Nrg Energy, Inc. · NYSE:NRG
Nrg Energy — Q1 2025 Earnings Presentation
53 slides from Nrg Energy's earnings presentation, May 12, 2025
Slide 1: First Quarter 2025 Earnings and Acquisition of a Premier Power Portfolio
NRG Energy, Inc. First Quarter 2025 Earnings and Acquisition of a Premier Power Portfolio May 12, 2025 1 | NRG 1Q25 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 1Q Results & Business Review Acquisition Strategic Dr. Larry Coben Overview & Highlights Chair, President & CEO Financial Highlights Closing Remarks Bruce Chung Executive Vice President & CFO Q&A 3 | NRG 1Q25 Earnings
Slide 4: Key Messages
Key Messages Record First Quarter Results and Reaffirming 2025 Guidance Highly Accretive Acquisition of Premier 13 GW Natural Gas Fleet and 6 GW C&I VPP Platform from LS Power Raising 5-Year Pro Forma Adj EPS CAGR to >14% (from >10%) Reaffirming 2025 Capital Allocation and Returning At Least $1 Bn A
Slide 5: 1Q25 Business and Financial Highlights
1Q25 Business and Financial Highlights ($ millions, except per share amounts) Year-over-Year Results 1Q Highlights Adjusted EPS1 Financial & Operational Results • Top decile safety performance +84% • Record 1Q Adjusted EBITDA; ~30% YoY $2.68 Key Drivers: Cost & Growth Initiatives + $0.65 Margin Expa
Slide 6: Portfolio Acquisition Strategic Overview & Highlights
Portfolio Acquisition Strategic Overview & Highlights 6 | NRG 1Q25 Earnings
Slide 7: Transformative Acquisition of a Premier Power Portfolio
Transformative Acquisition of a Premier Power Portfolio NRG to Acquire Portfolio for $12 Bn Enterprise Value, Adding 13 GW of Natural Gas Generation and 6 GW of C&I VPP at an Attractive 7.5x ‘26 EV/EBITDA 1 Transforms Generation Fleet with Irreplicable Assets in Core Markets – Particularly in PJM •
Slide 8: Transforms Generation Fleet with Irreplicable Assets
1 Transforms Generation Fleet with Irreplicable Assets Complementary Footprint Long Across Competitive Markets Long Capacity in Long Energy in East: 10.8 GW Northeast2,3 Texas2 GW 11 GW TWh 82 TWh Out-of-the 40 Money Generation ~40 TWh Portfolio Texas: 2.1 GW 9 Acquisition Portfolio Key 94 Acqui
Slide 9: Increases Upside Opportunities for Supercycle
2 Increases Upside Opportunities for Supercycle Large, Flexible Assets in High-Value Markets Upside Growth Opportunities Natural Gas Generation East4 and Texas Additionality (GW) 231 • 1+ GW potential new capacity through CT uprates to highly-efficient CCGTs in the East 19 181 12 Expands Service
Slide 10: Financial Discipline and Capital Allocation
3 Financial Discipline and Capital Allocation Prudent Capital Allocation Focused on Value Creation Highly accretive, risk-reducing acquisition that exceeds stated hurdle rates Expect to maintain current credit ratings with a stable outlook Enhances credit risk profile, supporting an investment
Slide 11: Immediately and Highly Accretive on All Metrics
4 Immediately and Highly Accretive on All Metrics1,2,3 Free Cash Flow Adjusted EBITDA Adjusted EPS before Growth 2026 2026 & Run-Rate >$1.30 2026 & Run-Rate 18% ’26 accretion >$1.6 Bn >$1.0 Bn 42% ’26 accretion Run-Rate 48% ’26 accretion >$1.85 18% ’29 accretion Raises Base Adj EPS and FCFbG per Sha
Slide 12: Financial Highlights
Financial Highlights 12 | NRG 1Q25 Earnings
Slide 13: Record 1Q Results – NRG Standalone
Record 1Q Results – NRG Standalone ($ millions, except per share amounts) Three Months Ended 1Q25 Highlights 3/31/2025 3/31/2024 • Texas favorably impacted by margin expansion, Adjusted EBITDA $1,126 $870 including impact of weather, strong operational performance, and supply optimization ) Adjusted
Slide 14: 2025 Capital Allocation – NRG Standalone
2025 Capital Allocation – NRG Standalone ($ millions) $2,625 380 No change from Previously Disclosed Indicates change from Previously Disclosed 110 1,355 $2,100 FCFbG (midpoint) 345 130 265 $525 - 2024 Remaining CAFA $40 2025 Liability Integration Share Common Revenue Synergy Other 2025 Excess Cash1
Slide 15: Acquisition Key Terms
Acquisition Key Terms ▪ The Enterprise Value of $12.0 billion is comprised of $6.4 billion of cash consideration, $2.8 billion in stock consideration to LS Power (24.25 million shares1 of NRG stock using the 10-day trailing VWAP of $114.98), $3.2 Purchase billion of net debt assumed at closing, less
Slide 16: Acquisition Financing – Sources & Uses
Acquisition Financing – Sources & Uses Highlights Acquisition Financing Plan • LS Power’s election to receive NRG shares for 23% of purchase price reflects strong conviction in NRG’s NRG Common Stock to LS Power $2.8 Bn post-acquisition value • Targeting $3.7 Bn debt reduction over 24-36 months New
Slide 17: Immediately and Highly Accretive
Immediately and Highly Accretive Raising Long-Term Adj EPS Base CAGR to >14%, from >10%1 (Growth rate will very from year to year, see slide 23 for key assumptions) Includes $12.25 >14% Base Organic Growth (from >10%) Portfolio Acquisition 80% from earnings growth 2.00 + $1.30 Day 1 +14% + $0.55 Deb
Slide 18: Clear and Prudent Capital Allocation
Clear and Prudent Capital Allocation ($ billions) 2026E-2029E Capital Allocation $13.3 Liability Management / Other: + $3.7 Bn of acquisition debt pay down $4.2 + $0.1 Bn of integration cost $9.3 $0.4 $0.4 Unallocated: - $0.1 Bn $0.5 $1.3 $1.3 Growth: No change $5.7 Share Repurchases: $5.7 No change
Slide 19: Pro Forma Corporate Credit Profile
Pro Forma Corporate Credit Profile Portfolio Acquisition and Rockland 2025 Run-Rate ($ millions) Guidance Pro Forma Expected Credit Rating Corporate Debt1 $10,892 $10,892 Agency Rating Term Loan B Amortization Payment (13) (13) S&P BB / Stable Debt for New Builds 200 200 Moody’s Ba1 / Stable Debt fo
Slide 20: Closing Remarks
Closing Remarks 20 | NRG 1Q25 Earnings
Slide 21: Compelling 5–Year Financial Outlook
Compelling 5–Year Financial Outlook 2025-2029 >14% >14% (up from >10%) (up from >10%) Adjusted EPS Growth FCFbG / Share Growth ~$9.1 Bn ~3.0x (up from $8.8 Bn) (up from 2.50-2.75x) Return of Capital Net Debt to Adj EBITDA Plus: Significant Upside Opportunities 21 | NRG 1Q25 Earnings 1Q Results & Bus
Slide 22: Appendix A
Appendix A Portfolio Acquisition 22 | NRG 1Q25 Earnings
Slide 23: Key Assumptions for Outlook
Key Assumptions for Outlook 2025 2026-2029 Guidance Pro Forma Outlook Power Price - ERCOT ATC ($/MWh) $47 $47 flat, see sensitivity table (slide 34) Power Price - PJM ATC ($/MWh) $50 $50 flat for all periods PJM Capacity Prices ($/MW-Day) $190 $275 flat for all periods Effective Tax Rate for Adj EPS
Slide 24: Transforms Generation Fleet with Irreplicable Assets
Transforms Generation Fleet with Irreplicable Assets Portfolio Portfolio Acquisition Acquisition Operating Assets 2024 Pro Forma Capacity, GW1 25% Coal & Other Natural Gas 48% 11.9 GW 52% 12.9 GW 24.8 GW 75% 100% Operating Assets Geography, GW1 16% 16% 0% 48% ERCOT NYISO 82% CAISO PJM 7% 11.9 GW 1%
Slide 25: Portfolio Acquisition from LS Power Asset List
Portfolio Acquisition from LS Power Asset List # Plant Name MW Tech State ISO LDA Heat Rate 1 Ironwood 760 CCGT PA PJM MAAC 7.0 2 Springdale 600 CCGT PA PJM RTO 7.1 Springdale CT 100 CT PA PJM RTO 10.0 3 Aurora 1,050 CT IL PJM ComEd 10.6/10.0 4 Armstrong 780 CT PA PJM RTO 10.6 5 Troy 780 CT OH PJM A
Slide 26: NRG Asset List
NRG Asset List Plant Name MW Fuel Tech State ISO LDA Cedar Bayou 1,494 Natural Gas ST TX ERCOT Houston Cedar Bayou 4 252 Natural Gas CCGT TX ERCOT Houston Greens Bayou 327 Natural Gas CT TX ERCOT Houston Limestone 1,660 Coal ST TX ERCOT Houston San Jacinto 160 Natural Gas CT TX ERCOT Houston T.H. Wh
Slide 27: CPower: Leading Virtual Power Plant Platform
CPower: Leading Virtual Power Plant Platform Overview Geographic Footprint 0.7 GW 6.0 GW C&I Virtual Power Plant (VPP) Platform 0.2 GW ISO-NE • Founded in 2000, provides energy management services to C&I MISO customers 0.1 GW • Leader in virtual power plant operation, with unmatched national experie
Slide 28: Appendix B
Appendix B Unlocking Upside Opportunities 28 | NRG 1Q25 Earnings
Slide 29: U.S. Power Market Enters Unprecedented Supercycle
U.S. Power Market Enters Unprecedented Supercycle Resurgence of Power Demand Following Load Growth is Underway… Decade of No Growth and Low Prices Electricity Demand Growth2 Rise of Competitive Value of the End-to-End 22% Markets Customer Value Expansion 2016-2020 8% 2020-2024 6% 6% Value 5- Home
Slide 30: Structural Constraints Amplifies and Extends Tightness
Structural Constraints Amplifies and Extends Tightness Intermittent Generation Best Case Timelines for Mounting Headwinds for Dominate Planned Additions New Generation New and Existing Generation PJM Battery Today 2030 2035 Global Supply Chain & Labor Shortages Other 23% 14% • Equipment manufacturin
Slide 31: Optimizing Site Portfolio – NRG Standalone
Optimizing Site Portfolio – NRG Standalone High Priority Medium Priority Lower Priority Site Data Center Hosts Strategic Load Hubs Future Growth Sites Categories Premier sites, development Quality medium to small sites with high Sites that may become ready or near-ready potential but unresolved cons
Slide 32: NRG, GE Vernova & Kiewit Venture
NRG, GE Vernova & Kiewit Venture Powering the Future of Data Centers U.S.-Based Fully Integrated Venture Signed Project Development Agreement GE Vernova, Kiewit-TIC, NRG: Developer, Operator, OEM and EPC Venture Benefits Status ✓ Coordinated development, power equipment and EPC ✓ 1.2 GW CCGTs in-ser
Slide 33: Data Center Developer Partnerships
Data Center Developer Partnerships Progressing Data Center Strategy with Developers PowLan and Menlo Signed Letters of Intent (LOI) PowLan Letter of Intent #1 Letter of Intent #2 ✓ 500+ MW target; initial phase of 100 MW by 2027 ✓ 5+ GW target; first in-service 2029+ ✓ Existing NRG sites identified
Slide 34: Texas Generation Fleet – NRG Standalone
Texas Generation Fleet – NRG Standalone Significant Upside Opportunity From Rising Power Prices ($ millions) Illustrative Mark-to-Market for Texas Generation-Only Portfolio Gas Sensitivity Year 1 Year 2 Year 3 Open +$0.25 -$0.25 Base Earnings 2025 Texas Base Gross Margin $1,710 MM $1,710 Assumptions
Slide 35: NRG Texas Energy Fund Development Portfolio
NRG Texas Energy Fund Development Portfolio Power Market Review – Texas Potential Benefits from Texas Legislation • Texas has approved legislation to incentivize new • Low-interest rate (3%) loans from the Texas Energy dispatchable generation resources Fund – SB2627 • Completion Bonus Grants of $80-
Slide 36: Appendix C
Appendix C NRG Standalone Disclosures – 1Q25 36 | NRG 1Q25 Earnings
Slide 37: 2025 Priorities
2025 Priorities ❑ Deliver Financial, Operational, Safety, and Sustainability Objectives ❑ Deliver on Cost and Growth Initiatives $750 MM Adjusted EBITDA organic growth plan (2025-2029) Launch Home Virtual Power Plant (VPP) energy management Develop 1.5 GW shovel-ready dispatchable Texas capaci
Slide 38: Committed to Sustainability
Committed to Sustainability Progress US CO2e Emissions (MMtCO2e)2 Highlights1 NRG Targets3 Carbon Reduction Target: 50% by 20251 57% Net-Zero by 2050 58 Reduction in 25 29 CO2e emissions Net-Zero (2024) 2014 2024 2025 2050 71% Reduction in SO2 emissions 2023 Sustainability Report Published August 2,
Slide 39: Home Integrated Retail Supply Procurement
Home Integrated Retail Supply Procurement Net Home Position1 Supply Position Highlights (Avg. On-Peak MWh) Texas East/Other ✓ Balance net generation and market purchases against priced load Total Expected Load2 (normal weather) 88% ✓ Manage current financial exposure while 82% planning for physical
Slide 40: Mature Risk Strategy
Mature Risk Strategy Managing Through-Cycle Stability 1 Forecast & Price 2 Retail Sale & Hedge 3 Optimize • Proprietary forecasting program models • Fully hedge priced load to firm gross • Enhance hedge profile to incorporate expected load and variability margin additional data (i.e. weather) • Data
Slide 41: Historical Consolidated Metrics
Historical Consolidated Metrics1 ($ millions except per share amounts) 2023 1Q24 2Q24 3Q24 4Q24 2024 1Q25 Adjusted EBITDA $3,319 $870 $962 $1,055 $902 $3,789 $1,126 Adjusted Net Income $1,076 $305 $353 $434 $316 $1,408 $531 Adjusted EPS2 $4.72 $1.46 $1.70 $2.10 $1.56 $6.83 $2.68 Basic Share Count –
Slide 42: Energy Modeling Aid
Energy Modeling Aid 2025 Metrics 2025E East/West/ Other Texas (EWO2) Operational Statistics Additional Commentary-Power Retail Energy Sales1: Home Load served primarily by Home Power Expected Load (TWh) ~40 ~17 owned generation and supplemented Business Power Expected Load (TWh) ~40 ~65 with third-p
Slide 43: Energy KPIs and Modeling Data
Energy KPIs and Modeling Data Operational KPIs1 1Q24 1Q25 Change Texas EWO2 Texas EWO2 Texas EWO2 Home Power Load (TWh) 8 4 8 5 0 1 Business Power Load (TWh) 9 15 9 14 0 (1) Total Power Load (TWh) 17 19 17 19 0 0 Total Natural Gas Sales (MMDths) -- 583 -- 616 -- 33 Total Owned Generation (TWh) 4 2 6
Slide 44: Smart Home KPIs and Modeling Data
Smart Home KPIs and Modeling Data Key Metrics1 1Q24 1Q25 Change Portfolio Customers (MM)2 2.04 2.17 +6% Customer Lifetime (years)2 ~9 ~9 -- Retention (%)3 89.1% 89.9% +80 bps Optimized Pricing in Key Sales Channel Drives ~$400 Improvement in Customer Bad Debt as % of Revenue 2.8% 1.9% -90 bps Lifeti
Slide 45: Debt Maturity Schedule
Debt Maturity Schedule Balance as of 3/31/2025 ($ millions) Debt as of 3/31/25 Principal 5.75% Senior Notes, due 2028 $821 5.25% Senior Notes, due 2029 733 3.375% Senior Notes, due 2029 500 5.75% Senior Notes, due 2029 798 3.625% Senior Notes, due 2031 1,030 3.875% Senior Notes, due 2032 480 NRG Ene
Slide 46: Appendix D
Appendix D Reg G Schedules 46 | NRG 1Q25 Earnings
Slide 47: Reg. G
Reg. G ($ millions except per share amounts) Appendix Table A-1: 2025 Guidance The following table summarizes the 2025 Guidance calculations of Adjusted EBITDA, Adjusted Net Income and Adjusted EPS and provides a reconciliation from Net Income1 2025 7 Guidance 1 Net Income $1,025 - $1,225 Interest e
Slide 48: Reg. G
Reg. G ($ millions) Appendix Table A-2: 2025 Guidance The following table summarizes the calculation of FCFbG providing a reconciliation from Adjusted EBITDA and Cash provided by operating activities 2025 Guidance Adjusted EBITDA $3,725 - $3,975 Interest payments, net 1 (610) Income tax payments 2 (
Slide 49: Reg. G
Reg. G ($ millions except per share amounts) Appendix Table A-3: Three months ended 3/31/25 Adjusted EBITDA and Adjusted Net Income Reconciliation by Operating Segment and Consolidated Adjusted EPS Reconciliation The following table summarizes the calculation of Adjusted EBITDA, Adjusted Net Income
Slide 50: Reg. G
Reg. G ($ millions except per share amounts) Appendix Table A-4: Three months ended 3/31/24 Adjusted EBITDA and Adjusted Net Income Reconciliation by Operating Segment and Consolidated Adjusted EPS Reconciliation The following table summarizes the calculation of Adjusted EBITDA, Adjusted Net Income
Slide 51: Reg. G
Reg. G ($ millions) Appendix Table A-5: Three months ended 3/31/25 and 3/31/24 Free Cash Flow before Growth The following table summarizes the calculation of FCFbG and provides a reconciliation from Adjusted EBITDA and Cash provided by operating activities Three Months Three Months Ended 3/31/25 End
Slide 52: Reg. G
Reg. G Definitions Non-GAAP Financial Measures NRG reports its financial results in accordance with the accounting principles generally accepted in the United States (GAAP) and supplements with certain non-GAAP financial measures. These measures are not recognized in accordance with GAAP and should
Slide 53: Smart Home Performance Metrics
Smart Home Performance Metrics Definitions • New Customers is the aggregate number of new smart home and security customers originated during a given period. This metric excludes new customers acquired by the transfer of a service contract from one customer to another. • Average Monthly Customers is