Nrg Energy, Inc. · NYSE:NRG
Nrg Energy — Q1 2022 Earnings Presentation
26 slides from Nrg Energy's earnings presentation, May 6, 2022
Slide 1: First Quarter 2022 Earnings Presentation
NRG Energy Inc. First Quarter 2022 Earnings Presentation May 06, 2022 1 | NRG 1Q22 Earnings
Slide 2: Safe Harbor
Safe Harbor 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, ex
Slide 3: Agenda
Agenda Business Review Mauricio Gutierrez President & CEO Financial Review Alberto Fornaro EVP & CFO Closing Remarks Mauricio Gutierrez President & CEO Q&A Management 3 | NRG 1Q22 Earnings
Slide 4: Key Messages
Key Messages Delivered Strong Results; Maintaining 2022 Guidance Platform Designed for Volatile Commodity Price Environments Advancing Customer-Focused Growth Strategy 4 | NRG 1Q22 Earnings Business Review | Financial Review | Closing Remarks | Appendix
Slide 5: Business Highlights & Results
Business Highlights & Results Q1 Business Highlights Financial Update ($ millions) Strong Financial and Operational Results • Top decile safety performance Adjusted EBITDA • Strong earnings despite supply-chain & inflation $5671 • Limestone returns to operation, on-time & on-budget $509 Drivers:
Slide 6: Well-Positioned for Commodity Price Volatility
Well-Positioned for Commodity Price Volatility Risk Management Program Mature Platform Designed for Mitigates Price Volatility Various Commodity Price Cycles Retail Power Hedge Position (On-Peak)1 Best-in-class commercial and risk management 100% Expected Pricing insights from unmatched scale, L
Slide 7: Goal Zero: Clean Energy Resilience and Storage
Goal Zero: Clean Energy Resilience and Storage The Goal Zero Energy Storage Advantage Clean – Solar powered storage Accessible – Services all dwellings Innovative – User scalable & portable Customer Focused – Best-in-class NPS “Power Anything, Anywhere” Strategic Focus Integrated Solutions G
Slide 8: Financial Review
Financial Review 8 | NRG 1Q22 Earnings
Slide 9: Financial Update
Financial Update ($ millions) Three Months Ended 2022 3/31/2021 3/31/2022 Guidance Texas $246 $198 $1,300-$1,500 East/West/Other1 321 311 650-750 Adjusted EBITDA2 $567 $509 $1,950-$2,250 Free Cash Flow before Growth (FCFbG) $239 $1,140-$1,440 Highlights • Net of divestitures, delivered comparable re
Slide 10: 2022 Capital Allocation
2022 Capital Allocation ($ millions) No change from Prior Quarter Indicates change from Prior Quarter $109 $599 $334 $961 $699 $1,290 $262 FCFbG Executed (mid-point) through 4/30/22 $170 $315 Earmarked for $100 Growth Plan $215 2022 Storm Uri Increase in Dividends3 Share Other 2022 Excess Cash Impac
Slide 11: Closing Remarks
Closing Remarks 11 | NRG 1Q22 Earnings
Slide 12: 2022 Priorities
2022 Priorities Deliver on Financial, Operational and ESG Objectives Execute on Direct Energy Objectives $50 MM incremental 2022 EBITDA-accretive synergies (cumulative $225 MM in ‘22) $300 MM cumulative 2023 run-rate EBITDA-accretive synergies – On Track Optimize and Grow from Core Execu
Slide 13: Appendix
Appendix 13 | NRG 1Q22 Earnings
Slide 14: Committed to Sustainability
Committed to Sustainability NRG Sustainability Framework Sustainable Sustainable Sustainable Sustainable Sustainable Business Customers Workplace Operations Suppliers Industry-Leading Disclosure Environmental Leadership1 Diversity & Inclusion Focus U.S. CO2e Emissions (MMtCO2e2) 64% Board Diversity
Slide 15: Goal Zero: Energy Storage & Resiliency
Goal Zero: Energy Storage & Resiliency Growing Addressable Market Driven by Unmet Consumer Needs Goal Zero Revenues1 ($ MM) ~$135 ~50% CAGR Direct Retail 2018 2019 2020 Marketplace 2021 Home Off-Grid Vehicle Secondary Resilience Portable Power Power • Global grid instability • No noise, maintenance,
Slide 16: 1Q22 Business Metrics
1Q22 Business Metrics Home & Business Volumes Texas East / Other Electric Natural Gas 70% 13 30% 38% 23 62% 79 572 TWh TWh MMDth MMDth Home / Residential Business / C&I Home / Residential Business / C&I 36 TWh 651 MMDth Electricity Natural Gas Strong Start to 2022 – Ending Quarter at 5.55 MM1 Home C
Slide 17: Mature Risk Strategy
Mature Risk Strategy Managing Through-Cycle Stability 1 Forecast & Price 2 Retail Sale & Hedge 3 Optimize • Proprietary forecasting • Fully hedge priced load to firm • Perfect hedge profile to program models expected gross margin incorporate additional data load and variability (i.e. weather) • Part
Slide 18: Corporate Credit Profile
Corporate Credit Profile ($ millions) 2022 Guidance Corporate Debt1 $8,100 Minimum Cash balance (650) 2022 Unallocated Capital 2 (215) Corporate Net Debt $7,235 Adjusted EBITDA3 $2,100 Other Adjustments4 175 Corporate Adjusted EBITDA $2,275 Long-Term Target Investment Grade Metrics Net Debt / Adjust
Slide 19: Recourse Long-Term Debt Maturity Schedule
Recourse Long-Term Debt Maturity Schedule Balance as of 3/31/2022 ($ millions) $1,733 $1,275 $1,030 $1,100 $1,041 $821 $600 $500 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Therafter Recourse Debt Principal 6.625% Senior notes, due 2027 $375 5.75% Senior notes, due 2028 $821 5.25% Senior
Slide 20: Direct Energy Integration
Direct Energy Integration Advancing Customer Focused Strategy ($ millions) Direct Energy Integration Scorecard On Track 2021 2022 2023 / As of 03/31/2022 Realized Target Run Rate Accretive & Recurring: Synergies 175 225 300 Total Recurring EBITDA & FCFbG $175 $225 $300 –Accretion Non-Recurring: Inte
Slide 21: Appendix: Reg. G Schedules
Appendix: Reg. G Schedules 21 | NRG 1Q22 Earnings
Slide 22: Reg. G
Reg. G ($ millions) Appendix Table A-1: 2022 Guidance The following table summarizes the calculation of Free Cash Flow before Growth and provides a reconciliation to Adjusted EBITDA and to Net Income: 2022 Guidance Net Income1 $480-$780 Interest expense, net 380 Income tax 210 Depreciation, amortiza
Slide 23: Reg. G
Reg. G ($ millions) Appendix Table A-2: Three months ended 3/31/22 and 3/31/21 Adjusted EBITDA Reconciliation by Operating Segment The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Net Income: Three Months ended 3/31/22 Three Months ended 3/31/21 West
Slide 24: Reg. G
Reg. G ($ millions) Appendix Table A-3: Three months ended 3/31/2022 Free Cash Flow before Growth The following table summarizes the calculation of Free Cash Flow before Growth and provides a reconciliation to Cash Provided by Operating Activities: Three Months ended 3/31/22 Adjusted EBITDA $ 509 In
Slide 25: Reg. G
Reg. G 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 r
Slide 26: Reg. G
Reg. G 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, integratio