Financial Highlights

• $729 million of Adjusted EBITDA¹ in the second quarter and $1,569 million¹ in the first six months of 2015
• $274 million of Free Cash Flow (FCF) before growth investments in the first six months of 2015
• Achieved record second quarter and first six months results at NRG Home Retail with over $200 million and $370 million of Adjusted EBITDA, respectively
• Offered next set of drop down assets to NRG Yield, consisting of wind facilities acquired in the EME transaction representing $35 million of Adjusted EBITDA and $20 million in Cash Available for Distribution (CAFD) on an annual run-rate basis²

Business and Operational Highlights

• Completed the 575 MW gas conversion at Big Cajun Unit 2 and environmental compliance controls at various coal units within the fleet
• Announced plans to develop a 20 MW solar energy facility for Cisco’s San Jose headquarters, scheduled to begin commercial operation by the end of 2016

Financial Guidance and Capital Allocation Update

• Reaffirming full year 2015 Guidance:
  • Adjusted EBITDA of $3,200-$3,400 million³
  • FCF before growth investments of $1,100-$1,300 million
• Executed $107 million of share repurchases in second quarter for a total of $186 million repurchased year-to-date with $51 million in remaining authorized capacity and $200 million in expected capacity⁴

PRINCETON, N.J.--(BUSINESS WIRE)--Aug. 4, 2015-- NRG Energy, Inc. (NYSE:NRG) today reported second quarter Adjusted EBITDA of $729 million¹, with $338 million from NRG Business and NRG Renew combined⁵, $204 million from NRG Home Retail, and $187 million from NRG Yield. Year-to-date adjusted cash flow from operations totaled $678 million. Net loss for the first six months of 2015 was $145 million, or $0.43 per diluted common share compared to a net loss of $147 million, or $0.48 per diluted common share for the first six months of 2014.

“Our competitive retail business continues to lead the way, achieving record results in a low supply cost environment while our wholesale unit continues to deliver solid operational performance through a strongly hedged baseload position,” said David Crane, NRG’s Chief Executive Officer. “After a weather impeded start of the year, NRG Home Solar’s pace of customer bookings has us easily in the top four in the residential solar industry, with California still to come.”

Segment Results

NRG Business: Second quarter Adjusted EBITDA was $285 million; $16 million lower than in the second quarter 2014 primarily driven by:

• East Region: $11 million lower due to lower energy margins caused by milder weather and lower capacity revenues due to lower base residual auction prices and less capacity following plant deactivations, partially offset by lower operating costs due to fewer outages and decreased run time
• West Region: $26 million lower due to decreased pricing and a decline in contracted volumes from certain capacity contracts including the retirement of Coolwater
• Gulf Coast Region: $27 million increase due to higher realized energy margins, partially offset by increased outage costs during planned outages for fuel conversion and back-end control installations.

NRG Home Retail: Second quarter Adjusted EBITDA was $204 million, $47 million higher than second quarter 2014 driven primarily by favorable supply costs, partially offset by an increase in operating costs associated with customer growth in Texas.

NRG Renew: Second quarter Adjusted EBITDA was $66 million, $11 million lower than in second quarter 2014 primarily due to lower generation by wind assets following the drop in wind resource availability in 2015 and increased distributed solar development costs, partially offset by the ramp up of Ivanpah as generation continues to increase year over year.

NRG Yield: Second quarter Adjusted EBITDA was $187 million, $46 million higher than in second quarter 2014 primarily due to the Alta Wind acquisition.

Liquidity and Capital Resources

NRG-level cash as of June 30, 2015, was $709 million, an increase of $48 million over the end of 2014, and $1,409 million was available under the Company’s credit facilities at the end of the current quarter. Total liquidity was $3,988 million including restricted cash and cash at non-guarantor subsidiaries (primarily GenOn and NRG Yield)⁶.

NRG Strategic Developments

Next Drop Down to NRG Yield

NRG Energy offered NRG Yield the opportunity to acquire a 75% stake in a portfolio of 12 wind projects totaling net 814 MW. The transaction is expected to result in approximately $35 million of Adjusted EBITDA and $20 million of CAFD on an annual run-rate basis⁷ to NRG Yield and is expected to close in the third quarter of 2015, subject to negotiation with, and approval by, NRG Yield Independent Directors.

Including this most recent offer and the residential and distributed generation solar partnerships with NRG Yield, NRG is targeting drop downs to NRG Yield over the second half of 2015 which are expected to result in an aggregate of $600 million in drop down proceeds, of which $200 million is expected to be available for incremental share repurchase capacity pursuant to the Company’s previously announced capital allocation program.

NRG Yield

On June 29, 2015, NRG Yield issued 28,198,000 shares of Class C common stock at $22.00 per share for net proceeds of $600 million. Additionally, NRG Yield issued $287.5 million of 3.25% convertible senior notes due 2020. The net proceeds of both of these issuances were used for the acquisition of a 25% interest in the Desert Sunlight Solar Farm for $285⁸ million, to repay a portion of the $491 million in debt associated with the Alta X and Alta XI wind facilities (in order to facilitate the tax equity financing transaction described below) and to repay outstanding indebtedness under NRG Yield’s revolving credit facility.

On June 30, 2015, NRG Yield closed a new tax equity facility in order to monetize production tax credits from the Alta Wind X and XI projects. This financing resulted in $119 million of cash proceeds after expenses and is expected to provide ongoing annual cash payments indexed to and limited by the projects’ wind production levels during the course of the tax equity investor’s investment holding period. Proceeds from this transaction and a portion of the proceeds from the recently completed equity and debt offerings were utilized to repay the entire $491 million of outstanding project debt associated with the Alta X and Alta XI wind facilities.

By 2016, the Desert Sunlight acquisition and the Alta X and Alta XI debt repayment and tax equity financing arrangement are expected to increase both the annual run-rate EBITDA by approximately $45 million and CAFD by approximately $50 million, including $9 million for debt service associated with the recently issued convertible senior notes.

NRG Home Solar

While the strong sales momentum positions the Company for robust growth over the balance of the year, NRG is revising its expectations for NRG Home Solar with a negative EBITDA contribution of $100 million to $175 million, due primarily to an increase in expenses associated with positioning NRG Home Solar in certain key residential solar markets, including a comprehensive sales and marketing push into the large and fast-growing California market set to start in August.

In advance of NRG Home Solar’s push into California, investments across the platform are yielding strong results. While overall bookings and deployments for the first half of 2015 lag original expectations, June sales exceeded March sales by nearly 90%.

Outlook for 2015

Driven by robust second quarter results and a significantly hedged baseload portfolio over the remainder of 2015, the Company is reaffirming its guidance range for fiscal year 2015. As in previous quarters, the Company’s guidance assumes normalized weather in its core merchant markets over the remainder of the year.

2015 Capital Allocation Update

During the second quarter, NRG repurchased $107 million of its common stock at an average cost of $24.53 per share. Together with repurchases completed during the first quarter of 2015 under the December 2014 common stock repurchase program, NRG has purchased a total of $186 million of NRG common stock since December 31, 2014.

Consistent with the capital allocation policy announced last quarter, NRG intends to allocate cash in an amount equal to the expected $600 million of proceeds from NRG Yield equally towards the repurchase of NRG shares, the repayment of corporate debt and the reinvestment in NRG Yield eligible projects of which $200 million is expected to be available for share repurchases. NRG currently has $51 million in remaining authorized buyback capacity.

On July 15, 2015, NRG declared a quarterly dividend on the Company's common stock of $0.145 per share, payable August 17, 2015, to stockholders of record as of August 3, 2015, representing $0.58 on an annualized basis.

The Company's common stock dividend and share repurchases are subject to available capital, market conditions and compliance with associated laws and regulations.

Earnings Conference Call

On August 4, 2015, NRG will host a conference call at 8:00 a.m. Eastern to discuss these results. Investors, the news media and others may access the live webcast of the conference call and accompanying presentation materials by logging on to NRG’s website at http://www.nrgenergy.com and clicking on “Investors.” The webcast will be archived on the site for those unable to listen in real time.

About NRG

NRG is leading a customer-driven change in the U.S. energy industry by delivering cleaner and smarter energy choices, while building on the strength of the nation’s largest and most diverse competitive power portfolio. A Fortune 200 company, we create value through reliable and efficient conventional generation while driving innovation in solar and renewable power, electric vehicle ecosystems, carbon capture technology and customer-centric energy solutions. Our retail electricity providers serve almost 3 million residential and commercial customers throughout the country. More information is available at www.nrgenergy.com. Connect with NRG Energy on Facebook and follow us on Twitter @nrgenergy.

Safe Harbor Disclosure

In addition to historical information, the information presented in this communication includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. These statements involve estimates, expectations, projections, goals, assumptions, known and unknown risks and uncertainties and can typically be identified by terminology such as “may,” “should,” “could,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “expect,” “intend,” “seek,” “plan,” “think,” “anticipate,” “estimate,” “predict,” “target,” “potential” or “continue,” or the negative of these terms or other comparable terminology. Such forward-looking statements include, but are not limited to, statements about the Company’s future revenues, income, indebtedness, capital structure, plans, expectations, objectives, projected financial performance and/or business results and other future events, and views of economic and market conditions.

Although NRG believes that its expectations are reasonable, it can give no assurance that these expectations will prove to have been correct, and actual results may vary materially. Factors that could cause actual results to differ materially from those contemplated above include, among others, general economic conditions, hazards customary in the power industry, weather conditions, competition in wholesale power markets, the volatility of energy and fuel prices, failure of customers to perform under contracts, changes in the wholesale power markets, changes in government regulation of markets and of environmental emissions, the condition of capital markets generally, our ability to access capital markets, unanticipated outages at our generation facilities, adverse results in current and future litigation, failure to identify or successfully implement acquisitions and repowerings, our ability to implement value enhancing improvements to plant operations and companywide processes, our ability to obtain federal loan guarantees, the inability to maintain or create successful partnering relationships with NRG Yield and other third parties, our ability to operate our businesses efficiently including NRG Yield, our ability to retain retail customers, our ability to realize value through our commercial operations strategy and the creation of NRG Yield, the ability to successfully integrate the businesses of acquired companies, the ability to realize anticipated benefits of acquisitions (including expected cost savings and other synergies) and the ability to sell assets to NRG Yield, Inc. or the risk that anticipated benefits may take longer to realize than expected and our ability to pay dividends and initiate share repurchases under our capital allocation plan, which may be made from time to time subject to market conditions and other factors, including as permitted by United States securities laws. Furthermore, any common stock dividend is subject to available capital and market conditions.

NRG undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. The adjusted EBITDA and free cash flow guidance are estimates as of August 4, 2015. These estimates are based on assumptions believed to be reasonable as of that date. NRG disclaims any current intention to update such guidance, except as required by law. The foregoing review of factors that could cause NRG’s actual results to differ materially from those contemplated in the forward-looking statements included in this Earnings Presentation should be considered in connection with information regarding risks and uncertainties that may affect NRG's future results included in NRG's filings with the Securities and Exchange Commission at www.sec.gov.