Document
0001013871false00010138712019-11-072019-11-07

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

November 7, 2019
Date of Report (date of earliest event reported)

NRG ENERGY, INC.
(Exact name of registrant as specified in its charter)
Delaware
001-15891
41-1724239
(State or other jurisdiction of incorporation or organization)
(Commission File Number)
(I.R.S. Employer Identification No.)
804 Carnegie Center
Princeton
New Jersey
08540
(Address of Principal Executive Offices)
(Zip Code)
(609) 524-4500
Registrant's telephone number, including area code
N/A
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01NRGNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.




Item 2.02 Results of Operations and Financial Condition

On November 7, 2019, NRG Energy, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2019.  A copy of the press release is furnished as Exhibit 99.1 to this report on Form 8-K and is hereby incorporated by reference.

Item 9.01  Financial Statements and Exhibits
Exhibits
Exhibit
Number

Document
99.1
104Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.


Document
https://cdn.kscope.io/16a4e71fd43b6760e458e85aad885cff-nrglogoq319pr1.jpg
Exhibit 99.1



NRG Energy, Inc. Reports Third Quarter 2019 Results,
Announces Dividend Increase and Initiates 2020 Guidance

Enhancing Long-Term Return of Capital Policy
Increasing 2020 annual dividend from $0.12/share to $1.20/share and targeting 7-9% annual growth 
Executing current $250 million share repurchase authorization, announced Q2 2019
Narrowing 2019 guidance and initiating 2020 financial guidance


PRINCETON, NJ - November 7, 2019 - NRG Energy, Inc. (NYSE: NRG) today reported third quarter 2019 income from continuing operations of $374 million, or $1.45 per diluted common share and Adjusted EBITDA for the third quarter of $792 million.

"In the third quarter, our integrated platform continued to deliver stable results amid a volatile summer," said Mauricio Gutierrez, NRG President and Chief Executive Officer. "We continue to execute on our disciplined capital allocation principles, including increasing the dividend and enhancing our long-term return of capital policy.”


Consolidated Financial Results a

Three Months EndedNine Months Ended
($ in millions)
9/30/199/30/189/30/199/30/18
Income from Continuing Operations$374  $287  $657  $553  
Cash provided by Continuing Operations$472  $407  $853  $671  
Adjusted EBITDA$792  $651  $1,593  $1,503  
Free Cash Flow Before Growth Investments (FCFbG)$433  $553  $637  $769  
a. In accordance with GAAP, 2018 results have been recast to reflect the discontinued operations of the South Central Portfolio, Clearway Energy, the Renewables Platform and Carlsbad Energy Center.
1


          
Segments Results

Table 1: Income/(Loss) from Continuing Operations
($ in millions)Three Months EndedNine Months Ended
Segment9/30/199/30/189/30/199/30/18
Retail$422  $(128) $252  $732  
Generation a
63  574  794  255  
Corporate(111) (159) (389) (434) 
Income from Continuing Operations a
$374  $287  $657  $553  
a. In accordance with GAAP, 2018 results have been recast to reflect the discontinued operations of the South Central Portfolio, Clearway Energy, the Renewables Platform and Carlsbad Energy Center.



Table 2: Adjusted EBITDA
($ in millions)Three Months EndedNine Months Ended
Segment9/30/199/30/189/30/199/30/18
Retail

$269  $269  $662  $755  
Generation a

524  395  938  780  
Corporate

(1) (13) (7) (32) 
Adjusted EBITDA b

$792  $651  $1,593  $1,503  
a. In accordance with GAAP, 2018 results have been recast to reflect the discontinued operations of the South Central Portfolio, Clearway Energy, the Renewables Platform and Carlsbad Energy Center.
b. See Appendices A-1 through A-4 for Operating Segment Reg G reconciliations.

Retail: Third quarter Adjusted EBITDA was $269 million, consistent with third quarter in 2018, driven by margin enhancement and the acquisition of Stream Energy, offset by higher supply costs and weather.

Generation: Third quarter Adjusted EBITDA was $524 million, $129 million higher than third quarter 2018, driven by:
Texas Region: $213 million increase due to higher realized power prices; and
East/West1: $84 million decrease due to lower capacity revenues and lower generation volumes, driven by lower power pricing in PJM combined with 2018 asset sales and the deconsolidation of projects.




























1 Includes International and Renewables
2



Liquidity and Capital Resources
Table 3: Corporate Liquidity
($ in millions)09/30/1912/31/18
Cash and Cash Equivalents$243  $563  
Restricted Cash 17
Total$247  $580  
Total credit facility availability1,297  1,397  
Total Liquidity, excluding collateral received$1,544  $1,977  

As of September 30, 2019, NRG cash was at $0.2 billion, and $1.3 billion was available under the Company’s credit facilities. Total liquidity was $1.5 billion, including restricted cash. Overall liquidity as of the end of the third quarter 2019 was $433 million lower than at the end of 2018 driven by share repurchases, the acquisition of Stream Energy and debt reductions executed during the period.

NRG Strategic Developments

Transformation Plan
Through the third quarter of 2019, NRG realized $401 million of its cost savings target as part of the previously announced Transformation Plan, and is on track to realize $590 million in savings in 2019. Margin Enhancement provided $53 million in uplift through the third quarter toward the $135 million 2019 target.

Petra Nova Debt Repayment
On September 27, 2019, NRG contributed $95 million to Petra Nova to prepay a significant portion of the project debt and fund operations. NRG also posted a $12 million letter of credit to cover certain project debt reserve requirements. As a result, the $124 million of financial guarantees previously provided by NRG to the project lenders have been canceled and the remaining project debt is now non-recourse to NRG.

2019 and 2020 Guidance
NRG has narrowed the range of its Adjusted EBITDA, Adjusted Cash From Operations and Free Cash Flow before Growth Investments (FCFbG) guidance for 2019 and is initiating guidance for fiscal year 2020.


Table 4: 2019 and 2020 Adjusted EBITDA, Cash from Operations, and FCFbG Guidance
20192020
($ in millions)Revised GuidanceGuidance
Adjusted EBITDAa
$1,900-$2,000$1,900-$2,100
Adjusted Cash From Operations$1,425-$1,525$1,450-$1,650
FCFbG$1,250-$1,350$1,275-$1,475
a. Non-GAAP financial measure; see Appendix Tables A-8 for GAAP Reconciliation to Net Income that excludes fair value adjustments related to derivatives. The Company is unable to provide guidance for Net Income due to the impact of such fair value adjustments related to derivatives in a given year 









3



Capital Allocation Update
Through November 7, 2019, NRG completed $1.305 billion in share repurchases at an average price of $38.75 per share and has approximately $195 million remaining under the latest $250 million share repurchase program announced on the second quarter 2019 earnings call. In total, NRG has allocated $1.5 billion of capital available for allocation to share repurchases in 2019.

On October 17, 2019, NRG declared a quarterly dividend on the Company's common stock of $0.03 per share, payable November 15, 2019, to stockholders of record as of November 1, 2019, representing $0.12 on an annualized basis. Beginning in the first quarter of 2020, NRG will increase the annual dividend to $1.20 per share and expects to target an annual dividend growth rate of 7-9 % per share.

In addition, NRG has adopted a long-term capital allocation policy that will target allocating fifty percent (50%) of FCFbG to growth investments and fifty percent (50%) to be returned to shareholders. The return of capital to shareholders is expected to be completed through the newly announced increased dividend supplemented by share repurchases.

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








































2 As of October 31, 2019, 251,594,290 shares outstanding

4



Earnings Conference Call
On November 7, 2019, NRG will host a conference call at 9:00 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.nrg.com and clicking on “Investors” then "Presentations & Webcasts." The webcast will be archived on the site for those unable to listen in real time.

About NRG
At NRG, we’re bringing the power of energy to people and organizations, putting customers at the center of everything we do. We generate electricity and provide energy solutions and natural gas to more than 3.5 million residential, small business, and commercial and industrial customers through our diverse portfolio of retail brands. A Fortune 500 company, operating in the United States and Canada, NRG delivers innovative solutions while advocating for competitive energy markets and customer choice, and by working towards a sustainable energy future. More information is available at www.nrg.com. Connect with NRG on Facebook, LinkedIn and follow us on Twitter @nrgenergy, @nrginsight.

Forward-Looking Statements
In addition to historical information, the information presented in this press release 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 be correct, and actual results may vary materially. Factors that could cause actual results to differ materially from those contemplated herein 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 regulations, the condition of capital markets generally, our ability to access capital markets, cyberterrorism and inadequate cybersecurity, unanticipated outages at our generation facilities, adverse results in current and future litigation, failure to identify, execute or successfully implement acquisitions, repowerings or asset sales, our ability to implement value enhancing improvements to plant operations and companywide processes, our ability to implement and execute on our publicly announced transformation plan, including any cost savings and margin enhancement, our ability to achieve our net debt targets, our ability to achieve investment grade credit metrics, our ability to proceed with projects under development or the inability to complete the construction of such projects on schedule or within budget, the inability to maintain or create successful partnering relationships, our ability to operate our businesses efficiently, our ability to retain retail customers, our ability to realize value through our commercial operations strategy, the ability to successfully integrate businesses of acquired companies, our ability to realize anticipated benefits of transactions (including expected cost savings and other synergies) or the risk that anticipated benefits may take longer to realize than expected, and our ability to execute our Capital Allocation Plan. Achieving investment grade credit metrics is not an indication of or guarantee that the Company will receive investment grade credit ratings. Debt and share repurchases 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, free cash flow and excess cash guidance are estimates as of November 7, 2019. These estimates are based on assumptions the company 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 press release 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.



5



Contacts:

Media:
Investors:
Candice Adams
Kevin L. Cole, CFA
609.524.5428
609.524.4526



6



NRG ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended September 30,Nine months ended September 30,
(In millions, except for per share amounts)2019201820192018
Operating Revenues
Total operating revenues$2,996  $2,960  $7,626  $7,486  
Operating Costs and Expenses
Cost of operations2,153  2,238  5,649  5,512  
Depreciation and amortization91  99  261  331  
Impairment losses—  —   74  
Selling, general and administrative210  211  615  587  
Reorganization costs 27  16  70  
Development costs    
Total operating costs and expenses2,456  2,576  6,547  6,583  
Gain on sale of assets—  14   30  
Operating Income540  398  1,081  933  
Other Income/(Expense)
Equity in earnings of unconsolidated affiliates29  20   26  
Impairment losses on investments(107) (1) (107) (16) 
Other income, net17  19  49  12  
Loss on debt extinguishment, net—  (19) (47) (22) 
Interest expense(99) (122) (318) (361) 
Total other expense(160) (103) (415) (361) 
Income from Continuing Operations Before Income Taxes380  295  666  572  
Income tax expense   19  
Income from Continuing Operations374  287  657  553  
(Loss)/income from discontinued operations, net of income tax(2) (336) 399  (272) 
Net Income/(Loss)372  (49) 1,056  281  
Less: Net income attributable to noncontrolling interest and redeemable interests—  23    
Net Income/(Loss) Attributable to NRG Energy, Inc.$372  $(72) 1,055  280  
Earnings per Share Attributable to NRG Energy, Inc.
Weighted average number of common shares outstanding — basic254  299  266  309  
Income from continuing operations per weighted average common share — basic $1.47  $0.88  $2.47  $1.79  
(Loss)/income from discontinued operations per weighted average common share — basic$(0.01) $(1.12) $1.50  $(0.88) 
Earnings/(Loss) per Weighted Average Common Share — Basic $1.46  $(0.24) $3.97  $0.91  
Weighted average number of common shares outstanding — diluted256  299  268  313  
Income from continuing operations per weighted average common share — diluted$1.46  $0.88  $2.45  $1.76  
(Loss)/income from discontinued operations per weighted average common share — diluted$(0.01) $(1.12) $1.49  $(0.87) 
Earnings/(Loss) per Weighted Average Common Share — Diluted$1.45  $(0.24) $3.94  $0.89  

7



NRG ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
Three months ended September 30,Nine months ended September 30,
2019201820192018
(In millions)
Net Income/(Loss)$372  $(49) $1,056  $281  
Other Comprehensive (Loss)/Income
Unrealized gain on derivatives—   —  $24  
Foreign currency translation adjustments(4) (2) (4) $(8) 
Available-for-sale securities(14) —  (13) $ 
Defined benefit plans(41) (1) (47) $(3) 
Other comprehensive (loss)/income(59)  (64) 14  
Comprehensive Income/(Loss)313  (47) 992  295  
Less: Comprehensive income attributable to noncontrolling interest and redeemable noncontrolling interest—  26   15  
Comprehensive Income/(Loss) Attributable to NRG Energy, Inc.$313  $(73) $991  $280  



8



NRG ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2019December 31, 2018
(In millions, except share data)(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents$243  $563  
Funds deposited by counterparties30  33  
Restricted cash 17  
Accounts receivable, net1,376  1,024  
Inventory364  412  
Derivative instruments735  764  
Cash collateral paid in support of energy risk management activities164  287  
Prepayments and other current assets271  302  
Current assets - held-for-sale—   
Current assets - discontinued operations—  197  
Total current assets3,187  3,600  
Property, plant and equipment, net2,615  3,048  
Other Assets
Equity investments in affiliates405  412  
Operating lease right-of-use assets, net482  —  
Goodwill591  573  
Intangible assets, net828  591  
Nuclear decommissioning trust fund756  663  
Derivative instruments358  317  
Deferred income taxes53  46  
Other non-current assets252  289  
Non-current assets - held-for-sale—  77  
Non-current assets - discontinued operations—  1,012  
Total other assets3,725  3,980  
Total Assets$9,527  $10,628  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt and finance leases$302  $72  
Current portion of operating lease liabilities73  —  
Accounts payable866  863  
Derivative instruments668  673  
Cash collateral received in support of energy risk management activities30  33  
Accrued expenses and other current liabilities625  680  
Current liabilities - held-for-sale—   
Current liabilities - discontinued operations—  72  
Total current liabilities2,564  2,398  
Other Liabilities
Long-term debt and finance leases5,798  6,449  
Non-current operating lease liabilities500  —  
Nuclear decommissioning reserve294  282  
Nuclear decommissioning trust liability453  371  
Derivative instruments364  304  
Deferred income taxes70  65  
Other non-current liabilities1,036  1,274  
Non-current liabilities - held-for-sale—  65  
Non-current liabilities - discontinued operations—  635  
Total other liabilities8,515  9,445  
Total Liabilities11,079  11,843  
Redeemable noncontrolling interest in subsidiaries19  19  
Commitments and Contingencies
Stockholders' Equity
Common stock; $0.01 par value; 500,000,000 shares authorized; 421,859,844 and 420,288,886 shares issued and 251,985,517 and 283,650,039 shares outstanding at September 30, 2019 and December 31, 2018, respectively  
Additional paid-in-capital8,494  8,510  
Accumulated deficit(4,991) (6,022) 
Less treasury stock, at cost - 169,874,327 and 136,638,847 shares at September 30, 2019 and December 31, 2018, respectively(4,920) (3,632) 
Accumulated other comprehensive loss(158) (94) 
Total Stockholders' Equity(1,571) (1,234) 
Total Liabilities and Stockholders' Equity$9,527  $10,628  

9



NRG ENERGY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended September 30,
(In millions)20192018
Cash Flows from Operating Activities
Net Income$1,056  $281  
Income/(loss) from discontinued operations, net of income tax399  (272) 
Income from continuing operations657  553  
Adjustments to reconcile net income to cash provided by operating activities:
Distributions and equity earnings of unconsolidated affiliates(5) 10  
Depreciation, amortization and accretion289  364  
Provision for bad debts87  57  
Amortization of nuclear fuel40  38  
Amortization of financing costs and debt discount/premiums20  21  
Loss on debt extinguishment, net47  22  
Amortization of emissions allowances and out-of-market contracts28  21  
Amortization of unearned equity compensation15  21  
Gain on sale and disposal of assets(20) (50) 
Impairment losses108  90  
Changes in derivative instruments36  (17) 
Changes in deferred income taxes and liability for uncertain tax benefits(3) (6) 
Changes in collateral deposits in support of energy risk management activities129  (30) 
Changes in nuclear decommissioning trust liability27  50  
GenOn settlement—  (125) 
Loss on deconsolidation of Agua Caliente and Ivanpah projects—  13  
Changes in other working capital(602) (361) 
Cash provided by continuing operations853  671  
Cash provided by discontinued operations 396  
Net Cash Provided by Operating Activities861  1,067  
Cash Flows from Investing Activities
Payments for acquisitions of businesses(348) (209) 
Capital expenditures(183) (343) 
Net proceeds from notes receivable —  
Net proceeds from sale of emission allowances14  24  
Investments in nuclear decommissioning trust fund securities(295) (449) 
Proceeds from the sale of nuclear decommissioning trust fund securities271  398  
Proceeds from sale of assets, net of cash disposed and sale of discontinued operations, net of fees1,293  1,555  
Deconsolidation of Agua Caliente and Ivanpah projects—  (268) 
Net contributions to investments in unconsolidated affiliates(94) (39) 
Contributions to discontinued operations(44) (23) 
Cash provided by continuing operations616  646  
Cash used by discontinued operations(2) (705) 
Net Cash Provided/(Used) by Investing Activities614  (59) 
Cash Flows from Financing Activities
Payments of dividends to common stockholders(24) (28) 
Payments for treasury stock(1,286) (1,000) 
Payments for debt extinguishment costs(24) —  
Distributions to noncontrolling interests from subsidiaries(1) (17) 
Proceeds from issuance of common stock 15  
Proceeds from issuance of short and long-term debt2,048  995  
Payment of debt issuance costs(34) (19) 
Payments for short and long-term debt(2,487) (970) 
Receivable from affiliate—  (26) 
Other—  (4) 
Cash used by continuing operations(1,805) (1,054) 
Cash provided by discontinued operations43  403  
Net Cash Used by Financing Activities(1,762) (651) 
Effect of exchange rate changes on cash and cash equivalents—   
Change in Cash from discontinued operations49  94  
Net (Decrease)/increase in Cash and Cash Equivalents, Funds Deposited by Counterparties and Restricted Cash(336) 264  
Cash and Cash Equivalents, Funds Deposited by Counterparties and Restricted Cash at Beginning of Period613  1,086  
Cash and Cash Equivalents, Funds Deposited by Counterparties and Restricted Cash at End of Period$277  $1,350  

10



Appendix Table A-1: Third Quarter 2019 Adjusted EBITDA Reconciliation by Operating Segment
The following table summarizes the calculation of Adj. EBITDA and provides a reconciliation to income/(loss) from continuing operations:
($ in millions)Texas
East/West1
GenerationRetailCorp/ElimTotal
Income/(Loss) from Continuing Operations 55  63  422  (111) 374  
Plus:
Interest expense, net—     88  95  
Income tax—    —    
Depreciation and amortization22  25  47  37   91  
ARO Expense 14  17  —  —  17  
Contract amortization —   —  —   
EBITDA38  101  139  460  (11) 588  
Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates 23  26  —  —  26  
Acquisition-related transaction & integration costs—  —  —   —   
Reorganization costs—  —  —   —   
Deactivation costs—    —    
Other non recurring charges (1) —  (2)  —  
Impairments101  —  101  —   107  
Mark to market (MtM) (gains)/losses on economic hedges238  17  255  (191) —  64  
Adjusted EBITDA381  143  524  269  (1) 792  
1 Includes International, remaining renewables and Generation eliminations


Third Quarter 2019 condensed financial information by Operating Segment:
($ in millions)Texas
East/West1
GenerationRetailCorp/ElimTotal
Operating revenues805  425  1,230  2,545  (569) 3,206  
Cost of sales302  204  506  2,011  (569) 1,948  
Economic gross margin2
503  221  724  534  —  1,258  
Operations & maintenance and other cost of operations3
118  121  239  103  (1) 341  
Selling, marketing, general and administrative
32  11  43  161   210  
Other expense/(income)4
(28) (54) (82)  (4) (85) 
Adjusted EBITDA  381  143  524  269  (1) 792  
1 Includes International, remaining renewables and Generation eliminations
2 Excludes MtM loss of $64 million and contract amortization of $5 million
3 Excludes deactivation costs of $5 million
4 Excludes acquisition-related transaction & integration costs of $1 million and reorganization costs of $1 million
11



The following table reconciles the condensed financial information to Adjusted EBITDA:
($ in millions)Condensed financial informationInterest, tax, depr., amort.MtMDeactivationOther adj.
Adjusted EBITDA
Operating revenues2,996  —  210  —  —  3,206  
Cost of operations1,807  (5) 146  —  —  1,948  
Gross margin1,189   64  —  —  1,258  
Operations & maintenance and other cost of operations346  —  —  (5) —  341  
Selling, marketing, general & administrative
210  —  —  —  —  210  
Other expense/(income)1
259  (209) —  —  (135) (85) 
Income/(Loss) from Continuing Operations374  214  64   135  792  
1 Other adj. includes impairments of $107 million, acquisition-related transaction & integration costs of $1 million and reorganization costs of $1 million


12



Appendix Table A-2: Third Quarter 2018 Adjusted EBITDA Reconciliation by Operating Segment
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to income/(loss) from continuing operations:
($ in millions)Texas
East/West1
GenerationRetailCorp/ElimTotal
Income/(Loss) from Continuing Operations 387  187  574  (128) (159) 287  
Plus:  
Interest expense, net  —  10  10   105  116  
Income tax  —  —  —  —    
Loss on debt extinguishment  —  —  —  —  19  19  
Depreciation and amortization  21  39  60  30   99  
ARO Expense    13  —  —  13  
Contract amortization   —   —  —   
Lease amortization  —  (2) (2) —  —  (2) 
EBITDA  424  238  662  (97) (18) 547  
Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates   25  27  —  —  27  
Acquisition-related transaction & integration costs  —  —  —   (1) —  
Reorganization costs      18  27  
Deactivation costs  —  —  —  —    
Gain on sale of business  —    —  (15) (14) 
Other non recurring charges
 
 —    —  —   
Impairments  —  (8) (8) —  —  (8) 
Mark to market (MtM) (gains)/losses on economic hedges (259) (32) (291) 359  —  68  
Adjusted EBITDA168  227  395  269  (13) 651  
1 Includes International, remaining renewables and Generation eliminations


Third Quarter 2018 condensed financial information by Operating Segment:
($ in millions) Texas  
East/West1
Generation  Retail  Corp/Elim  Total  
Operating revenues  594  589  1,183  2,202  (480) 2,905  
Cost of sales  296  262  558  1,702  (475) 1,785  
Economic gross margin2
298  327  625  500  (5) 1,120  
Operations & maintenance and other cost of operations3
117  117  234  89  (3) 320  
Selling, marketing, general & administrative
25  30  55  144  12  211  
Other expense/(income)4
(12) (47) (59) (2) (1) (62) 
Adjusted EBITDA
 
 168  227  395  269  (13) 651  
1 Includes International, remaining renewables and Generation eliminations
2 Excludes MtM loss of $68 million and contract amortization of $7 million
3 Excludes deactivation costs of $3 million
4 Excludes gain on sale of business of $14 million, reorganization costs of $27 million and loss on debt extinguishment of $19 million


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The following table reconciles the condensed financial information to Adjusted EBITDA:
($ in millions)Condensed financial informationInterest, tax, depr., amort.MtMDeactivationOther adj.Adjusted EBITDA
Operating revenues2,960  —  (55) —  —  2,905  
Cost of operations1,915  (7) (123) —  1,785  
Gross margin1,045   68  —  —  1,120  
Operations & maintenance and other cost of operations323  —  —  (3) —  320  
Selling, marketing, general & administrative1
211  —  —  —  —  211  
Other expense/(income)2
224  (234) —  —  (52) (62) 
Income/(Loss) from Continuing Operations287  241  68   52  651  
1 Other adj. includes impairments of $8 million, gain on sale of business of $14 million, reorganization costs of $27 million and loss on debt extinguishment of $19 million


14



Appendix Table A-3: YTD Third Quarter 2019 Adjusted EBITDA Reconciliation by Operating Segment
The following table summarizes the calculation of Adj. EBITDA and provides a reconciliation to income/(loss) from continuing operations:
($ in millions)Texas
East/West1
GenerationRetailCorp/ElimTotal
Income/(Loss) from Continuing Operations590  204  794  252  (389) 657  
Plus:
Interest expense, net—  19  19   281  302  
Income tax—       
Loss on debt extinguishment—  —  —  —  47  47  
Depreciation and amortization66  72  138  100  23  261  
ARO Expense10  20  30  —   31  
Contract Amortization16  —  16  —  —  16  
EBITDA682  316  998  355  (30) 1,323  
Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates11  80  91  —  —  91  
Acquisition-related transaction & integration costs—  —  —     
Reorganization costs—     11  16  
Legal Settlement  11  —  —  11  
Deactivation costs—  11  11  —   17  
Other non recurring charges
(1)   —  (1)  
Impairments101  —  101    108  
Market to market (MtM) (gains)/losses on economic hedges(237) (41) (278) 301  —  23  
Adjusted EBITDA559  379  938  662  (7) 1,593  
1 Includes International, remaining renewables and Generation eliminations

YTD Third Quarter 2019 condensed financial information by Operating Segment:
($ in millions)Texas
East/West1
GenerationRetailCorp/ElimTotal
Operating revenues1,705  1,186  2,891  5,898  (1,214) 7,575  
Cost of sales723  517  1,240  4,534  (1,212) 4,562  
Economic gross margin2
982  669  1,651  1,364  (2) 3,013  
Operations & maintenance and other cost of operations3
378  340  718  264  (2) 980  
Selling, marketing, general & administrative4
52  97  149  438  17  604  
Other expense/(income)5
(7) (147) (154) —  (10) (164) 
Adjusted EBITDA559  379  938  662  (7) 1,593  
1 Includes International, remaining renewables and Generation eliminations
2 Excludes MtM loss of $23 million and contract amortization of $16 million
3 Excludes deactivation costs of $17 million
4 Excludes legal settlement of $11 million
5 Excludes acquisition-related transaction & integration costs of $2 million, reorganization costs of $16 million and loss on debt extinguishment of $47 million



15



The following table reconciles the condensed financial information to Adjusted EBITDA:
($ in millions)Condensed financial informationInterest, tax, depr., amort.MtMDeactivationOther adj.
Adjusted EBITDA
Operating revenues7,626  —  (51) —  —  7,575  
Cost of operations4,652  (16) (74) —  —  4,562  
Gross margin2,974  16  23  —  —  3,013  
Operations & maintenance and other cost of operations997  —  —  (17) —  980  
Selling, marketing, general & administrative1
615  —  —  —  (11) 604  
Other expense/(income)2
705  (603) —  —  (266) (164) 
Income/(Loss) from Continuing Operations657  619  23  17  277  1,593  
1 Other adj. includes legal settlement of $11 million
2 Other adj. includes impairments of $108 million, acquisition-related transaction & integration costs of $2 million, reorganization costs of $16 million and loss on debt extinguishment of $47 million

16



Appendix Table A-4: YTD Third Quarter 2018 Adjusted EBITDA Reconciliation by Operating Segment
The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to income/(loss) from continuing operations:
($ in millions)Texas
East/West1
GenerationRetailCorp/ElimTotal
Income/(Loss) from Continuing Operations73  182  255  732  (434) 553  
Plus:
Interest expense, net—  46  46   301  349  
Income tax—    —  18  19  
Loss on debt extinguishment—  —  —  —  22  22  
Depreciation and amortization64  156  220  86  25  331  
ARO Expense20  12  32  —   33  
Contract Amortization19   20  —  —  20  
Lease amortization—  (6) (6) —  —  (6) 
EBITDA176  392  568  820  (67) 1,321  
Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates 47  52  —   53  
Acquisition-related transaction & integration costs—  —  —     
Reorganization costs  10  10  50  70  
Legal Settlement13  —  13  —   19  
Deactivation costs—  10  10  —   18  
Gain on sale of business—    —  (29) (27) 
Other non recurring charges
(2)    (4)  
Impairments15  87  102  —  —  102  
MtM (gains)/losses on economic hedges19  —  19  (81) —  (62)