Nrg Energy, Inc. · NYSE:NRG
Nrg Energy — Lehman Brothers 2006 CEO Energy/Power Conference
19 slides from Nrg Energy's conference presentation, Sep 6, 2006
Slide 1: NRG Energy, Inc.: Transforming The Business of Wholesale Power Generation
NRG Energy, Inc.: Transforming The Business of Wholesale Power Generation Lehman Brothers 2006 CEO Energy/Power Conference New York, New York September 5-8, 2006
Slide 2: Safe Harbor Statement
Safe Harbor Statement This Investor Presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are subject to certain risks, uncertainties and assumptions and typi
Slide 3: Agenda
Agenda Update on NRG Current Performance Going Forward Q&A
Slide 4: NRG Update: What a Difference a Year Makes!
NRG Update Since the Lehman Brothers Power/Energy Conference in September 2005, NRG has: What a Difference a Year Makes! Doubled its domestic baseload generation capability through the acquisition of NRG Texas Increased its annual estimated economic EBITDA by more than double to $1.5 billion and ann
Slide 5: Portfolio with Scale and Diversity
Portfolio with Scale and Diversity South Central Western Northeast Texas Combined Scale2 Gas 5,480 MW 50.9% Nuclear 1,101 MW 10.2% Coal 4195 MW 38.9% Gas 1,948 MW 100% Gas 906 MW 37.8% Coal 1,489 62.2% Oil 3,563 MW 50.1% Gas1 1,487 MW 20.9% Coal 2,065 MW 29.0% Gas 10,399 MW 45.6% Coal 7,764 MW 34.0%
Slide 6: NRG Strategy: Multiple Growth Opportunities in Multiple Regions
NRG Strategy: Multiple Growth Opportunities in Multiple Regions Reinvestment through repowering key assets (Repowering Initiative) Acquisitions which enhance our existing regional lineups (Texas Genco) Extracting maximum value from existing fleet (FORNRG, Enhanced Commercial Ops.) Our Customer Focus
Slide 7: NRG Financial Philosophy
NRG Financial Philosophy NRG) Debt to T. Capital Debt-to-Total-Cap ratio remains within range while returning meaningful capital returns to shareholders $405mm Share buyback (12/2004) $250mm Share buyback (8/2005) $750mm Share buyback announced (8/2006) YTD Non-Core Asset Sales removed debt of NRG B
Slide 8: Financial: Managing NRG for Cash
Financial: Managing NRG for Cash 1 Guidance as of August 1, 2006; Adjusted for the sale of Australian assets 2 Cash Flow yield based on July 31, 2006 NRG common stock closing share price of $49.25 and projected 2006 free cash flows Cash Flow Yield of 16% contributes to...
Slide 9: Financial: Enhancing Liquidity
Financial: Enhancing Liquidity ....Strong liquidity! Note: December balances are not restated for discontinued operations
Slide 10: Commercial Risk Management
Commercial Risk Management: NRG) Focus on Baseload Power Hedging Baseload Power Locking in Dark Spread 1200 == 93% Optimizing Excess Allowances YTD $02 Emissions Allowances 2006+ YTO Actual vs Expected Allowance Consumption 22,046 | 1. Energy poston as of uy 32, 2006; 2006 reflects balance of year r
Slide 11: FORNRG Initiatives Driving Additional Portfolio Value
FORNRG Initiatives Driving Additional Portfolio Value Targeting top quartile operating performance Target NRG Classic Operations Target NRG Corporate Target NRG Texas $35 $81 $122 $162 $200 $mm
Slide 12: Repowering Strategic Principles
Repowering Strategic Principles PPA-based not merchant Fuel mismatch, not spark spread play Greater barriers to entry with solid fuel plant Market has greater locational sophistication Brownfield price is advantaged over greenfield Strategic Principles Multi-regional, multi-fuel, multi-dispatch gene
Slide 13: Fundamental building blocks to a successful repowering program
Fundamental building blocks to a successful repowering program Growth: Investment, even net of retirements, yields NPV returns in excess of cost of capital Repowering Fuel Prices: High gas prices, in particular, encourage a fuel mismatch play in gas dominated power markets Reserve Margins: supply sh
Slide 14: NRG's Carbon "PENTAGON" - Five Point Strategy
NRG's Carbon "PENTAGON" - Five Point Strategy Baseload Alternatives Carbon Hedge Increased Credibility Increased Credibility Carbon Hedge A program to address carbon's impact on all phases of NRG's business Policy Outreach Responsible Planning Phased, Certain Equal Treatment Carbon R&D "Test Bed" Se
Slide 15: Objectives, Execution & Value Drivers
Objectives, Execution & Value Drivers Maintain strong liquidity: Over $2.0bn, including $972mm of unrestricted cash Prudent balance sheet management: Net debt-to- total capital ratio of 53%, within targeted range of 45% to 60% Return capital to shareholders: Repurchased 20% of outstanding (12/04 and
Slide 16: Question and Answers
NRG ) Question and Answers
Slide 17: Appendix: Reconciliations
“4, NRG ) Appendix: Reconciliations
Slide 18: Reg. G Reconciliation: Net Debt to Total Capital
Reg. G Reconciliation Appendix Table A-1: Net Debt to Total Capital Reconciliation Appendix Table A-1: Net Debt to Total Capital Reconciliation Appendix Table A-1: Net Debt to Total Capital Reconciliation Appendix Table A-1: Net Debt to Total Capital Reconciliation 30-June-06 30-June-06 Numerator Gr
Slide 19: Reg. G Reconciliation: EBITDA and Adjusted EBITDA
Reg. G Reconciliation EBITDA and Adjusted EBITDA are nonGAAP 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
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