With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

America's Most Innovative Companies

Energy sector dominated this year for the first time since 2008, with 28 companies featured on the list.

100 Fastest-Growing Companies

Industries included in the sector are mining, oil and gas exploration and services, pipelines, refining, and utilities.

Fortune Sector Leaders: Energy

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

Fortune Global 500

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

This year’s Fortune 500 marks the 68th running of the list.

This year’s group delivered stellar revenue and profit growth, but it underperformed the broader stock market.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-333-NRG Energy

The energy company produces and distributes electricity and other utility services to a variety of clients, both residential and commercial, across the country. In May, NRG Energy announced it relocated its headquarters from New Jersey to Houston, and the city has committed to purchasing 100% renewable energy.

This year's Fortune 500 marks the 66th running of the list.

F500 2020 324 NRG Energy

With headquarters in both Princeton, N.J. and Houston, this energy company serves about 3.7 million residential, small business, commercial, and industrial customers.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

Business insiders have spoken: Asked which companies they most admire, more than 4,100 executives, directors, and analysts chose these top 50 All-Stars.

World's Most Admired Companies

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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NRG Energy has grown into a top power, electricity, and smart home corporation in Texas, the Northeast, the Midwest, and parts of California. With headquarters in Houston, NRG focuses on power generation from natural gas and coal, but the gas side of the business is rapidly growing. In May, NRG agreed to pay $10 billion for 18 natural-gas-fired power plants from LS Power, not including debt, in a move designed to prepare NRG for a domestic power market that’s set to soar. NRG also is focusing more on smart home and security offerings since acquiring Vivint Smart Home in 2023, rather than just selling retail electricity.

Q2 2026

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Q3 2024

NRG Energy (NRG): Company Profile, Stock Price, News, Rankings

legacy

NRG Energy

nrg energy

Good day, and thank you for standing by. Welcome to the NRG Energy Inc. First Quarter twenty twenty five business update and earnings call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session.

To ask a question during the session, you'll need to press 11 on your telephone. You will then hear an automated message advising your hand is raised. Please be advised today's conference is being recorded. I would now like to hand the conference over to Kevin Cole, Head of Treasury and Investor Relations to read the Safe Harbor introductory and introduce the call. You may begin.

Thank you. Good morning, and welcome to NRG Energy's first quarter and business update call. This morning's call is being broadcast live over the phone and via webcast. Today's webcast presentation and press release can be located in the Investors 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.

Actual results may differ materially. 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 press release.

And now with that, I'll now turn the call over to Larry Coben, NRG's Chair, President and CEO.

Thank you, Kevin. Good morning, everyone, and thank you for your interest in NRG. I'm joined today by Bruce Chung, our Chief Financial Officer. Other members of the management team are also on the line and available for questions. This morning marks a defining step for NRG.

Alongside our outstanding first quarter results, we are announcing the acquisition of a portfolio of assets from LS Power comprised of 13 gigawatts of natural gas generation and a six gigawatt commercial and industrial virtual power plant platform located across the Northeast and Texas. This acquisition expands our generation base, improves our ability to serve customers, positions us naturally long versus our retail load in all core markets and increases our asymmetric exposure to demand growth across U. S. Power markets. Let's turn to slide four for the key takeaways of today's call.

We delivered the strongest first quarter adjusted EBITDA in company history, surpassing last year's record by 30%. We are reaffirming our 2025 financial guidance ranges. Second, the acquisition of the LS Power portfolio reshapes our competitive position. It improves how we serve customers by doubling our own generation and materially strengthening our virtual power plant operations. This significantly expands our earnings potential and positions us to capture meaningful upside as power markets tighten.

Third, we are raising our five year adjusted EPS compound annual growth rate to 14%, a 40% increase to the base plan we presented in February, reflecting the combined contributions of today's acquisition and the Rockland portfolio addition. This outlook maintains a flat view of power and capacity prices and does not include potential upsides such as rising prices, data centers and other large load contracts or success in our full PEF pipeline. Finally, we remain disciplined in capital allocation. We are maintaining a strong balance sheet, returning substantial capital to shareholders, investing in growth and positioning the business for sustained long term value creation. Turning to slide five with the quarterly results and key highlights.

Adjusted EPS for the first quarter was $2.68 an 84% increase compared to the first quarter of last year. This improvement was driven by strong asset performance, expanded consumer margins, favorable weather and natural gas optimization in the Northeast. We are reaffirming our 2025 financial guidance, reflecting strong year to date performance and the expected contribution from the Rockland acquisition. First quarter results were exceptional, and we are already tracking at the upper end of our full year guidance ranges. This reflects disciplined execution on margins, supply optimization and strong operating performance across every aspect of our business.

We delivered top decile safety performance and outstanding fleet reliability. Our third Texas Energy Fund project, Greens Bayou, was selected for due diligence review in March, bringing all three of our brownfield projects into that program totaling 1.5 gigawatts of capacity. Separately, we secured an additional 1.2 gigawatts of GE Vernova turbine reservations, a direct result of accelerating customer conversations and rising demand signals. We now hold a total of 2.4 gigawatts of total slot reservations for projects that are expected to begin operations in 2029 and 02/1930. These slot reservations demonstrate confidence in our commercial discussions and ensure we can act quickly where long term premium power purchase agreements support new development.

Finally, we completed $445,000,000 in share repurchases through April, leaving $855,000,000 remaining to be completed through the end of twenty twenty five. With that, let's turn to the details of the acquisition starting on Slide seven. We are acquiring 13 gigawatts of natural gas capacity and a six gigawatt C and I virtual power plant platform from LS Power for an enterprise value of approximately $12,000,000,000 This is a highly strategic acquisition that strengthens our position as one of the nation's leading competitive power generators. We're acquiring these assets at a significant discount to new build costs at an attractive valuation and at the strategically opportune time to be adding high quality, difficult to replicate resources into our portfolio as the sector enters into a period of sustained demand. We would also note that LS Power will receive a meaningful portion of the transaction consideration in NRG shares.

LS Power will receive approximately $2,800,000,000 of equity as consideration and own approximately 11% of NRG at closing. This is LS Power's largest single equity investment in firm history, which I think speaks for itself in terms of their confidence in our company's future. We welcome them as a future large shareholder in our company. The acquisition is built on four key pillars. First, it more than doubles the size of our generation fleet, creating a pro form a portfolio of 25 gigawatts of owned capacity.

Second, it enhances and magnifies our opportunity to create value in the emerging power market super cycle by expanding our scale in key competitive regions, strengthening our large load strategy and increasing our asymmetric upside opportunities. Third, it improves our credit risk profile, supporting a long term net debt to adjusted EBITDA target of less than three times and a balanced capital allocation plan, $1,000,000,000 in annual share repurchases through our deleveraging period. Fourth, it delivers immediate and substantial accretion, while establishing an even stronger foundation for sustained long term growth. Let me take you through each of these pillars in detail, beginning on Slide eight. This transaction transforms our portfolio.

We are acquiring the largest privately held natural gas generation fleet and the leading C and I virtual power plant platform. In the East, we are adding approximately 11 gigawatts of natural gas fired capacity with 75% of that in PJM and the balance in NISO and ISO NE. These assets include some of the highest capacity factor combined cycle units and most efficient peakers in PJM. Several of the peakers also present opportunities for conversion and upgrades to combined cycle plants, improving long term flexibility and value. In Texas, we are acquiring more than two gigawatts of capacity in the North Zone.

This strengthens and diversifies our Houston focused fleet and shifts our residential supply position to naturally long. These assets improve our ability to serve both large and small customers and give us more control over meeting demand in a tightening supply environment, while at the same time lowering our cost to serve. The acquisition also includes SeaPower, the national leader in distributed energy optimization, with six gigawatts of commercial and industrial virtual power plant capacity. We believe this is the premier C and I VPP platform valued for its proprietary software and managing more than 2,000 customers across 60 grid programs. The business has 95% retention and a well diversified customer base spanning commercial, industrial, government, education and healthcare sectors.

As customer demand becomes more dynamic and the grid more constrained, we believe this capability will meaningfully grow in value. It gives us the tools and scale to serve customers, support reliability and compete in a market that increasingly values flexibility. Pro form a, the combined portfolio gives NRG a balanced mix of resources and significant excess supply relative to our residential retail load. In Texas, we expect to generate enough output from our own plants to serve our residential retail load. In PJM, we will produce more than twice the energy required to serve our retail customers.

And the acquisition gives us embedded upside as market conditions evolve. We're also impressed by the regulatory momentum in both markets. In Texas, SB6 is progressing, and we see it as an important step toward improving transparency and clarifying how large loads connects to the system. In PJM, we're seeing constructive progress on key issues. We feel good about where both markets are headed.

Moving to slide nine, the transaction significantly strengthens NRG's ability to capture upside as demand grows. With the addition of this portfolio, we will hold the third largest natural gas generation portfolio in the East and Texas. This puts us at competitive scale alongside other top players in the sector and enhances our position to meet rising load and respond to changing market conditions. We've already identified one gigawatt of potential upgrades through converting peakers to combined cycle plants in the East, creating a clear path to expand output using existing sites and meeting large load additionality requests. The acquisition meaningfully increases the number of sites available to support large loads in data centers, positioning us to meet the needs of hyperscalers and other large load customers and the emerging demand across our core markets.

Importantly, none of these opportunities are incorporated into the accretion and growth metrics. Let me repeat that. None of these opportunities are incorporated into the accretion and growth metrics. Together, these advantages position NRG to capture value well beyond our base forecast with multiple avenues for upside as markets tighten and customer demand for more customized supply solutions increases. Turning to Slide 10, beyond the strategic and operational drivers, we want to outline how this strengthens foundation.

What sets this acquisition apart is not just the quality of the assets. It is the way it accelerates our growth trajectory and reinforces our ability to deliver durable shareholder value. It exceeds our hurdle rates, produces immediate and substantial accretion, lowers risk and positions NRG for sustained financial strength. We are committed to a balanced capital allocation approach that prioritizes deleveraging and includes both substantial return of shareholder capital and growth investment. We expect to return at least $1,000,000,000 annually to shareholders via share repurchases while maintaining our target 7% to 9% annual dividend per share growth even through the deleveraging period.

We are targeting $3,700,000,000 of debt reduction related to the acquisition. Once we have achieved our targeted credit metrics, we plan to return to our 80% capital return and 20% growth allocation framework. Turning to Slide 11 for a summary of headline metrics. This is an exceptionally accretive acquisition that delivers significant immediate value, including $1,600,000,000 of incremental adjusted EBITDA, dollars 1,000,000,000 of free cash flow before growth and double digit percentage accretion in adjusted EPS and free cash flow per share. Over the medium and long term, it lifts our adjusted EPS compound annual growth rate by 40%, bringing it to 14% through 2029.

And to repeat, this 14% growth rate does not include any additional upside opportunities such as rising power prices or data centers. With that, I'll turn it over to the man who today is the most famous Bruce from New Jersey, Bruce Chung, to walk you through the financial details.

Thank you, Larry. Before turning to our exciting announcement today, I'm going to provide a brief overview of our fantastic first quarter financial results. Turning to Slide 13, I'm pleased to share that NRG delivered record first quarter financial results with $2.68 in adjusted earnings per share and over $1,100,000,000 in adjusted EBITDA. Adjusted net income was $531,000,000 and free cash flow before growth was $293,000,000 Compared to the first quarter of last year, we achieved an impressive 84% increase in adjusted EPS and a 30% increase in adjusted EBITDA. Each of our segments executed exceptionally in the first quarter and produced strong financial results over the prior year.

Our results were driven by a mix of expanded margins, favorable weather and excellent commercial optimization in our East, West And Texas segments as well as continued customer growth and net service margin expansion in our Smart Home segments. First quarter twenty twenty five free cash flow before growth exceeded the same period in 2024 by $333,000,000 largely driven by our strong EBITDA growth and the timing of certain working capital items. With the strong performance delivered in the first quarter, we are reaffirming our 2025 financial guidance across all metrics, while also noting that we are trending at the upper end of our guidance range. I look forward to providing you updates on subsequent earnings calls. Turning to 2025 capital allocation.

There are minimal changes to our original capital allocation outlook compared to what I shared in our February call. We began 2025 with $525,000,000 in unallocated excess cash from the prior year, largely driven by the Aerotron divestiture that closed in the fourth quarter. When combined with the midpoint of our free cash flow before growth guidance, that brought the starting 2025 capital allocation capital available for allocation to over $2,600,000,000 Our plan to execute $1,300,000,000 in share repurchases remains unchanged. Through April 30, we executed $445,000,000 in share repurchases. We generally manage our share repurchases through periodic 10b5-one trading plans, which enables a more programmatic and regular approach to when we are buying in the market.

We enter into these plans during open windows when we do not possess material non public information. These plans will execute over several months or longer and are designed to allow for the continued execution of share repurchases if or when we come into possession of material non public information during such period. Wrapping up the slide, we are showing a slight change from the chart presented during our last earnings call to reflect financing fees related to our liability management program and incremental capital for our newbuild program, which includes amounts for turbine reservation swaps through the GE KeyWit partnership we announced last quarter. Finally, we are showing $40,000,000 of unallocated capital, which we will allocate over the course of the year. Moving to Slide 15 for a look at the key terms of the acquisition we're announcing today.

I echo Larry's excitement that NRG will be acquiring a transformative 13 gigawatt portfolio, adding diversity and scale to our generation strategy, while also acquiring the premier C and I VPP platform in The U. S. This is a highly complementary and strategic acquisition and a very compelling transaction from a financial perspective. As you can see on the slide, enterprise value for the portfolio is $12,000,000,000 representing a very attractive multiple of 7.5 times twenty twenty six EV to EBITDA. The enterprise value includes $2,800,000,000 of stock consideration, which is based on 24,250,000.00 shares that we will issue to LS Power multiplied by the ten day trailing volume weighted average price as of last Friday.

In addition to the stock consideration, the enterprise value includes $3,200,000,000 of existing debt at the acquired companies and $6,400,000,000 of cash consideration paid to LS Power, less approximately $400,000,000 of the NPV of tax benefits generated directly as a result of the acquisition. The acquisition is highly accretive with 18% accretion to adjusted EPS in year one and adds $1.85 per share on a run rate basis. On free cash flow before growth per share, the transaction is more than 20% accretive in year one and adds $3.25 per share on a run rate basis. As a result of the highly accretive nature of the acquisition, we are raising our long term adjusted EPS and free cash flow per share growth rates to greater than 14%, and that's before upside opportunities. The acquisition significantly enhances NRG's credit profile and helps support a long term leverage target of less than three times net debt to EBITDA.

We expect all three rating agencies to affirm our current credit ratings. From a capital allocation perspective, we remain committed to maintaining both a strong balance sheet and a robust return of capital program. As such, we expect to execute $1,000,000,000 in annual share repurchases, while aggressively repaying 3,700,000,000 of debt over the twenty twenty four to thirty six months post closing until we achieve our target credit metrics. Upon achieving our target credit metrics, we expect to return to our eightytwenty capital allocation framework. Finally, we anticipate closing the transaction during the first quarter of twenty twenty six after the receipt of various regulatory approvals.

Turning to an overview of our acquisition financing plan on Slide 16. The acquisition will be funded through the issuance of NRG stock to LS Power, dollars six point four billion of new secured and unsecured debt financings and the assumption of $3,200,000,000 of existing debt. The stock consideration represents 23% of the total enterprise value and reflects LS Power's strong conviction in NRG's post acquisition value. The funding plan for the new debt is designed to preserve credit quality and maintain our commitment to a strong balance sheet. We expect to be opportunistic in the market between now and the anticipated closing date to place permanent financing at compelling rates while also maximizing prepayment flexibility given our aggressive deleveraging plan post closing.

Our investment grade senior secured rating will allow us to tap the very liquid and cost effective investment grade debt market, while great and which greatly enhances our ability to place permanent debt for the transaction. As always, the strength of our balance sheet remains a top priority. Consistent with the views of the rating agencies, we firmly believe this acquisition enhances our credit profile and mitigates key financial risks. We intend to reduce debt by $3,700,000,000 within twenty four to thirty six months after closing to ensure we achieve our long term target investment grade credit metrics. Based on our analysis, this is very achievable and does not rely on any significant power and capacity price increases, nor does the plan rely on achieving any cost or revenue synergies associated with the acquisition.

Furthermore, we expect the transition transaction to provide at least $500,000,000 of potential collateral efficiencies, translating into tens of millions of dollars in carrying cost savings annually. We have not included any of this in our pro form a. The combination of the strong free cash flow generation of the combined businesses, our financing plan and its associated debt reduction creates tremendous flexibility to maintain a robust return of capital program post closing. As I said earlier, we intend to execute $1,000,000,000 of share repurchases annually through the deleveraging period, while continuing to grow our common dividend per share of 7% to 9%. On Slide 17, we provide an overview of how the transaction impacts our long term adjusted EPS growth trajectory.

The transaction is immediately accretive by 18% in year one and will add $1.85 per share of incremental run rate earnings by 2029. Combined with the recent acquisition of the Rockland, Texas portfolio, this acquisition will increase our long term adjusted EPS growth rate from greater than 10% to greater than 14%. What is noteworthy is that 80% of our long term growth will come from our previously announced organic growth plan and the accretive earnings from our acquisitions, with the remaining 20 attributed to our return of capital program. Recall that this mix was closer to fifty-fifty back in our third quarter earnings call, thereby demonstrating how this transaction significantly enhances the source of our long term earnings growth and substantially reduces the impact that an increasing share price would have on our ability to achieve our adjusted EPS growth targets. For example, if today our stock price were to only partially close its valuation discount and reach $200 per share, our compound annual growth rate would be around 12%.

Furthermore, this uplift in our growth rate only considers the accretion of the transaction itself based on flat power markets. Consistent with the 10% CAGR we unpacked in our third quarter twenty twenty four earnings call, our raised adjusted EPS growth rate does not account for any potential upside related to increases in energy and capacity prices as well as any impacts from our data center and large load strategy. Moving on to pro form a capital allocation on Slide 18. As highlighted earlier, the portfolio we are acquiring will add $1,000,000,000 of annual free cash flow on a run rate basis. This results in $4,000,000,000 of incremental free cash flow before growth for the twenty twenty six to twenty twenty nine period, which when added to our stand alone capital available for allocation, results in $13,300,000,000 of excess cash.

As discussed earlier, we will aggressively reduce debt by $3,700,000,000 over the next twenty four to thirty six months. Despite the incremental debt reduction, our return of capital program remains largely unchanged from what we discussed on our third quarter earnings call. The pro form a plan provides for $7,400,000,000 of return of capital comprised of $5,700,000,000 in share repurchases and $1,700,000,000 of common dividends. Forecasted expenditures for growth investments remained at $1,300,000,000 for the period. The free cash flow from the acquired portfolio will materially enhance NRG's capital return and growth investment flexibility following the deleveraging period in 2029 and beyond, putting NRG on solid footing for sustained earnings per share growth.

Finally, we forecast $400,000,000 of remaining CAFA, which we will allocate as appropriate in the given period. Turning to Slide 19 for a brief overview on pro form a credit profile. The physical attributes of the acquired generation assets, additional earnings diversity from the portfolio and incremental scale to NRG's platform will translate into a more enhanced credit position for NRG as a whole. The aforementioned credit enhancing attributes of this acquisition support a long term investment grade target credit metric of less than three times net debt to EBITDA, up from our current target range of 2.5 times to 2.75 times. As you can see from the table, both our standalone and pro form a plans ensure that we achieve our targeted credit metrics.

On a pro form a run rate basis, we will add $6,400,000,000 of incremental debt supported by the additional EBITDA from this acquisition and the Rockland portfolio acquisition. The $3,700,000,000 of incremental debt reduction in the pro form a column will be done through internally generated cash flows over a twenty four to thirty six month period after closing. This debt reduction is an important component of our pro form a capital allocation plan and demonstrates our commitment to a strong balance sheet. We expect all three rating agencies to affirm our credit ratings, which was a critical component to our evaluation of this transaction. Our high BB unsecured and investment grade secured credit ratings have historically provided advantageous access and pricing in the debt markets.

Our acquisition financing and pro form a debt reduction plans were carefully crafted to ensure that we will maintain good access to those markets. NRG continues to produce impressive financial results and the highly complementary and accretive transaction we announced today further enhances our earnings profile, while enabling NRG to maintain a strong balance sheet and continued significant return of capital. I look forward to updating you throughout the balance of the year. With that, I'll turn it back to you, Larry.

Thank you, Bruce. I think you can see our Bruce is not dancing in the dark. Beginning on Slide 21, our long term outlook. As we have outlined today, this acquisition supercharges our outlook to 14% compound annual growth in adjusted EPS and free cash flow before growth per share through 2029, while reducing our overall risk. These are very achievable targets built on a stronger platform, greater scale and a more flexible asset base.

Our increased growth forecast reflects contributions from the acquisition portfolio and Rockland being added to our base plan that we rolled out last November. Again, it does not include upside from rising power prices, premium large load contracts or execution of our full TEF development pipeline. We have the scale, reach and balance sheet to lead through the most dynamic period this sector has ever seen. Today's announcement significantly strengthens our earnings power, improves our risk profile and expands our ability to return capital to shareholders. But more than that, it unlocks significantly more potential in a market entering a period of sustained structural growth.

Before we open the line for questions, I want to recognize Rishish Patel, who is retiring this week. Rishesh played a central role in the successful integration of Vivint and in building the country's leading smart home and retail energy platform. His strategic clarity, steady hand and focus on execution have helped define the NRG we are building today. We will miss him for that and for his friendship. On behalf of all of us, thank you, Rishi.

We wish you and your family the very best, and we're proud to have you remain part of the NRG family as a customer and long term shareholder. We expect to name Rishi's successor by the end of the second quarter. Operator, we're ready for questions.

Thank you. Our first question comes from Julien Dumoulin Smith with Jefferies. Your line is open.

Hey, team. Good morning. Thank you guys very much for the time. Nicely done.

Hey. Great, Larry. Thank you so much. Hey. So let's let's let's dig right in here.

So just first off in that EBITDA real quick. I just wanna make sure I heard a couple things and if you can clarify. So you're assuming $50 and $47 for the PJM and ERCOT respectively. I think that's below market forwards today. Just want to try to understand a little bit on that.

And then separately in that EBITDA, what portion is Sea Power? And how do you think about growth there? As well as how do you think about the synergies? I think you're not including anything in that $1.6 number. But do you want to just break down that EBITDA and the acquisition a little bit and just think about the various meaningful levers, if you don't mind?

Sure. I can start and then go on. I think there's about four questions in there, Julien, but let me try to get to them all. We wanted to use the same pricing that we've been using when we rolled out our plan so that it would be simple for shareholders to compare them apples to apples to really show the power of this acquisition. Obviously, if we raise the pricing to current market, all of the numbers would be significantly higher, but we choose not to do that to make the comparative life for everybody far, far simpler.

Second question was think. We're really excited about what CPower represents. I think we've seen VPP be a very powerful tool for us already, both on the C and I side and beginning to roll it out now on the residential side. And I think stay tuned, we'll be rolling out some more thoughts on VPP as the year goes on. There was a third question, Julien.

Synergies was the third one. Julien, we expect to find some synergies, but this is not a deal predicated on synergies in any way, shape or form. And if we're assuming zero and still showing the power, anything else will be additional benefit to our stockholders.

And then separate more strategic one. I mean, do you think about doing more? You've done a couple of things here in quick succession here. And I mean that both in power, but also specifically retail. How do you think about this enabling you?

Because this kind of flips the equation from earlier to do more retail conceivably, whether that's organically build out more retail presence or inorganically. Any thoughts there?

Do you want more, Julian? It's time to be more. Look, Julian, I think that does just give us enormous amounts of optionality across all of our customer bases, be it in the home or in the C and I book. It enables us to customize longer term solutions for people who want those in seafower markets. So I think it actually puts us in a position where we can grow across our spectrum of customers.

Again, we didn't really assume that in this beyond the growth plan that we had rolled out a couple of months back. But all that together, we're super confident about the opportunity set that this provides to us. I mean, I think it's exponentially higher. I mean, we've doubled the portfolio, but we've more than doubled the opportunity.

Yes, absolutely. Just clarifying there, some of the amount of growth reflected in retail or CPower, what have you, in your projected assumptions here. Can you break that down and clarify that within the organic piece of your longer term target?

Yes. If you take zero and then multiply it by zero, that's the answer. It's zero. Have not put any have not growth into that. Sorry, Julian.

That's great. Yep. Excellent. Thank you guys for that. Appreciate it.

One moment for our next question. Our next question comes from Shahriar Pourreza with Guggenheim Partners. Your line is open.

Good. I don't think I'll ever question whether Bruce is working hard enough after today's announcement, Shahriar.

He's trying to get that bonus back, Sharp.

He goes. Larry, this deal seems like it's another huge vote of confidence, I guess, the industry in the Eastern generation. I guess, what has changed what was it that changed the company's views on your position in Eastern markets? Is it capacity, energy volatility, the price? Just trying to understand a little bit more on your views on Eastern markets, how that's evolved, especially on the heels of some of the PJM states floating opportunities for wires companies to own generation, which to me seems like a bit of a tail risk.

Look, Shar, I think we've always, as we said, liked PJM market. We just weren't really in a position to be a strong generation player in it. The developments that are going on, be they for data centers, be they for large load, be they for tightening capacity markets, be they for the recent settlement on capacity, all give us a great deal of comfort on where this has to go. And Shar, we also we run a lot of sensitivities. It won't surprise We don't need exorbitant capacity or energy prices for this to be an exceptionally, exceptionally accretive transaction.

PJM is probably where we have the most asymmetric gearing to the upside, and so that's why we like it. We don't see any way that market can't tighten, but even if it doesn't, this is an exceptionally accretive transaction.

Got it. Got it. And then are there any large is there any large customer or colocation deal tied to these assets? Are there ones you're inheriting from LS or ones that you've been working on but just didn't previously have the Gen four?

Nothing yet, Shar. We believe it will definitely enhance our large load and data center strategy, but nothing we're prepared to talk about at this time.

Okay, perfect. And then just lastly, I guess, do you go about unlocking the $500,000,000 in collateral efficiency? Does it require to hit IG first? Any just rough guidance on how to at least think about potential synergies there? Thanks.

Yes, no, Shar, it's Bruce. I think that's really just a function of having generation now alongside a pretty significant C and I book and being able to sort of match that up appropriately. That's something that we're going to be able to do just by our own internal means.

Got it. Perfect. Big congrats guys, Larry, everything. Bruce, I'm very proud of you this morning. Thanks guys.

Thank you, Shar. I feel like such a good son now. Thanks, Shar.

One moment for our next question. Our next question comes from Steve Fleishman with Wolfe Research. Your line is open.

Yes, hi there. Congrats. Thank to Larry and team. I guess my data center question was just asked. Just a couple other, details.

The shares that you're issuing, is there that's just that fixed amount of shares. There's no, like, collars or anything else like that related to it? Correct. That is good. And then just could you just go through the path of deleveraging in terms of just like where are you after year one of closing?

And then how do you then get down to the three times?

Yes, see. So like I said, we're going be deleveraging through internally generated cash flow. Year one after close, we'll probably be right around 3.5 times, and then we'll tick down steadily over the following two years until we get to three times.

Okay. So not that far off to three. Yep. Good. And then I guess you touched on it a little bit, but just on the data center strategy that you had been talking about.

Well, I guess the two strategies you've been talking about previously. First, the data centers, it sounds like you're hoping to lock those up in Q2, the Menlo and the Palin. Then also just the new build strategy. So even you're still bullish on pursuing continued new build generation even as we've seen prices go up and the like for the cost of new build?

Steve, we are. We think that additionality is still going to be a big part of people's data strategies going forward, and we now have the optionality to be able to do that. And we're continuing to all the things we said about data centers in the last call, let me just reaffirm and reiterate those. Our view on data centers hasn't changed. Obviously, we didn't spend much time on it in this presentation because there were some other things to talk about.

One moment for our next question. Our final question comes from David Aucar with Morgan Stanley. Your line is open.

Good. Good. Congratulations. Know, hey, I was thinking or I was wondering at a at a higher strategic level, you know, how does your how does the overall NRG portfolio look in your view right now? There have been, it seems like a bunch of transformations now over the last couple of years.

After this acquisition, is this a good balance? Are there holes or opportunities versus what you think the overall kind of ideal NRG portfolio looks like?

Yeah, look, I think we really like where we sit in the portfolio, both in terms of exposure to markets, large loads, data centers, then layering in on top of that the optionality we have with GE and KeyWit to provide additionality. We really like where we sit in every segment of the market, be it generation, be it large load, be it data center, be it retail. We're really quite pleased with the way that this portfolio enables us to compete across the board in every competitive market we want to be in.

Okay, great. Understood. And then I was wondering, is there if you were to are you able to give if you were to mark to market just what the EBITDA and cash flow uplift would be on the current forward curves? And maybe a bit of a follow on to that, but a lot of the new assets are peakers and you've got a decent amount of exposure here to the PJM capacity auction. Wondering if you could talk about just how much exposure there is, what's the sensitivity to capacity prices here, and kind of how do you look at the outlook for PGM capacity?

Look, I don't think we're the assumptions that we've utilized and that you can see in some of the appendices really are particularly aggressive or require high levels of capacity auction. You can run this across a series of sensitivities, David, and you're still going to get this incredible double digit accretive outcomes that we're looking at here. So I think we'll end up providing some more color over time as to exactly how those sensitivities work. But we're super confident that across a wide variety of potential outcomes in the market, this is an outstandingly good transaction. Bruce, do want to add anything to that?

Yes, David. In terms of your point about this portfolio having a good number of peakers, that's correct. But if you think about the gross margin associated with the portfolio, it's actually probably more 55% energy, 45% capacity. And that's in large part because of you know, these are the CCG, the CCGTs that are in the portfolio are very efficient and have very high run time. So you can think about it that way.

NRG Energy (NRG) Q1 2025 Earnings Call Transcript

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