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OFFON

NRG ENERGY, INC.

(NRG)
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NRG Energy, Inc. Reports Third Quarter 2021 Results

11/04/2021 | 06:00am EST

  • Narrowing 2021 guidance and initiating 2022 financial guidance
  • Direct Energy integration and synergies plan on track
  • Increasing 2022 annual dividend by 8% from $1.30/share to $1.40/share
  • ERCOT advancing comprehensive market reforms

NRG Energy, Inc. (NYSE: NRG) today reported a third quarter 2021 net income of $1,618 million, or $6.60 per diluted common share and Adjusted EBITDA for the third quarter of $767 million.

"Our platform has demonstrated resilient year-to-date performance, despite facing supply chain constraints driven by economy-wide shortages. As a result, we are focusing on mitigating near-term impacts," said Mauricio Gutierrez, NRG President and Chief Executive Officer. "As we turn towards the remainder of the year, we will look forward to continued progress on our strategic priorities, including the completion of our announced asset sales and furthering our customer-focused strategy."

Consolidated Financial Results

 

 

Three Months Ended

 

Nine Months Ended

($ in millions)

 

 

9/30/2021

 

9/30/2020

 

9/30/2021

 

9/30/2020

Net Income

 

$

1,618

 

 

$

249

 

 

$

2,614

 

 

$

683

 

Cash provided by Operating Activities

 

$

1,478

 

 

694

 

 

$

1,855

 

 

$

1,386

 

Adjusted EBITDAa

 

$

767

 

 

$

752

 

 

$

1,990

 

 

$

1,674

 

Free Cash Flow Before Growth Investments (FCFbG)

 

$

395

 

 

$

625

 

 

$

1,163

 

 

$

1,157

 

a. Three and nine months ended 9/30/2021 excludes the loss due to Winter Storm Uri of $21 million and $1,070 million, respectively

Segments Results

Table 1: Net Income/(Loss)

($ in millions)

 

Three Months Ended

 

Nine Months Ended

Segment

 

9/30/2021

 

9/30/2020

 

9/30/2021

 

9/30/2020

Texas

 

$

251

 

 

$

287

 

 

$

600

 

 

$

799

 

East

 

1,976

 

 

145

 

 

3,107

 

 

307

 

West/Services/Othera

 

(609)

 

 

(183)

 

 

(1,093)

 

 

(423)

 

Net Income

 

$

1,618

 

 

$

249

 

 

$

2,614

 

 

$

683

 

a. Includes Corporate segment

Third quarter net income was $1,618 million, $1,369 million higher than third quarter 2020, driven by the acquisition of Direct Energy and the resulting mark-to-market on economic hedge positions in 2021 versus 2020 which were driven by large movements in gas prices and power prices.

Table 2: Adjusted EBITDA

($ in millions)

 

Three Months Ended

 

Nine Months Ended

Segment

 

9/30/2021

 

9/30/2020

 

9/30/2021

 

9/30/2020

Texas

 

$

446

 

 

$

514

 

 

$

1,004

 

 

$

1,087

 

East

 

229

 

 

140

 

 

781

 

 

359

 

West/Services/Othera

 

92

 

 

98

 

 

205

 

 

228

 

Adjusted EBITDAb

 

$

767

 

 

$

752

 

 

$

1,990

 

 

$

1,674

 

a. Includes Corporate segment

b. Three and nine months ended 9/30/2021 excludes the loss due to Winter Storm Uri of $21 million and $1,070 million, respectively

The following discussion of financial results exclude the impact from Winter Storm Uri:

Texas: Third quarter Adjusted EBITDA was $446 million, $68 million lower than third quarter of 2020. This decrease was driven by increased costs to service retail load resulting from increased power and fuel costs as well as replacement power due to the extended forced outage at Limestone. These were partially offset by an increase due to the acquisition of Direct Energy.

East: Third quarter Adjusted EBITDA was $229 million, $89 million higher than third quarter of 2020. This increase was driven by the acquisition of Direct Energy partially offset by lower retail volumes and higher supply costs.

West/Services/Other: Third quarter Adjusted EBITDA was $92 million, $6 million lower than third quarter of 2020. This decrease is due to lower equity earnings from the sale of Agua Caliente in February 2021 and prior year MISO uplift payments resulting from out-of-market dispatch during extreme weather. These were partially offset by an increase due to the acquisition of Direct Energy.

Liquidity and Capital Resources

Table 3: Corporate Liquidity

($ in millions)

 

09/30/21

 

12/31/20

Cash and Cash Equivalents

 

$

259

 

 

$

3,905

 

Restricted Cash

 

14

 

 

6

 

Total

 

$

273

 

 

$

3,911

 

Total Revolving Credit Facility and collective collateral facilities

 

3,041

 

 

3,129

 

Total Liquidity, excluding collateral received

 

$

3,314

 

 

$

7,040

 

As of September 30, 2021, NRG cash was at $0.3 billion, and $3.0 billion was available under the Company’s credit facilities. Total liquidity was $3.3 billion. Overall liquidity as of the end of the third quarter 2021 was approximately $3.7 billion lower than at the end of 2020, driven by the closing of the $3.6 billion Direct Energy acquisition, the impact of Winter Storm Uri and $255 million of deleveraging.

NRG Strategic Developments

Texas Legislation and Winter Storm Uri Updates

Following Winter Storm Uri, the Texas legislature passed an omnibus reliability and customer-protection bill, SB3, in addition to two other statutes, HB4492 and SB1580, that provide for the financial stabilization of the market through securitization. The Public Utility Commission of Texas (PUCT) has implemented these laws by adopting mandatory weatherization standards for the electric sector, proposing market design reforms that prevent extraordinary energy price excursions in ERCOT while providing supplementary revenues for dispatchable resources, and issuing orders that cumulatively provide for $2.9 billion of financial relief to load-serving entities and their customers, as well as short-paid entities. The PUCT is expected to announce additional information regarding the ERCOT market re-design on December 20, 2021. ERCOT is also expected to publish its calculation of eligible entities’ share of securitization proceeds related to extraordinary uplift costs on December 7, 2021, with such proceeds expected to be disbursed in the first quarter of 2022. ERCOT expects to disburse proceeds of the smaller market-participant default securitization in 2021.

The Company expects Winter Storm Uri's total 2021 loss before income tax to be $1,070 million driven by resettlement data, ERCOT system wide counterparty defaults, provisions for credits losses, increased uplift charges to load, ancillary charges, and other estimates including results from other regions. The Company plans to mitigate the loss by a range of $370-$570 million which includes, but is not limited to, customer bad debt mitigation, counterparty default recovery, ERCOT default and uplift regulatory securitization as noted above, and one-time cost savings. The total net impact to cash flow is expected to be $600 million based on the mid-point of the mitigants, of which $65 million will be realized in 2022 for bill credits owed to large Commercial and Industrial (C&I) customers.

Issuance of 2032 Senior Notes and Redemption of 2026 and 2027 Senior Notes

On August 23, 2021, the Company issued $1.1 billion of aggregate principal amount at par of 3.875% senior notes due 2032. The 2032 Senior Notes were issued under NRG's Sustainability-Linked Bond Framework, which sets out certain sustainability targets, including reducing greenhouse gas emissions. Failure to meet such sustainability targets will result in a 25-basis point increase to the interest rate payable on the 2032 Senior Notes from and including August 15, 2026.

The proceeds along with cash on hand were used to fund the redemption of higher interest notes including $1.0 billion 7.250% Senior Notes due 2026 and $355 million of 6.625% senior notes due 2027 on August 24, 2021. In connection with the redemptions, a $57 million loss on debt extinguishment was recorded, which included the write-off of previously deferred financing costs of $9 million, during the nine months ended September 30, 2021. The Company will realize annual interest savings of $53 million.

Narrowing 2021 Guidance and Initiating 2022 Guidance

NRG is narrowing its Adjusted EBITDA, Adjusted Cash from Operations, and Free Cash Flow Before Growth Investments (FCFbG) guidance for 2021 which excludes the full year impact of Winter Storm Uri. NRG is also initiating guidance for fiscal year 2022.

Table 4: 2021 and 2022 Adjusted EBITDA, Adjusted Cash from Operations, and FCFbG Guidance

 

 

2021

 

2022

(In millions)

 

Revised Guidance

 

Guidance

Adjusted EBITDAa

 

$2,400 - $2,500

 

$1,950 - $2,250

Adjusted Cash Flow from Operations

 

$1,640 - $1,740

 

$1,380 - $1,680

FCFbG

 

$1,440 - $ 1,540

 

$1,140 - $1,440

a. Non-GAAP financial measure; see Appendix Tables A-4 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.

Capital Allocation Update

On October 15, 2021, NRG declared a quarterly dividend on the Company's common stock of $0.325 per share, payable on November 15, 2021 to stockholders of record as of November 1, 2021. Beginning in the first quarter of 2022, NRG will increase the annual dividend by 8% to $1.40 per share.

The Company deleveraged by a total of $255 million of senior notes through September 30, 2021. The Company’s deleveraging program will extend into 2023 growing into its target investment grade metrics of 2.5 - 2.75x, primarily through the full realization of Direct Energy’s run-rate earnings. The Company remains committed to maintaining a strong balance sheet and to achieving investment grade credit metrics.

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

Earnings Conference Call

On November 4, 2021, 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 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 by putting customers at the center of everything we do. We generate electricity and provide energy solutions and natural gas to millions of 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, 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.

Forward-Looking Statements

In addition to historical information, the information presented in this presentation 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: the potential impact of COVID-19 or any other pandemic on the Company’s operations, financial position, risk exposure and liquidity; general economic conditions, including global supply chain disruptions; hazards customary in the power industry; weather conditions and extreme weather events; competition in wholesale power and gas markets; the volatility of energy and fuel prices; failure of customers or counterparties to perform under contracts; changes in the wholesale power and gas markets; changes in government or market regulations; the condition of capital markets generally and 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 or dispositions; our ability to implement value enhancing improvements to plant operations and companywide processes including weatherization of our physical assets; our ability to achieve our net debt targets; our ability to achieve investment grade credit metrics; our ability to achieve our growth plan; our ability to retain retail customers; our ability to realize value through our market operations strategy; the ability to successfully integrate businesses of acquired companies, including Direct Energy; 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; 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 business efficiently; 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 and free cash flow guidance are estimates as of November 4, 2021. 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 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.

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)

2021

 

2020

 

2021

 

2020

Operating Revenues

 

 

 

 

 

 

 

Total operating revenues

$

6,609

 

 

$

2,809

 

 

$

19,943

 

 

$

7,066

 

Operating Costs and Expenses

 

 

 

 

 

 

 

Cost of operations (excluding depreciation and amortization shown below)

3,692

 

 

2,034

 

 

13,496

 

 

4,925

 

Depreciation and amortization

199

 

 

99

 

 

569

 

 

318

 

Impairment losses

 

 

29

 

 

306

 

 

29

 

Selling, general and administrative costs

318

 

 

216

 

 

973

 

 

592

 

Provision for credit losses

64

 

 

26

 

 

715

 

 

74

 

Acquisition-related transaction and integration costs

17

 

 

12

 

 

81

 

 

13

 

Total operating costs and expenses

4,290

 

 

2,416

 

 

16,140

 

 

5,951

 

Gain on sale of assets

 

 

 

 

17

 

 

6

 

Operating Income

2,319

 

 

393

 

 

3,820

 

 

1,121

 

Other Income/(Expense)

 

 

 

 

 

 

 

Equity in earnings of unconsolidated affiliates

15

 

 

36

 

 

23

 

 

37

 

Impairment losses on investments

 

 

 

 

 

 

(18)

 

Other income, net

8

 

 

11

 

 

42

 

 

52

 

Interest expense

(122)

 

 

(99)

 

 

(374)

 

 

(292)

 

Total other expense

(156)

 

 

(52)

 

 

(366)

 

 

(222)

 

Income Before Income Taxes

2,163

 

 

341

 

 

3,454

 

 

899

 

Income tax expense

545

 

 

92

 

 

840

 

 

216

 

Net Income

1,618

 

 

249

 

 

2,614

 

 

683

 

Income per Share

 

 

 

 

 

 

 

Weighted average number of common shares outstanding — basic

245

 

 

244

 

 

245

 

 

246

 

Income per Weighted Average Common Share — Basic

$

6.60

 

 

$

1.02

 

 

$

10.67

 

 

$

2.78

 

Weighted average number of common shares outstanding — diluted

245

 

 

245

 

 

245

 

 

247

 

Income per Weighted Average Common Share — Diluted

$

6.60

 

 

$

1.02

 

 

$

10.67

 

 

$

2.77

 

NRG ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

 

Three months ended September 30,

 

Nine months ended September 30,

(In millions)

2021

 

2020

 

2021

 

2020

Net Income

$

1,618

 

 

$

249

 

 

$

2,614

 

 

$

683

 

Other Comprehensive (Loss)/Income

 

 

 

 

 

 

 

Foreign currency translation adjustments

(11)

 

 

4

 

 

(6)

 

 

2

 

Defined benefit plans

1

 

 

 

 

20

 

 

 

Other comprehensive (loss)/income

(10)

 

 

4

 

 

14

 

 

2

 

Comprehensive Income

$

1,608

 

 

$

253

 

 

$

2,628

 

 

$

685

 

 

 

 

 

 

 

 

 

NRG ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

September 30, 2021

 

December 31, 2020

(In millions, except share data)

(Unaudited)

 

(Audited)

ASSETS

 

 

 

Current Assets

 

 

 

Cash and cash equivalents

$

259

 

 

$

3,905

 

Funds deposited by counterparties

1,748

 

 

19

 

Restricted cash

14

 

 

6

 

Accounts receivable, net

3,096

 

 

904

 

Inventory

445

 

 

327

 

Derivative instruments

8,528

 

 

560

 

Cash collateral paid in support of energy risk management activities

21

 

 

50

 

Prepayments and other current assets

461

 

 

257

 

Total current assets

14,572

 

 

6,028

 

Property, plant and equipment, net

1,976

 

 

2,547

 

Other Assets

 

 

 

Equity investments in affiliates

167

 

 

346

 

Operating lease right-of-use assets, net

293

 

 

301

 

Goodwill

1,801

 

 

579

 

Intangible assets, net

2,915

 

 

668

 

Nuclear decommissioning trust fund

957

 

 

890

 

Derivative instruments

2,671

 

 

261

 

Deferred income taxes

1,994

 

 

3,066

 

Other non-current assets

619

 

 

216

 

Total other assets

11,417

 

 

6,327

 

Total Assets

$

27,965

 

 

$

14,902

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

Current Liabilities

 

 

 

Current portion of long-term debt and finance leases

$

504

 

 

$

1

 

Current portion of operating lease liabilities

79

 

 

69

 

Accounts payable

1,967

 

 

649

 

Derivative instruments

6,032

 

 

499

 

Cash collateral received in support of energy risk management activities

1,748

 

 

19

 

Accrued expenses and other current liabilities

1,679

 

 

678

 

Total current liabilities

12,009

 

 

1,915

 

Other Liabilities

 

 

 

Long-term debt and finance leases

7,957

 

 

8,691

 

Non-current operating lease liabilities

257

 

 

278

 

Nuclear decommissioning reserve

316

 

 

303

 

Nuclear decommissioning trust liability

619

 

 

565

 

Derivative instruments

1,489

 

 

385

 

Deferred income taxes

74

 

 

19

 

Other non-current liabilities

1,166

 

 

1,066

 

Total other liabilities

11,878

 

 

11,307

 

Total Liabilities

23,887

 

 

13,222

 

Commitments and Contingencies

 

 

 

Stockholders' Equity

 

 

 

Common stock; $0.01 par value; 500,000,000 shares authorized; 423,545,261 and 423,057,848 shares issued
and 244,779,313, and 244,231,933 shares outstanding at September 30, 2021 and December 31, 2020,
respectively

4

 

 

4

 

Additional paid-in-capital

8,525

 

 

8,517

 

Retained earnings/(accumulated deficit)

971

 

 

(1,403)

 

Less treasury stock, at cost - 178,765,948, and 178,825,915 shares at September 30, 2021 and December 31, 2020, respectively

(5,230)

 

 

(5,232)

 

Accumulated other comprehensive loss

(192)

 

 

(206)

 

Total Stockholders' Equity

4,078

 

 

1,680

 

Total Liabilities and Stockholders' Equity

$

27,965

 

 

$

14,902

 

NRG ENERGY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

Nine months ended September 30,

(In millions)

2021

 

2020

Cash Flows from Operating Activities

 

 

 

Net Income

$

2,614

 

 

$

683

 

Adjustments to reconcile net income to cash provided by operating activities:

 

 

 

Distributions from and equity in earnings of unconsolidated affiliates

8

 

 

6

 

Depreciation and amortization

569

 

 

318

 

Accretion of asset retirement obligations

21

 

 

46

 

Provision for credit losses

715

 

 

74

 

Amortization of nuclear fuel

39

 

 

40

 

Amortization of financing costs and debt discounts

30

 

 

23

 

Loss on debt extinguishment, net

57

 

 

1

 

Amortization of in-the-money contracts, emissions allowances and retirements of RECs

111

 

 

60

 

Amortization of unearned equity compensation

16

 

 

17

 

Net gain on sale and disposal of assets

(29)

 

 

(22)

 

Impairment losses

306

 

 

47

 

Changes in derivative instruments

(4,419)

 

 

(7)

 

Changes in deferred income taxes and liability for uncertain tax benefits

782

 

 

202

 

Changes in collateral deposits in support of energy risk management activities

1,970

 

 

96

 

Changes in nuclear decommissioning trust liability

38

 

 

39

 

Oil lower of cost or market adjustment

 

 

29

 

Changes in other working capital

(973)

 

 

(266)

 

Cash provided by operating activities

1,855

 

 

1,386

 

Cash Flows from Investing Activities

 

 

 

Payments for acquisitions of businesses, net of cash acquired

(3,534)

 

 

(277)

 

Capital expenditures

(219)

 

 

(167)

 

Net sales/(purchases) of emission allowances

6

 

 

(15)

 

Investments in nuclear decommissioning trust fund securities

(460)

 

 

(360)

 

Proceeds from the sale of nuclear decommissioning trust fund securities

424

 

 

318

 

Proceeds from sale of assets, net of cash disposed

198

 

 

15

 

Changes in investments in unconsolidated affiliates

 

 

2

 

Cash used by investing activities

(3,585)

 

 

(484)

 

Cash Flows from Financing Activities

 

 

 

Payments of dividends to common stockholders

(239)

 

 

(221)

 

Payments for share repurchase activity

(9)

 

 

(229)

 

Net receipts/(payments) from settlement of acquired derivatives that include financing elements

396

 

 

(6)

 

Repayments of long-term debt and finance leases

(1,360)

 

 

(62)

 

Proceeds from issuance of long-term debt

1,100

 

 

59

 

Payments for debt extinguishment costs

(48)

 

 

 

Payments of debt issuance costs

(18)

 

 

(24)

 

Proceeds from issuance of common stock

1

 

 

1

 

Net repayments of Revolving Credit Facility and Receivables Securitization Facilities

 

 

(83)

 

Purchase of and distributions to noncontrolling interests from subsidiaries

 

 

(2)

 

Cash used by financing activities

(177)

 

 

(567)

 

Effect of exchange rate changes on cash and cash equivalents

(2)

 

 

(2)

 

Net (Decrease)/Increase in Cash and Cash Equivalents, Funds Deposited by Counterparties and Restricted
Cash

(1,909)

 

 

333

 

Cash and Cash Equivalents, Funds Deposited by Counterparties and Restricted Cash at Beginning of Period

3,930

 

 

385

 

Cash and Cash Equivalents, Funds Deposited by Counterparties and Restricted Cash at End of Period

$

2,021

 

 

$

718

 

Appendix Table A-1: Third Quarter 2021 Adjusted EBITDA Reconciliation by Operating Segment

The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Net Income/(Loss):

($ in millions)

Texas

East

West/Services/ Other1

Corp/Elim

Total

Net Income/(Loss)

251

 

1,976

 

130

 

(739)

 

1,618

 

Plus:

 

 

 

 

 

Interest expense, net

 

1

 

3

 

117

 

121

 

Income tax

 

13

 

1

 

531

 

545

 

Loss on debt extinguishment

 

 

 

57

 

57

 

Depreciation and amortization

84

 

88

 

20

 

7

 

199

 

ARO Expense

3

 

4

 

 

 

7

 

Contract amortization

7

 

(54)

 

5

 

 

(42)

 

EBITDA

345

 

2,028

 

159

 

(27)

 

2,505

 

Winter Storm Uri

19

 

 

 

2

 

21

 

Adjustment to reflect NRG share of adjusted EBITDA in
unconsolidated affiliates

 

 

17

 

 

17

 

Acquisition-related transaction & integration costs

1

 

 

 

16

 

17

 

Legal Settlement

 

(15)

 

 

3

 

(12)

 

Deactivation costs

 

 

1

 

 

1

 

Other non recurring charges

(1)

 

(1)

 

2

 

3

 

3

 

Mark to market (MtM) (gains)/losses on economic hedges

82

 

(1,783)

 

(84)

 

 

(1,785)

 

Adjusted EBITDA

446

 

229

 

95

 

(3)

 

767

 

1 Includes International

Third Quarter 2021 condensed financial information by Operating Segment:

($ in millions)

Texas

East

West/Services/ Other1

Corp/Elim

Total

Operating revenues

2,636

 

3,087

 

886

 

 

6,609

 

Cost of fuel, purchased power and other cost of sales2

1,797

 

2,582

 

727

 

1

 

5,107

 

Economic gross margin3

839

 

505

 

159

 

(1)

 

1,502

 

Operations & maintenance and other cost of operations4

203

 

148

 

52

 

(2)

 

401

 

Selling, marketing, general and administrative

150

 

125

 

44

 

12

 

331

 

Provision for credit losses

58

 

3

 

3

 

 

64

 

Other (income)5

1

 

 

(35)

 

(6)

 

(40)

 

Winter Storm Uri impact

(19)

 

 

 

(2)

 

(21)

 

Adjusted EBITDA

446

 

229

 

95

 

(3)

 

767

 

1 Includes International

2 Includes capacity, emissions credits, and TDSP expenses in Texas and East

3 Excludes MtM gains of $1,785 million and contract amortization of $42 million

4 Excludes deactivation costs of $1 million

5 Excludes acquisition-related transaction & integration of $17 million

The following table reconciles the condensed financial information to Adjusted EBITDA:

($ in millions)

Condensed
Consolidated
Results of
Operations

Interest, tax,
depr., amort.

MtM

Deactivation

Winter
Storm Uri

Other adj.

Adjusted
EBITDA

Operating revenues

6,609

 

3

 

(3)

 

 

2

 

(2)

 

6,609

 

Cost of operations (excluding
depreciation and amortization
shown below)

3,280

 

45

 

1,782

 

 

15

 

 

5,122

 

Depreciation and Amortization

199

 

(199)

 

 

 

 

 

 

Gross margin

3,130

 

157

 

(1,785)

 

 

(13)

 

(2)

 

1,487

 

Operations & maintenance and
other cost of operations

412

 

 

 

(1)

 

 

(10)

 

401

 

Selling, marketing, general &
administrative

318

 

 

 

 

(2)

 

13

 

329

 

Provision for credit losses

64

 

 

 

 

(32)

 

1

 

33

 

Other expense/(income)1

718

 

(666)

 

 

 

 

(95)

 

(43)

 

Net Income/(Loss)

1,618

 

823

 

(1,785)

 

1

 

21

 

89

 

767

 

1 Other adj. includes acquisition-related transaction & integration costs of $17 million, and adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates of $17 million

Appendix Table A-2: Third Quarter 2020 Adjusted EBITDA Reconciliation by Operating Segment

The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Net Income/(Loss):

($ in millions)

Texas

East

West/Services/ Other1

Corp/Elims

Total

Net Income/(Loss)

287

 

145

 

23

 

(206)

 

249

 

Plus:

 

 

 

 

 

Interest expense, net

 

3

 

1

 

93

 

97

 

Income tax

 

1

 

 

91

 

92

 

Depreciation and amortization

49

 

33

 

10

 

7

 

99

 

ARO Expense

22

 

3

 

3

 

 

28

 

Contract amortization

2

 

 

 

 

2

 

EBITDA

360

 

185

 

37

 

(15)

 

567

 

Adjustment to reflect NRG share of adjusted EBITDA in
unconsolidated affiliates

 

 

25

 

 

25

 

Acquisition-related transaction & integration costs

 

 

 

12

 

12

 

Reorganization costs

 

 

 

(1)

 

(1)

 

Deactivation costs

 

2

 

 

 

2

 

Other non recurring charges

2

 

(2)

 

3

 

(3)

 

 

Impairments

 

 

29

 

 

29

 

Mark to market (MtM) (gains)/losses on economic hedges

152

 

(45)

 

11

 

 

118

 

Adjusted EBITDA

514

 

140

 

105

 

(7)

 

752

 

1 Includes International and remaining renewables

Third Quarter 2020 condensed financial information by Operating Segment:

($ in millions)

Texas

East

West/Services/
Other1

Corp/Elim

Total

Operating revenues

1,991

 

623

 

159

 

(3)

 

2,770

 

Cost of fuel, purchased power and other cost of sales2

1,140

 

301

 

75

 

(1)

 

1,515

 

Economic gross margin3

851

 

322

 

84

 

(2)

 

1,255

 

Operations & maintenance and other cost of operations4

187

113

28

(1)

 

327

 

Selling, marketing, general & administrative

129

 

68

 

16

 

6

 

219

 

Provision for credit losses

24

 

1

 

1

 

 

26

 

Other (income)5

(3)

 

 

(66)

 

 

(69)

 

Adjusted EBITDA

514

 

140

 

105

 

(7)

 

752

 

1 Includes International and remaining renewables

2 Includes capacity, emissions credits, and TDSP expenses in Texas and East

3 Excludes MtM gain of $118 million and contract amortization of $2 million

4 Excludes deactivation costs of $2 million

5 Excludes acquisition-related transaction & integration costs of $12 million

The following table reconciles the condensed financial information to Adjusted EBITDA:

($ in millions)

Condensed
Consolidated
Results of
Operations

Interest, tax,
depr., amort.

MtM

Deactivation

Other adj.

Adjusted
EBITDA

Operating revenues

2,809

 

 

(39)

 

 

 

2,770

 

Cost of operations (excluding depreciation and
amortization shown below)

1,674

 

(2)

 

(157)

 

 

 

1,515

 

Depreciation and amortization

99

 

(99)

 

 

 

 

 

Gross margin

1,036

 

101

 

118

 

 

 

1,255

 

Operations & maintenance and other cost of
operations

360

 

 

 

(4)

 

(29)

 

327

 

Selling, marketing, general & administrative

216

 

 

 

 

3

 

219

 

Provision for credit losses

26

 

 

 

 

 

26

 

Other expense/(income)1

185

 

(189)

 

 

 

(65)

 

(69)

 

Net Income/(Loss)

249

 

290

 

118

 

4

 

91

 

752

 

1 Other adj. includes adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates of $25 million and acquisition-related transaction & integration costs of $12 million

Appendix Table A-3: YTD Third Quarter 2021 Adjusted EBITDA Reconciliation by Operating Segment

The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Net Income/(Loss):

($ in millions)

Texas

East

West/Services/Other1

Corp/Elim

Total

Net Income/(Loss)

600

 

3,107

 

251

 

(1,344)

 

2,614

 

Plus:

 

 

 

 

 

Interest expense, net

1

 

(1)

 

9

 

364

 

373

 

Income tax

 

29

 

3

 

808

 

840

 

Loss on debt extinguishment

 

 

 

57

 

57

 

Depreciation and amortization

245

 

238

 

65

 

21

 

569

 

ARO Expense

10

 

9

 

2

 

 

21

 

Contract amortization

 

23

 

15

 

 

38

 

EBITDA

856

 

3,405

 

345

 

(94)

 

4,512

 

Winter Storm Uri Impact

1,211

 

(136)

 

(13)

 

8

 

1,070

 

Adjustment to reflect NRG share of adjusted EBITDA in
unconsolidated affiliates

1

 

 

55

 

 

56

 

Acquisition-related transaction & integration costs

1

 

 

 

80

 

81

 

Legal settlements

 

(15)

 

 

11

 

(4)

 

Deactivation costs

 

16

 

1

 

 

17

 

Gain on sale of business

 

 

(17)

 

(15)

 

(32)

 

Other non recurring charges

2

 

1

 

1

 

3

 

7

 

Impairments

 

306

 

 

 

306

 

Mark to market (MtM) (gains)/losses on economic hedges

(1,067)

 

(2,796)

 

(160)

 

 

(4,023)

 

Adjusted EBITDA

1,004

 

781

 

212

 

(7)

 

1,990

 

1 Includes International

YTD Third Quarter 2021 condensed financial information by Operating Segment:

($ in millions)

Texas

East

West/Services/Other1

Corp/Elim

Total

Operating revenues

8,367

 

9,070

 

2,628

 

(4)

 

20,061

 

Cost of fuel, purchased power and other cost of sales2

6,791

 

7,340

 

2,172

 

1

 

16,304

 

Economic gross margin3

1,576

 

1,730

 

456

 

(5)

 

3,757

 

Operations & maintenance and other cost of operations4

656

 

423

 

177

 

(4)

 

1,252

 

Selling, marketing, general and administrative

434

 

388

 

128

 

32

 

982

 

Provision for credit losses

701

 

7

 

8

 

(1)

 

715

 

Other (income)5

(8)

 

(5)

 

(82)

 

(17)

 

(112)

 

Winter Storm Uri impact

(1,211)

 

136

 

13

 

(8)

 

(1,070)

 

Adjusted EBITDA

1,004

 

781

 

212

 

(7)

 

1,990

 

1 Includes International

2 Includes capacity, emissions credits, and TDSP expenses in Texas and East

3 Excludes MtM gains of $4,023 million and contract amortization of $38 million

4 Excludes deactivation costs of $17 million

5 Excludes acquisition-related transaction & integration costs of $81 million and legal settlements of ($4) million

The following table reconciles the condensed financial information to Adjusted EBITDA:

($ in millions)

Condensed
Consolidated
Results of
Operations

Interest, tax,
depr., amort.

MtM

Deactivation

Winter
Storm Uri

Other adj.

Adjusted
EBITDA

Operating revenues

19,943

 

19

 

99

 

 

(2,663)

 

13

 

17,411

 

Cost of operations (excluding
depreciation and amortization
shown below)

12,201

 

(20)

 

4,122

 

 

(3,052)

 

2

 

13,253

 

Depreciation and amortization

569

 

(569)

 

 

 

 

 

 

Gross margin

7,173

 

608

 

(4,023)

 

 

389

 

11

 

4,158

 

Operations & maintenance and
other cost of operations

1,295

 

 

 

(36)

 

2

 

(9)

 

1,252

 

Selling, marketing, general &
administrative

973

 

 

 

 

(23)

 

12

 

962

 

Provision for credit losses

715

 

 

 

 

(637)

 

 

78

 

Other expense/(income)1

1,576

 

(1,212)

 

 

 

(23)

 

(465)

 

(124)

 

Net Income/(Loss)

2,614

 

1,820

 

(4,023)

 

36

 

1,070

 

473

 

1,990

 

1 Other adj. includes impairments of $306 million, acquisition-related transaction & integration costs of $81 million, adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates of $56 million, and gain on sale of business of $32 million

Appendix Table A-4: YTD Third Quarter 2020 Adjusted EBITDA Reconciliation by Operating Segment

The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Net Income/(Loss):

($ in millions)

Texas

East

West/Services/Other1

Corp/Elims

Total

Net Income/ (Loss)

799

 

307

 

97

 

(520)

 

683

 

Plus:

 

 

 

 

 

Interest expense, net

 

10

 

2

 

272

 

284

 

Income tax

 

 

1

 

215

 

216

 

Loss on debt extinguishment

 

1

 

 

 

1

 

Depreciation and amortization

167

 

97

 

28

 

26

 

318

 

ARO Expense

29

 

14

 

4

 

(1)

 

46

 

Contract amortization

4

 

 

 

 

4

 

EBITDA

999

 

429

 

132

 

(8)

 

1,552

 

Adjustment to reflect NRG share of adjusted EBITDA in
unconsolidated affiliates

2

 

 

72

 

 

74

 

Acquisition-related transaction & integration costs

 

 

 

13

 

13

 

Reorganization costs

 

 

 

1

 

1

 

Deactivation costs

2

 

1

 

2

 

 

5

 

Gain on sale of business

 

 

 

(15)

 

(15)

 

Other non recurring charges

4

 

(1)

 

 

7

 

10

 

Impairments

18

 

 

29

 

 

47

 

Mark to market (MtM) (gains)/losses on economic hedges

62

 

(70)

 

(5)

 

 

(13)

 

Adjusted EBITDA

1,087

 

359

 

230

 

(2)

 

1,674

 

1 Includes International and remaining renewables

YTD Third Quarter 2020 condensed financial information by Operating Segment:

($ in millions)

Texas

East

West/Services/Other1

Corp/Elim

Total

Operating revenues

4,927

 

1,669

 

401

 

(9)

 

6,988

 

Cost of fuel, purchased power and other cost of sales2

2,850

 

792

 

161

 

(4)

 

3,799

 

Economic gross margin3

2,077

 

877

 

240

 

(5)

 

3,189

 

Operations & maintenance and other cost of operations4

581

 

330

 

89

 

(3)

 

997

 

Selling, marketing, general & administrative

346

 

187

 

40

 

16

 

589

 

Provision for credit losses

69

 

4

 

 

1

 

74

 

Other (income)5

(6)

 

(3)

 

(119)

 

(17)

 

(145)

 

Adjusted EBITDA

1,087

 

359

 

230

 

(2)

 

1,674

 

1 Includes International and remaining renewables

2 Includes capacity, emissions credits, and TDSP expenses in Texas and East

3 Excludes MtM gain of $13 million and contract amortization of $4 million

4 Excludes deactivation costs of $5 million

5 Excludes acquisition-related transaction & integration costs of $13 million

The following table reconciles the condensed financial information to Adjusted EBITDA:

($ in millions)

Condensed
Consolidated
Results of
Operations

Interest, tax,
depr., amort.

MtM

Deactivation

Other adj.

Adjusted
EBITDA

Operating revenues

7,066

 

 

(78)

 

 

 

6,988

 

Cost of operations (excluding depreciation and
amortization shown below)

3,868

 

(4)

 

(65)

 

 

 

3,799

 

Depreciation and amortization

318

 

(318)

 

 

 

 

 

Gross margin

2,880

 

322

 

(13)

 

 

 

3,189

 

Operations & maintenance and other cost of
operations

1,057

 

 

 

(14)

 

(46)

 

997

 

Selling, marketing, general & administrative

592

 

 

 

 

(3)

 

589

 

Provision for credit losses

74

 

 

 

 

 

74

 

Other expense/(income) 1

474

 

(501)

 

 

 

(118)

 

(145)

 

Net Income/(Loss)

683

 

823

 

(13)

 

14

 

167

 

1,674

 

1 Other adj. includes adjustment to reflect NRG share of adjusted EBITDA in unconsolidated affiliates of $74 million, impairments $47 million, and gain on sale of business of $15 million

Appendix Table A-5: 2021 and 2020 Three Months Ended September 30 Adjusted Cash Flow from Operations Reconciliations

The following table summarizes the calculation of adjusted cash flow operating activities providing a reconciliation to net cash provided by operating activities:

 

 

Three Months Ended

($ in millions)

 

September 30, 2021

 

September 30, 2020

Adjusted EBITDA

 

767

 

 

752

 

Winter Storm Uri loss

 

(21)

 

 

 

Interest payments

 

(143)

 

 

(68)

 

Income tax

 

(20)

 

 

(15)

 

Collateral / working capital / other

 

895

 

 

25

 

Cash Provided by Operating Activities

 

1,478

 

 

694

 

Winter Storm Uri:

 

 

 

 

Loss

 

21

 

 

 

C&I credits and remaining open accounts receivables

 

4

 

 

 

Net receipts from settlement of acquired derivatives that include

financing elements

 

205

 

 

 

Merger and integration costs

 

16

 

 

12

 

Encina site improvement and GenOn pension

 

4

 

 

1

 

Effect of exchange rate changes on cash and cash equivalents

 

(3)

 

 

(2)

 

Proceeds from investment and asset sales

 

 

 

3

 

Adjustment for change in collateral

 

(1,274)

 

 

(38)

 

Nuclear decommissioning trust liability

 

(9)

 

 

(5)

 

Adjusted Cash Flow from Operating Activities

 

442

 

 

665

 

Maintenance Capital Expenditures, net

 

(47)

 

 

(39)

 

Environmental Capital Expenditures, net

 

 

 

(1)

 

Free Cash Flow Before Growth Investments (FCFbG)

 

395

 

 

625

 

Appendix Table A-6: 2021 and 2020 Nine Months Ended September 30 Adjusted Cash Flow from Operations Reconciliations

The following table summarizes the calculation of adjusted cash flow operating activities providing a reconciliation to net cash provided by operating activities:

 

Nine Months Ended

($ in millions)

 

September 30, 2021

 

September 30, 2020

Adjusted EBITDA

 

1,990

 

 

1,674

 

Winter Storm Uri loss

 

(1,070)

 

 

 

Interest payments

 

(333)

 

 

(240)

 

Income tax

 

(8)

 

 

(19)

 

Collateral / working capital / other

 

1,276

 

 

(29)

 

Cash Provided by Operating Activities

 

1,855

 

 

1,386

 

Winter Storm Uri:

 

 

 

 

 

 

1,070

 

 

 

 

 

(107)

 

 

 

Net receipts from settlement of acquired derivatives that include

financing elements

 

396

 

 

 

Merger and integration costs

 

82

 

 

15

 

Encina site improvement and GenOn pension

 

19

 

 

4

 

Proceeds from investment and asset sales

 

 

 

15

 

Effect of exchange rate changes on cash and cash equivalents

 

(2)

 

 

(2)

 

Adjustment for change in collateral

 

(1,970)

 

 

(96)

 

Nuclear decommissioning trust liability

 

(36)

 

 

(42)

 

Adjusted Cash Flow from Operating Activities

 

1,307

 

 

1,280

 

Maintenance Capital Expenditures, net

 

(142)

 

 

(121)

 

Environmental Capital Expenditures, net

 

(2)

 

 

(2)

 

Free Cash Flow Before Growth Investments (FCFbG)

 

1,163

 

 

1,157

 

Appendix Table A-7: YTD Third Quarter 2021 Sources and Uses of Liquidity

The following table summarizes the sources and uses of liquidity through third quarter of 2021:

($ in millions)

Nine months ended
September 30, 2021

Sources:

 

Cash provided by operating activities1

1,855

 

Proceeds from issuance of long-term debt

1,100

 

Proceeds from asset sales

198

 

Net receipts from settlement of acquired derivatives that include financing elements

396

 

Net sales of emission allowances

6

 

Uses:

 

Payments for acquisition of businesses, net of cash acquired

(3,534)

 

Funds deposited by counterparties

(1,729)

 

Decrease in Credit Facility

(88)

 

Growth investments and acquisitions, net

(75)

 

Maintenance and Environmental CapEx, net

(144)

 

Net investments/proceeds from nuclear decommission trust fund securities

(36)

 

Payments for share repurchase activity

(9)

 

Common Stock Dividends

(239)

 

Repayments of long-term debt and finance leases

(1,360)

 

Payments for debt extinguishment costs

(48)

 

Payments of debt issuance costs

(18)

 

Other Investing and Financing

(1)

 

Change in Total Liquidity

(3,726)

 

1 Cash provided by operating activities includes GenOn pension, Encina site improvements, and small book acquisitions

Appendix Table A-8: 2021 and 2022 Guidance Reconciliation

The following table summarizes the calculation of Adjusted EBITDA providing reconciliation to Net (Loss)/Income, and the calculation of Free Cash Flow before Growth providing reconciliation to Cash from Operations:

 

 

 

 

 

2021

2022

($ in millions)

 

Guidance

Guidance

Net (loss)/Income1

 

$ (370) - (270)

$ 480 - 780

Winter Storm Uri

 

1,070

 

 

Interest expense, net

 

440

 

380

 

Income tax

 

(110)

 

210

 

Depreciation, amortization, contract amortization, and ARO
Expense2

 

850

 

760

 

Adjustment to reflect NRG share of adjusted EBITDA in
unconsolidated affiliates

 

75

 

70

 

Impairments

 

306

 

 

Loss on debt extinguishment

 

57

 

 

Other costs3

 

80

 

50

 

Adjusted EBITDA

 

2,400 - 2,500

1,950 - 2,250

Interest payments, net

 

(440)

 

(395)

 

Income tax

 

(30)

 

(20)

 

Working capital / other assets and liabilities

 

(320)

 

(165)

 

Cash provided by Operating Activities

 

1,610-1,710

1,370 - 1,670

Adjustments: proceeds from investment and asset sales, collateral,
GenOn pension, nuclear decommissioning trust liability

 

30

 

10

 

Adjusted Cash flow from Operations

 

1,640 - 1,740

1,380 - 1,680

Maintenance capital expenditures, net

 

(190) - (205)

(220) - (240)

Environmental capital expenditures, net

 

(5) - (10)

(5) - (10)

Free Cash Flow before Growth

 

$ 1,440 - 1,540

$ 1,140 - 1,440

1 For purposes of guidance fair value adjustments related to derivatives are assumed to be zero

2 Provisional amounts related to the Direct Energy acquisition are subject to revision until evaluations are completed; for details see Note 4 of NRG 3Q21 10Q

3 Includes deactivation costs and integration expenses

EBITDA and Adjusted EBITDA are non-GAAP financial measures. These measurements are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance. The presentation of Adjusted EBITDA should not be construed as an inference that NRG’s future results will be unaffected by unusual or non-recurring items.

EBITDA represents net income before interest expense (including loss on debt extinguishment), income taxes, depreciation and amortization, asset retirement obligation expenses, contract amortization consisting of amortization of power and fuel contracts and amortization of emission allowances. EBITDA is presented because NRG considers it an important supplemental measure of its performance and believes debt-holders frequently use EBITDA to analyze operating performance and debt service capacity. EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are:

  • EBITDA does not reflect cash expenditures, or future requirements for capital expenditures, or contractual commitments;
  • EBITDA does not reflect changes in, or cash requirements for, working capital needs;
  • EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments;
  • Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; and
  • Other companies in this industry may calculate EBITDA differently than NRG does, limiting its usefulness as a comparative measure.

Because of these limitations, EBITDA should not be considered as a measure of discretionary cash available to use to invest in the growth of NRG’s business. NRG compensates for these limitations by relying primarily on our GAAP results and using EBITDA and Adjusted EBITDA only supplementally. See the statements of cash flow included in the financial statements that are a part of this news release.

Adjusted EBITDA is presented as a further supplemental measure of operating performance. As NRG defines it, Adjusted EBITDA represents EBITDA excluding impairment losses, gains or losses on sales, dispositions or retirements of assets, any mark-to-market gains or losses from forward position of economic hedges, adjustments to exclude the Adjusted EBITDA related to the non-controlling interest, gains or losses on the repurchase, modification or extinguishment of debt, the impact of restructuring and any extraordinary, unusual or non-recurring items plus adjustments to reflect the Adjusted EBITDA from our unconsolidated investments. The reader is encouraged to evaluate each adjustment and the reasons NRG considers it appropriate for supplemental analysis. As an analytical tool, Adjusted EBITDA is subject to all of the limitations applicable to EBITDA. In addition, in evaluating Adjusted EBITDA, the reader should be aware that in the future NRG may incur expenses similar to the adjustments in this news release.

Management believes Adjusted EBITDA is useful to investors and other users of NRG's financial statements in evaluating its operating performance because it provides an additional tool to compare business performance across companies and across periods and adjusts for items that we do not consider indicative of NRG’s future operating performance. This measure is widely used by debt-holders to analyze operating performance and debt service capacity and by equity investors to measure our operating performance without regard to items such as interest expense, taxes, depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired. Management uses Adjusted EBITDA as a measure of operating performance to assist in comparing performance from period to period on a consistent basis and to readily view operating trends, as a measure for planning and forecasting overall expectations, and for evaluating actual results against such expectations, and in communications with NRG's Board of Directors, shareholders, creditors, analysts and investors concerning its financial performance.

Adjusted cash flow from operating activities is a non-GAAP measure NRG provides to show cash from operations with the reclassification of net payments of derivative contracts acquired in business combinations from financing to operating cash flow, as well as the add back of merger, integration, related restructuring costs, changes in the nuclear decommissioning trust liability, and the impact of extraordinary, unusual or non-recurring items. The Company provides the reader with this alternative view of operating cash flow because the cash settlement of these derivative contracts materially impact operating revenues and cost of sales, while GAAP requires NRG to treat them as if there was a financing activity associated with the contracts as of the acquisition dates. The Company adds back merger, integration related restructuring costs as they are one time and unique in nature and do not reflect ongoing cash from operations and they are fully disclosed to investors. The company excludes changes in the nuclear decommissioning trust liability as these amounts are offset by changes in the decommissioning fund shown in cash from investing.

Free cash flow (before Growth investments) is adjusted cash flow from operations less maintenance and environmental capital expenditures, net of funding, preferred stock dividends and distributions to non-controlling interests and is used by NRG predominantly as a forecasting tool to estimate cash available for debt reduction and other capital allocation alternatives. The reader is encouraged to evaluate each of these adjustments and the reasons NRG considers them appropriate for supplemental analysis. Because we have mandatory debt service requirements (and other non-discretionary expenditures) investors should not rely on free cash flow before Growth investments as a measure of cash available for discretionary expenditures.

Free Cash Flow before Growth Investment is utilized by Management in making decisions regarding the allocation of capital. Free Cash Flow before Growth Investment is presented because the Company believes it is a useful tool for assessing the financial performance in the current period. In addition, NRG’s peers evaluate cash available for allocation in a similar manner and accordingly, it is a meaningful indicator for investors to benchmark NRG's performance against its peers. Free Cash Flow before Growth Investment is a performance measure and is not intended to represent net income (loss), cash from operations (the most directly comparable U.S. GAAP measure), or liquidity and is not necessarily comparable to similarly titled measures reported by other companies.


ę Business Wire 2021
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Financials (USD)
Sales 2021 20 069 M - -
Net income 2021 2 600 M - -
Net Debt 2021 7 183 M - -
P/E ratio 2021 3,20x
Yield 2021 3,32%
Capitalization 9 595 M 9 595 M -
EV / Sales 2021 0,84x
EV / Sales 2022 1,08x
Nbr of Employees 4 104
Free-Float 57,2%
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Number of Analysts 11
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Managers and Directors
Mauricio Gutierrez President, Chief Executive Officer & Director
Alberto Fornaro Chief Financial Officer & Executive Vice President
Lawrence Stephen Coben Chairman
Donna Benefield Senior Vice President- Information Technology
Christopher S. Moser Executive Vice President-Operations
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