NRG Energy, Inc.

Good day and thank you for standing by. Welcome to the NRG Energy Inc's first quarter 2022 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Kevin Cole, Head of Investor Relations. Please go ahead.

Thank you, Kim. Good morning, and welcome to NRG Energy's first quarter 2022 earnings call. This morning's call will be 45 minutes in length and is being 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 forward-looking statements, which are based on 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 with that, I'll now turn the call over to Mauricio Gutierrez, NRG's President and CEO.

Thank you, Kevin. Good morning, everyone, and thank you for your interest in NRG. I'm joined this morning by Alberto Fornaro, Chief Financial Officer. And also on the call and available for questions, we have Elizabeth Kirringer, Head of Home, Ron Gaudet, Head of Business and Market Operations, and Chris Moser, Head of Competitive Markets and Policy. I'd like to start on slide four by highlighting the three key messages for today's presentation. First, our business delivered strong results in the first quarter, and we are maintaining our 2022 guidance ranges. We are well positioned going into the summer with a balanced risk management strategy designed to provide stability through volatile market conditions. And finally, we continue to advance our strategic growth priorities, moving closer to the customer while being excellent stewards of your capital. Moving to the first quarter results on slide five, we delivered top decile safety performance and $509 million of adjusted EBITDA. This result is in line with the first quarter of last year when adjusted for asset sales and the outage of limestone. But when including supply chain constraints and higher ancillaries, it is a very strong result driven by our core operations. The limestone power plant in Texas returned to service in April on time, on budget, and ready for the summer. I want to thank the operations team for completing this project on schedule despite a difficult supply chain backdrop. Now, moving to direct energy integration, we are reaffirming both 2022 and the full plan targets. As part of our capital life strategy, we have now assigned 2.6 gigawatts of renewable PPAs in ERCA, with 45% currently in service and the remaining expected to come online over the next couple of years. These assets are geographically diverse within Texas, and have an average tenure of 12 years. We will continue to execute on this strategy and grow our renewable PPAs, but I do expect the development of renewable projects to slow down in the near term, given supply chain constraints and regulatory uncertainty. Finally, we are executing on our $1 billion share buyback program, which Alberto will provide additional details. And we are maintaining our 2022 adjusted EBITDA and free cash flow before growth guidance ranges. Over the past few months, we all have seen the significant increase in energy prices, particularly natural gas. I want to take a moment to discuss how our business is positioned to navigate through these volatile market conditions on slide six. Beginning on the left-hand side of the slide with our hedge tables for this year and next year. As you can see, we are well hedged against our expected load with a combination of our own generation portfolio and third-party hedges. This is by design, as it also allows us to maintain predictable and stable margins while mitigating the impact of short-term market volatility for our customers. As a matter of fact, VC is probably one of the biggest benefits of competitive markets. Retail companies that hedge can mitigate the impact of short-term market disruptions for their customers. In the medium to long term, our platform is uniquely positioned to manage structural changes in commodity prices. We have a proven commercial team that manages commodity price risk across our portfolio, all the way from our power plants to our retail brands, providing them with significant visibility on the fundamentals of our core markets. Our pricing team has significant insights on price elasticity, given the scale and scope of our customer base. And finally, we have a multi-brand, multi-channel, multi-product strategy that ensures we're tailoring solutions for each customer segment while balancing customer retention and margins. We continue to execute on our five-year growth roadmap and are making great progress across many of our initiatives, as you can see on slide seven. On our last earnings call, I provided an overview of all the solutions and capabilities currently available and in development for our customers in two areas, energy services and home services. Today, I want to focus on one area of growth that I'm especially excited about, energy resilience. Go Zero is our home energy resilience and storage company that has been part of NRG since 2014. When we acquired the company, their primary focus was to serve a niche market of outdoor enthusiasts. And while they were a market leader in that space, the total addressable market was limited. Recognizing that extreme weather events and power outages were only going to increase given climate change and an aging power grid, we shifted the company's strategy to address energy resilience head on. Low Zero's energy resilience products are clean, accessible, and affordable. Their power stations and solar generators are modular and portable, meaning they can provide resilience to any apartment, residential home, or recreation vehicle of any size, something a gas generator or rooftop solar system cannot do. They're also scalable, enabling customers to design a resilient solution that can expand in the future. therefore balancing budget and need. Importantly, these products cost a fraction of what a standby genset or rooftop solar system costs fully installed, which allows us to serve an even broader customer base. And they require minimal installation. These are just some of the reasons why customers love Go Zero products, giving them a net promoter score above 70. a rating that is typically reserved for best-in-class brands. In the last three years, Goal Zero has grown revenue at a 50% CAGR and gross margin of around 40%. While the overall revenue and gross margin of the business today remains small compared to the core operating platform, the energy resilience market is expected to grow at 50% CAGR through 2025. and we expect Goal Zero to grow along with it. And this is before considering external factors that could potentially drive growth even higher. For example, last December, California announced a ban on gas generator sales beginning in 2028. Such policy decisions by local and state governments will only increase demand for Goal Zero's products. The team is already working on the next generation of solar-powered generators that will launch in 2023 with a focus on storage technology upgrades, enhanced home integration, and a better digital customer experience. I look forward to providing you updates on their progress as we bring new products to market and integrate these solutions closer with our core energy offerings. So, with that, I will pass it over to Alberto for the financial review.