Terry: remains the same and still points up and to the right. The PJM capacity markets have been reflective of these tightening fundamentals as well, with the last two base residual capacity auctions clearing up the price gap. This trend is expected to continue, and PJM, with the support of the governors and other stakeholders, has indicated it intends to seek an extension of the price collar for two additional base residual auctions. In relation to energy and spark spreads, we have seen appreciation in the forward curves for 2026 to 2028, from the end of July to the end of the year, with growth and spark spreads in PJM increasing over 15% during that period. Turning to slide seven, I'd like to provide a brief update on our hedging activity this past quarter. As a reminder, we have a pragmatic, not programmatic hedging strategy. Our strategy is focused on maintaining appropriate risk tolerances and financial discipline to support cash flow stability, while also leaving room to capture upside when opportunities arise. This gives our team the flexibility to add hedges during higher pricing periods, as detailed on the right-hand side. As you can see from the graph and the table on the slide, SPARC spreads for the PJM market for 2026 to 2028 experienced upward movements during the fourth quarter. which allowed our commercial team to layer in additional hedges for 2026 and 2027 as the opportunities presented themselves. I'll now turn the call over to Cole to discuss our financial and operating performance.
Cole: Thanks, Terry, and good afternoon, everyone. As Mac mentioned earlier, for the year ended 2025, we are reporting $1.035 billion of adjusted EBITDA and $524 million of adjusted free cash flow. These results exceed the high end of our revised guidance ranges issued last quarter, primarily due to the closing of freedom and currency acquisitions in November 2025. We have more than $2 billion of liquidity available, including $1.2 billion of cash and full availability of our $900 million revolving credit facility. Given that our net debt includes freedom and currency financing, but only five weeks of EBITDA contribution, our net leverage ratio using actual 2025 EBITDA is like comparing apples and oranges and therefore is not a meaningful metric for 2025. Turning to our operational metrics, safety remains our top priority across the fleet and our team works safely during a busy year. Our recordable incident rate was 0.55, which continues to be below the industry average. Our fleet ran well with a 4.7% equivalent force outage factor, and we generated approximately 40 terawatt hours, about 10% more than in 2024. This was driven by a significant increase in dispatch opportunities across our fossil fleet, driving higher generation and energy margin. Turning to slide nine. Our full year 2025 financial results were significantly higher than 2024 due to a number of factors. Higher capacity prices and RMR revenues that began in June 2025, the continued ramp of AWS revenues as the campus continues to progress, five weeks of freedom and currency operations, as well as higher power prices net of hedges. Our results were partially offset by the impacts from the Susquehanna Unit 2 extended outage last spring and Susquehanna also not receiving the PTC in 2025. During the fourth quarter, we generated adjusted EBITDA of $382 million and adjusted free cash flow of $292 million. Note that our adjusted free cash flow in Q4 2025 alone was higher than all of 2024. Demonstrating the free cash flow growth of the business, growth that we expect will continue as we move forward into 2026 and beyond. Speaking of 2026, on slide 10, we are reaffirming the previously announced 2026 guidance ranges. Our adjusted EBITDA range is $1.75 billion to $2.05 billion, and our adjusted free cash flow range is $980 million to $1.18 billion. All of this remains consistent with our investor day guidance and does not include any contribution from the pending quarterstone acquisitions. As Mac mentioned earlier, while our fleet ran well during the recent winter weather, it's still early in the year, and it's not our practice to make any adjustments halfway through the first quarter. Slide 11 may look familiar to those who listened last month when we announced the Cornerstone transaction. We project continued free cash flow per share growth, with our 2026 forecast more than double our 2025 actual results. Further, we anticipate the Cornerstone acquisition to create more than $4 in incremental annual impact on adjusted free cash flow per share upon closing. While we illustrate this impact beginning in 2027, there's room for upside in 2026 as we anticipate closing the transaction as soon as this summer. And our base free cash flow per share continues to move higher, supported by increasingly contracted cash flows from our long-term AWS PPA ramp. We continue to see additional upside through the forward growth levers we outlined at our investor day last September, with the uplift potential to further build on our increasing free cash flow per share. We illustrate this impact on the slide, noting that we are already executing on these levers, as demonstrated through the Cornerstone acquisition. We are focused on building our track record of delivering on opportunities to create additional growth in the coming quarters and years. We remain committed to returning capital to our shareholders through our previously announced $2 billion share repurchase program and further data center contracting opportunities, including support for the AWS ramp and potential acceleration opportunities established in the existing PPA. and we're always evaluating accretive M&A opportunities. We will continue to maintain capital discipline and focus on the most accretive levers that meaningfully increase free cash flow per share available to investors, while seeking compelling growth opportunities through the talent flywheel. Now to slide 12. Our balance sheet strength is a strategic asset that gives us the flexibility to execute the flywheel and grow our free cash flow per share. We remain committed to maintaining sufficient liquidity and keeping our long-term net leverage ratio below our stated target of 3.5 times. As of February 20th, our net leverage ratio using our current net debt level in 2026 EBITDA guidance midpoint is 3.0 times. Upon closing the cornerstone transaction, we expect to maintain the ability to achieve below 3.5 times net leverage on a go-forward basis by year-end 2026. I'll turn it back to Max.
Mac: All right, thanks, Cole. With that, Michelle, why don't we open the line for questions?
Operator: Thank you. As a reminder, to ask a question, please press Star 1-1 on your telephone and wait for your name to be announced. And to withdraw your question, please press Star 1-1 again. And again, we ask that you please limit to one question and one follow-up. And our first question will come from David Arcaro with Morgan Stanley. Your line's open.
David Arcaro: Oh, hey, thanks so much for taking my question. Maybe if I could ask for a little bit more color on how you're thinking about the backstop auction and just generally with some of the policy uncertainty in PJM, is it still or how are your contract negotiations and discussions progressing? You know, is there still interest and is it still possible to successfully reach contracts while some of this uncertainty is going on in PJM?
Mac: Yeah, hey, David, it's Mac. I'll start and then anybody else can jump in. Look, first of all, with respect to the RBA, which is now being couched as the RVP as a procurement more than an auction, at least in our view, because we think it should be done as pay as bid. And that's the distinction that's being made there. And I think that that's how it's starting to be referred to even at PJM. But look, I think that when you implement The concept of the backstop is to come in and use the existing tariff by which to procure and to fill a resource adequacy need for the out years, which would therefore relieve some of the tightness, if you will, in the market. But again, if it's done at the same levels of whatever the load projections are, it wouldn't change the outcome. That's our view on that. So it's there to provide the supply to maintain the reserve margin. Because you know the last auction would have cleared over $500 if it had not been for the 330 cap that was imposed on that. But that backstop procurement, in our mind, actually provides a relief valve and therefore allows for contracts to continue to go forward. And it's one of the things, it was one of the tenets of the NEDC's statement that came out, the National Energy Dominance Council and that group, when they put that forth, said that in addition to it being one time and limited and then there should be longer term capacity reforms and then return to the outcome, but it should allow for continuation of existing contracts. And I think that by gaining more certainty as we work our way through the process that obviously continues to support that. And so that is, as a practical matter, we view that as a relief valve to doing existing contracts. And as far as existing contracts and the discussions that are ongoing there across the fleet and across our pipeline of opportunities, those have not slowed down. You know, I think that the regulatory uncertainty, who pays for this and how it gets paid for and how it gets allocated and how it gets procured and all of that will work its way through. But data centers are coming. and they're not slowing down. And any time you talk to or hear any of the analyst calls, whether it be from the chip manufacturers to the hyperscalers themselves, they continue to talk about the race for creating data centers on the ground, powering them today, powering them in 28, and then soon 29 will become the new 28. And so I think that as we progress through that, it just further aids in the ability to continue those discussions. So we don't see any slowdown to it. And we think that the RVP will ultimately provide for, will increase the level of those discussions.
David Arcaro: Got it. Yeah, thanks. I appreciate that color. And then maybe when it comes to the procurement, do you have upgrades or new builds that you think might be opportunities to bid in to the procurement?
Mac: We are working on a set of opportunities in the new build front. We do think that upgrades should count if you're asking that. If you're asking specifically if we have upgrades, most of the upgrades that we had at Susquehanna were put in about 10 years ago. So there's not a lot that goes there that you may hear from other producers. But there are opportunities we've been working on thinking across the spectrum of the form of generation, whether it be batteries, CTs, or CCGTs, and developing those opportunities. And look, with a 15-year contract at the right price, you can make the math work there. So obviously, we're gearing that up. And once the rules are more defined, we would look to see how we can participate.
David Arcaro: Okay, perfect. Thank you.
Operator: Thank you. And our next question will come from Angie Storzinski with Seaport. Your line's open.
Angie Storzinski: Thank you. How are you? So I'm just trying to link the comments that we're hearing from, PPL and AP to your generation contracting. So for example, the comment that you quoted yourself, right, in the slides that PPL expects 10 gigs of load under ESAs by the end of the first quarter, which sounds like one more month. How does that relate to you being the largest generation company in the PPL zone and signing generation contracts to back this 10 gigs of load?
Mac: Well, I mean, first, we don't have that list, just to be specific. I mean, PPL does. So what's in that list specifically, you'd have to talk to them. But I do think that is a very supporting point to the question that was just asked, that this is not slowing down and that if PPL is signing up the ESAs. Now, signing up ESAs, you don't necessarily need to procure your energy and capacity, but what you're doing is making a commitment to pay for the network upgrades and the rest of it. That to me is just a, you know, that's a, highly positive sign that supports that nothing is slowing down. Now, we don't have what the list is, but obviously, you know, we're working a pipeline of opportunities ourselves and hope to participate on that front going forward.
Cole: Look, Andy, the ESA point, that's the first step. I mean, without an ESA, data centers aren't going to contract for under a PPA, right? So, I think that's just a good kind of leading indicator of PPAs coming. And just to be really clear, we obviously have announced two gigawatts, roughly, of tangible PPA in that zone. So, I mean, again, leave it to PPL to break down their count, but, you know, that's two of the ten right there.
Angie Storzinski: Okay. Okay. I mean, we're waiting, as you are aware.
Mac: So maybe now about... Hey, Angie, I would just further add that, you know, we have a model that we're doing it with hyperscalers, but there's other people that develop that are just, I'll call them co-locators, which are your typical data center people, which is build and connect data centers and then lease those out. And that is where energy and capacity typically can be just, or in the old paradigm, was a pass-through. Okay, so to Cole's point, you get the ESA first, even in our model, and then get the energy and capacity. But in some models, it just takes from the grid and as energy as a pass-through. So it takes the person that is signing the lease, signing up for the lease, to decide to contract for energy and capacity there. But again, hyperscalers and the like in the development model we have is powered land, get the ESA, get the energy capacity, and then you put all that together and you have what we did at Sesquihanna.
Angie Storzinski: Okay. So my other question is about slide 11, and I know it's the same slide that you had in your MLS Day presentation. So two things. One is the upside potential to the free cash flow per share you're showing for 2028. So is it that there is no potential upside to, say, 27? So that's number one. And number two is as you show us the new one gig of data center PPAs and then accelerated Susquehanna contract by 480, is it just that metric 480 here and one gig there? Is it just, you know, like a measurement or is it that this is basically what you would expect to happen as potential upside? So is it basically the cap of, again, additional data center PPAs and additional ramp under the Susquehanna contract by 28.
Mac: Yeah, let me just provide some context on the slide overall, Angie, to answer your question. Then Cole's going to take the 480. But when we did this slide in Investor Day, we ended with the 2028 outlook. And so we were showing levers that could pull that would further increase free cash flow per share out there. Now, the timing of them, they were all done off of a 28. Now, the timing of them, if you look, we pulled cornerstone forward into 2027 and probably can pull some of it into 2026 with the expected close here. So we're even, there's more upside there to this guidance. But we were just showing it like if you looked at 28 as the terminal year that we were showing, we wanted to show that there's more levers to pull to create more value as we see the implementation of the flywheel. One of those was the, and this is all without any repurchase built into it, And, well, that's why we put the pluses at the top of this. But it didn't, you know, where it says $4 plus or $31.10 plus, $31.40 plus up at the top of the bars. But none of this is with share repurchases, right? And so we outlined that. We put the accretive M&A. We pulled that forward. Why don't we talk about the 480 and then maybe we can hit the last one on the chart.
Cole: Yeah, look, the 480 and the 1 gigawatt, those were just to be representative so folks can make their own assumptions and scale, right? So... By 2028, the contract, as we've disclosed before, gets only up to the first 480 megawatts. So we just put out what it would take to get to the 960. We could have gone out to all the way to 1920. We didn't think that was necessarily helpful. We wanted to show the impact of every 480. And then on the data center, the new data center PPA, we set a standard one gigawatt, is it? More potentially, and you could scale from there.
Mac: But I think it's also an important part as to why that was the new one gigawatt data center. If you think about it, Angie, and you think about the ramp that's going on at Susquehanna, as Cole just described, any new data center PPA, and this maybe is going to feed into perhaps a little bit more of a discussion. I said we won't discuss Montwell, but maybe we'll unpack it a little bit for you. But the one gigawatt data center PPA is really more than likely a post-2028. Because when you think about when you've got to build data centers like is going on at Susquehanna, there'd be a ramp rate. And so that's why we show that out there on 28. That one's probably the least likely to be pulled forward early. Because even if there was a signed contract today on the so-called Montour deal or some other virtual PPA contract, across our pipelines of opportunity, the delivery of those megawatts is not going to be 2028. And this is something that I find very interesting going back to the Montour. Whether Montour happens today or happens six months from now, it really is irrelevant to when the megawatts would flow under that type of arrangement because they're not going to be delivered until 2028 and they're going to ramp up from there more than likely. This is why I said there was a lot of sort of short-term discussion and sort of frenzied outcome around the county commission vote. But when you look at it in the delivery of the megawatts, we're still on that long arc, as I described. The long arc hasn't changed. It's a short-term hurdle. Now, would we rather the commission vote the other way? Absolutely. No doubt. we are commercial and we're going to figure that out. And we have a number of other opportunities in the pipeline that avail themselves to do the same thing. And so that's what we're looking at is adding another gigawatt data center contract, but the delivery won't start until 28. And it's almost irrelevant of when it's signed in 2026.
Angie Storzinski: Can I ask you one follow up on that one? Sure. Why is it at all linked to that Montour site? Because, you know, let's, Again, it's just assuming that it is potentially with AWS. I mean, AWS has other sites in the PPL zone, and you have, as you said, existing assets in the PPL zone. Your Susquehanna 2.0 contract supplies those other sites that are already data center sites that are being developed. Why couldn't I have a PPA that serves some of those other sites that are being developed, and as such, the impact on the 2828 EBITDA would actually be likely?
Mac: Excellent point, and you're making our point for us, which is that it is a virtual PPA. And I'm going to come back and answer your question specifically, but if you go to the Susquehanna, when we moved it to the front of the meter, remember we said one of the attributes of that transaction was is that we're obligated to deliver anywhere in Pennsylvania. So that goes back to this 480 acceleration. If there's other data centers, you know, they can be, they can take under that contract early, but then they're going to have, if they build more than the 1920, they're going to have to add more megawatts in the back end. That's Amazon. That's just Amazon. There's others out there other than just Amazon. But with respect to your question about does it need to be linked to Montour, not necessarily. Okay, there's a 1,000 megawatt or 1,200 megawatt or 960 megawatt, whatever the right number is. Here we just do one gig. Does that contract need to tie specifically to a site? Not necessarily because, again, it's about the delivery point. But it is when you think about if you're a data center developer, whether it's Amazon, whether it's anybody else, you need to have sites with a line of sight to be able to construct the data center by which to direct the megawatts to. Okay? So while they are somewhat interrelated, they're not necessarily discreetly intertwined. They can be, but they don't have to be.
Angie Storzinski: Okay. Understood. Thank you.
Operator: Thank you. And our next question will come from Michael Sullivan with Wolf. Your line is open.
Michael Sullivan: hey hey guys how are you good are you yeah doing well thanks uh wanted to maybe just unpack a little more than some of the cross currents within pennsylvania i guess in in light of latest commentary from from governor shapiro and then with all this ppl load coming to uh coming to the fore here i guess where where it is existing generation versus new generation fit in? Can it all be served with the excess transmission capacity? And when do we need to start thinking about new build and how that ties to the political kind of rhetoric?
Mac: Yeah, I think that, you know, the political rhetoric is focused on affordability, focused on resource adequacy. And again, we think the RVP is the way to solve that. And it does provide a relief valve. I think that in any of the proposals, it contemplates that there is a carve out for existing contracts with respect to cost allocation. That's one of the things that's been talked about. Like when you go procure and the NEDC use $15 billion as a number, how do you allocate that? But it would not be allocated to new loads if they had an existing contract. That's somewhat standard across the different coalitions. Our coalition, other coalitions, there's an exemption for existing contracts. So again, It allows us to continue. It's yet to be seen how that allocation and the rest of that RBP will pan out. But in the meantime, again, I go back to nothing stopping. And so people are in the process of lining things up and trying to figure out where they go from here with respect to the RBP. But let me turn it over to Cole and see if he's got anything to add here.
Cole: All I say, Michael, is I think everyone would agree that business are coming. And the loads are going to continue to increase and ramp up in 2027, 2028, and 2029 and continue from there. I don't know too much new gen that can actually serve that load. So, you know, we are, you know, continue to focus on conversations around existing gen. Obviously, at some point, new generation needs to come online. Those decisions need to be made soon. Obviously, the RVP is one angle. Bilateral contracts are another angle. And I think we've said fairly consistently that we think over time we'll start to shift to kind of hybrid models where there's existing gen powering the first three to five year build out of the data centers across Pennsylvania, Ohio, Indiana, and so forth. And then eventually backed by a second either upscaling of a PPA or a second PPA that enables new generation to kind of fill the gap from there.
Mac: New generation, it's either bring your own power or new generation that's procured through the RVP. So that's why this is all still going on. But it's sort of you wane off of the existing and you come on to the new. And it's whether it comes to the RVP or whether people bring their own power, that's yet to be determined, but I think to Cole's point, that's where you're going to see things head.
Terry: And Michael, maybe to add to those comments, obviously in the PJM discussions that are taking place around the RBP, specifically to Governor Shapiro, his team is engaged in that. They're involved in the discussions. They've heard the proposals from the different coalition groups. They're an active participant. I think generally, obviously the concept is going to get additional gen procured if it moves forward. And so I think they're supportive of that. And so, you know, they remain active and remain engaged. And they're right in the mix just with all the other stakeholders.
Michael Sullivan: Okay, great. And then I just wanted to ask on, you mentioned, I know you don't want to get into individual opportunities, but just within your pipeline, the organic opportunities, the inorganic-powered land, maybe just more color on how you weigh those, economics, speed. Presumably, you have a lot of land already, but maybe just the value prop of the inorganic-powered land angle.
Unidentified Participant: Yeah.
Mac: Look, Michael, it's a great question, and it's something that in a perfect world, for just talking to investors. It's something we'd be excited to talk about. But every time we do, we're running a commercial trade in our face or we're creating an expectation about a certain outcome. And so that's why I made those opening remarks. It's not because there's not a frenzy level of activity going on here at Talon. There is. And it's around our existing sites and it's around sites aren't existing that other people have that want to work with us to do things. But we're not going to get into the specifics of those and how we're doing it, because one, it's commercially sensitive, and two, it creates these expectations. And so, look, we created those expectations around Montour, our fault, no doubt about it. But we'll figure that out. There's Plan Bs, but there's other opportunities in our pipeline that give us more of this. If we had done, if Montour had gone, let's just kind of provide the hypothetical, if Montour had gone and there had been a deal announced on that, everybody would say, what's your next deal? Well, it's not as though we're getting one deal done and then focusing on the next deal. We're working on multiple fronts all the time, okay? And what we realized is that there was just this sort of concentration on one outcome there which really isn't going to define that long arc that I was trying to describe, that long arc that is constantly growing, that long arc that's constantly growing with AI capabilities, and also our commercial abilities to get these things done, our commercial abilities to build new build, our commercial abilities to contract new build, our commercial abilities to contract existing as Cole just said, or a hybrid of the two. And so we're working on sort of all of the above. We're working on getting prepared for fitting into the RVP, if we can find the right pricing mechanisms and if the world works out the way that we think it should with respect to the RVP. We're going to contribute to all of that. And it just becomes, you know, where do we allocate things? But we did get ourselves, quite frankly, caught in a little bit of a, you know, this binary view that Montour was going to define what Talon is going to be. And we're just not going to get down that because of that one issue, but because also it it impedes our ability to develop other things. And we're just steering away from that going forward. So probably doesn't satisfy your question, but unfortunately, that's the path we're going down.
Michael Sullivan: Okay. No, I appreciate it. Thank you very much.
Operator: Thank you. And our next question is going to come from Jeremy Tonant with JP Morgan Securities. Your line's open.
Jeremy Tonant: Hi. Good afternoon. Hi there. Jeremy. Hey, Jeremy. Just wanted to build, I guess, on some of your comments right here. And, you know, as the hyperscalers head to D.C. next week, just wondering, you know, what do you see, I guess, could be possible, you know, coming out of this? You know, when there's discussions of bringing their own generation, What does this mean in Talon's view, and how do you think this could impact market architecture?
Mac: Yeah, hey, Jeremy, Mac, I'll go first here. We don't know what they're going to commit to. There's been speculation as to what they're going to commit to. I think what you've seen is a commitment publicly by all of them to pay their fair share. The definition of what is fair share is interesting. From my perspective, and we've said this in many a forum, PJM is an RTO that is based off of not this concept that the next incremental megawatt of load pays for the next incremental megawatt of generation. It's never been that case. You have states that are deficit in generation that have paid for transmission and are using it. You have LSCs that are incredibly short. We happen to be in an LSC that's long. and Pennsylvania and PPL and long transmission that has the ability to absorb these things. So it's all going to get around to the definition of what are they committing to in terms of what is fair share or pay for it. And that definition, I don't know what they're going to commit to, Jeremy.
Jeremy Tonant: Got it. Fair enough there. We'll see what happens. Just wondering if we could, you know, pivot the conversation more towards, I guess, you know, contracting as it relates to gas contracting, maybe the evolution of those discussions over time and any comments you might be able to provide around hyperscaler appetite around, you know, absorbing the gas risk or could there be, you know, fixed capacity plus heat rate type of arrangements? Just wondering what you might, you know, how those conversations have evolved over time, where you see them going.
Cole: Hey, Jeremy, it's Cole. Look, I think we've talked about this a few times. I think that, not to be flimsy, but the answer depends on the counterparty, right? So some hyperscalers may have more appetite to take on the cost variability of gas and some less. So you mentioned a couple of different variations. contracting. I think it's suffice to say we've explored a lot of different structures internally and with counterparties. And I think there's a number of different avenues to ultimately contract and protect ourselves in any structure here. And we've got a commercial desk that Chris leads that can also manage that position. And if we did it, if we contracted in that manner, we would Obviously, you have a different premium structure in the PPA to accommodate that aspect. I think there's a variety of different structures. Obviously, when we have a deal announced, we'll probably talk about that a little bit more.
Mac: I would just add on that Cole's exactly right. It's going to be dependent upon what somebody wants. But if I was advising somebody who is buying this, I would say that you want somebody who manages the commodity risk to take the commodity risk and to pay for somebody to do that, unless you're going to warehouse that risk yourself. And we are set up to do that. And that's what we've talked about, being able to provide credit support to be able to do that, to be able to manage the gas risk, be able to manage the physical gas delivery. to our plants and the rest of it, even if it's just financial, manage that financial risk associated with the gas. And so that's the service that we're trying to provide that full suite. Now, if someone, to Cole's point, people can pick and choose across that, but that would be what we would advise.
Jeremy Tonant: Got it. That makes sense. Thank you.
Operator: Thank you. And our next question is going to come from Nicholas Campanella with Barclays. Your line's open.
Nicholas Campanella: Hey, good afternoon. Thanks for taking my questions. Hope you can hear me.
Nicholas Campanella: Um, I just, a lot, a lot of good answers in the commentary. Hey, how are you? Um, a lot of good answers in the commentary, but just, I just wanted to follow up on, you know, how you guys are really trying to frame what's, what's going on around RBA, ratepayer protection pledge, some of the comments that you responded to the Michael just, um, you know, do you still feel that you have the ability to sign gas with incumbent generation? in a front-of-meter framework, and just trying to understand if you're really just trying to say that this would only now come with additionality and a new-build commitment.
Nicholas Campanella: Maybe you can just kind of clarify just very clearly the expectations there.
Unidentified Participant: Let me be very clear. Yes. We think you can continue to contract with existing assets. I understand. It's yes.
Mac: Do we think that there will be some form that may include New Build in the future? Yes. I mean, I'm not trying to be flippant about it. It's just that the answer is yes. We believe that there's the capacity to do so. We believe that there's a desire and appetite to do so, and we're working on it.
Nicholas Campanella: And then just, you know, I know that in, you know, Montour hearings specifically, it was brought up by Amazon that this would not be kind of an additionality deal and that, you know, they talked about the current state of the supply chain. And I'm cognizant that some of your peers on their calls have been kind of talking about that they may have new build gas and utilizing turbines or bridge power that others have procured or don't have a spot for. So maybe could you just kind of talk to what your existing kind of EPC relationships would be or your ability to maybe do something either internal via partnership or inorganic to secure the supply chain further to kind of be able to deliver on that?
Mac: Sure. Happy to do so. And just so you understand, I was just trying to be clear that we think that there's the ability to do so. I wasn't trying to be sharp-edged there. But with respect to turbines and EPC relationships and the rest of it, Our view, and the reason why we've built up and invested in as existing assets is very much to the point which we think that there's still the capability to use existing assets to contract. There's a lot of data centers that are out there right now that are looking at whether they contract for a longer period of time. Existing ones, right? You saw that in a recent PPA announcement with existing data center loads. I think that when it comes to new build, and there's a fair amount of discussion around new build, we view new build very simply. New build is going to require either winning in the RBP and having a 15-year contract that allows for taking the merchant risk of the capacity off, thereby allowing financing, or new build is going to require a contract. If you have either one of those, and a slight difference with the RBP versus sort of bring your own power or new build generation as Cole described in the hybrid, you're going to need the offtake agreement. It is the offtake agreement that defines this. In our opinion, not necessarily the turbine orders or the EPC. And the first group that has an offtake agreement will find all sorts of people that want to invest in it, all sorts of turbines that want to be part of it, and all sorts of VPC providers that will want to be part of it. Because it is a live project once you have either that contract or the RVP award. So hopefully that answers the question. I think that I hear your point. We have relationships with those. We put Dale in the spot in the chief asset development officer role. specifically to focus on technology, costing, EPC work, et cetera. That's very important, but it is the offtake that is most important.
Nicholas Campanella: Thank you for those thoughts. I really appreciate it. Thank you. Yeah.
Unidentified Participant: Thank you. Thanks, Nick.
Operator: Thank you. And our next question will come from Nick Emakuchi with Evercore. Your line is open.
Nick Emakuchi: Hey, guys. Mac, I'm not going to ask you if you think that you could sign contracts currently. But I did want to ask, just as we kind of think about the hedge book, kind of looking through 2027, still a lot of upside optionality there. How should we expect that to continue to creep up over time? Or are we comfortable kind of leaving that open just given that the forward curves still aren't fully reflective of kind of the tightness?
Mac: Hey, thanks, Craig. I'm going to get our chief commercial officer to jump in here. But look, I think in macro, and then Chris fill in the spots, but like we saw an opportunity in December of last year as Terry walked through in his opening remarks when prices went up to take some 27 off the table or to lock it in through the hedges, okay? We do that not necessarily as we said, it's a pragmatic, you know, not a programmatic. We don't like set limits like by this date, we got to be this hedge. And so when we look at it, we've been saying this for quarters that we haven't seen necessarily the forward market responding, but we saw the forward market responded and we legged into that stone. Now, I can't tell you, you know, we see this and we're sitting here today and the sparks have moved up since our investor day presentation. They moved up dramatically versus it at some point and they came back down. They're moving all over the place. The good news is the general direction is up and to the right. And we believe that that's consistent with our fundamental view, but we don't feel the need necessarily to go out and hedge. So it's hard to answer your question specifically, but let me throw that over to Chris.
Chris: You said it. I think we've been leaning in previous quarters on our intentional length in some of the outer periods, waiting for these instances of volatility, seemingly happening with more frequency. And so as happened with this winter, as we expect to continue to happen through the year, the tightening supply and demand will provide real-time opportunities for us to continue to lay off hedges. So we have stated targets. We have ranges. We've been on the lower end of those, intentionally so, and we will continue to add to those as the market presents us with compelling opportunities.
Mac: Yeah, I think that's an important part, which is, you know, when we came out of, it's kind of a trip down memory lane here, but when we came out of BK, people were saying, well, how are you going to hedge this in and things of that nature? And we put out stated targets of 60 to 80 and 40 to 60 prompts and prompt plus one. And those are guidelines. And so, but Chris manages the position. We have discussions, Terry, the risk management, Cole, Chris get together. We talk about this, but when you're managing a big book, you can't just eventually get to 27 long 10,000 megawatts. That's what we're starting to become with the addition of Cornerstone, with the addition of Freedom and Guernsey. You have to take some of these opportunities to leg in some, but then it's not like a forced take it off. We can decide how we want to tilt the book based off of our fundamental view.
Terry: Nick, maybe to add to that too, as we get more as we get more and more contracted margin in the overall portfolio, right, when we think about just the support to the cash flows that we need, you know, you have less and less need to sort of lock those in. And so, once again, when we take a look at our hedging program, we're taking a look at both. What's our contracted margin or contracted cash flows to support the business, be able to make our P&I payments, be able to make sure that we take care of sort of basic needs. But as we get more and more of the contracted margin from the AWS deal, hedging becomes a little bit more opportunistic. So we'll continue to have that view as we move forward. And I think that's a benefit that we really like having.
Nick Emakuchi: Yep. No, it makes sense. Thanks, guys. And Cole, just really quickly, just kind of a cleanup question, I guess, just with regards to the cornerstone. Now, obviously, it's going to depend on the timing, but of the closing of the acquisition. But is it fair to kind of take that $500 million in EBITDA and just kind of allocate that over the, you know, from the closing date across 2026? Or is there some growth embedded in there in 2027?
Cole: And it got, look, I think that's a good run rate number. So pick your assumption on a closed date. And I think, you know, 12 months forward from there, it's a good round number. Perfect. Thanks, guys.
Mac: And if you wanted to get just a tad more precise, you've got to think about, you know, there's more value in July, August, December, winter timeframe, too, across that. But it's a good round number. Yeah.
Nick Emakuchi: Well, you guys know I'm not that precise, so it's fine. Thanks, Dave.
Operator: Thank you. And the next question is going to come from Crackshear with Toohey Brothers. Your line is open.
Crackshear: Good afternoon, and thanks for squeezing me in. You know, a year ago, if we talked about new build, I think that was not really a part of the discussion of talent. And now it sounds like this is at least something, you know, quite plausible that we might have something by year end, especially through the auction. And I'm wondering how you're thinking about, you know, capital and balance sheet management decisions, you know, over the next two, three quarters. given the fact you might have some, you know, obviously you would only do it if you're incentivized, but you might be incentivized towards some chunky new build. How do you think about maybe being, would you be less aggressive with the balance sheet or if opportunities arise with the shares down or an acquisition, you're not going to change what you've done the last year, year and a half?
Terry: Hey, Craig, it's Terry. Maybe one little sort of nuance to your comment. We've always said, and this really dovetails with Max's comment a few minutes ago, we've always said if we've got the right certainty, whether it's through an offtake agreement or a very clear sort of underwriting case with an offtaker, we would be more than happy to do new bills, right? I think We've always had that as one of the talking points we've talked about. That being said, I think the RBA potentially gives you that clarity. If we end up in a procurement process where you can get a 15-year commitment, that's what you need to underwrite and effectively finance the new build of an asset. That's a challenge that this market has had for the past several years. it's not the question of whether or not you can build something, it's whether or not you can finance it. In PJM in particular. Now back to your second part of that question, we are always balancing and looking for the highest and best use of our capital, whether that's buying the shares back, whether that's doing M&A, whether that's doing new build, and we're always looking at high-teens returns. We want to make sure that we stay disciplined in doing that, And so that's why you've seen us toggle through, I mean, even for the last several years, we've toggled through a number of those different strategies. And each time we're looking at returns that are significantly high. I mean, just to give you two or three of those examples, we've done a significant amount of share repurchase over the last two and a half years. I mean, we bought back over $2 billion worth of stock, close to like 24% of the total, total float of the business. at an average price of $149 a share. And those were really good strategic moves and a great use of our balance sheet and our capital. Take a look at the freedom and guarantee transaction. Greater than 40% accretive free cash flow per share growth from those acquisitions, right? So we're always going to direct the capital and the use of our balance sheet to whatever the highest returns are. And we talk about it all the time. We sit around the table and as we think about what is the best use for that marginal dollar we're going through all that entire list. I mean, very similar to the list that's on slide 11 of how we think about, you know, growing the business and growing the free cash flow.
Unidentified Participant: I just got a question.
Crackshear: Go ahead. Yeah, go ahead. No, go ahead, Craig. I was just going to throw another twist in there because you got the buybacks, you got the acquisitions, and you've got kind of the new build organic growth. which it seems like maybe there's more clarity, potential clarity, where that could be more real and incentivized by the end of this year than previously. But then you've got this whole discussion that's been brought up in this call about managing fuel slash commodity risks on long-term gas-fired PPAs, and that requires balance sheet capacity as well. You know, especially if you're, you know, look, if you're cash flowing really hard, it doesn't matter what you do to your balance sheet in two, three years, it's going to be dry, right? But if you sign a PPA where you're delivering next year, maybe you need that capacity. And I'm just thinking that between the new build, between managing, you know, the fuel risk, maybe there's more to think about with the balance sheet today than there was a year ago.
Mac: Look, Craig, I think it's a good question. And let me just, when you frame this question, you said a year ago you weren't thinking about new build. I think a year ago we said we would consider new build. We were thinking about it, but it's like a 2030, 32 timeframe issue. Well, we're another year down and, you know, 29 is the new 28 when it comes to data center power and, you know, and that we're a year closer to that and then the RVP has put this in further light. I think that it really is dependent upon what structure you go after because depending upon what the PPAs look like, with respect to the RVP, for example, you own the energy and it just goes into the book like Chris. It's really you're receiving a capacity payment is how you think about bidding in there, which covers your cost and that allows for the financing. That could be actually in a project finance structure, which we haven't done. So it may require less balance sheet than you actually think in that system. If we're doing PPAs that are longer term and it requires credit support, we work through that. We think about is there the ability to post an LC, do things first lien, et cetera. So there's not an easy answer to your question. I get it. But I think what we've always said is that this is why we toggle things. We have the SRP. We have the net leverage of three and a half times. We've shown the ability to toggle back and forth between those. As Terry said, do share, repurchase when we need to. Push up the balance sheet with a clear view to bring it back down within space in order to do M&A. And so it really depends on when we get there and what the opportunity looks like. But I think we would just view that as how do we toggle the different aspects that we have in order to make things work if the right returns are there with the right contract. So I think we're about out of time. Do we have? Thank you.
Unidentified Participant: Two more?
Mac: What are you saying? Okay. Yeah, we're past time. So I think we're going to end there. I apologize. I know there's a couple people in the queue that we didn't get to, and we're happy to take follow-up questions, Sergio and the rest of us here. Appreciate everybody's interest and talent, and have a good evening.
Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect.
