7f2c4fa65d1ec902e2c475bdf2910d4b70e5831d612535646f3f06bb6f86cdf2

NRG Energy, Inc. is a leading energy and home services company operating across the United States and Canada, focusing on delivering innovative and sustainable solutions under brand names such as NRG, Reliant, Direct Energy, Green Mountain Energy, and Vivint **[0001013871-24-000005_nrg-20231231.htm:8]** **[0001104659-24-067272_tm2416154d1_ex1-01.htm:0]** **[0001013871-24-000020_nrg-20240930.htm:53]** **[0001013871-24-000010_nrg-20240331.htm:41]** **[0001013871-24-000015_nrg-20240630.htm:46]** **[0001013871-24-000005_nrg-20231231.htm:9]** **[0001013871-24-000005_nrg-20231231.htm:36]** **[0001013871-24-000005_nrg-20231231.htm:7]** **[0001104659-24-034809_tm242662d2_def14a.htm:7]** **[0001013871-24-000005_nrg-20231231.htm:52]** **[0001013871-24-000015_nrg-20240630.htm:11]** **[0001013871-24-000020_nrg-20240930.htm:12]** **[0001013871-24-000005_nrg-20231231.htm:32]** **[0001013871-24-000005_nrg-20231231.htm:43]** **[0001013871-24-000020_nrg-20240930.htm:94]** **[0001013871-24-000015_nrg-20240630.htm:84]** **[0001013871-24-000005_nrg-20231231.htm:123]** **[0001013871-24-000010_nrg-20240331.htm:69]** **[0001013871-24-000005_nrg-20231231.htm:44]** **[0001013871-24-000005_nrg-20231231.htm:17]**. The company's core business activities include the sale of electricity and natural gas to residential, commercial, industrial, and wholesale customers, supported by its wholesale electric generation **[0001013871-24-000005_nrg-20231231.htm:8]** **[0001104659-24-067272_tm2416154d1_ex1-01.htm:0]** **[0001013871-24-000020_nrg-20240930.htm:53]** **[0001013871-24-000010_nrg-20240331.htm:41]** **[0001013871-24-000015_nrg-20240630.htm:46]** **[0001013871-24-000005_nrg-20231231.htm:9]** **[0001013871-24-000005_nrg-20231231.htm:36]** **[0001013871-24-000005_nrg-20231231.htm:7]** **[0001104659-24-034809_tm242662d2_def14a.htm:7]** **[0001013871-24-000005_nrg-20231231.htm:52]** **[0001013871-24-000015_nrg-20240630.htm:11]** **[0001013871-24-000020_nrg-20240930.htm:12]** **[0001013871-24-000005_nrg-20231231.htm:32]** **[0001013871-24-000005_nrg-20231231.htm:43]** **[0001013871-24-000020_nrg-20240930.htm:94]** **[0001013871-24-000015_nrg-20240630.htm:84]** **[0001013871-24-000005_nrg-20231231.htm:123]** **[0001013871-24-000010_nrg-20240331.htm:69]** **[0001013871-24-000005_nrg-20231231.htm:44]** **[0001013871-24-000005_nrg-20231231.htm:17]**. NRG also offers a variety of smart home products and services through its Vivint Smart Home segment **[0001013871-24-000005_nrg-20231231.htm:8]** **[0001104659-24-067272_tm2416154d1_ex1-01.htm:0]** **[0001013871-24-000020_nrg-20240930.htm:53]** **[0001013871-24-000010_nrg-20240331.htm:41]** **[0001013871-24-000015_nrg-20240630.htm:46]** **[0001013871-24-000005_nrg-20231231.htm:9]** **[0001013871-24-000005_nrg-20231231.htm:36]** **[0001013871-24-000005_nrg-20231231.htm:7]** **[0001104659-24-034809_tm242662d2_def14a.htm:7]** **[0001013871-24-000005_nrg-20231231.htm:52]** **[0001013871-24-000015_nrg-20240630.htm:11]** **[0001013871-24-000020_nrg-20240930.htm:12]** **[0001013871-24-000005_nrg-20231231.htm:32]** **[0001013871-24-000005_nrg-20231231.htm:43]** **[0001013871-24-000020_nrg-20240930.htm:94]** **[0001013871-24-000015_nrg-20240630.htm:84]** **[0001013871-24-000005_nrg-20231231.htm:123]** **[0001013871-24-000010_nrg-20240331.htm:69]** **[0001013871-24-000005_nrg-20231231.htm:44]** **[0001013871-24-000005_nrg-20231231.htm:17]**.

1. **Retail Electricity** - Sells electricity to residential, commercial, industrial, and wholesale customers across various regions.
2. **Natural Gas** - Provides natural gas services to a diverse customer base, including residential and commercial sectors.
3. **Vivint Smart Home** - Offers smart home products and services, enhancing home automation and security.
4. **Energy Management** - Delivers energy efficiency and management solutions, focusing on distributed energy resources and renewable energy.
5. **HVAC Services** - Provides heating, ventilation, and air conditioning services to improve home comfort and efficiency.
6. **Home Protection Products** - Offers products designed to protect and maintain home systems and appliances.
7. **Carbon Offsets** - Provides solutions for customers to offset their carbon footprint through sustainable practices.
8. **Portable Power Solutions** - Offers portable power products for various consumer needs.

dd8b98e5473b2529ec3050e95e35480d05a63ad7311208268bdc3f018cdf7aaa

| Geographical Segment | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Texas (in millions)  | **$2,200**  **[0001013871-23-000002_ex991-q42022.htm:10]**  | **$2,034**  **[0001013871-23-000012_nrg-20230331.htm:37]**  | **$2,515**  **[0001013871-23-000015_nrgq22023ex991.htm:9]**  | **$3,686**  **[0001013871-23-000022_nrg-20230930.htm:48]**  | **$2,241**  **[0001013871-24-000003_ex991-q42023.htm:11]**  | **$2,233**  **[0001013871-24-000010_nrg-20240331.htm:32]**  | **$2,763**  **[0001013871-24-000015_nrg-20240630.htm:36]**  | **$3,301**  **[0001013871-24-000019_nrgq32024ex991.htm:12]**  |
| East (in millions)   | **$4,191**  **[0001013871-23-000002_ex991-q42022.htm:10]**  | **$4,176**  **[0001013871-23-000012_nrg-20230331.htm:37]**  | **$2,458**  **[0001013871-23-000015_nrgq22023ex991.htm:9]**  | **$2,809**  **[0001013871-23-000022_nrg-20230930.htm:48]**  | **$3,037**  **[0001013871-24-000003_ex991-q42023.htm:11]**  | **$3,515**  **[0001013871-24-000010_nrg-20240331.htm:32]**  | **$2,532**  **[0001013871-24-000015_nrg-20240630.htm:36]**  | **$2,606**  **[0001013871-24-000019_nrgq32024ex991.htm:12]**  |
| West/Services/Other (in millions) | **$1,305**  **[0001013871-23-000002_ex991-q42022.htm:10]**  | **$1,374**  **[0001013871-23-000012_nrg-20230331.htm:37]**  | **$870**  **[0001013871-23-000015_nrgq22023ex991.htm:9]**  | **$978**  **[0001013871-23-000022_nrg-20230930.htm:48]**  | **$1,014**  **[0001013871-24-000003_ex991-q42023.htm:11]**  | **$1,219**  **[0001013871-24-000010_nrg-20240331.htm:32]**  | **$910**  **[0001013871-24-000015_nrg-20240630.htm:36]**  | **$828**  **[0001013871-24-000019_nrgq32024ex991.htm:12]**  |

dbb959b3474c5956550f99fe7f7763bf53b12b8e86b67dd677850db334b19f2f

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

108de84d605e90119771dbbb196e37007b6319669333c8475decf63a1ad63613

ab80b53db3032fbf2f17e3f2383bef6db5a13f975cc138883c247e5936bcac33

| Segment/Quarter                  | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | Q1 2022 |
|----------------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **Vivint Smart Home ($ million)**| **479**  **[0001013871-24-000003_ex991-q42023.htm:10]**  | **478**  **[0001013871-23-000022_nrg-20230930.htm:16]**  | **444**  **[0001013871-23-000015_nrgq22023ex991.htm:9]**  | **148**  **[0001013871-23-000012_nrg-20230331.htm:37]**  | N/A     | N/A     | N/A     | N/A     |
| **Corporate/Eliminations ($ million)** | **(4)**  **[0001013871-24-000003_ex991-q42023.htm:10]**  | N/A     | **(6)**  **[0001013871-23-000015_nrgq22023ex991.htm:9]**  | **(10)**  **[0001013871-23-000012_nrg-20230331.htm:37]**  | N/A     | N/A     | N/A     | N/A     |

8cc6513097ab1aefe8e4f1eb03def599d2b06f4a821a047fc4df5630b7e5359d

7adfd7f9329899491286710fde735509a8536d8be9883285d1fc51d7502083c5

1. The company's growth projections heavily rely on the success of the Smart Home services and the Virtual Power Plant initiative, including significant customer adoption of the Home Essentials bundle  **[NRG_3407269_2]** **[NRG_3407269_4]** **[NRG_3407269_5]** . What are the risks associated with achieving the projected customer adoption rates and incremental revenues, and how confident is management in these assumptions?

2. NRG's long-term outlook holds Texas power prices flat at $47 through 2029, despite expectations of market tightening due to growing demand  **[NRG_3407269_2]** . Why has management chosen not to factor in potential rises in Texas power prices, and how might this conservative pricing assumption impact future earnings?

3. The company plans to return $8.8 billion to shareholders, with $7.1 billion dedicated to share repurchases  **[NRG_3407269_2]** **[NRG_3407269_9]** . Given the significant opportunities for organic growth and potential investments in projects like data centers and Texas brownfield projects  **[NRG_3407269_2]** , how does management justify prioritizing share repurchases over investing in these growth opportunities?

4. The new partnership with Renew Home and Google aims to develop a 1-gigawatt residential Virtual Power Plant in Texas, with Renew Home funding a significant portion of customer acquisition costs  **[NRG_3407269_4]** **[NRG_3407269_5]** . Can you provide more details on the financial terms of this partnership, and what are the potential risks if customer adoption or VPP performance does not meet expectations?

5. NRG has adjusted its reporting of adjusted EBITDA by moving amortization of capitalized customer acquisition costs into the depreciation and amortization line  **[NRG_3407269_1]** **[NRG_3407269_6]** . This change resulted in an upward adjustment to the 2024 guidance midpoint by $130 million  **[NRG_3407269_6]** . How does this accounting change enhance transparency, and could it potentially lead to confusion among investors regarding the company's actual performance?

2cd8a5618e8898fc72457783d84a5fb4817d46799ff10324c7dfb0d1feabaad4

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2025
- **Guidance**:
  - **Adjusted Net Income**: $1.33 billion to $1.53 billion, midpoint of $1.43 billion  **[NRG_3407269_8]** .
  - **Adjusted Earnings Per Share (EPS)**: $6.75 to $7.75, midpoint of $7.25 per share  **[NRG_3407269_8]** .
  - **Adjusted EBITDA**: $3.725 billion to $3.975 billion, midpoint of $3.85 billion  **[NRG_3407269_7]** .
  - **Free Cash Flow Before Growth (FCFbG)**: $1.975 billion to $2.225 billion, midpoint of $2.1 billion  **[NRG_3407269_7]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - **Adjusted EBITDA**: $3.3 billion to $3.55 billion  **[NRG_3397411_4]** .
  - **Free Cash Flow Before Growth**: $1.825 billion to $2.075 billion  **[NRG_3397411_4]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - **EBITDA and Free Cash Flow**: Reaffirmed guidance for 2024  **[NRG_3386757_6]** .
  - **Return of Capital**: Approximately $1.2 billion, including $825 million in share repurchases  **[NRG_3386757_5]** .
  - **Growth and Efficiency Initiatives**: $550 million program  **[NRG_3386757_6]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  - **Financial Guidance**: Reaffirmed 2024 financial guidance ranges  **[NRG_3375417_2]** .
  - **Free Cash Flow Before Growth**: Achieved $9.25 per share in 2023, targeting 15% to 20% growth  **[NRG_3375417_4]** **[NRG_3375417_8]** .
  - **Debt Paydown and Shareholder Returns**: $500 million debt paydown and nearly $1.2 billion in shareholder returns  **[NRG_3375417_5]** .
  - **Cost Initiatives**: $550 million target by end of 2025  **[NRG_3375417_3]** **[NRG_3375417_15]** .
  - **Smart Home Business**: Mid-single-digit subscriber growth anticipated for 2024  **[NRG_3375417_17]** .
  - **Retail Energy Gross Margin**: Higher assumption on COGS for retail business  **[NRG_3375417_22]** .

25879f64ba9ee140dcf8757057e234c9fde9aeb420445c666da596a648247275

d1417584495b286db80d1e16f0cd9011deb2cb253651c386359fe8e12b1659d0

80f97dfca075bc5327d0df72c0df1469a1259b2d26c8077236e163fb9d57cb4e

Home Electricity Sales Volume (GWh)

Business Electricity Sales Volume (GWh)

Home Natural Gas Sales Volume (MDth)

Business Natural Gas Sales Volume (MDth)

Average Retail Home Customer Count (thousands)

Ending Retail Home Customer Count (thousands)

Average Vivint Smart Home Subscriber Count (thousands)

Ending Vivint Smart Home Subscriber Count (thousands)

GWh Sold

GWh Generated

Coal GWh Generated

Gas GWh Generated

Renewables GWh Generated

Average On-Peak Power Price ($/MWh)

Average Henry Hub Natural Gas Price ($/MMBtu)

a854117429ab21d7326c11865f9c976bca6f0128d5d5d2a53ebb3b4ca0f5ec34

| Name                  | Position                                      | Start Date         | Short Bio                                                                                                                                                                                                 |
|-----------------------|-----------------------------------------------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Lawrence S. Coben     | Interim President and CEO                     | November 17, 2023  | Lawrence S. Coben has been a director at NRG since 2003 and Chair of the Board since 2017. He has extensive experience in the energy industry, having founded Catalyst Energy Corporation  **[0001104659-24-034809_tm242662d2_def14a.htm:29]** **[0001104659-24-034809_tm242662d2_def14a.htm:37]** **[0001104659-24-034809_tm242662d2_def14a.htm:49]** .                                          |
| Woo-Sung (Bruce) Chung| Executive Vice President and CFO              | June 2023          | Bruce Chung was previously EVP of Strategy, M&A, and NRG Services. He has a background in investment banking and energy technology investments  **[0001104659-24-034809_tm242662d2_def14a.htm:37]** .                                                                                           |
| Robert J. Gaudette    | Executive Vice President, NRG Business        | April 2022         | Robert J. Gaudette has held various senior positions at NRG since 2013, including SVP, Business Solutions. He began his career at Mirant in 2001  **[0001104659-24-034809_tm242662d2_def14a.htm:38]** **[0001104659-23-032997_tm231822d2_def14a.htm:42]** .                                                                                       |
| Elizabeth Killinger   | Executive Vice President, NRG Home            | February 2016      | Elizabeth Killinger has been with NRG since 2002, holding various operational and business leadership positions. She has a background in strategy, management, and systems consulting  **[0001104659-24-034809_tm242662d2_def14a.htm:38]** **[0001104659-23-032997_tm231822d2_def14a.htm:42]** .                                                  |
| Rasesh Patel          | President, NRG Consumer                       | May 28, 2024       | Rasesh Patel was EVP, Smart Home at NRG since March 2023. Before joining NRG, he was COO of Vivint and held executive roles at AT&T  **[0001013871-24-000015_nrg-20240630.htm:95]** **[0001104659-24-034809_tm242662d2_def14a.htm:38]** .                                                                                                     |
| Brian Curci           | Executive Vice President and General Counsel  | March 2021         | Brian Curci joined NRG in 2007 and has held various legal roles, including Corporate Secretary. Before NRG, he was a corporate associate at Saul Ewing LLP  **[0001104659-24-034809_tm242662d2_def14a.htm:38]** **[0001104659-23-032997_tm231822d2_def14a.htm:42]** .                                                                              |

97eec9709aaaceadc3b0700fe545c42cf92fd754314e07a70b501cb93b55a344

| Program Details          | Program 1            | Program 2            |
|--------------------------|----------------------|----------------------|
| Approval Date            | June 2023  **[0001013871-24-000020_nrg-20240930.htm:39]** **[0001013871-24-000020_nrg-20240930.htm:87]** **[0001013871-24-000020_nrg-20240930.htm:62]**   | October 2024  **[0001013871-24-000020_nrg-20240930.htm:39]** **[0001013871-24-000020_nrg-20240930.htm:87]** **[0001013871-24-000020_nrg-20240930.htm:62]** |
| End Date/Duration        | Through 2025  **[0001013871-24-000020_nrg-20240930.htm:39]** **[0001013871-24-000020_nrg-20240930.htm:87]** **[0001013871-24-000020_nrg-20240930.htm:62]** | Through 2025  **[0001013871-24-000020_nrg-20240930.htm:39]** **[0001013871-24-000020_nrg-20240930.htm:87]** **[0001013871-24-000020_nrg-20240930.htm:62]** |
| Total additional amount  | $2.7 billion  **[0001013871-24-000020_nrg-20240930.htm:39]** **[0001013871-24-000020_nrg-20240930.htm:87]** **[0001013871-24-000020_nrg-20240930.htm:62]** | $1.0 billion  **[0001013871-24-000020_nrg-20240930.htm:39]** **[0001013871-24-000020_nrg-20240930.htm:87]** **[0001013871-24-000020_nrg-20240930.htm:62]** |
| Remaining authorization amount | $1.0 billion  **[0001013871-24-000020_nrg-20240930.htm:39]** **[0001013871-24-000020_nrg-20240930.htm:87]** **[0001013871-24-000020_nrg-20240930.htm:62]**  | $1.0 billion  **[0001013871-24-000020_nrg-20240930.htm:39]** **[0001013871-24-000020_nrg-20240930.htm:87]** **[0001013871-24-000020_nrg-20240930.htm:62]**  |
| Details                  | Part of a $3.7 billion total authorization  **[0001013871-24-000020_nrg-20240930.htm:39]** **[0001013871-24-000020_nrg-20240930.htm:87]** **[0001013871-24-000020_nrg-20240930.htm:62]**  | Part of a $3.7 billion total authorization  **[0001013871-24-000020_nrg-20240930.htm:39]** **[0001013871-24-000020_nrg-20240930.htm:87]** **[0001013871-24-000020_nrg-20240930.htm:62]**  |

330dffeb82e0b49c49993901464295cac1bb60ffbcfddfb43c20e9e112ed14fc

**Annual guidance for FY 2025:**
- **Adjusted Net Income**: $1.33B–$1.53B  **[NRG_3407269_8]**  (no prior guidance)  
- **Adjusted EPS**: $6.75–$7.75  **[NRG_3407269_8]**  (no prior guidance)  
- **Adjusted EBITDA**: $3.725B–$3.975B  **[NRG_3407269_7]**  (raised from $3.3B–$3.55B  **[NRG_3397411_4]** )  
- **Free Cash Flow Before Growth**: $1.975B–$2.225B  **[NRG_3407269_7]**  (raised from $1.825B–$2.075B  **[NRG_3397411_4]** )  

fe4979d0d20212f9577c0831d9b09c8bf987a3e356d996b543b57d1240cbe7dd

| Name       | Start Date | End Date | Reason for Change |
|------------|------------|----------|-------------------|
| KPMG LLP   | 2004  **[0001013871-24-000005_nrg-20231231.htm:118]**    | Present  | Current auditor   |

2e4b5a16a49ecd311bfe5869b53ebda0cbb7ccb7b51503fc4abde1d2a8f46319

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- Total Revenue: $7,223  **[0001013871-24-000020_nrg-20240930.htm:17]** **[0001013871-24-000020_nrg-20240930.htm:42]** , down ~9% YoY from $7,946 in Q3 2023  **[0001013871-23-000022_nrg-20230930.htm:16]** **[0001013871-23-000022_nrg-20230930.htm:48]**   
- Retail Home Segment: $3,231  **[0001013871-24-000020_nrg-20240930.htm:17]** , down ~15% YoY from $3,808  **[0001013871-23-000022_nrg-20230930.htm:16]**   
- Retail Business Segment: $3,259  **[0001013871-24-000020_nrg-20240930.htm:17]** , down ~12% YoY from $3,713  **[0001013871-23-000022_nrg-20230930.htm:16]**   
- Texas Region: $3,301  **[0001013871-24-000020_nrg-20240930.htm:42]** , down ~10% YoY from $3,686  **[0001013871-23-000022_nrg-20230930.htm:48]**   
- East Region: $2,600  **[0001013871-24-000020_nrg-20240930.htm:42]** , down ~7% YoY from $2,809  **[0001013871-23-000022_nrg-20230930.htm:48]**   
- SG&A: $556  **[0001013871-24-000020_nrg-20240930.htm:7]** , down ~13% YoY from $638  **[0001013871-23-000022_nrg-20230930.htm:69]** **[0001013871-23-000022_nrg-20230930.htm:7]**   
- Operating Income (EBIT): -$812  **[0001013871-24-000020_nrg-20240930.htm:7]** , down from $561 in Q3 2023  **[0001013871-23-000022_nrg-20230930.htm:48]** **[0001013871-23-000022_nrg-20230930.htm:69]** **[0001013871-23-000022_nrg-20230930.htm:7]**   
- Net Income: **-$767**  **[0001013871-24-000020_nrg-20240930.htm:7]** , down from $343  **[0001013871-23-000022_nrg-20230930.htm:48]** **[0001013871-23-000022_nrg-20230930.htm:69]** **[0001013871-23-000022_nrg-20230930.htm:7]**   
- EPS (Basic): -$3.73  **[0001013871-24-000020_nrg-20240930.htm:7]** , down from $1.42  **[0001013871-23-000022_nrg-20230930.htm:7]**   

b6f2b7dde02af0b7029cf610314d36ab7c5522baf6cfd1bb88978b817f5472da

2b72b7031dbc1a9ef78506c1aa78a71b1c7b7d58757f21bbe7736d2491dc96b3

- NRG is seeing data centers seeking long-term energy contracts, leading to an uplift in their commercial and industrial business opportunities in **ERCOT and PJM**.  **[NRG_3407269_24]**
- NRG raised its 2024 adjusted EPS guidance by **12%**, expecting **$1.3 billion** in adjusted net income or **$6.35 per share**, showing strong business performance and profitability growth.  **[NRG_3407269_2]**
- With nearly **40%** market share in the Texas residential energy market, NRG is expanding its share of wallet by launching **'home-based essentials'**, and in trials, **20%** of customers purchased additional Smart Home services, indicating significant growth potential.  **[NRG_3407269_23]**

31d35460a9b9ba7f0bf50af4af830d308eadbbbc7fba21da14dc4bc2d803910f

- **NRG plans to expand generation capacity with 1.5 GW of dispatchable brownfield projects in Texas**, positioning itself to benefit from growing power demand and tightening supply-demand fundamentals.  **[NRG_3375417_12]**
- **The Smart Home business showed strong performance in 2023, with 6% subscriber growth, 11% revenue growth, and 17% adjusted EBITDA growth**, and expects continued margin expansion and mid-single-digit subscriber growth in 2024.  **[NRG_3375417_17]**
- **NRG remains committed to achieving 15%-20% growth in free cash flow before growth per share**, increasing both free cash flow and EBITDA, with 2024 projections about **$150 million** above prior indications.  **[NRG_3375417_8]**

ebbea60c4a4325734169e048b1faeff3b865baf88ebc3eccc941fad10bd76bd4

1. **Free Cash Flow Growth Target**  
   **Q:** Are you still committed to 15%–20% FCF per share growth?  
   **A:** Yes, we remain committed to achieving **15%–20% growth in free cash flow before growth per share**.  **[NRG_3375417_8]**  We're increasing both free cash flow and EBITDA; the 2024 EBITDA is about **$150 million** above prior indications.  **[NRG_3375417_8]** 

2. **Capital Allocation and New Investments**  
   **Q:** Will new projects affect share buybacks?  
   **A:** No, proceeding with the **1.5 GW** dispatchable generation projects will **not impact our capital allocation strategy or share buybacks at all**.  **[NRG_3375417_16]**  We're very clear on maintaining our capital allocation plan.  **[NRG_3375417_16]** 

3. **Cost Improvements and Growth Opportunities**  
   **Q:** Can you break down the $550 million target by 2025?  
   **A:** Roughly **50%** of the $300 million growth synergies come from organic growth, and the other **50%** from cross-selling and increased revenue per customer.  **[NRG_3375417_15]**  On costs, we've exceeded our year-one target and have full line of sight to the **$100 million** in cost synergies by 2025.  **[NRG_3375417_15]** 

4. **Asset Strategy Amid Tightening Markets**  
   **Q:** How does market tightening affect your asset-light strategy?  
   **A:** We're not asset-light but **asset-optimal**.  **[NRG_3375417_12]**  We have **1.5 GW** of brownfield projects ready to go  **[NRG_3375417_12]** , and we'll always be asset-optimal to meet market demands.  **[NRG_3375417_12]** 

5. **Retail Energy Gross Margin Outlook**  
   **Q:** What is the outlook for retail energy margins?  
   **A:** The 2024 outlook reflects higher COGS with a timing lag between costs and revenue rates.  **[NRG_3375417_22]**  However, we've demonstrated **margin stability** over the years and expect to continue delivering stable and growing margins.  **[NRG_3375417_22]** 

6. **Data Center Impact and Load Growth**  
   **Q:** How does data center growth affect your business?  
   **A:** Increased demand from data centers will expand margins on our existing generation portfolio and make the **1.5 GW** projects more attractive.  **[NRG_3375417_12]** **[NRG_3375417_18]**  It's good for the industry and especially good for us.  **[NRG_3375417_12]** **[NRG_3375417_18]** 

7. **Transitioning to EPS Reporting**  
   **Q:** Will you shift to EPS reporting and longer guidance?  
   **A:** Yes, we're considering transitioning to EPS reporting.  **[NRG_3375417_10]**  **Stay tuned** for more details.  **[NRG_3375417_10]** 

8. **CEO Search Progress**  
   **Q:** What's the status of the CEO search?  
   **A:** The search is ongoing with a strong committee working diligently.  **[NRG_3375417_11]**  We expect to find someone spanning both consumer and energy sectors within **0 to 6 months**.  **[NRG_3375417_11]** 

9. **Texas Market Dynamics**  
   **Q:** What's the outlook on Texas market structure changes?  
   **A:** We see a fair amount of legislative stability.  **[NRG_3375417_19]**  The PUC is implementing measures passed, and we believe capacity needs will be met without major changes.  **[NRG_3375417_19]** 

10. **Smart Home Growth Expectations**  
    **Q:** What are your Smart Home growth expectations for 2024?  
    **A:** We anticipate **mid-single-digit** subscriber growth, continued elevated margins, and strong customer retention in 2024.  **[NRG_3375417_17]** 

11. **Investment-Grade Aspirations**  
    **Q:** How do credit agencies view your investment-grade goals?  
    **A:** We're not chasing an investment-grade rating but focus on hitting metrics that correspond to one.  **[NRG_3375417_14]**  Agencies appreciate our credit path, and we're triangulating around all key metrics.  **[NRG_3375417_14]** 

12. **Lubbock Market Opportunity**  
    **Q:** Is the Lubbock market included in your plan?  
    **A:** Yes, the Lubbock market is baked into our **2024 and beyond** growth plans.  **[NRG_3375417_21]**  We are overperforming with about **39%** market share in Texas and exceeding that in Lubbock.  **[NRG_3375417_21]** 

cda1e8581198fb02742206c8c3c15ed83a2a0641cdcb23b48c643d9e3d8bc259

- **NRG's integrated model allows it to capitalize on higher power prices**, gearing themselves to take advantage of price increases, enhancing EBITDA and free cash flow.  **[NRG_3386757_17]** **[NRG_3386757_12]**
- **Proven ability to maintain and even increase retail margins over time**, even as energy prices rise, demonstrating resilience and pricing power in their retail business.  **[NRG_3386757_26]** **[NRG_3386757_12]**
- **Reaffirmation of 15% to 20% free cash flow per share growth target** despite a higher stock price, expecting upside from higher power prices and continued execution of their $550 million growth and cost program.  **[NRG_3386757_15]**

48948c7baec588610e0d6b61aa2ac7adb7bde2ee0cf4403780143036a49c034a

- **Supply chain challenges and interconnection delays in PJM could delay new gas plant construction until after 2030**, potentially limiting NRG's ability to meet growing demand in that region.  **[NRG_3397411_25]**
- **NRG is investing in new generation assets with only 2-3 years visibility into profitability**, raising concerns given previous cycles where IPPs faced difficulties without long-term contracts.  **[NRG_3397411_12]**
- **Regulatory changes in the Northeast could impact NRG's retail energy business**, although the company currently views the impact as negligible.  **[NRG_3397411_11]**

093706a44c323ce97586aa2fa852e8165e1153921b7b0cb9bb0d2deed5a5d195

- NRG anticipates tight power markets over the next several years due to supply constraints and increasing demand, positioning the company to benefit from higher capacity and energy prices. Management expresses confidence in their portfolio and is optimistic about future market conditions, seeing opportunities in current market pricing.  **[NRG_3397411_25]** **[NRG_3397411_10]** **[NRG_3397411_19]**
- The company's Smart Home and retail energy businesses reported strong quarterly performance, with the Smart Home segment achieving **5% year-over-year subscriber growth**, **7% revenue growth**, and near **90% customer retention rates**, despite high interest rates and a slowdown in housing activity, indicating robust operational performance and growth potential.  **[NRG_3397411_21]** **[NRG_3397411_11]**
- NRG is strategically investing in flexible generation assets to meet growing customer demand and leveraging market volatility to enhance asset value, demonstrating proactive management and potential for increased earnings.  **[NRG_3397411_14]** **[NRG_3397411_19]**

8a0c25b48237d5f650d78d943e33081fede861b2757cbf27da74f857c61460ac

- **NRG is experiencing only "modest household growth" in the Texas residential energy market, limiting opportunities for organic customer expansion.**  **[NRG_3407269_23]**
- **The company's strategy focuses on expanding share of wallet with existing customers, which may be challenging in a market where they already hold nearly 40% market share.**  **[NRG_3407269_23]**
- **NRG acknowledges market tightness and competition for megawatts in the commercial and industrial sector, potentially impacting growth despite increased demand from data centers.**  **[NRG_3407269_24]**

0ce66a127c74ccfa01d1755849570dbb01fd1ffcadcbeb89287a9bb8c0950bf5

1. **Impact of Higher Power Prices**  
   **Q:** How do rising power prices affect NRG's margins?  
   **A:** NRG expects higher power prices to significantly expand gross margins, leading to approximately **80% translation to EBITDA** and **75% to free cash flow**. Existing running plants have zero impact on OpEx with price increases, while additional run times may incur more costs but are offset by higher revenues.  **[NRG_3386757_12]** 

2. **Capital Allocation and Buybacks**  
   **Q:** Will higher valuations affect NRG's share buybacks?  
   **A:** NRG reaffirms its capital allocation commitments, believing it has enough capital to both invest in growth opportunities and return capital to shareholders through buybacks, even as the stock price appreciates.  **[NRG_3386757_19]** 

3. **New Generation Investments**  
   **Q:** How is NRG funding new gas generation builds?  
   **A:** NRG plans to use the Texas Energy Fund to cover **60% of capital costs** for new builds. The remaining **40% equity** will be funded from internal cash flow without impacting share repurchases or deleveraging.  **[NRG_3386757_16]** 

4. **ERCOT Power Price Outlook**  
   **Q:** Is there more upside in ERCOT power prices?  
   **A:** NRG believes ERCOT prices can continue to rise due to large loads coming to the system, with ERCOT monitoring the situation, indicating potential for further increases in the forward curves.  **[NRG_3386757_20]** 

5. **Impact of EPA Regulations**  
   **Q:** How will recent EPA regs affect NRG's generation?  
   **A:** NRG anticipates that the new EPA regulations will be litigated and are not influencing their investment decisions. Their focus on gas fleet investments and **1.5 GW** of shovel-ready proposals is driven by market opportunities, not regulatory changes.  **[NRG_3386757_10]** 

6. **Feasibility of New Gas Plants**  
   **Q:** Are new gas plants economically viable amid renewables growth?  
   **A:** NRG asserts that new gas plants are profitable, as peakers and combined cycle units can flexibly capture high prices during peak demand hours, especially when prices can spike **5 or 6 times** during summer afternoons in Texas. Projects exceed their hurdle rates.  **[NRG_3386757_13]** 

7. **Retail Margin Stability**  
   **Q:** Will higher power prices impact retail margins?  
   **A:** NRG maintains confidence in sustaining strong retail margins despite rising power prices, having a proven ability to pass costs to consumers over time, and expects competitors to remain rational in pricing.  **[NRG_3386757_12]** ,  **[NRG_3386757_26]** 

8. **21 Sites and Capacity Expansion**  
   **Q:** How many gigawatts can be added at the 21 sites?  
   **A:** NRG sees significant potential in developing the 21 sites but is still evaluating specifics. The company is exploring options like data centers and power plants, with more details expected by year-end.  **[NRG_3386757_18]** 

9. **CEO Search Update**  
   **Q:** Any updates on the CEO search?  
   **A:** The search committee continues its work with no rush, and Interim CEO Lawrence Coben will remain in position until the right candidate is found.  **[NRG_3386757_11]** 

10. **Competition in Retail Energy**  
    **Q:** Are you seeing retail market pricing pressure?  
    **A:** NRG reports stable performance in the retail energy business with strong customer growth and margins, not observing significant impact from new entrants.  **[NRG_3386757_22]** 

9837058c417f48d8efd32e06c328dba93845e744c803818a9d7fe08b0da97f4a

| Year | Amount Due (in millions) | Debt Type                        | Interest Rate (%) | % of Total Debt                                                                                     |
|----------|------------------------------|--------------------------------------|-----------------------|---------------------------------------------------------------------------------------------------------|
| 2024     | 258                          | Current Portion of Long-Term Debt    | N/A                   | 2.4% = (258 / 10,680) * 100 **[0001013871-24-000020_nrg-20240930.htm:8]**                                                                    |
| 2025     | 500                          | Senior Secured First Lien Notes      | 2.000                 | 4.7% = (500 / 10,680) * 100 **[0001013871-24-000020_nrg-20240930.htm:31]**                                                                    |
| 2027     | 900                          | Senior Secured First Lien Notes      | 2.450                 | 8.4% = (900 / 10,680) * 100 **[0001013871-24-000020_nrg-20240930.htm:31]**                                                                    |
| 2027     | 600                          | Vivint Senior Secured Notes          | 6.750                 | 5.6% = (600 / 10,680) * 100 **[0001013871-24-000020_nrg-20240930.htm:31]**                                                                    |
| 2028     | 821                          | Senior Notes                         | 5.750                 | 7.7% = (821 / 10,680) * 100 **[0001013871-24-000020_nrg-20240930.htm:31]**                                                                    |
| 2028     | 1,310                        | Vivint Senior Secured Term Loan      | SOFR + 2.750          | 12.3% = (1,310 / 10,680) * 100 **[0001013871-24-000020_nrg-20240930.htm:31]**                                                                 |
| 2029     | 733                          | Senior Notes                         | 5.250                 | 6.9% = (733 / 10,680) * 100 **[0001013871-24-000020_nrg-20240930.htm:31]**                                                                    |
| 2029     | 500                          | Senior Notes                         | 3.375                 | 4.7% = (500 / 10,680) * 100 **[0001013871-24-000020_nrg-20240930.htm:31]**                                                                    |
| 2029     | 500                          | Senior Secured First Lien Notes      | 4.450                 | 4.7% = (500 / 10,680) * 100 **[0001013871-24-000020_nrg-20240930.htm:31]**                                                                    |
| 2029     | 800                          | Vivint Senior Notes                  | 5.750                 | 7.5% = (800 / 10,680) * 100 **[0001013871-24-000020_nrg-20240930.htm:31]**                                                                    |
| 2031     | 1,030                        | Senior Notes                         | 3.625                 | 9.6% = (1,030 / 10,680) * 100 **[0001013871-24-000020_nrg-20240930.htm:31]**                                                                  |
| 2031     | N/A                          | Term Loan                            | SOFR + 2.000          | N/A                                                                                                    |
| 2032     | 480                          | Senior Notes                         | 3.875                 | 4.5% = (480 / 10,680) * 100 **[0001013871-24-000020_nrg-20240930.htm:31]**                                                                    |
| 2033     | 740                          | Senior Secured First Lien Notes      | 7.000                 | 6.9% = (740 / 10,680) * 100 **[0001013871-24-000020_nrg-20240930.htm:31]**                                                                    |
| 2048     | 232                          | Convertible Senior Notes             | 2.750                 | 2.2% = (232 / 10,680) * 100 **[0001013871-24-000020_nrg-20240930.htm:31]**                                                                    |

0571fec2ecb7f4524806e599fd5eacac8029e3c76ed9de251fa5cb3609d2711c

1. **Data Center Site Strategy**  
   **Q:** What's the update on data center site plans and timing?  
   **A:** The company will provide an update by the fourth-quarter call.  **[NRG_3407269_11]**  They are seeing strong interest across their sites in PJM and Texas, both for portfolio and individual approaches.  **[NRG_3407269_11]**  Due to TEF's decision to allow only one loan per customer, they've included two shovel-ready projects with additionality potential.  **[NRG_3407269_13]**  They are proceeding as if there's no TEF 2 and may not disclose some deals but expect to raise estimates and CAGR as these materialize  **[NRG_3407269_11]** **[NRG_3407269_14]** .

2. **Virtual Power Plant (VPP) Opportunity**  
   **Q:** How does the VPP contribute to profitability amid battery investment cooling?  
   **A:** The VPP is the most cost-effective way to hedge against price spikes during peak demand.  **[NRG_3407269_16]**  It allows the company to self-provide insurance for their consumer energy business, managing risks without relying on third parties or building extensive peakers.  **[NRG_3407269_16]**  Customer value from the VPP is stable and sustainable, while supply value can vary and be significantly higher in tighter markets.  **[NRG_3407269_21]**  Their partnership with Renew Home and Google provides exclusivity to new Nest thermostat enrollments in Texas, making it hard for competitors to replicate this scale.  **[NRG_3407269_22]** 

3. **Growth Plan and Investment**  
   **Q:** Where is there room for variability in growth components, and what's the cost to achieve?  
   **A:** The company feels confident about the plan and sees bias to the upside across all segments.  **[NRG_3407269_12]**  To achieve **$750 million** of annualized EBITDA over the next five years, they are investing **$1.6 billion** in total.  **[NRG_3407269_12]**  They believe the larger opportunity is to expand the share of wallet with their existing nearly **40%** market share in home energy, leveraging offerings like home-based essentials.  **[NRG_3407269_23]** 

4. **Texas Forward Curves and Load Growth**  
   **Q:** Why aren't forward power curves in Texas reflecting expected load growth?  
   **A:** Current forward curves don't reflect the load the company expects, possibly due to shortsightedness after a milder summer with less price formation.  **[NRG_3407269_17]**  The company believes incremental load growth, including data centers and abnormal weather, can lead to significant price formation.  **[NRG_3407269_17]**  They are seeing data centers coming with long-term contract requirements, which could tighten the market and benefit skilled operators like them.  **[NRG_3407269_24]** 

5. **Share Buybacks and Free Cash Flow Yield**  
   **Q:** Is there a free cash flow yield below which share buybacks are unwarranted?  
   **A:** While there's a threshold, the company doesn't believe they're close to it, as they're still in the **double digits**.  **[NRG_3407269_18]**  When the stock reaches mid-single digits in free cash flow yield, they might reconsider their capital return strategy.  **[NRG_3407269_18]** 

6. **Guidance on Growth Rates**  
   **Q:** Can the 10% plus growth rate vary year-to-year?  
   **A:** There may be some years where growth might go below 10% and some years where it might exceed it.  **[NRG_3407269_19]**  Over the long term, they see visibility around the **plus 10%** growth rate.  **[NRG_3407269_19]** 

7. **Impact of Expiring Tax Credits**  
   **Q:** Will expiring tax credits in '26 affect earnings?  
   **A:** There's an incremental increase in the tax rate after '25 due to expiring tax credits.  **[NRG_3407269_20]**  The company expects business performance and growth to offset this drag.  **[NRG_3407269_20]** 

e8bdb9210f4e26a3132b6b7881817af9c4ee4045cba411c685d424ed2ef40d55

- **Rising power prices may pressure NRG's retail margins**, as higher costs might be difficult to pass on to consumers, potentially leading to margin compression. Analysts questioned how higher power prices impact the retail business, suggesting that NRG is no longer **power price-agnostic**.  **[NRG_3386757_12]**
- **NRG's claims of being power price-agnostic are being questioned**, indicating that the company might be more exposed to power price volatility than previously thought. This could affect earnings predictability and **impact the EBITDA**.  **[NRG_3386757_12]**
- **Increased operational and capital expenditures may offset expected gross margin expansion**, as higher power prices lead to **additional O&M and CapEx costs**, reducing the net benefit to EBITDA and free cash flow. Management indicated that increased run times would incur more costs, with only about **80% translating to EBITDA** and **75% to free cash flow**.  **[NRG_3386757_12]**

f1b11477ca4ba631b31a135c54ed2bf61832890d7574ead5edcce0cb87520968

- **NRG Energy is projecting higher cost of goods sold for its retail energy business in 2024, which may pressure gross margins, and management was unable to specify the cost escalation assumed.**  **[NRG_3375417_22]**
- **NRG's strategy of being "asset-optimal" rather than owning more physical power plants may limit its ability to capitalize on tightening supply-demand fundamentals in the power market compared to peers who own more generation assets.**  **[NRG_3375417_12]**
- **NRG's planned brownfield generation projects will not come online until 2026 to 2028, potentially missing near-term market opportunities from tightening power supply-demand dynamics.**  **[NRG_3375417_20]**

5e734cf37e57e2e8d3b298724ed5e1a3b6fa8f1b8732e59a2430587a4133da27

1. **Texas New Builds and Market Outlook**  
   **Q:** How will new builds and demand impact Texas power markets?  
   **A:** NRG is seeing significant demand growth in Texas, particularly from data centers, and is investing in new generation capacity to meet this need.  **[NRG_3397411_7]** **[NRG_3397411_10]**  They acknowledge short-term power curve fluctuations due to a warm but not very pricey summer, but believe the long-term market remains strong, with summers in **'27 and '28 looking undervalued**.  **[NRG_3397411_10]**  They are confident in their projects under current market conditions, emphasizing their ability to contract and use their generation assets to meet customer needs.  **[NRG_3397411_7]** **[NRG_3397411_12]** **[NRG_3397411_19]** 

2. **Economics of New Builds Given Forward Curves**  
   **Q:** Do new builds in Texas make sense given current forward curves?  
   **A:** NRG states that if forward curves were depressed, it would impact their decision to proceed with new builds, but they do not believe they are at that point today.  **[NRG_3397411_19]**  They emphasize that the value of flexible gas generation depends on both power prices and **volatility**, which remains high.  **[NRG_3397411_19]**  Therefore, they believe the projects are still economically viable.

3. **PJM Capacity Prices and New Build Opportunities**  
   **Q:** Are higher PJM capacity prices prompting new build considerations?  
   **A:** The recent PJM capacity auction results are constructive but unlikely to spur immediate new generation due to interconnection queue delays and supply chain challenges.  **[NRG_3397411_18]** **[NRG_3397411_24]** **[NRG_3397411_25]**  NRG has sites in PJM and views the capacity prices as supportive of development, but does not expect a rush of new builds based on one auction print.  **[NRG_3397411_24]**  Realistically, new gas plants would not come online before **2030** due to these challenges.  **[NRG_3397411_25]** 

4. **Data Center Opportunities and Brownfield Sites**  
   **Q:** What's the status of data center opportunities on your brownfield sites?  
   **A:** NRG is receiving significant interest in their brownfield sites for data center development.  **[NRG_3397411_13]** **[NRG_3397411_15]**  They are conducting a strategic review to determine the best approach to maximize value, indicating that there may be **more value** than initial bids suggest.  **[NRG_3397411_15]**  They plan to share more details, potentially before the end of the year.  **[NRG_3397411_15]** **[NRG_3397411_20]** 

5. **Transition to EPS Reporting**  
   **Q:** Are you changing your disclosures to EPS reporting?  
   **A:** NRG is working towards transitioning to EPS reporting, targeting the **third quarter earnings** as the optimal time to make this change.  **[NRG_3397411_8]**  Their thoughts have evolved, and they are planning accordingly.  **[NRG_3397411_8]** 

6. **Impact of Economic Outlook on Retail Business**  
   **Q:** Is a softening consumer impacting your retail and smart home business?  
   **A:** NRG reports strong performance in their retail and smart home businesses, with **5% year-over-year subscriber growth** and **7% revenue growth** in the Smart Home segment.  **[NRG_3397411_21]**  They attribute this to a high-quality customer base with average FICO scores over **700**, and see opportunities for continued growth despite broader economic conditions.  **[NRG_3397411_21]** 

7. **Regulatory Changes in New England Retail Market**  
   **Q:** How might New England regulatory reviews affect your retail business?  
   **A:** NRG is closely monitoring regulatory changes in the Northeast but expects minimal impact on their earnings.  **[NRG_3397411_11]**  For example, changes in Maryland affect a very small part of their earnings stream.  **[NRG_3397411_11]**  Overall, their retail business delivered strong results, with **8% subscriber growth**, double-digit volume growth, and strong margins.  **[NRG_3397411_11]** 

8. **Potential Divestitures of Non-Core Assets**  
   **Q:** Are you considering selling more non-core assets?  
   **A:** NRG is always looking to optimize their portfolio but does not currently have any assets identified for divestiture.  **[NRG_3397411_23]**  They remain open to opportunities if attractive offers arise, given their range of investment opportunities and undervalued stock.  **[NRG_3397411_23]** 

9. **Allocation of Proceeds from HVAC Divestiture**  
   **Q:** How will you allocate the $400 million from the HVAC sale?  
   **A:** NRG will provide more visibility on the allocation once the sale closes and they receive the proceeds.  **[NRG_3397411_16]**  They indicate that the allocation will remain consistent with their capital allocation principles.  **[NRG_3397411_16]** 

10. **Timing of TEF Project Announcements**  
    **Q:** When will we know which TEF projects proceed to due diligence?  
    **A:** The Public Utility Commission of Texas (PUCT) is expected to issue an order or draft order listing the projects moving forward towards due diligence at their **August 29** meeting.  **[NRG_3397411_22]** 

11. **Strategic Direction Under New CEO**  
    **Q:** How is your strategic trajectory changing under new leadership?  
    **A:** NRG's strategy remains consistent, focusing on being **supply optimal** rather than asset-light.  **[NRG_3397411_14]**  They are increasing their generation assets to meet growing customer demand but continue to utilize a mix of generation and other instruments to optimize their supply portfolio.  **[NRG_3397411_14]** 

12. **Managing Downside Risk in Mild Texas Summer**  
    **Q:** How are you managing risks if Texas has a mild summer?  
    **A:** NRG manages downside risk by adjusting operations, including turning down assets in unconstructive markets.  **[NRG_3397411_17]**  They consider both up and down scenarios in their planning and remain confident in their guidance.  **[NRG_3397411_17]** 

0d01a3b40acb287b3a0c37df58125bea9739843f86d10bdeb15b4e98a44ed2b2

NRG Energy Inc (NRG)

Financials