Operator: Good day, ladies and gentlemen, and welcome to the NRG Energy First Quarter 2017 Earnings Conference Call. As a reminder, today's conference is being recorded. I'd now like to introduce your host for today's conference Mr. Kevin Cole, Head of Investor Relations. Sir, please go ahead.

Thank you, Liz. Good morning and welcome to NRG Energy's first quarter 2017 earnings call. This morning's call will be 45 minutes and is being broadcast live over the phone and via webcast, which can be located in the Investors section of our website at www.nrg.com under Presentations & Webcasts. As this is an earnings call for NRG Energy, any statements made on this call that may pertain to NRG Yield will be provided from NRG's perspective. 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 press release. With that, I'll now turn the call over to Mauricio Gutierrez, NRG's President and Chief Executive Officer.

Thank you, Kevin, and good morning, everyone. Joining me this morning is Kirk Andrews, our Chief Financial Officer. Also on the call and available for questions, we have Elizabeth Killinger, Head of our Retail business; and Chris Moser, Head of Operations. Let's start today's call with our Q1 results on slide 3. Today, we are reporting first quarter adjusted EBITDA of $412 million and reaffirming our full-year financial guidance for 2017 of $2.7 billion to $2.9 billion. Our operational execution remained outstanding during the quarter. First and foremost, we achieved top decile safety performance, which is a testament to our ability to focus on our most critical objectives. We also maintained our focus on our key strategic priorities reducing cost, optimizing assets and balance sheet management. We announced the deactivation and mothball of 1,600 megawatts of generation, reinforcing our commitment to constantly optimize our portfolio given changing market conditions. We continue our prudent approach to growth and capital recycling with a dropdown of the Utah Solar and 31% of our interest in Agua Caliente assets for $130 million in total proceeds. And today, we are announcing the offer of our remaining 25% interest in a large portfolio of wind assets from the ROFO pipeline to NRG Yield. Finally, the Business Review Committee is well underway in its evaluation and is making good progress. All businesses are engaged and we're working diligently to provide an update to the market as soon as possible. Turning to the right side of the page, I want to take a moment to identify and explain the key drivers for the quarter and touch upon our path to full-year guidance. Kirk will provide additional details later in the presentation. Let me start with the first quarter results. As you can see on the chart, the decreasing…

Thank you, Mauricio, and good morning, everyone. Turning to financial summary on slide 9, NRG delivered $412 million in adjusted EBITDA for the first quarter, Generation and Renewables delivered $95 million in adjusted EBITDA during the quarter while Retail and Yield contributed $133 million and $184 million. As Mauricio discussed earlier, our first quarter results relative to 2016 were impacted by a combination of expected changes as well as other unexpected variances. As shown in the chart in the bottom half of the page, approximately 75% of the quarter-over-quarter change in EBITDA was anticipated and occurred in our Generation segment. The majority of this anticipated variance was a result of the impact of lower realized energy margins including the roll-off of higher priced hedges in 2016 combined with the one-time impact with the sale of emissions credits. The remainder of this expected change in the Generation segment was due to a combination of lower year-over-year capacity prices as well as the shift of hedge revenues from 2017 to 2016 as a result of the early monetization of hedges at GenOn. The remaining quarter-over-quarter variance was primarily due to the impact of milder weather, which affected all four of our major segments during the quarter. Our Retail business was primarily impacted by lower margins resulted from a combination of milder weather and higher supply costs while both NRG Yield and Renewables saw below-normal solar insulation and wind speeds, primarily in California. The milder than the normal weather for the quarter also impacted the Generation segment, particularly in the East. And finally, we saw additional G&A expenses due to advisory fees largely associated with the newly formed Business Review Committee we established late in the quarter. Turning to the outlook for full year 2017, we are reaffirming our guidance ranges for the…

Thank you, Kirk. And in closing, you can see on slide 13 that we have made good progress against our key priorities this quarter. With respect to GenOn, we continue to evaluate all options available in advance of the upcoming bond maturities on June 15 of this year with our primary goal of negotiating a comprehensive solution to satisfy our stated core principles. We, along with GenOn, remain in active dialog with GenOn's creditors while we continue to evaluate and pursue a broader range of possible outcomes. To that end, GenOn recently appointed a new dedicated CEO to assist in these ongoing efforts. I expect to update the market in the near term. As I look into the summer and beyond, I am confident in our ability to deliver strong results across our well diversified and integrated platform with a philosophy of continuous improvement. Thank you. And with that, operator, we're ready to open the lines for questions.

Our first question comes from the line of Greg Gordon with Evercore ISI.

Hey, guys. Good morning.

Hey. Good morning, Greg.

So when I look at the slide 3 and also I look at page 9, although you haven't given specific – you haven't called out specific numbers, but it looks like weather and advisory fees could have been numbers approaching $75 million to $100 million of variance in the quarter, is that within the realm of reasonableness or not because if it is, it looks like, all things equal, you probably would have had a decent quarter, had you not had those things that were out of your control?

Yes, Greg, it was actually around the $100 million. A quarter of that was advisory fees, and if you look at the two drivers of the remaining, it was a really the mild weather that affected Retail and Generation, and it was the lower wind speeds and solar insulation that impacted Yield and Renewables.

Right. And so on page 11, again just I think you were pretty clear, the low – slightly higher gross and net debt to EBITDA is purely a function of where the quarter came in and where you are on the guidance range.

Greg, it's Kirk. That's true with respect to the denominator because we basically adjusted out less with respect to GenOn. It's really the numerator component of that, as I indicated earlier, that we did increase the corporate debt just associated with that drawdown under the intercompany revolver, which NRG in turn funded by drawing its own revolver.

Okay. Sorry, I had to top off on the call for a second, so I missed that. What is the – can you give us – this is my last question – sort of a specific expectation for a timeline on when the business review will be complete? Should we expect that update to come in conjunction with the Q2 earnings call or if it comes to resolution prior to the earnings call with a significant enough margin of time, would you do a separate disclosure?

Yes, Greg, I think we're making really good progress inside the BRC. As I mentioned, the entire companies are engaged, all the businesses are engaged. As you all know, we have a now (24:52) date of August 15, but we're working as diligent as we can to be able to communicate to the market as soon as possible. So if that merits – if we come to a conclusion and if that merits a standalone call before the earnings call, we will do that. My objective is to communicate that as soon as we have resolution and really not waiting for a quarterly earnings call. So if we have something to say, we're going to say it as soon as we can.

Okay. I actually do have one more question, sorry, on Retail since you have your retail guru on the call with you. There's obviously been a significant move by your competitors to enhance their retail sales channel capabilities. We're also in an environment with very low volatility and very low pricing. Your customer count was up in the quarter, but your EBITDA results were lower. Are we starting to experience a significant amount of competition for certain types of customers and how should we – if that is a reason why (25:56) we factor that in?

Yeah. Well, that's a good question, Greg. And before I pass it on to Elizabeth, just to make sure on the quarter, if you can see, we actually have milder weather and wholesale prices quarter-on-quarter were higher. So that really and naturally that compresses our gross margin, but in terms of the competitive landscape on Retail, Elizabeth, can you answer the question?

Sure. Thank you. I appreciate the question. So I would say right now, we are not seeing any more competition than we have historically seen and NRG's retail engine is very strong. We have great momentum in both customer acquisition and retention, demonstrated really by our customer growth. Once again, we grew 14,000 customers in the quarter. Mauricio mentioned, last year in Texas alone, we grew by 87,000 customers. Every one of our competitors is looking at declines of some level and that customer growth actually mitigated the impact that we would have seen otherwise. On your question around margins, we do see some margin compression when we look at customer growth because if we decide to grow in a particular pocket, we will be willing to accept customers at lower margins if they deliver strong EBITDA, and because of our scalable platform, we're able to take on those customers and grow from there. So we do make trade-offs. I don't think that anything that's going on in the competitive dynamics is driving material compression in margin. And while we did see some compression largely associated with weather and a little bit associated with customer mix, we're still strong in our momentum at maintaining our margins and only when we take deliberate action will we see some compression, but it's going in eyes wide open.

Thank you very much.

Thanks for the question.

Thank you, Greg.

(28:05) is ready now. Sorry.

Our next question comes from Julien Dumoulin-Smith with UBS.

Hey, good morning, everyone.

Hey, good morning, Julien.

Good morning.

Hey, so, quick question to the extent possible, can you give us a little bit more of a sense on how to think about the puts and takes in your 2017 EBITDA guidance as you reflect the GenOn and BRC updates? I suppose obviously being at the lower end, should we be thinking about GenOn as a net degradation and then the BRC to the extent to which that some of the cost-cutting initiatives can have an effect in the back half of the year that that could be an offset to GenOn and keep you at least at the low end, if not push you up? I'm just trying to get a sense of what the factors you would be updating here are as you think about it.

Yes. Well, I think you've mentioned the two big events that we have coming up, which is the BRC process and GenOn. GenOn clearly could have a significant shift in the composition of our portfolio. And the BRC, as we said before, their focus is – or our focus right now is on the cost initiatives, asset optimization and capital allocation, which is very consistent with how we approached our priorities last year in 2016. I think what you should expect is additional cost savings or cost reductions, just like we did in 2016 over $0.5 billion, most of it recurring. You should expect the continuation of that in 2017, but as I said before, I think we need to let the process work. I don't want to front-run it. We're all working very diligently and we're making really good progress, but I think the way you should think about it is additional cost initiatives and all the other decisions that we make will be towards creating shareholder value or maximizing shareholder value. Kirk, is there something else that you want to add?

No, not a lot more to add, Julien. Obviously, GenOn is an outcome-dependent situation, but there are significant costs associated with the provision of shared services and inclusive of that change combined with any reasonable anticipation of any cost coming out of the BRC process, as you implied which I'd agree with, that would be certainly a net positive relative to the outlook because we haven't embedded any of that into our current outlook that underpins our guidance.

Great. Said differently, the loss of dissynergies of the GenOn breakup, if that is indeed what ultimately happened, you have confidence that at the back half of the year, the BRC could offset that.

I think that's fair. The combination of those two outcomes assuming any reasonable amount of cost cutting above and beyond GenOn should be a net positive vis-à-vis our outlook today.

Excellent. Second quick question, development related on the Renewables side. You added 1.3 gigs to utility scale and DG pipeline in the quarter, which seems pretty meaningful especially given some of the, I suppose, wider conversations around what you intend to do with your development renewable activities under the BRC. Can you comment what those additions were and then just talk about your commitment to the specific aspects of the business?

Yes, the increase in the pipeline as I mentioned to you, after we integrated, post the GreenCo process, after we integrated our Renewables business and have stabilized that group, I think you can see the results here, not only with the acquisition of SunEdison, but really increasing our pipeline of projects. Keep in mind that these pipeline of projects are in various stages of development. I will say that most of them are really on an early stage development. And this is an important driver for Yield. We are a significant owner of Yield, and as we can provide more clarity on assets that we can drop down, it just enhances the value of Yield, which enhances the value of NRG. So I think that's the objective that we have and the mandate that I've given to the Renewables business. We need to continue growing that pipeline.

Got it. It would seem as if you're talking about early stage projects and expanding capital deployment in the early stage, that would actually suggest furthering your efforts on this front as you just said, enhancing the pipeline?

I think when you talk about capital deployment, keep in mind that most of the capital deployment around Renewables is transitory because we have said before – we have set it up as a quick capital replenishment, so redevelopment and then we very quickly turn it to Yield or sell it down to Yield to replenish capital and redeploy that at NRG. So, just keep that in mind, this is not permanent capital.

Absolutely understood. Thank you all very much.

Thanks, Julien.

Our next question comes from Steve Fleishman with Wolfe Research.

Yeah, hi. Good morning. Just a couple quick questions.

Hey. Good morning, Steve.

Hey, Mauricio. Any sense of the – how much the advisory fees are expected to be for the year, when you've kind of updated to lower half?

Yes, as I mentioned, the first quarter was about $25 million. And what I will tell you is that it's hard to pinpoint right now the exact fees that we're going to have because it's going to depend on the outcome of both the BRC process and ultimately the path that we get to GenOn, but what we have embedded right now in our guidance is it's under $50 million.

Okay. And by itself, that pretty much gets you into the lower half per the numbers, I guess. Secondly, do you have – a lot of the hit that you were expecting this year occurred here in the Q1 even without the weather and the like. What kind of helps you – the hit later in the year is just a lot less than it was in Q1. Is that just that the hedge roll-off is not as dramatic, capacity payments get better, I guess, is there any other kind of key items that limit the hit later in the year again before BRC?

Yes. Keep in mind, as I said, the big driver here was the roll-off of high priced hedges that we actually put post the polar vortex of 2014. So if you remember, after the polar vortex, all the winter strips re-priced right after that, the 2016 and 2017 winter strip completely – or the 2015 and 2016 re-priced. And most of that – the uptick that we saw post polar vortex were exactly in the winter months. So, that's why the largest impact was in this quarter. I think as you progress in the year, that's going to subside. And the other thing that I will say is we've always identified 2017 as the trough year. So I think as you move in the outer years at current market prices, I think it's fair to assume that the outlook for commodity prices improve.

And that's without any BRC benefits and and the whole thing (35:50)?

That is correct.

Yeah. Okay. Thank you.

Thank you, Steve.

Our next question comes from Angie Storozynski with Macquarie. Angie Storozynski - Macquarie Capital (USA), Inc.: Thank you. So I wanted to – I know you are not giving us the specific date when you're going to announce the results of the pending review, but given that it looks like Texas is going to be particularly tight this year and maybe next, and you will be potentially making decisions regarding asset optimization in the markets, how do you think about it – that you would have to make those decisions before you see any type of summer-driven volatility in power prices in Texas?

Yeah. Well, I think, first of all, as I said, the BRC – well, good morning, Angie, first of all. Angie Storozynski - Macquarie Capital (USA), Inc.: Good morning.

And I think when you look at the focus of the BRC, one is cost initiatives. And given the low commodity price environment, I think it's fair to assume that we will continue our focus on reducing cost and that's somewhat independent of a particular season or particular summer. Of course, in every decision that we make including the evaluation of all our businesses inside the BRC, we're looking prospectively at the markets. We're looking at the current curve, we're looking at the sensitivity around it, and that's what is going to inform the decisions that we make at the BRC and ultimately the recommendations that we give to the board. So I don't think we are looking prospectively and I think that's the point that I want to make, Angie. This is not just a single point and marking a special decision against a curve. We are actually stressing different scenarios to understand the total composition of the portfolio and the sensitivity of the portfolio. Angie Storozynski - Macquarie Capital (USA), Inc.: Okay. And then on the GenOn. So GenOn has the new CEO, was appointed before the upcoming PJM capacity auction. How should we think about it? Should we think that this appointment somehow changes GenOn's bidding strategies, how do you think about the way these assets should be bid into the auction given the fact that you might not operate them or own them still?

Yeah. Well, Angie, I will say that the appointment of the new CEO, I think, in his responsibility is to review and be responsible for ultimately the bidding of these assets. Now we continue to provide shared services agreement including asset management, commercial – the wide range of shared services agreement that we give to GenOn, but as we have done in the past, we provide a recommendation and the commercial team gives them their perspective, but ultimately it's going to be the new CEO's responsibility to determine how that portfolio is going to be bidding to the market. Angie Storozynski - Macquarie Capital (USA), Inc.: Okay. And my last question, I promise. The DOE study about the importance of base load assets, how does it play into your business review, if at all?

Well, I think everything is taken into consideration on the Business Review Committee. We have said in the past that one of the strengths of our portfolio is the diversity of our merit order, base load merit and peaking. So clearly, if there is something that focuses on recognizing the value of base load, then we welcome that, but I want to be crystal clear, it has to be in a way that doesn't jeopardize the integrity of competitive markets and we have to find ways to find the right competitive pricing to ensure the reliability of the system and that every single one of the resources is fairly compensated for the services that he provides to the group, and I think that has been our approach. Angie Storozynski - Macquarie Capital (USA), Inc.: Great. Thank you.

Thank you, Angie.

We have time for one last question. This question comes from the line of Stephen Byrd with Morgan Stanley. Stephen Calder Byrd - Morgan Stanley & Co. LLC: Hi, good morning.

Hey, good morning, Stephen. Stephen Calder Byrd - Morgan Stanley & Co. LLC: I just want to follow up on Angie's question on asset rationalization and just at a high level when you look at your fleet and you look at the market outlook today, is it your sense that there are opportunities to – or maybe not opportunities, but sort of if that it makes sense to think about some shutdowns of assets just given that they're not really economically viable or is this something we should be waiting for as part of the broader BRC update you'll provide later in the year?

Well, let me just start with our retirements because I've been very clear in the past. Our business is not to keep uneconomic generation running. We have retired a significant amount of generation that we felt was unprofitable and didn't have good prospects. Just last month, we retired Greens Bayou 5, 370 megawatts of capacity in Texas. And earlier in the year, we retired Pittsburgh in California. So I think the combination was close to 1,500 megawatts of generation. So when we have an uneconomic plant, we will move quickly and swiftly to take it out of the market. And of course, as part of the BRC, we're doing a holistic review of the portfolio. There are opportunities and I think we demonstrated that last year. We sold three plants. We monetized them over $0.5 billion of asset or sale proceeds. I think there is an opportunity where perhaps another counterparty has a different view on commodity markets or can create a – or looks at value differently than us and we will execute on that. But as I said, I think as part of the – with that respect, I don't want to front-run the BRC process. When it comes to asset divestitures, I think we need to let that play out. We are having good and very constructive conversations inside the BRC. And as I said before, we're moving as fast as we can because I am the first one who wants to communicate this to the market. So you have my commitment that as soon as we have something to communicate, we will tell you. Stephen Calder Byrd - Morgan Stanley & Co. LLC: Very much understood. That's all I had. Thank you.

Great. Thank you, Steve.

And thank you all for your interest at NRG. Thank you and good morning.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program and you may now disconnect. Everyone, have a great day.