the growing and evolving needs of our customers while returning billions of dollars in capital. We believe we have the right strategy and the best team to fix the depressed valuation of our company once and for all. Let's begin with NRG's strategic positioning.

Larry Cohen: First I just wanted to express how excited I am to be leading NRG as chairman President and CEO.

Larry Cohen: I am grateful for the outpouring of support I received from the investment community employees and other stakeholders over the last nine months and again in the last week. Following the board's announcement of August 1st.

Larry Cohen: We are laser focused on delivering exceptional shareholder value by meeting the growing and evolving needs of our customers, while returning billions of dollars in capital.

Unknown Executive: Good day, and thank you for standing by. Welcome to the NRG Energy Inc. 2nd quarter, 2024, earnings call.

Larry Cohen: We believe we have the right strategy and the best team to fix the depressed valuation of our company once and for all.

Unknown Executive: At this time, our participants are in listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 1 again.

Larry Cohen: Let's begin with Nrg's strategic positioning.

Larry Coben: For those new to NRG, we have the largest energy and smart home platform in North America. We're the trusted partner to over 8 million residential customers offering tailored energy and smart home solutions. We are also the second largest energy and energy services provider, as well as the largest natural gas provider to commercial and industrial companies. If there's been one takeaway from today's discussion that you should take away, it's that our business and financial outlook has never been stronger. We are witnessing a structural long-term tightening in power supply and demand driving a step change improvement in fundamentals.

Larry Cohen: For those new to NRG, we have the largest energy and smart home platform in North America.

Larry Cohen: The trusted partner to over 8 million residential customers offering tailored energy and smart home solutions.

Larry Cohen: Also the second largest energy and energy services provider as well as the largest natural gas provider to commercial and industrial companies.

Larry Cohen: There's been one takeaway from todays discussion that you should have is that our business and financial outlook has never been stronger.

Unknown Executive: Please be a boss that today's conference is being recorded.

Unknown Executive: I would now like to hand a conference over to your first speaker today.

Speaker Change: We are witnessing a structural long term tightening in power supply and demand driving a step change improvement in fundamentals.

Larry Coben: Customers across our platform are using more of our products and increasingly requesting premium customized experiences, as well as innovative offerings focused on convenience, sustainability, and cost. Our integrated platform enables us to stabilize and increase our near-term earnings while capturing medium to long-term growth opportunities. We generate significant excess cash well beyond our current business.

Larry Cohen: Customers across our platform are using more of our products and increasingly requesting premium customized experiences as well as innovative offerings focused on convenience sustainability and cost our integrated platform enables us to stabilize and increase our near term earnings Wildcat.

Larry Cohen: During medium to long term growth opportunities.

Larry Cohen: We generate significant excess cash well beyond our current business needs, resulting in the financial flexibility to grow earnings.

Larry Coben: This has resulted in the financial flexibility to grow earnings while at the same time returning substantial capital to our shareholders and maintaining a strong balance. The strength of our business and financial outlook has positioned us to capitalize on what we believe to be the beginning stages of an exceptional time for our industry and an exciting time for our company. I have never been more excited about the opportunities in front of us than I am today. Let's dive into the key messages on slide 5.

Larry Cohen: At the same time, returning substantial capital to our shareholders and maintaining a strong balance sheet.

Kevin Cole: Kevin Cole, Head of Treasury and Investor Relations. Please go ahead. Thank you.

Larry Cohen: The strength of our business and financial outlook has positioned us to capitalize on what we believe to be the beginning stages of an exceptional time for our industry.

Kevin Cole: Good morning and welcome to NRG Energy's 2nd quarter, 2024, earnings call. This morning's call will be 45 minutes in length and will be broadcast live over the phone and via webcast, which can be located in the investor section of our website at www.nrg.com under presentations and webcasts. Please note that today's discussion may contain four looking statements, which are based upon assumptions that we believe to be reasonable as of the state. Actual results may differ materially.

Kevin Cole: We urge everyone to review the safe harbor in today's presentation, as well as the risk factors in our SDT finalings. We undertake no obligation to update these statements as result of future events, except as required by law. In addition, we will refer to both GAAP and non-GAAP financial measures. For information regarding our non-GAAP financial measures and reconciliations, the most directly comparable GAAP measures, please refer to today's presentation.

Larry Cohen: And with that, an alter the call over to Larry Cohen, NRG's chairman and CEO. Thank you, Kevin. Good morning, everyone. Thank you for your interest in NRG. I'm joining this morning by Bruce Chung, our chief financial officer. We also have members of the management team on the call, and they are all available to answer questions.

Larry Cohen: And an exciting time for our company.

Larry Cohen: I have never been more excited about the opportunities in front of us than I am today.

Larry Cohen: First, I just want to express how excited I am to be leading NRG as chairman, president and CEO. I'm grateful for the outpouring of support I've received from the investment community, employees, and other stakeholders over the last nine months, and again in the last week following the board's announcement of August 1st. We are laser focused on delivering exceptional shareholder value by meeting the growing and evolving needs of our customers while returning billions of dollars in capital. We believe we have the right strategy and the best team to fix the depressed valuation of our company once and for all.

Larry Cohen: Let's dive into the key messages on slide five.

Larry Coben: Our business performance exceeded expectations in the second quarter and year to date. We are reaffirming our financial guidance ranges and trending toward the upper end of that guidance range. Next, electrification trends compounded by Gen-AI data center and other large load growth continue to materialize.

Speaker Change: <unk> business performance exceeded expectations in the second quarter and year to date.

Larry Cohen: We are reaffirming our financial guidance ranges.

Larry Cohen: And trending towards the upper end of that guidance range.

Larry Cohen: Next electrification trends compounded by Gen AI data center and other large load growth continue to materialize.

Larry Coben: We expect competitive markets, such as ours, to realize outside benefits from this trend, driven by business-friendly policies, available resources, and the ability to execute projects quickly. Additionally, we have made progress on the strategic priorities discussed in our last earnings call. This includes submitting our brownfield development projects to the Texas Energy Fund and continuing to advance with our portfolio of sites. Finally, we continue to fulfill our Capital Allocation Commitment, with our share repurchase program underway and a line of sight to achieving our balance sheet target. Turning to slide 6, we delivered $935 million in adjusted EBITDA in the second quarter, a 14% year-on-year increase. This brings year-to-date adjusted EBITDA to $1.784 billion, up 22% from last year.

Speaker Change: Do you expect competitive markets, such as ours to realize outsized benefits from this trend driven by business friendly policies available resources and the ability to site projects quickly.

Larry Cohen: Let's begin with NRG's strategic positioning. For those new to NRG, we have the largest energy and smart home platform in North America. We're the trusted partner to over 8 million residential customers, offering tailored NRG and smart home solutions. We are also the second largest NRG and NRG services provider as well as the largest natural gas provider to commercial and industrial companies.

Speaker Change: Additionally, we have made progress on the strategic priorities discussed in our last earnings call.

Larry Cohen: This includes submitting our brownfield development projects to the Texas Energy fund and continuing to advance with our portfolio of sites.

Speaker Change: Finally, we continue to fulfill our capital allocation commitments with our share repurchase program underway in light of sight to achieving our balance sheet targets.

Larry Cohen: If there's been one takeaway from today's discussion that you should have, it's that our business and financial outlook has never been stronger. We are witnessing a structural long-term tightening and power supply in demand, driving a step change improvement in fundamental, customers across our platform are using more of our products and increasingly requesting premium customized experiences, as well as innovative offerings focused on convenience, sustainability and cost. Our integrated platform enables us to stabilize and increase our near term earnings while capturing medium to long term growth opportunities.

Speaker Change: Turning to slide six we delivered $935 million and adjusted EBITDA in the second quarter, a 14% year on year increase.

Speaker Change: This brings year to date adjusted EBITDA to 178 4 billion up 22% from last year.

Larry Coben: Following this strong first half, we are reaffirming our financial guidance ranges and again trending toward the upper part of that range. All of our businesses are excelling and demonstrating strong performance across the board. Our consumer segments demonstrated strong year-on-year growth. Home Energy subscribers increased by 8% at stable margins.

Speaker Change: Knowing this strong first half we are reaffirming our financial guidance ranges and again trending towards the upper part of that range.

Speaker Change: All of our businesses are excelling and demonstrating strong performance across the board.

Speaker Change: Our consumer segments demonstrated strong year on year growth home energy subscribers increased by 8% at stable margins.

Larry Cohen: We generate significant excess cash well beyond our current business. Resulting in the financial flexibility to grow earnings while at the same time returning substantial capital to our shareholders and maintaining a strong balance sheet. The strength of our business and financial outlook has positioned us to capitalize on what we believe to be the beginning stages of an exceptional time for our industry. And an exciting time for our company. I have never been more excited about the opportunities in front of us than I am today.

Larry Coben: Smart Home had a 5% increase in subscribers and 7% growth in revenue and delivered industry-leading retention rates and expanded markets. We continue to make substantial progress toward our virtual power plant offering and look forward to sharing more about that by the time of our third quarter earnings call. On the supply side, we continue to experience significant improvements in the availability and reliability of our generation assets, thanks to the investments we have made in them in recent years.

Speaker Change: Smart home had a 5% increase in subscribers and 7% growth in revenues and delivered industry, leading retention rates and expanded margins.

Speaker Change: We continue to make substantial progress toward our virtual power plant, operator, and look forward to sharing more about that by the time of our third quarter earnings call.

Speaker Change: On the supply side, we continue to experience significant improvements in the availability and reliability of our generation assets. Thanks to the investments we have made in them in recent years, we are well prepared for the summer and winter seasons across our fleet after successfully completing our spring.

Larry Cohen: Let's dive into the key messages on slide five. Our business performance exceeded expectations in the second quarter and year to date. We are re-informing our financial guidance ranges and trending toward the upper end of that guidance range. Next, electrification trends compounded by Gen. A.I, data center and other large load growth continue to materialize. We expect competitive markets such as ours to realize outside benefits from this trend driven by business friendly policies available resources and the ability to site projects quickly.

Larry Coben: We are well prepared for the summer and winter seasons across our fleet after successfully completing our spring maintenance outage. This level of preparedness helps ensure we can meet demand and consistently deliver exceptional service to our customers. A shout-out to our incredible team of plant operators, as our assets delivered 97% reliability during Hurricane Beryl in July, with no storm-induced or caused outages or lost generation.

Speaker Change: Maintenance outages.

Speaker Change: This level of preparedness helps ensure we can meet demand and consistently deliver exceptional service to our customers a shout out to our incredible team of plant operators as our assets delivered 97% reliability during hurricane barrel in July with no storm.

Speaker Change: Induced or cause outages or lost generation.

Speaker Change: I'm also happy to report that our cost and growth synergies are on track.

Larry Coben: I'm also happy to report that our cost and growth synergies are on track. Today, we're reaffirming our plan of $550 million in synergies by the end of 2025, and we remain on track to achieve our 15% to 20% free cash flow before growth per share growth target, even as our rising stock price means repurchasing shares at higher prices, much higher prices, than projected a year ago. On share repurchases, we've completed $176 million of the current buyback program, with $649 million to be completed over the balance of the year. Lastly, we are announcing the sale of Airtron HVAC, which will result in $400 million in net cash gross. Turning to slide seven.

Larry Cohen: Additionally, we have made progress on the strategic priorities discussed in our last earnings call. This includes submitting our Brownfield development projects to the Texas Energy Fund and continuing to advance with our portfolio of sites. Finally, we continue to fulfill our capital allocation commitments with our share repurchase program underway and line of sight to achieving our balance sheet targets.

Speaker Change: Today, we are reaffirming our plan of $550 million in synergies by the end of 2025, and we remain on track to achieve our 15% to 20% free cash flow before growth per share growth target.

Speaker Change: Even as our rising stock price means repurchasing shares at higher prices much higher prices than projected a year ago.

Larry Cohen: Turning to slide six, we delivered $935 million in adjusted EBITDA in the second quarter, a 14% year-on-year increase. This brings year-to-date adjusted EBITDA to $1.784 billion, up 22% from last year. Following the strong first half, we are reaffirming our financial guidance ranges and again, trending toward the upper part of that range. All of our businesses are excelling and demonstrating strong performance across the board. Our consumer segments demonstrated strong year-on-year growth. Home energy subscribers increased by 8% at stable margins.

Speaker Change: On share repurchases with complete we've completed $176 million of the current buyback program with $649 million to be completed over the balance of the year.

Speaker Change: Lastly, we are announcing the sale of Airtran, HVAC, which will result in $400 million and net cash proceeds.

Speaker Change: Turning to slide seven.

Larry Coben: I'd like to provide you with a little additional context on the strong demand outlook we are seeing in Texas. In the first half of the year, Texas experienced over 3% weather-normalized load growth, setting new record peaks in January, April, and May. Looking ahead, ERCOT continues to anticipate substantial load growth in the coming years. ERCOT's latest projection indicates that more than 60 gigawatts of growth through 2030 will take place, driven by on-shoring, data centers, and other large load customers.

Speaker Change: I'd like to provide you a little additional context on the strong demand outlook, we are seeing in Texas.

Speaker Change: In the first half of the year <unk> experienced over 3% weather normalized load growth setting new record peaks in January April and May.

Larry Cohen: Smart home had a 5% increase in subscribers and 7% growth in revenue and delivered industry-leading retention rates and expanded margins. We continue to make substantial progress toward our virtual power plant offering and look forward to sharing more about that by the time of our third quarter earnings call. On the supply side, we continue to experience significant improvements in the availability and reliability of our generation assets, thanks to the investments we have made in them in recent years.

Speaker Change: Looking ahead ERCOT continues to anticipate substantial loan growth in the coming years.

Speaker Change: <unk> latest projections indicate that more than 60 gigawatts of growth through 2030 will take place driven by onshoring data centers and other large load customers.

Larry Coben: Notably, many of these new loads are backed by contracts with the transmission and distribution utilities in ERCOT or have been confirmed by an officer of a TDU, adding credibility to the projected growth. Meanwhile, within our own portfolio, we continue to advance our 1.5 gigawatts of brownfield natural gas development in Texas. We filed applications for all three projects with the Texas Energy Fund in June. We anticipate the PUCT will announce later this month which projects are advancing to the due diligence phase, which is expected to last four to eight months, depending on the quality of the projects and their applications. Following that, loan agreements will be executed.

Speaker Change: Notably many of these new loads are backed by contracts with the transmission and distribution utilities in ERCOT or have been confirmed by an officer of a TPU, adding credibility to the projected growth.

Larry Cohen: We are well prepared for the summer and winter seasons across our fleet after successfully completing our spring maintenance outages. This level of preparedness helps ensure we can meet demand and consistently deliver exceptional service to our customers. A shout out to our incredible team of plant operators has our assets delivered 97% reliability during Hurricane Barrow in July with no storm induced or caused outages or lost generation. I'm also happy to report that our cost and growth synergies are on track.

Speaker Change: Within our own portfolio, we continue to advance our one five gigawatts of brownfield natural gas development in Texas.

Speaker Change: We filed applications for all three projects with the Texas Energy Fund in June.

Speaker Change: We anticipate the PUC will announce later this month, which projects are advancing to the due diligence phase, which is expected to last four to eight months, depending on the quality of the projects and their applications.

Speaker Change: Following that loan agreement will be executed we believe our projects are well situated for a timely approval given there are several ready nature and the completeness of the applications that we submitted.

Larry Cohen: Today we're reaffirming our plan of $550 million in synergies by the end of 2025 and we remain on track to achieve our 15 to 20% free cash flow before growth, per share growth target. Even as our rising stock price means repurchasing shares at higher prices, much higher prices than projected a year ago. On share repurchases, we've completed $176 million of the current buyback program with $649 million to be completed over the balance of the year.

Larry Coben: We believe our projects are well-situated for a timely approval given their shovel-ready nature and the completeness of the applications that we submitted. Finally, we've received numerous questions about our site portfolio since our first quarter call. Our singularly devoted development team is diligently working to maximize the value of these sites. As a reminder, our portfolio includes 21 sites encompassing 21,000 acres of land in competitive markets. These sites are ideally suited for new large loads and power plant development, offering co-location opportunities both behind and in front of the meter.

Larry Cohen: Lastly, we are announcing the sale of an Airtron H-Track which will result in $400 million in net cash growth.

Speaker Change: Finally, we've received numerous questions about our site portfolio since our first quarter call. Our citizenry devoted development team is diligently working to maximize the value of these sites.

Speaker Change: As a reminder, our portfolio includes 21 sites encompassing 21 acres of land.

Speaker Change: In competitive markets. These sites are ideally suited for new large loads and power plant development offering co location opportunities both behind and in front of the meter.

Speaker Change: To identify the site is best suited for Datacenters key factors include access to water for cooling premium fiber channel access for low latency and existing grid access and infrastructure for rapid market entry as.

Larry Coben: To identify the sites best suited for data centers, key factors include access to water for cooling, premium fiber channel access for low latency, and existing grid access and infrastructure for rapid marketing. As you can see, our sites possess these attributes, but they also have potential for other large load applications. In this appendix, we provide several paths to value under consideration. I look forward to discussing this more with you as we progress. With that, let me turn it over to Bruce Chung for the financial review. Bruce?

Larry Cohen: Turning this slide 7, I'd like to provide you a little additional context on the strong demand outlook we are seeing in Texas. In the first half of the year, Texas experienced over 3% weather normalized load growth, setting new record peaks in January, April and May. Looking ahead, Birkot continues to anticipate substantial load growth in the coming years. Birkot's latest projection indicates that more than 60 gigawatts of growth through 2030 will take place driven by ensuring data centers and other large load customers.

Speaker Change: As you can see our sights possess these attributes but also have potential for other large load applications.

Speaker Change: They put the appendix, we provided several paths to value under consideration.

Speaker Change: I look forward to discussing this more with you as we progress.

Speaker Change: With that let me turn it over to Bruce Chubb for the financial review Bruce.

Bruce Chubb: Thank you Larry.

Bruce Chung: Turning to slide 9, NRG delivered another strong quarter of financial and operational performance with adjusted EBITDA of $935 million, an increase of $116 million over the prior year. Pre-cash flow before growth was $663 million, exceeding prior year results by $238 million.

Bruce Chubb: Turning to slide nine NRG delivered another strong quarter of financial and operational performance with adjusted EBITDA of $935 million, an increase of $116 million over the prior year.

Larry Cohen: Notably, many of these new loads are backed by contracts with the transmission and distribution utilities in Airtot or have been confirmed by an officer of ATDU adding credibility to the projected growth. Within our own portfolio, we continue to advance our 1.5 gigawatts of brownfield natural gas development in Texas. We filed applications for all three projects with the Texas Energy Fund in June. We anticipate the PUCT will announce later this month which projects are advancing to the due diligence phase, which is expected to last 4-8 months depending on the quality of the projects and their applications. Following that, loan agreements will be executed. We believe our projects are well situated for a timely approval given their several ready-nature and the completeness of the applications that we submitted.

Bruce Chubb: Free cash flow before growth was $663 million.

Bruce Chubb: Exceeding prior year results by $238 million.

Bruce Chung: Each segment of our business performed well, with much of the performance underscored by positive momentum and a growing subscriber count. Increased Volumes and Margin Expansion Starting with our results in our east-west services other segments, we saw strong performance producing $282 million of adjusted EBITDA, a $184 million increase over the prior year. $132 million of the year-over-year increase came from the East segment, where an increase in subscriber counts and lower realized retail supply costs were the primary drivers of performance. The remainder of the year-over-year growth was driven by a decrease in realized power supply costs in the West.

Speaker Change: Each segment of our business performed well with much of the performance underscored by positive momentum and growing subscriber counts.

Bruce Chubb: Increased volumes and margin expansion.

Bruce Chubb: Starting with our results and our east West services. Other segments, we saw strong performance producing $282 million of adjusted EBITDA of $184 million increase over the prior year.

Bruce Chubb: $132 million of the year over year increase came from the East segment, where an increase in subscriber counts and lower realized retail supply costs were the primary drivers of performance the.

Bruce Chubb: The remainder of the year over year growth was driven by a decrease in realized power supply costs and the west.

Bruce Chubb: Adjusted EBITDA in Texas for the second quarter was $452 million a slight decline.

Bruce Chung: Adjusted EBITDA in Texas for the second quarter was $452 million, a slight decline compared to the prior year. Texas performance was driven by favorable hedging activity, along with increased volumes and subscriber counts in the region. This favorable was offset by an estimated $40 million due to the impact of last year's STP and Gregory Asset Sales, as well as $50 million in higher maintenance costs from the extended plant outage program we deployed in the quarter to ensure our plants are well positioned for this summer's operations and beyond.

Larry Cohen: Finally, we've received numerous questions about our site portfolio since our first quarter call. Our seemingly devoted development team is diligently working to maximize the value of these sites. As a reminder, our portfolio includes 21 sites encompassing 21,000 acres of land in competitive markets. These sites are ideally suited for new large loads and power plant development, offering co-location opportunities both behind and in front of the meter. To identify the sites best suited for data centers, key factors include access to water for cooling, premium fiber channel access for low latency, and existing grid access and infrastructure for rapid market entry. As you can see, our sites possess these attributes, but also have potential for other large load applications.

Bruce Chubb: Declined compared to prior year.

Bruce Chubb: <unk> performance was driven by favorable hedging activity along with increased volumes in subscriber counts in the region.

Bruce Chubb: This favorability was offset by an estimated 4 million $40 million due to the impact of last year's STP and Gregory asset sales as well as $50 million and higher maintenance costs from the extended planned outage program, we deployed in the quarter to ensure our plants are well positioned for this summer's operations and beyond.

Bruce Chubb: This marks our third year of enhanced preventative investment to improve reliability and flexibility across our fleet.

Bruce Chung: This marks our third year of enhanced preventative investment to improve reliability and flexibility across our fleet. Our plants have performed well this year, and we expect them to continue to do so as the summer rolls on.

Bruce Chubb: Our plants have performed well through the year and we expect them to continue to do so as the summer rolls on.

Bruce Chung: Our smart home business has continued to execute well, growing subscriber count by 5% and service margins by 4% year over year and generating $201 million of adjusted EBITDA in the quarter. While that represents a slight decrease from the prior year, it is important to point out the decrease was primarily driven by an expected increase in the amortization of fulfillment expenses, which began impacting EBITDA after we closed on the acquisition. Absent this non-cash impact and other non-recurring adjustments, adjusted EBITDA for this segment would have shown an increase of 6% year over year.

Speaker Change: Our smartphone business has continued to execute well growing subscriber count by 5% and service margins by 4% year over year, and generating 200 $201 million of adjusted EBITDA in the quarter.

Larry Cohen: In these appendix, we provide several paths to value under consideration. I look forward to discussing this more with you as we progress.

Bruce Chubb: While that represents a slight decrease from the prior year. It is important to point out. The decrease was primarily driven by an expected increase in the amortization of fulfillment expenses, which began impacting EBITDA. After we closed on the acquisition of the business.

Bruce Chung: With that, let me turn it over to Bruce Chung for the financial review. Bruce? Thank you, Larry.

Bruce Chung: Turning to slide 9, NRG delivered another strong quarter of financial and operational performance with an adjusted EBITDA of $935 million, an increase of $116 million over the prior year. Free cash flow before growth was $663 million, exceeding prior year results by $238 million. Each segment of our business performed well with much of the performance underscored by positive momentum and growing subscriber counts, increased volumes and margin expansion.

Bruce Chubb: Absent this noncash impacts and other nonrecurring adjustments adjusted EBITDA for this segment would have shown an increase of 6% year over year.

Bruce Chung: Key performance indicators for the smart home segment continue to remain strong as the average smart home subscriber interacts with their systems more than 16 times per day, and we see this high level of engagement carried through to our best in class retention, which is nearly 90%.

Bruce Chubb: Key performance indicators for the Smart home segment continued to remain strong as the average smart home subscriber interacts with their systems more than 16 times per day, and we see this high level of engagement carried through to our best in class retention, which is nearly 90%.

Bruce Chubb: Our free cash flow before growth came in at $663 million $238 million higher than the prior year and driven by our significant growth in adjusted EBITDA and favorable working capital.

Bruce Chung: Our free cash flow before growth came in at $663 million, $238 million higher than the prior year, and driven by our significant growth in adjusted EBITDA and favorable working capital. We are reaffirming our 2024 guidance of $3.3 billion to $3.55 billion for adjusted EBITDA and $1.825 billion to $2.075 billion for free cash flow before growth. Our strong year-to-date performance, coupled with the investments we have made in our plants, gives us confidence that we are trending towards the upper end of the Guidelines.

Bruce Chung: Starting with our results in our East, West services, other segments, we saw strong performance producing $282 million of adjusted EBITDA, a $184 million increase over the prior year. $132 million of the year-over-year increase came from the East segment, where an increase in subscriber counts and lower realized retail supply costs were the primary drivers of performance. The remainder of the year-over-year growth was driven by a decrease in realized power supply costs in the West.

Bruce Chubb: We are reaffirming our 2024 guidance of $3 3 billion to $3 55 billion for adjusted EBITDA and $1 85 billion to $2 75 billion for free cash flow before growth.

Bruce Chubb: Our strong year to date performance, coupled with the investments we have made and our plans give us confidence that we are trending towards the upper end of guidance, we continue to see growth and momentum in our business platforms and the continued execution of our diversified supply strategy positions us well through the remainder of the year.

Bruce Chung: Adjusted EBITDA in Texas for the second quarter was $452 million, a slight decline compared to prior year. Texas performance was driven by favorable hedging activity along with increased volumes and subscriber counts in the region. This favorability was offset by an estimated $40 million due to the impact of last year's STP and Gregory Asset sales, as well as $50 million in higher maintenance costs from the extended plant outage program we deployed in the quarter to ensure our plants are well positioned for this summer's operations and beyond.

Bruce Chung: We continue to see growth and momentum in our business platforms, and the continued execution of our diversified supply strategy positions us well through the remainder of the year. Turning to slide 10, for a current view of our 2024 capital allocation. As you can see, there have been few changes since our first quarter call.

Bruce Chubb: Turning to slide 10 for our current view of our 2024, our capital allocation.

Bruce Chubb: As you can see there have been a few changes since our first quarter call. We are on track to deliver on nearly $600 million of liability management initiatives and $1 2 billion and return of capital through share repurchases and the common dividend.

Bruce Chung: We are on track to deliver on nearly $600 million of liability management initiatives and $1.2 billion in return of capital through share purchases and the common dividend. As I mentioned last time, the strength of our share price performance has made our convertible notes one of the most expensive pieces of paper in our capital structure. And we subsequently seized the opportunity to mitigate that through strategic repurchases. As part of our liability management program, we repurchased $343 million, or approximately 60% of the original issue.

Bruce Chubb: As I mentioned last time, the strength of our share price performance has made our convertible notes one of the most expensive pieces of paper in our capital structure and we subsequently seized the opportunity to mitigate that through strategic repurchases as part of our liability management program.

Bruce Chung: This marks our third year of enhanced preventative investment to improve reliability and flexibility across our fleet. Our plants have performed well through the year and we expect them to continue to do so as the summer rolls on.

Bruce Chung: Our smart home business has continued to execute well, growing subscriber count by 5% and service margins by 4% year-over-year, and generating $200 million of adjusted EBITDA in the quarter. While that represents a slight decrease from the prior year, it is important to point out that decrease was primarily driven by an expected increase in the amortization of fulfillment expenses, which began impacting EBITDA after we closed on the acquisition of the business. Absent this non-cash impact and other non-recurring adjustments, adjusted EBITDA for the segment would have shown an increase of 6% year over year.

Bruce Chubb: We repurchased $343 million or approximately 60% of the original issuance for the remainder of these notes we have fully hedged the premium we will pay when the notes are retired.

Bruce Chung: For the remainder of these notes, we have fully hedged the premium we will pay when the notes are retired. Turning briefly to share repurchases, we have completed $176 million of the $825 million share repurchase target for 2024 via open market repurchases, bringing us to over 40% of our total $2.7 billion authorization. We see tremendous value in buying our shares and will continue to take advantage of our currently depressed stock price through share repurchase.

Bruce Chubb: Turning briefly to share repurchases, we have completed $176 million of the $825 million.

Bruce Chubb: Share repurchase target for 2024 via open market repurchases, bringing us to over 40% of our total $2 7 billion authorization.

Bruce Chubb: We see tremendous value in buying our shares and will continue to take advantage of our currently depressed stock price through share repurchases.

Bruce Chung: The only substantial change to our capital available for allocation relates to the sale of our Airtron HVAC business for $500 million, which will yield approximately $400 million of net proceeds. We expect the transaction to close before the end of the year. Finally, we now show $441 million of unallocated capital available for allocation in 2024 after taking into account the incremental $400 million of net proceeds from the Airtron transaction. We will evaluate the use of this unallocated capital as we move into the latter part of the year and after the closing of the Airtron sale. With that, I will turn it back to you, Larry.

Bruce Chung: Key performance indicators for the smart home segment continue to remain strong as the average smart home subscriber interacts with their systems more than 16 times per day, and we see this high level of engagement carried through to our best-in-class retention, which is nearly 90%.

Bruce Chubb: The only substantial change to our capital available for allocation relates to the sale of our airtran HVAC business for $500 million.

Bruce Chubb: Which will yield approximately $400 million of net proceeds we expect the transaction to close before the end of the year.

Bruce Chubb: Finally, we now show $441 million of unallocated capital available for allocation in 2024 after taking into account the incremental $400 million of net proceeds from the airtran transaction.

Bruce Chung: Our free cash flow before growth came in at $663 million, $238 million higher than the prior year, and driven by our significant growth in adjusted EBITDA and favorable working capital. We are reaffirming our 2024 guidance of $3.3 billion to $3.55 billion for adjusted EBITDA, and $1.825 billion to $2.075 billion for free cash flow before growth. Our strong-eater-date performance coupled with the investments we have made in our plants give us confidence that we are trending towards the upper end of guidance. We continue to seek growth and momentum in our business platforms, and the continued execution of our diversified supply strategy positions us well through the remainder of the year.

Bruce Chubb: We will we will evaluate the use of this unallocated capital as we move into the latter part of the year and after closing of the Airtran sale with that I will turn it back to you Larry.

Larry Cohen: Thank you Bruce.

Larry Coben: On slide 12, I'd like to share a few closing thoughts on our 2024 priorities and expectations. During the quarter, we made significant progress on our strategic initiatives, and I'm confident we have the right platform and strategy to deliver on our commitments to both our customers and our shareholders. As CEO, I'm deeply committed to driving NRG forward to create significant additional shareholder value. We are seeing a long-term step change improvement in fundamentals across our platform.

Larry Cohen: On slide 12, I'd like to share a few closing thoughts on our 2024 priorities and expectations.

Larry Cohen: During the quarter, we've made significant progress on our strategic initiatives and I am confident we have the right platform and strategy to deliver on our commitments to both our customers and our shareholders.

CEO: As CEO I am deeply committed to driving NRG forward to create significant additional shareholder value.

Bruce Chung: Turning to slide 10 for our current view of our 2024 capital allocation. As you can see, there have been few changes since our first quarter call. We are on track to deliver on nearly $600 million of liability management initiatives, and $1.2 billion in return of capital through share purchases and the common dividend. As I mentioned last time, the strength of our share price performance has made our convertible notes one of the most expensive pieces of paper in our capital structure, and we subsequently see the opportunity to mitigate that through strategic repurchases as part of our liability management program.

CEO: We are seeing a long term step change improvement in fundamentals across our platform.

Larry Coben: You can expect a continued heightened focus on operational excellence, prudent growth, and being good stewards of you, our investors' capital. I have never been more excited about the potential of our company than I am today. Thank you for your time and continued interest in NRG. Operator, we're now ready to open the line for questions. Thank you.

Larry Cohen: You can expect a continued heightened focus on operational excellence prudent growth and being good stewards of you our investors capital.

Larry Cohen: I've never been more excited about the potential of our company that I am today.

Larry Cohen: Thank you for your time and continued interest in NRG.

Speaker Change: Operator, we're now ready to open the line for questions.

Operator: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while I compile the Q&A list. Our first question comes from Shahriar Pourreza. From Guggenheim, please go ahead.

Speaker Change: Thank you.

Speaker Change: At this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one of your telephone and wait for your name to be announced.

Bruce Chung: We repurchased $343 million or approximately 60 percent of the original issuance. For the remainder of these notes, we have fully hedge the premium we will pay when the notes are retired. Turning briefly to share repurchases, we have completed $176 million of the $825 million share repurchase target for 2024 via open market repurchases, bringing us over 40 percent of our total $2.7 billion authorization. We see tremendous value in buying our shares, and we'll continue to take advantage of our currently depressed stock price through share repurchases.

Speaker Change: To withdraw your question. Please press star one again please.

Speaker Change: Please standby, while we compile the Q&A roster.

Speaker Change: Our first question comes from SAR Perrigo from.

SAR Perrigo: From Guggenheim. Please go ahead.

Shahriar Pourreza: Hey guys, good morning. Morning, Shahriar. Morning, morning.

SAR Perrigo: Hey, guys good morning.

Larry Coben: Larry, since we last spoke, we've seen something like 40 to 60 gigawatts get in line for the energy fund. Do you think the state could do a second fund if this one helps meet the demand? Do you think this means the curves could revert to backwardation? And could you get involved with more generation assuming the expanded program next year? So do you have more bandwidth?

SAR Perrigo: Good morning, Shar. Good morning morning, Larry since we last spoke we've seen something like 40 to 60 gigs get in line for the Energy Fund do you think the state could do second fund at this one helps mute the demand do you think this means the curves could revert to backwardation and could you get involved with more generation assuming next.

Bruce Chung: The only substantial change to our capital available for allocation relates the sale of our AirTron HVAC business for $500 million, which will yield approximately $400 million of net proceeds. We expect the transaction to close before the end of the year. Finally, we now show $441 million of unallocated capital available for allocation in 2024 after taking into account the incremental $400 million of net proceeds from the AirTron Transact. We will evaluate the use of this unallocated capital as we move into the latter part of the year and after closing of the Airtron sale.

Speaker Change: <unk> program next year, So do you have more bandwidth.

Larry Coben: Is that one question, Shahriar, or three? But they're all great questions. Look, this state has talked about, I think you probably saw the governor and the lieutenant governor talk about, you know, adding a second tranche to the TEP, and I think they'll then see what happens and what the availability is.

SAR Perrigo: Yes.

Speaker Change: Is that one question or three but.

Speaker Change: Great questions and.

Speaker Change: Look at this date has talked about I think you probably saw the governor and the lieutenant Governor talked about adding a second tranche to the task and I think bold and see what happens and what the availability is.

Larry Coben: I think the bigger question, you know, Shahriar, is first of all, how much of these are real. And we don't know yet. We know that ours is shovel-ready. But if you look at, you know, people who've applied for, you know, transmission studies and the like, it's an awful lot less than 40 gigabytes. I think it's about 12, to be exact.

Shar: I think the bigger question Shar is first of all how much of these are real and we don't know yet we know that ours are several ready, but if you look at people who have applied for transmission studies and the like it's an awful lot less than 40 gigs I think its about 12 to be exact and so.

Larry Cohen: With that, I will turn it back to you Larry. Thank you Bruce. On slide 12, I'd like to share a few closing thoughts on our 2024 priorities and expectations. Thank you for your commitment to both our customers and our shareholders. As CEO, I'm deeply committed to driving NRG forward to create significant additional shareholder value. We are seeing a long term step change improvement in fundamentals across our platform. You can expect a continued heightened focus on operational excellence, prudent growth, and being good stewards of you are investors capital. I have never been more excited about the potential of our company than I am today. Thank you for your time and continued interest in NRG.

Larry Coben: And so, you know, there's a long way to go before a lot of those projects become real and ready to go. Some of them, I'm sure, will, but many will not. So I don't see the curve, you know, while in the short term we've seen some fluctuation in curves, I don't see what we've seen from the TEF filings to have a major impact on what the long-term market is going to look like. I'm sorry, there's a second half to your question, Shahriar, I think.

Speaker Change: There's a long way to go before a lot of those projects become.

Speaker Change: <unk> and ready to go some of them I'm sure will but it will not.

Speaker Change: So I don't see the Kurt Weill.

Speaker Change: Short term, we have seen some fluctuation and curves I don't see what we've seen from the <unk> filings to have a major impact on what the long term market is going to look like.

Speaker Change: And so there is a second half to your question I think just assuming like you see an expanded program do you guys have like kind of bandwidth to do additional generation.

Larry Coben: Just assuming, like, you see an expanded program, do you guys have, like, the kind of bandwidth to do additional generation? Absolutely, we do if our customers and clients continue to need it, and it's optimal for our portfolio strategy. But remember, as we've talked about before, the lead times for development, primarily because of turbines and other equipment, are several years. So, if you don't have a place in the turbine queue today, there's no way you're getting a new project online before 2030 at the earliest.

Speaker Change: Absolutely, we do if our customers and clients continue to need it and it is optimal for our portfolio strategy.

Speaker Change: Remember as we've talked about before the lead times for development, primarily because of.

Unknown Executive: Operator, we're now ready to open the line for questions. Thank you. At this time, we will conduct a question and a session. As a reminder, to ask a question, you need to press star 11 in your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while I compile the Q&A roster.

Speaker Change: Turbines and other equipment is several years. So if you don't have a place in the turbine Q today. There is no way you are getting a new project online before 2030 at the earliest.

Larry Coben: Got it. Perfect. And just lastly, Larry, on transitioning to EPS, I mean, I know I asked you this on the last call, but have your thoughts evolved around just maybe changing disclosures and guidance a little bit?

Speaker Change: Got it perfect and then just lastly, just on transitioning to EPS.

Speaker Change: I asked you this on the last call but.

Speaker Change: Your thoughts evolve around just maybe changing disclosures and guidance a little bit.

Sara Parisa: Our first question comes from Sara Parisa from Guggenheim. Please go ahead. Hey guys, good morning. Morning, sir. Morning, morning.

Larry Coben: My thoughts have evolved. That's a short one. Good. I'll let Bruce expand on how my thoughts have evolved.

Speaker Change: My thoughts have evolved.

Speaker Change: Yes.

Speaker Change: I'll, let I'll, let I'll, let Bruce expand on how my thoughts have evolved.

Larry Cohen: Larry, I don't think we last spoke. We've seen something like 40 to 60 gigs get in line for the NRG fund. Do you think the state could do a second fund if this one helps me to demand? Do you think this means the curves could revert to backwardation? And could you get involved with more generation assuming the expanded program next year, so do you have more bandwidth? Thanks. Is that one question, Sara, or three, but on all great questions.

Speaker Change: Okay.

Speaker Change: Okay.

Bruce Chubb: Sure I guess in short Larry thoughts have evolved such that there hasn't been no change in terms of what we're thinking about.

Bruce Chung: Sure, I guess, in short, Larry's thoughts have evolved such that there hasn't been any change in terms of what we're thinking about. You know, I think what we had indicated last time is that we are working towards making that transition. We see our third quarter earnings as being the optimal time to be able to do that. And that's what we're currently working towards.

Bruce Chubb: I think what we had indicated last time is that we are working towards making that transition we see our third quarter earnings as being the optimal time to be able to do that and that's what we're currently working towards.

Bruce Chung: Okay, that's a perfect color. Thanks, Larry. Big congrats. I know a couple of quarters ago I highlighted that we don't want you to leave and just stay as the CEO, so we're glad the board...

Speaker Change: Okay. That's perfect color. Thanks, Larry Big Congrats I know couple of quarters ago, I highlighted that we don't want you to leave and to stay at the CEO. So we're glad the board listen thanks, guys.

Larry Cohen: And look, at this date has talked about, I think you probably saw the governor and the lieutenant governor talk about, you know, adding a second tranche to the tap and I think they'll then see what happens and what the availability is. I think the bigger question, you know, Sara, is first of all, how much of these are real and we don't know yet. We know that ours are shovel ready, but if you look at people who've applied for, you know, transmission studies and the like, it's an awful lot less than 40 gigs.

Shahriar Pourreza: Well, Shahriar, you know, when the thing is taking off like a rocket ship, you want to wait until you get to the stars before you get off. That's right. That's right. Congratulations.

Speaker Change: And the thing Thats taken off like a rocket ship you want to wait till you get to the Starz before as you get off Thats right.

Larry Coben: That's right. Congratulations, guys. Thanks, Shahriar.

Speaker Change: Alright.

Speaker Change: Great guys.

Shar: Thanks Shar.

Speaker Change: Thank you one moment for our next question.

Angie <unk>: Our next question comes from Angie <unk> from Seaport. Please go ahead.

Larry Cohen: I think it's about 12 to be exact. And so, you know, there's a long way to go before a lot of those projects become, you know, real and ready to go. Some of them I'm sure will, but many will not. So I don't see the curve, you know, while in short term, we've seen some fluctuation in curves. I don't see what we've seen from the P E F filings to have a major impact on what the long term market is going to look like.

Angie: Thank you.

Unknown Speaker: Thank you. So maybe, I mean, we're all trying to be as excited as you are, Larry, about the prospect of power markets. I mean, clearly, the curves.

Speaker Change: I mean, we're all trying to be as excited as you are Larry about the prospect of final markets.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: I disagree.

Speaker Change: And I was just wondering if you can understand can explain to us why why do you think.

Speaker Change: Hi.

Speaker Change: Pull back in.

Speaker Change: Texas power curves given Dr and load up outflow PUC LLC.

Larry Cohen: I'm sorry, there was a second half to your questions, Sara, I think. Just assuming like you see an expanded program, do you guys have a kind of bandwidth to do additional generation? Absolutely, we do if our customers and clients continue to need it and it's optimal for our portfolio strategy. Though remember as we've talked about before, the lead times for development, primarily because of turbines and other equipment is several years. So if you don't have a place in the turbine queue today, there's no way you're getting a new project online before 2030 at the earliest. Got it, perfect.

Larry Coben: Sure. Good morning, Angie. I'm going to let Rob, you know, kind of take you through that because it's something we talk about a lot, but Rob, maybe. Yeah, so, so.

Engie: Sure Good morning, Engie, I'm going to let Rob.

Rob: Kind of take you through that because it's something we talk about a lot, but rob maybe yes.

Unknown Executive: So, Angie, obviously, we've seen the same moves and curves that you have. You know as well as I do that, to start with, the long-term curve gets impacted by the noise of whatever's going on in the front end of the market. We've had a warm but not very pricey summer, and that's kind of impacted things out on the curve. What I would tell you is, regardless of whether or not you see a lot of demand come into ERCOT or not, the back end of the curve actually looks like a place where we would be buyers, right? So, 27 and 28 summers look cheap.

Rob: So Andrew we obviously, we've seen the same moves and curves that you have.

Speaker Change: You know as well as I do that to.

Rob: To start with the long term curve gets impacted by the noise of whatever's going on in the front end of the.

Rob: Market.

Speaker Change: Had a warm, but not very pricey summer and thats kind of impacted things out the curve what I would tell you is as we look at these curves regardless of whether or not you see a bunch of demand come into ERCOT, we're not the backend of the curve actually it looks like a place where we would be buyers right, so 27% and 28 summers look cheap.

Bruce Chung: And then just lastly, Blair, just on transitioning to EPS. I mean, I asked you this in the last call, but as your thoughts evolve around just maybe changing disclosures and guidance a little bit. My thoughts have evolved. I'll let Bruce expand on how my thoughts have evolved. Sure, I guess in short, Larry thoughts have evolved so that there hasn't been no change in terms of what we're thinking about. You know, I think what we had indicated last time is that we are working towards making that transition.

Speaker Change: The market itself is constructive or would be constructive and we.

Unknown Executive: The market itself is constructive or would be constructive, and we think these are the right levels for us to step in because we think they're undervaluing what the curve looks like, and that's before you add to it. So I'm pretty bullish on what the market looks like. We feel very strongly about where our portfolio is, and we think that our retail business will continue to churn out the earnings that it has done over time. So I'm not very concerned.

Speaker Change: I think these are the right levels that for us to step in because we think they are undervaluing, what the curve looks like and Thats before you add demand so I'm pretty bullish on what <unk>, what the market looks like.

Speaker Change: Feel very strongly about where our portfolio is and we think that our retail business will continue to churn out the earnings that it's done over time, so I'm not very concerned about that.

Speaker Change: Speaking about retail business.

Unknown Speaker: Speaking about retail business, if you could talk to us about what's happening in New England, you know, any potential reviews of the retail electric market and how that could impact your business.

Speaker Change: If you could.

Bruce Chung: We see our third quarter earnings as being the optimal time to be able to do that and that's what we're currently working towards. Okay, that's a perfect color. Thanks, Larry. Big congrats. I know a couple of quarters ago, I highlighted that we didn't want you to leave and just stay at the CEO. So we're glad the board listened. Thanks guys. Well, sure, you know, things taken up like a rocket ship. You want to wait until you get to the stars before you get off. That's right. Congrats guys. Thanks, Shar. Thank you.

Speaker Change: Talk to us about what's happening in new England.

Speaker Change: Any potential reviews.

Speaker Change: Retail electric market and how that could impact your business.

Unknown Executive: One moment for our next question.

Speaker Change: Good morning, Andy This is received.

Rasesh Patel: Morning, Angie. This is Rasesh.

Speaker Change: You can put context.

Rasesh Patel: You know, To put the context of what's happening in the Northeast, our retail business overall performed really well, they had a very strong quarter, right, 8% subscriber growth, double-digit growth in volume, and strong margin performance. In the Northeast, there are a couple of things going on that we watch very carefully. The regulatory environment and, you know, some of the changes in the specific states. For example, Massachusetts ended up not making any changes.

Andy: What's happening in the northeast our retail business overall performed really deliver a strong quarter eight 8% subscriber growth and double digit growth in volume and strong margin performance.

Andy: In the northeast.

Speaker Change: And there are a couple of things going on that we watch very carefully.

Angie Storzinski: Our next question comes from Angie Storzinski from Seaport. Please go ahead. Thank you. So maybe, I mean, we're all trying to be as excited as you are, Larry, about the process of the style of markets. I mean, it could be the curves disagree. And I'm just wondering if you can explain to us why do you think we've had this short pullback in Texas power curves given the load up outlook you see and we see.

Speaker Change: The regulatory environment and some of the changes in.

Speaker Change: The specific states as an example, Massachusetts ended up.

Speaker Change: Not making any changes in Maryland.

Rasesh Patel: In Maryland, where we have seen some changes as a result of SB1, that's a very, very small part of our overall earnings stream, and so the impact of that will be negligible to our results. But we watch the environment very closely.

Speaker Change: We have seen some changes as a result of the SD Wan that's a very very small part of our overall earnings screen and so the impact of that will be negligible to our results, but we watch that the environment very closely.

Speaker Change: Okay.

Angie Storzinski: Sure. Good morning, Angie. I'm going to let Rob can take you through that because it's something we talk about a lot, but Rob, maybe. Yeah, so, so Angie, we obviously we've seen the same moves and curves that you have. You know as well, I do that to start with the long term curve gets impacted by the noise of whatever's going on in the front end of the market. We've had a warm but not very pricey summer, and that's kind of impacted things out the curve.

Unknown Speaker: Okay, and then back to the generation assets. So, I mean, this whole discussion about new build and the need to actually supply additional generation capacity. I'm just wondering, you know, those are assets with four-year lives, and you guys are making decisions based on, you know, two to three-year visibility into the profitability of these assets. So, one is how you approach the new build, you know, given that previous cycles were very painful for IPPs, and two, I mean, is there a way to basically maybe pursue new builds through long-term contracts as opposed to a truly merchant's new build?

Speaker Change: Okay, and then back to the other generation assets. So.

Speaker Change: I mean, this whole discussion about new bill.

Speaker Change: And then the trucks you supply additional generation capacity I'm, just wondering I mean.

Speaker Change: Those are assets before your lines.

Speaker Change: Making decisions based on your visibility into the profitability of these assets.

Speaker Change: So one is how you approach that <unk> given that previous cycles were very painful for IPP from too.

Angie Storzinski: What I would tell you is was as we look at these curves, regardless of whether or not you see a bunch of demand come into haircut or not. The back of the curve actually looks like a place where we would be buyers, right. So 27 and 28 summers look cheap. The market itself is constructive or would be constructive and we think these are the right levels that for us to step in, because we think they're under valuing what the curve looks like.

Christian: Is there a way to basically maybe Christian you built through long.

Speaker Change: From contract as opposed to a truly merchant new build I mean, if the demand is truly there.

Unknown Speaker: I mean, if the demand is truly there, one could argue that, you know, the demand should be comfortable with signing PPAs to support new build as opposed to just truly merchant assets, both in ARCOTA and PJM.

Speaker Change: One could argue that the.

Speaker Change: The demand should be comfortable with signing ppas to support new builds as opposed to just truly merchandise.

Speaker Change: Actually in ERCOT and PJM.

Larry Coben: Andy, I'm going to let Rob expand on that, but remember that we have the ability to contract and use all of the power. This isn't a merchant build for us. We have the ability to cross it to ourselves or utilize it ourselves, and so we're not doing speculative merchant builds. That's not the business that we're in. This is part of the supply stack that Rob and his team are really crucially putting together to meet all of our customers' needs going forward. But I don't know, Rob, do you want to? Larry Kupferman.

Speaker Change: Andy I'm going to let Rob expand on that but remember that.

Angie Storzinski: And that's before you add demand. So I'm pretty bullish on what you what the market looks like. We feel very strongly about where portfolio is, and we think that our retail business will continue to churn out the earnings that it's done over time. So I'm not very concerned.

Rob: We have the ability to contract and use all of the power. This isn't a merchant build for US we have the ability to cross it to ourselves.

Rob: Use it utilize it ourselves and so we're not doing speculative merchant build that's not the business that we're in and this is part of the supply stack that Rob and team are really crucial we're putting together to meet all of our customers' needs going forward, but I don't know Rob do you want to.

Rasesh Patel: Speaking about retail business, if you could talk to us about what's happening in New England, any potential reviews to the retail electric market and how that could impact your business? Good morning, Andy. This is Rashish. You know, to put the context of, you know, what's happening, you know, in the Northeast. Our retail business overall performed a really, really strong quarter, right? 8% subscriber growth, double digit growth in volume and strong margin performance in the Northeast.

Unknown Executive: Larry Coverman. This is for our portfolio. These assets were designed, built, and planned to support the retail portfolio, regardless of what we see kind of long-term. We have a long-term consumer-facing business, and these support that.

Rob: Larry covered at that distance for our portfolio like these assets were designed built and plan.

Rob: To support the retail portfolio, regardless of what we see kind of a long term, we have a long term consumer facing business and the support that.

Speaker Change: And nothing about.

Speaker Change: Perpetual or long term contracts I'm clear the session for some comments about those brownfield site.

Unknown Speaker: And nothing about potential long-term contracts. I'm clearly fishing for some comments about those brownfield sites if the monetization of those could come through a, you know, new build backed by TPA. So Angie, as we consider the sites and the strategy that

Rob: Monetization of those could come through.

Speaker Change: New build back by PPA.

Rasesh Patel: There are a couple of things going on that we watch very carefully. The regulatory environment and, you know, some of the changes in the specific estates as an example, Massachusetts ended up not making, you know, any changes. In Maryland, where we have seen some changes as a result of the SB1, that's a very, very small part of our overall earnings stream. And so the impact of that will be negligible to our results. So we watched that the environment very closely. Okay.

Unknown Executive: So, Angie, as we consider the sites and the strategy that we have with the sites, right? So, as we disclosed before, you know, two-thirds of those, at least, are up in PJM, where we don't play with generation quite as much as we do down in Texas. All of the answers that Larry and I just gave were in reference to the 3 new build projects that are on the way. When I think about the sites themselves, if we have an opportunity to build generation on 1 of those sites, and it's for a customer, then we obviously will be thinking about PPAs and different structures to support the capital for them.

Speaker Change: So angie as we consider the sites and the strategy that we do with the sites right. So.

Speaker Change: We disclosed before two thirds of those at least are up in PJM.

Larry Cohen: We don't play with generation quite as much as we do down in Texas all of the answers that Larry and I. Just gave were in reference to the three newbuild projects that are on the way when I think about the sites themselves. If we have an opportunity to build generation on one of those sites and it's for a customer that we obviously will be thinking about ppas in different struck.

Larry Cohen: And to support the capital for those.

Larry Cohen: And then back to the other generation assets. So, I mean, this whole discussion about new build and the need to actually supply additional generation capacity. I'm just wondering, I mean, you know, those are assets with four-year lives and you guys are making decisions based on, you know, to the three-year visibility and to the possibility of these assets. So one is how you approach the new build, you know, given that previous cycles were very painful for IPPs.

Speaker Change: Okay. Thank you.

Speaker Change: Sure. Thanks, Thank you.

Larry Cohen: Thank you.

Speaker Change: Our next question.

Antoine <unk>: Our next question comes from Antoine <unk> from Jefferies. Please go ahead.

Operator: Thank you. One moment for our next question. Our next question comes from Antoine Oramin from Jefferies. Please go ahead.

Speaker Change: Hey, guys.

Antoine Oramin: Hey guys, hope you're doing well; congratulations on the results. Thank you.

Antoine <unk>: Hope you hope you're doing well congrats on the results.

Larry Coben: And Larry, congrats on the permanent appointment. I guess on that note, just more broadly, taking a step back, how do you think about the strategic trajectory of the company under your new leadership? So again, over the past year, NRG emphasizes physical generation and an asset-light strategy. Do you think that's still the best position in the current market conditions and any other strategic shifts we should be considering?

Antoine <unk>: Thank you and Larry Congrats on the on a permanent appointment.

Speaker Change: On that note just more broadly taking a step back how do you think about just the strategic trajectory of the company.

Larry Cohen: And two, I mean, is there a way to basically maybe pursuing your build through a long-term contract as opposed to a truly emergency build? I mean, if the demand is truly there, I mean, one could argue that, you know, the demand should be comfortable with signing PPAs to support new build as opposed to just truly merchant assets, both actually in Arcada and PJM. And I'm going to let Rob expand on that.

Larry Cohen: New leadership.

Speaker Change: And I guess you had over to passengers.

Speaker Change: To emphasize physical generation asset light strategy.

Speaker Change: I think that's still the best positioning into current market conditions, and then yoga strategic shifts we should be considering.

Larry Coben: I mean, Antoine, I think our strategy isn't changing, but I don't, I've never really liked the description "asset light." I've always considered it to be supply optimal. I mean, a good mix of our own generation and other instruments or tolls in order to be able to do that. And that's continuing.

Speaker Change: And I think our strategy isn't changing but I don't ive never really liked the description asset light I've always considered to be supply optimal.

Larry Cohen: But remember that, you know, we have the ability to contract and use all of the power from this is an emergent build for us. We have the ability to cross it to ourselves or utilize it ourselves. And so, we're not doing speculative merchant build. That's not the business that we're in. This is part of the supplies back that Rob and team are really crucially putting together to meet all of our customers needs going forward.

Speaker Change: A good mix of our own generation and other instruments or tolls in order to be able to do that and thats continuing one of the reasons, we would like to have more iron than we did a year or two ago is because our customers and clients are demanding more electricity and so as we.

Larry Coben: One of the reasons we would like to have more iron than we did a year or two ago is because our customers and clients are demanding more electricity. And so, as we, construct the appropriate supply portfolio or supply stack. As we optimize that, having more hard metal in the ground is a good thing for us, and so we're doing that, but we're also going to have more of the other types of instruments that we use as well, because, you know, as you can see from this presentation, and I know you follow the industry, so you don't need me to tell you, the growth in power demand is continuing, and we need to be in a position to meet our clients needs to do that.

Larry Cohen: I don't know Rob, do you want to? Larry covered it. This is for our portfolio. Like these assets were designed built and planned to support the retail portfolio, regardless of what we see kind of long term. We have a long term consumer facing business and the support that. And nothing about potential long term contract. I'm clearly fishing for some comments about those brownfield sites as the monetization of those could come through, you know, new build back by PPAs.

Speaker Change: Constructively appropriate supply portfolio or supply stack.

Speaker Change: As we optimize that having more hard metal in the ground is a good thing for us and so we're doing that but we're also going to have more of the other types of instruments that we use as well because.

Speaker Change: As you can see from this presentation.

Speaker Change: I know you follow the industry. So you don't need me to tell you the growth in power demand is continuing and we need to be in a position to meet our clients' needs to do that.

Larry Cohen: So Angie, as we consider the sites and the strategy that we do with the sites, right. So as we disclose before, you know, two thirds of those at least are up in PJM where we don't play with generation quite as much as we do down in Texas. All of the answers that Larry and I just gave were in reference to the three new bill projects that are on the way. When I think about the sites themselves, if we have an opportunity to build generation on one of those sites and it's for a customer that we obviously will be thinking about PPAs and different structures to support the capital. Thank you.

Speaker Change: Yes.

Larry Coben: Yeah. That makes sense. And then, I guess, on the data center opportunity, can you maybe comment on the status of any discussions you may have with data center providers, the type of contracts that you may be contemplating, you know, how advanced you are in the negotiation process, and how we should think about sort of a timeline potentially now?

Unknown Executive: One more for our next question.

Speaker Change: Makes sense.

Speaker Change: And then I guess on the data center opportunity could you maybe comment on status of any discussions you may have with data center providers type of contracts that you may be contemplating.

Speaker Change: <unk> and <unk>.

Speaker Change: <unk> process and how should we think about the timeline potential announcements.

Larry Coben: Antoine, one of the things we did was we were getting so many inbounds that we just kind of pulled back for a strategic review of it all. And you can see the kinds of things we're contemplating on that slide in the appendix. Is it 18 or? 21. Sorry.

Speaker Change: And.

Speaker Change: One of the things. We did was we were getting so many inbounds that we've just kind of pulled back for a strategic review of at all as you can see the kinds of things we're contemplating on that slide in the appendix.

Speaker Change: Is it 18 or.

Speaker Change: 21, sorry, and I think as we land on our strategy, we're obviously going to share that with you and I'm sure that will be sometime probably before the end of the year.

Larry Coben: And I think as we land on a strategy, we're obviously going to share that with you, and I'm sure that'll be sometime before the end of the year. But we were getting lots of people throwing bids at our sites, and we're like, well, we know they think we're just a bunch of power guys who don't know anything about data centers. So if that's what they're bidding us, we really need to look at this because it means there's a lot more value in it than the bids that we're receiving. So I can't really comment too much more on it now, but look forward to sharing more with you as we have it.

Antoine Oramin: Our next question comes from Antoine Oramin from Jeffries, please go ahead. Hey guys, hope you're doing well, congrats on the results. And Larry, congrats on the permanent appointment. I guess on that note, you're just more broadly taking a step back. How do you think about the strategic trajectory of the company under your new leadership? So again, over the past year, NRG, the emphasis, physical generation, that's at light strategy, do you think that's still the best positioning in the current market conditions and any other strategic shifts we should be considering?

Speaker Change: But we were getting lots of people.

Speaker Change: Throwing us bids for our sites and we're like well we know they think we are just a bunch of power guys, who don't know anything about datacenter. So thats what they are bidding us we really need to look at this because it means there is a lot more value in there then the bids that we're receiving so can't really comment too much more on it now but look forward to share.

Speaker Change: More with you as we have it.

Antoine Oramin: Fair enough. And then lastly, on the 400 million dollars of net proceeds from some HVAC divestiture, I guess, somewhat unexpected. Where do you expect to find it?

Speaker Change: Fair enough and then.

Speaker Change: We are under $400 million of net proceeds from some HVAC divestiture, then I guess somewhat unexpected.

Speaker Change: Do you expect to allocate that for cash.

Antoine Oramin: I mean, Antoine, I think our strategy isn't changing, but I've never really liked the description asset light. I've always considered it to be supply optimal. I mean, a good mix of our own generation and other instruments or tolls in order to be able to do that. And that's continuing. One of the reasons we would like to have more iron than we did a year or two ago is because our customers and clients are demanding more electricity.

Unknown Executive: I'm sorry, can you just repeat that last part, Antoine? Where is it, the allocation? Oh, yeah, so, look, yeah, we'll, you know, from an allocation standpoint, we'll certainly provide more visibility around the allocation once we close and we get the proceeds in place, but you should expect that we'll remain consistent with our capital allocation.

Speaker Change: Im sorry can you just repeat that last part Antoine <unk>.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: From a from an allocation standpoint, we'll we'll certainly provide more visibility around the allocation once we close and we get the proceeds in place, but you should expect that we will remain consistent with our capital allocation principles.

Antoine Oramin: And so as we construct the appropriate supply portfolio or supply stack up as in we optimize that having more hard metal in the ground is a good thing for us. And so we're doing that, but we're also going to have more of the other types of instruments that we use as well because, you know, as you can see from this presentation and I know you follow the industry so you don't need me to tell you, the growth and power demand is continuing and we need to be in a position to meet our clients needs to do that.

Speaker Change: Okay, great. Thank you so much guys.

Unknown Executive: Okay, great. Thank you so much, guys. Talk to you soon.

Speaker Change: Thank you.

Operator: Thank you. One moment for our next question. Our next question comes from Steve Fleishman from Wolf Research. Please go ahead.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Our next question comes from Steve Fleishman from Wolfe Research. Please go ahead.

Steve Fleishman: Hey, good morning.

Steven Fleishman: Hey, good morning, and congrats, Larry.

Larry Cohen: Congrats Larry.

Larry Coben: Thank you, Steve. I appreciate it. Good morning.

Larry Cohen: Thank you Steve appreciate it good morning, yes.

Steven Fleishman: So, just a couple of near-term questions first. How should we think about if we do end up having a kind of milder, lower-priced summer in Texas? You know, you've done a lot to kind of make sure you were ready for a high-priced, hot summer, just protection from the opposite. And I assume that's kind of embedded in SING to the upper end, but just how should we think about it?

Steve Fleishman: So just a couple of kind of nearer term questions first.

Speaker Change: How should we think about if we do end up having a kind of a milder slower price summer in Texas, you've done a lot to kind of make sure you're ready for a high priced hot summer.

Antoine Oramin: Yeah, that makes sense. And then I guess under data center opportunity, can you maybe comment on status of any discussions you may have with data center providers, type of contract states that you may be contemplating, you know, advance your in the negotiation process and how should we think about sort of timeline potential announcements. And one of the things we did was we were getting so many inbounds that we just kind of pulled back for a strategic review of it all.

Speaker Change: Just protection from the opposite.

Speaker Change: And I assume that's kind of embedded in sync to the upper end, but just how are you how should we think about that.

Rob: Hey, Steve it's Rob.

Unknown Executive: Hey, Steve, it's Rob. We don't talk about it often, but we also do manage on the downside. The great thing about our portfolio is that we have those assets that we can turn down in markets that aren't constructive, like you've seen for the last two quarters. As far as the way we look forward into the year, we contemplate both up and down scenarios as to where we feel we're going to land on guys.

Speaker Change: We don't talk about it often but we also do manage to the downside.

Speaker Change: The great thing about.

Rob: Our portfolio is that we have those assets that we can turn down in markets that arent constructive like.

Speaker Change: <unk> seen for the last two quarters.

Rob: As far as the way, we look forward into the year, we contemplate both up and down scenarios.

Antoine Oramin: And you can see the kinds of things we're contemplating on that slide in the appendix, say, the 18 or 21, sorry. And I think as we, you know, land on a strategy, we're obviously going to share that with you and I'm sure that'll be sometime probably before the end of the year. But we were getting lots of people sort of, you know, throwing us bids for our sites and we're like, well, we know they think we're just a bunch of, you know, power guys who don't know anything about data center.

Rob: And where we feel we're going to land on guidance.

Speaker Change: Okay, and then also just kind of more we had this PJM auction outcome.

Steven Fleishman: Okay, and then also, just kind of more, we had this PGM auction outcome. Just how should we think about that capacity price flow through the retail business? I don't know how much you've already contracted; it's just not enough of a scale to matter much.

Speaker Change: How should we think about that.

Speaker Change: That capacity price flows through the retail business.

Speaker Change: I don't know how much you've already contracted or there's just not enough of them.

Speaker Change: To matter much.

Antoine Oramin: So that's what they're bidding us. We really need to look at this because it means there's a lot more value in there than the bids that we're receiving. So can't really comment too much more on it now, but, you know, look forward to sharing more with you as we have it. It's fair enough. And then lastly, on the 400 million of net proceeds from some age back, the investors, you know, someone unexpected.

Speaker Change: Yes, so when you say so the BRL print for this last auction is indicative of kind of the supply demand structure that we kind of see across the country.

Unknown Executive: Yeah, so the BRA print for this last auction is, you know, indicative of kind of the supply-demand structure that we kind of see across the country. And, you know, it's going to provide additional dollars towards generation.

Unknown Executive: We don't have a very large portfolio in PJM, so, you know, it is what it is. On the C&I and retail sides, think about our consumer business as very short-term, so don't expect a lot of impact there. And then on the C&I side, we contract with these guys, and depending on what changes in the markets, you know, we can use a change in law, depending on what happens, if we choose. But as we look at the impacts of the book on the retail side, it's a de minimis state.

Speaker Change: So it's going to provide additional dollars towards generation, we don't have a very large portfolio in PJM. So.

Speaker Change: It is what it is on the C&I and retail sites.

Antoine Oramin: Would you expect to allocate that extra cash? I'm sorry, can you just repeat that last part, Antoine? Oh, yeah, so, yeah, we'll, you know, from an allocation standpoint, we'll certainly provide more visibility around the allocation once we close and we get the proceeds in place, but you should expect that we'll remain consistent with our capital allocation principles. Thank you so much guys. Thank you.

Speaker Change: Think about our consumer business is very short term. So don't expect a lot of impact there and then on the C&I side.

Unknown Executive: One moment for our next question.

Speaker Change: We contract with these guys and depending on what changes in the markets. We can use change in law, depending on what happens if we chose but as we look at the impacts of the book.

Speaker Change: On the retail side, it's de Minimis, it's nothing that I would even talk about okay. Thank you and then just.

Steven Fleishman: Okay, thank you. And then, just, sorry to go back to Texas, new build, but...

Speaker Change: Sorry to go back to Texas Newbuild, but.

Steve Fleishman: Our next question comes from Steve Fleishman from Wolf Research, please go ahead. Hey, good morning and congrats Larry. Thanks. Appreciate it. Good morning. Yeah.

Larry Coben: So obviously, the TF has the low-cost loans and performance, bonuses, and the like, but then, you do have to kind of have a market price for return on equity. So just, I mean, is your messaging that basically, hey, this works for us at any forward curve? And just how should we think about kind of protecting equity?

Speaker Change: So obviously DTF has the low cost loans and performance.

Speaker Change: Bonuses and alike.

Speaker Change: But then.

Speaker Change: You do have to.

Speaker Change: To kind of have a market price for.

Rob Gaudette: So, just a couple kind of near term questions. First, the, how should we think about if we do end up having a kind of a milder lower price summer in Texas? I, you know, you've done a lot to kind of make sure you are ready for a high price hot summer, just protection from the opposite. And I assume that's kind of embedded in sync to the upper end, but just Harry, let's rethink about that.

Speaker Change: Return on equity. So just I mean is your messaging that basically hey, this works for us it any forward curve.

Speaker Change: And just how should we think about kind of protecting equity any folks.

Larry Coben: Okay, I know you don't mean any forward curves. I don't, but I'm just, it is, I'm just trying to understand the thought process behind it. If we actually believed that a depressed curve was reality, that would, you know, as Chris heard from here, be reality, that would obviously impact our decision. But as Rob discussed earlier, you know, what we're really seeing in terms of increased demand somewhat belies the short-term blip in the curve. But we look at that all the time, and, you know, there is a place where we wouldn't do the project. I don't think we're not there today.

Speaker Change: Okay, and I know you don't meet any forward curves.

Speaker Change: But I'm just it is I'm just trying to understand the thought.

Sean: Thanks, Sean.

Speaker Change: We absolutely believe that a depressed curve was reality that wood.

Rob Gaudette: Hey, Steve, it's Rob. We don't talk about it often, but we also do manage to the downside. The great thing about our portfolios that we have those assets that we can turn down and markets that aren't instructive. Like you've seen for the last two quarters, as far as the way we look forward into the year, we contemplate both up and down scenarios in where we feel we're going to land on guidance. Okay.

Chris: Chris Sorry from here was reality that would obviously impact our decision, but as Rob discussed earlier and what we're really seeing in terms of increased demand is somewhat belies. The short term blip in the curve, but we look at that all the time and there are there is a place where we wouldn't do the project.

Speaker Change: I don't think were not there today.

Unknown Executive: The one thing I would add to the math, or as you think about the value of these assets, flexible gas generation is a function of both power price, but it's also a function of volatility, right? And so the volatility curves, which are not very transparent, you can't see them by looking at the megawatt daily. Those are still up. And so the value of these projects as something that can move around with our load continues to support us in developing them and putting them into the portfolio.

Speaker Change: Got it wrong.

Speaker Change: The one thing I would add to the math or as you think about like the value of these assets flex.

Rob Gaudette: And then also just kind of more, we had this PGM auction outcome just how should we think about that capacity price flow through the retail business. It's, you know, I don't know how much you've already contracted or it's just not enough of a scale to matter much. Yeah, so we think so the BRA print for this last auction is, you know, indicative of kind of the supply demand structure that we kind of see across the country.

Speaker Change: Flexible gas generation is a function of both power price, but it's also a function of volatility right and so the volatility curves which are not very.

Speaker Change: Transparent you cant see them.

Speaker Change: Looking into megawatt daily.

Chris: Those are still up and so the value of these projects is something that can move around with our load continues to support.

Chris: Developing them and putting them into the portfolio.

Rob Gaudette: And so it's going to provide additional dollars towards generation. We don't have a very large portfolio in BJM. So, you know, it is what it is on the CNI and retail sides. Think about our consumer business is very short term. So don't expect a lot of impact there. And then on the CNI side, we contract with these guys. And depending on what changes in the markets, you know, we can use change in law depending on what happens if we chose. But as we look at the impacts of the book on the retail side, it's the minimum state. It's nothing that I would even talk about. Okay. Thank you.

Unknown Executive: Got it, that's helpful. Then one last quick one just on the...

Speaker Change: Got it that's helpful. And then one last quick one just on the.

Steven Fleishman: The Q3 disclosures, you've talked about the, you know, earnings and DPPs, just the, the site, the 21 sites. Do you think we'll get some update on the kind of the Q3 call? Or is that more, you know, kind of late year or next year? Like what timeline on that?

Speaker Change: The Q3 disclosures you talked about the earnings in <unk> just.

Speaker Change: The site the 21 sites do you think.

Speaker Change: We'll get some update on the kind of the Q3 call or is that more.

Speaker Change: Kind of late year or next year.

Speaker Change: Why isn't that.

Larry Coben: You know, we're, you know, we're pushing to do that, but it's a slow and iterative process a bit, Steve, so I'm sure we'll have some updates. But it may not be as complete a one as you all would like. That may have to wait till the first quarter next year or some conference in between. But, you know, we are working expeditiously, but it's more important that we get it right than do it fast.

Speaker Change: Where we're pushing to do that but.

Speaker Change: It's a slow and iterative process a bit Steve So I'm sure. We'll have some updates it may not be as completed one as you all would like that may have to wait until the first quarter next year or some conference in between but.

Larry Cohen: And then just sorry to go back to Texas new build, but so obviously the TF has the low cost loans and performance bonuses and the like. But then you do have to kind of have a market price for return on equity. So just, I mean, is your messaging that basically, hey, this works for us at any forward curve? Just how should we think about kind of protecting equity? I know you don't mean any forward curves.

Speaker Change: We are working expeditiously, but it's more important that we get it right and do it fast.

Steve Fleishman: Understood. Thank you very much thanks.

Steven Fleishman: I understand. Thank you very much. Thanks, Steve.

Steve Fleishman: Thanks, Steve.

Operator: Thank you. Please take a moment for our next question.

Speaker Change: Thank you one moment for our next question.

Neil <unk>: Our next question comes from Neil <unk> from Wells Fargo. Please go ahead.

Neil: Hi, guys just a quick question.

Speaker Change: Yes.

Speaker Change: Economic outlook, how do you think about so we've seen a softening in the consumer side like how do you think about the impacts to your business thinking both for home security business retail energy as well are you seeing any evidence that the consumers stepping back weakness et cetera.

Larry Cohen: I don't but I'm just it is I'm just trying to understand the process on. We actually believe that a depressed curve was reality that would, you know, a press server here was reality that would obviously impact our decision. But as Rob discussed earlier, you know, what we're really seeing in terms of increased demand is, you know, somewhat relies the short-term look in the curve. But we look at that all the time.

Speaker Change: Hey, Neil this is rajeev good morning.

Rasesh Patel: Hey Neil, this is Rasesh.

Speaker Change: <unk> delivered a really strong quarter.

Speaker Change: With 5% year over year subscriber growth at.

Speaker Change: 7% revenue growth for the smart home business.

Rasesh Patel: Good morning. You know, we delivered a really strong quarter with 5% year-over-year subscriber growth and 7% revenue growth for the smart home business. And that's sort of, think of that as an environment where we have high interest rates and a slowdown in housing activity. As that normalizes, we would expect that to potentially deliver a tailwind to the business. And I think it's largely a function of the fact that we've got a business that has a very high-quality customer base with an average FICO score of greater than 700.

Speaker Change: That sort of peak of that is that in an environment, where we have high interest rates and the slowdown in housing activity.

Larry Cohen: And there are there is a place where we wouldn't do the project. I don't think we're not there today. The one thing I would add to the math or as you think about like the value of these assets, flexible gas generation is a function of both power price, but it's also a function of volatility. Right. And so the volatility curves, which are not very, you know, transparent. You can't see them by looking into megawatt daily. Those are still up. And so the value of these projects as something that can move around with our load continues to support us developing them and putting them into the portfolio. Got it.

Neil: That normalizes, we'd expect that to potentially deliver a tailwind.

Neil: To the business and I think it's largely a function of the fact that we add a business that has a very high quality customer base with an average FICO score of greater than 700, and so you saw.

Rasesh Patel: And so you know, we posted near all-time record results for retention, customer retention, which is almost at 90% on an annualized basis. And we're still largely in an under-penetrated market. And so we see opportunities to not only continue to grow the customer base at a mid-single-digit rate but also grow the number of devices and services we provide to the customer within the home. And so we feel really, really good about our position.

Speaker Change: We posted near an all time record results for retention customer retention, which is almost at 90% on an annualized basis.

Speaker Change: We still largely in an underpenetrated market and so we see opportunities to not only continue to grow the customer base at the mid single digit rate, but also.

Steve Fleishman: That's helpful. And then one last quick one just on the Q3 disclosure, who's talked about the, you know, earnings and DPPs, just the site, the 21 sites, do you think we'll get some update on kind of the Q3 call or is that more, you know, kind of late year or next year, like what timeline on that? You know, we're, you know, we're pushing to do that, but it's a slow and iterative process a bit Steve.

Speaker Change: Grow the number of devices and services, we provide to the customer within the home and so we feel really really good about our position.

Speaker Change: And with the potential for a tailwind.

Speaker Change: Rates normalize in housing activity picks up.

Speaker Change: Got it thank you very helpful.

Operator: Thank you. One moment for our last question. Our last question comes from Durgesh Chopra from Evercore ISI. Please go ahead. Thank you. Larry, congrats.

Speaker Change: Thank you one moment for our last question.

<unk> Chopra: Our last question comes from <unk> Chopra from Evercore ISI.

Steve Fleishman: So I'm sure we'll have some updates. It may not be as complete a one is you all would like that may have to wait till the first quarter next year or some conference in between, but, you know, we are working it expeditiously, but it's more important that we get it right and do it fast. Understood. Thank you very much. Thanks, Steve. Thank you.

Unknown Executive: One moment for our next question.

Speaker Change: ISI. Please go ahead.

Durgesh Chopra: Thank you. Larry, congrats.

Speaker Change: Thank you Larry Congrats to August.

Speaker Change: Yes.

Durgesh Chopra: I've got two questions. Sure thing. Two questions. First, just for housekeeping.

Speaker Change: Sure. Thanks, two questions first in sports.

Speaker Change: Housekeeping August 29.

Speaker Change: When we get a list of projects would that be formally announced or how will we know which ones kind of made it to the second round of due diligence.

Neil Kalton: Our next question comes from Neil Colton from Wells Fargo. Please go ahead. Hi guys, just a quick question on the economic outlook. How do you think about so we've seen a softening in the consumer side? Like how do you think about the impacts to your business thinking both the home security business? Retail energy as well. Are you seeing any evidence that the consumers stepping back weakness, etc.? Hey, Neil. This is Rashid Shag.

Speaker Change: By the PUC.

Durgesh Chopra: I've got two questions. Sure thing. Two questions.

Speaker Change: This is this is Chris yeah, what we've been led to believe is that the PUC will have either an order or a draft order, which would lift the.

Speaker Change: Assets the projects that are moving forward towards due diligence.

Durgesh Chopra: First, just for housekeeping, August 29th: will we get a list of projects? Will that be formally announced? Or how will we know which ones kind of made it to the second round of due diligence by the BUCD? Hey, this is Chris.

Speaker Change: And that has been targeted for the August 2019 meeting.

Speaker Change: Okay perfect. Thank you and then just Larry back to you.

Unknown Executive: Yeah, what we've been led to believe is that the PUCT will have either an order or a draft order, which will list the assets, the projects that are moving forward towards due diligence, and that has been targeted for August 29th. Okay, perfect. And then just, Larry, back to you, you know, as you take the permanent role, obviously, there was this transaction announced here. Are there other non-core assets that, you know, we could potentially see being liquidated for cash proceeds back into the, you know, the core portion of the company? How are you thinking through that?

Larry Cohen: As you take a permanent role obviously there was this transaction announced here are there other noncore assets that.

Neil Kalton: Good morning. You know, we delivered a really strong quarter with 5% your rear subscriber growth, 7% revenue growth for the smartphone business. And that sort of think of that is that's an environment where we have high interest rates and a flow down in housing activity has that normalizes. We would expect that to potentially deliver a tailwind, you know, to the business. And I think it's largely a function of the fact that we've got a business that has a very high quality customer base with an average bicycle score of greater than 700.

Larry Cohen: We could potentially see being liquidated.

Larry Cohen: Sure.

Larry Cohen: Cash proceeds back into the.

Larry Cohen: The core portion of the company how are you thinking through that.

Larry Coben: Look, I mean, we always look to optimize everything we own. I guess there's nothing, you know, on the horizon that I see that would be, you know, divestible. But sometimes people walk in the door with very attractive offers for things that we own.

Speaker Change: Look I mean, we always look to optimize everything we owned our guests there is nothing on the horizon that I see that would be.

Speaker Change: Divest the ball, but sometimes people walk in the door with very attractive offers for things that we own and we would be silly not to take a look at those especially given that we have a broad and amazing range of opportunities number one in which to invest capital and number two we have a very undervalued stock.

Larry Coben: And, you know, we would be silly not to, you know, take a look at those, especially given that we have a broad and amazing range of opportunities, number one, in which to invest capital. And, number two, we have a very undervalued stock in which to invest capital as well. So when we look at those two things, if we can make a transaction that makes sense, we'll obviously do that. I don't see anything on the horizon today, but... um, You know, if the opportunity arises, we will certainly look at it hard and try to take advantage of it.

Neil Kalton: And so you saw, you know, we've posted near all time, a record results for retention customer retention, which is almost at 90% on an annualized basis and we're still largely in an under penetrated market. And so we see, you know, opportunities to not only continue to grow the customer base at the mid single digit rate, but also grow the number of devices and services we provide to the customer within the home. We see really good about our position and with a potential for a tailwind is, you know, rate normalize and housing it. Thank you. One moment for our last question.

Speaker Change: <unk> in which to invest capital as well so when we look at those two things that we can make a transaction that makes sense, we'll obviously do that I.

Speaker Change: I don't see anything on the horizon today, but.

Speaker Change: Yes.

Speaker Change: If the opportunity arises we will certainly look at it hard and try to take advantage of it.

Durgesh Chopra: Understood. Thanks for squeezing me in here.

Speaker Change: Understood. Thanks for squeezing me in here. Thank you.

Speaker Change: Thank you we have one last question.

Operator: Thank you. We have one last question. The last question comes from David Arcaro from Morgan Stanley. Please go ahead.

Speaker Change: The last question comes from Dave.

Speaker Change: David Arcaro from Morgan Stanley. Please go ahead.

David Arcaro: Oh, hey, thanks so much. The last last question here.

David Arcaro: Okay. Thanks, so much the last last question here.

Durgesh Chopra: Our last question comes from Durges Chopra from Evercore ISS, ISI. Please go ahead. Thank you.

David Arcaro: On.

David Arcaro: Hey, I was on the PJM market, just reflecting on the capacity print that we just saw. Is there an opportunity for you to look at new build there? Like this new build economics work at this point? And do you have any opportunities to look at that market in terms of power plant expansion?

Speaker Change: Got it.

Speaker Change: On the PJM market, just reflecting on the capacity print that we just saw is there an opportunity for you to look at Newbuild. There like this newbuild economics work at this point and do you have any opportunities to look at that market in terms of power plant expansion.

Durgesh Chopra: I've got two questions. Sure thing. Two questions first.

Chris: First, just for housekeeping, August 29th, will we get a list of projects, will that be formally announced, or how will we know which ones kind of made it to the second round of due diligence by the BUSCT? Okay, this is Chris. Yeah, what we've been led to believe is that the BUSCT will have either an order or a draft order, which will list the assets, the projects that are moving forward towards due diligence. And that has been targeted for the August 29th meeting. Okay, perfect. Thank you.

Rob: Hey, it's Rob.

Unknown Executive: Hey, it's Rob. So, the print is constructive as it comes to actually highlighting the supply-demand picture in the market. So, I think that's a positive. We have new build sites, which regardless, or we have sites, regardless if you new build them or not, that print is definitely supportive of the overall value as we think about them from a development perspective, whether that's for load or for generation. The one thing I would tell you, David, is that one print isn't going to get a bunch of generations running into the market.

Speaker Change: So the print as constructive as it comes to actually highlighting the supply demand picture.

Rob: In the market, so I think thats a positive.

Speaker Change: We have newbuild sites, which regardless, we have sites, regardless of <unk> Newbuild and we're not that print is definitely supported and the overall value as we think about them from a development perspective.

Rob: Whether that's for load or for generation.

Larry Cohen: And then just lay back to you, you know, as you take the permanent role, obviously there was this transaction announced here. Are there other non core assets that, you know, we could potentially see be liquidated for cash proceeds back into the, you know, the core portion of the company. How are you thinking through that? Look, I mean, we always look to optimize everything we own. I guess there's nothing on the horizon that I see that would be, you know, the festival, but sometimes people walk in the door with very attractive offers for things that we own, and we would be silly not to, you know, take a look at those, especially given, you know, we have a broad and amazing range of opportunities, number one in which to invest capital.

David: The one thing I would tell you David is that one print isn't going to get a bunch of generation running into the market. So I wouldn't expect to see a whole bunch of people applying to build generation based on one page.

Unknown Executive: So, I wouldn't expect to see a whole bunch of people applying to build generation based on one PJM print, but we do have another mark in December, which I expect would be supportive. And so, the supply dynamics in PJM aren't going to improve anytime soon, but I believe that, ultimately, competitive energy players are rational and will build when it makes sense.

David: PJM front, but we do have another mark in December, which I expect will be supportive and so the supply dynamics.

David: PJM aren't going to improve anytime soon.

David: But I believe that ultimately competitive energy players are rational and it will build when it makes sense.

David: Okay.

David Arcaro: That's helpful. Thanks. And just maybe, on expanding on that a little bit, do you have a sense as to when new gas plants could realistically get built in the PGM market, given the supply chain challenges that you mentioned, and your outlook for energy prices, too, in the context of that? So there are two challenges.

Speaker Change: That's helpful. Thanks, and just.

Speaker Change: Maybe on expanding on that a little bit do you have a sense as to when.

Speaker Change: New gas plants could realistically get built in the PJM market.

Larry Cohen: And number two, we have a very undervalued stock in which to invest capital as well. So when we look at those two things, if we can make a transaction that makes sense, we'll obviously do that. I don't see anything on the horizon today, but, you know, if the opportunity arises, we will certainly look at it hard and try to take advantage of it. Understood. Thanks for squeezing me in here. Thank you.

Speaker Change: Given the supply chain challenges that you mentioned in your outlook for energy prices too in that in the context of that.

Unknown Executive: So there are two challenges in PJM. One is PJM-specific, and that's the interconnection queue, right? Very deep and very slow, and so it's probably frustrating a lot of people.

Unknown Executive: We have one last question.

Speaker Change: So there is two challenges in PJM.

Speaker Change: One is PJM specific and that is the interconnection queue right.

Speaker Change: Very deep and very slow and so it's probably frustrating a lot of people.

Unknown Executive: The second piece is the one that is, you know, a global issue, which Larry alluded to earlier, which is if you want to build a power plant today and you're not in the queue, you're not going to get anything on the ground before 23rd. So demand is coming faster than that supply window. So I expect tight markets, both from a capacity and an energy perspective over the next several years.

Speaker Change: The second piece is the one that is a global issue, which Larry alluded to earlier, which is if you want to build a power plant today and youre not in the Q youre not going to get anything on the ground before 2030.

Speaker Change: So demand is coming faster than that supply window. So I expect tightened tight markets, both from a capacity and energy perspective.

David Arcaro: The last question comes from David, our carer from Morgan's family. Please go ahead. Oh, hey, thanks so much. The last last question here. Hey, I was just curious on the PJM market just reflecting on the capacity print that we just saw. Is there an opportunity for you to look at new build there, like this new build economics work at this point and do you have any opportunities to look at that market in terms of power plant expansion?

Speaker Change: Over the next several years.

David Arcaro: Okay, great. Very helpful. Thanks for the color. And congratulations, Larry.

Speaker Change: Okay, great very helpful. Thanks for the color and congratulations Larry.

Larry Coben: Thank you, David. I appreciate it.

Larry Cohen: Thank you David appreciate it.

Larry Coben: Thank you. I am showing no further questions at this time. I will turn it back over to Larry Coben for those remarks.

Speaker Change: Thank you I am showing.

Speaker Change: At this time I will turn it back over to Larry Colby.

Speaker Change: For those remarks.

Larry Coben: Thank you all for being on the call and for your interest in NRG, and, on a more personal note, for all the kind words and congratulations on my appointment. I'm here, and we're all here because we are super excited about the future of NRG. I think you all know that I've been here for 20 years, and I've never been more excited or more optimistic about the prospects. So, I hope you'll stick with us and join us as we continue to do well and take advantage of the amazing strategic opportunities and initiatives in front of us. Thank you all very much. Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. Thank you for watching! Thank you for watching!

Larry Colby: Thank you all for being on the call and for your interest in NRG and on a more personal note for all the kind words and congratulations on my appointment.

David Arcaro: Hey, it's Rob. So the print is constructive as it comes to actually highlighting the supply demand picture in the market. So I think that's a positive. We have new build sites, which regardless, or we have sites, regardless if you new build them or not, that print is definitely supportive in the overall value as we think about them from a development perspective, whether that's for load or for generation. The one thing I would tell you, David, is that one print isn't going to get a bunch of generation running into the market.

Speaker Change: I'm here and we're all here because we are super excited about the future of NRG.

Speaker Change: Thank you all know that I've been here for 20 years and I've never been more excited are more optimistic about the prospects.

Speaker Change: I hope, you'll stick with us and join US as we continue to execute well and take advantage of the amazing strategic.

Speaker Change: Opportunities and initiatives in front of us. Thank you all very much.

Speaker Change: Ladies and gentlemen, thank you for your participation in today's conference.

Operator: Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. Thanks for watching!

Speaker Change: This concludes the program.

David Arcaro: So, you know, I wouldn't expect to see a whole bunch of people applying to build generation based on one PJM print, but we do have another mark in December, which I expect would be supportive. And so, you know, the supply dynamics in PJM aren't going to improve anytime soon, but I believe that ultimately competitive energy players are rational and we'll build winners. It makes sense. That's helpful. Thanks, and just maybe on expanding on that a little bit.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

David Arcaro: Do you have a sense as to when new gas plants could realistically get built in the PGM market, given the supply chain challenges that you mentioned in your outlook for energy prices too in the context of that. So there's two challenges in PGM. One is being JMP specific, and that's the interconnection queue, right? It's very deep. And very slow, and so it's probably frustrating a lot of people. The second piece is the one that is, you know, a global issue, which Larry alluded to earlier, which is if you want to build a power plant today and you're not in the queue, you're not going to get anything on the ground before 2030.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: <unk>.

Speaker Change: Okay.

Speaker Change: Okay.

David Arcaro: So demand is coming faster than that supply window. So I expect tight and tight markets both from a capacity and an energy perspective over the next several years. Okay, great. Very helpful. Thanks for the color and congratulations, Larry. Thank you, David. Appreciate it. Thank you. I am showing you the questions at this time.

Larry Cohen: I will turn it back over to Larry Cobin for those remarks. Thank you all for being on the call and for your interested NRG and on a more personal note for all the kind words and congratulations on my appointment. I'm here and we're all here because we are super excited about the future of the of NRG. I think you all know that I've been here for 20 years and I've never been or excited or more optimistic about the prospects.

Larry Cohen: So I hope you'll stick with us and join us as we continue to execute well and take advantage of the amazing strategic opportunities and initiatives in front of us. Thank you all very much. Ladies and gentlemen, thank you for your participation in today's conference.

Unknown Executive: This concludes the program. . [inaudible] David Arcaro, David Arcaro, David Arcaro, David Arcaro, David Arcaro, David Arcaro, David Arcaro, David Arcaro, David Arcaro, David Arcaro,

Speaker Change: [music].

unknown: www.nrg.nlm.nz www.nrg.nlm.nz www.nrg.nlm.nz [inaudible] [music]

Speaker Change: [music].

Speaker Change: [music].

Speaker Change: [music].

Speaker Change: Okay.