Nrg Energy, Inc. · NYSE:NRG
Nrg Energy — Q2 2022 Earnings Presentation
26 slides from Nrg Energy's earnings presentation, Aug 4, 2022
Slide 1: Second Quarter 2022 Earnings Presentation
NRG Energy Inc. Second Quarter 2022 Earnings Presentation August 04, 2022 1 | NRG 2Q22 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 2Q22 Earnings
Slide 4: Key Messages
Key Messages Platform Navigating Through Volatility; Maintaining 2022 Guidance Advancing Customer-Focused Growth Strategy Executing $1 Billon Share Repurchase Program 4 | NRG 2Q22 Earnings Business Review | Financial Review | Closing Remarks | Appendix
Slide 5: Business Highlights & Results
Business Highlights & Results Q2 Business Highlights Financial Update ($ millions) Financial and Operational Results Adjusted EBITDA • Top decile safety performance • Published 12th Annual Sustainability Report $656 • Results impacted by W.A. Parish Unit outage Included in Guidance2: • Asset Sales
Slide 6: 2Q22 Market Review
2Q22 Market Review Platform Continues to Deliver through Record Volatility Record Load and Price Volatility Strong Retail Performance Mitigated Through Hedging Program Offset by Unplanned Outage Above Average Texas Temperatures… Strong Retail Operational Performance 900 Weather vs Normal1 April +4
Slide 7: Airtron: HVAC Solutions Complementary to Core
Airtron: HVAC Solutions Complementary to Core Airtron: Home Service Company with Scale Significant Scale – #1 provider nationally & top 3 across core retail markets Growing Opportunity – Complementary offerings with existing products; present in 9 states Customer Focused – Best-in-class NPS &
Slide 8: Financial Review
Financial Review 8 | NRG 2Q22 Earnings
Slide 9: Financial Update
Financial Update ($ millions) Three Months Ended Six Months Ended Maintaining 6/30/22 6/30/21 6/30/22 6/30/21 2022 Guidance Texas $251 $312 $449 $558 $1,300–$1,500 East/West/Services/Other1 107 344 418 665 650–750 Adjusted EBITDA2 $358 $656 $867 $1,223 $1,950–$2,250 Free Cash Flow before Growth (“FC
Slide 10: 2022 Capital Allocation
2022 Capital Allocation ($ millions) No change from Prior Quarter Indicates change from Prior Quarter $679 $80 $109 $333 $599 $961 $595 $366 completed $1,290 through FCFbG 7/31/22 (mid-point) $110 $456 Earmarked for $100 Growth Plan +$141 2022 Storm Uri Increase in Dividends3 Share Other 2022 Excess
Slide 11: Corporate Credit Profile
Corporate Credit Profile ($ millions) 2022 Guidance Corporate Debt1 $8,100 Minimum Cash balance (650) 2022 Unallocated Capital 2 (356) Corporate Net Debt $7,094 Adjusted EBITDA3 $2,100 Other Adjustments4 175 Corporate Adjusted EBITDA $2,275 Long-Term Target Investment Grade Metrics Net Debt / Adjust
Slide 12: Closing Remarks
Closing Remarks 12 | NRG 2Q22 Earnings
Slide 13: 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) $300 MM cumulative 2023 run-rate EBITDA-accretive synergies – On Track Optimize and Grow from Core Execu
Slide 14: Appendix
Appendix 14 | NRG 2Q22 Earnings
Slide 15: Committed to Sustainability
Committed to Sustainability NRG Sustainability Framework Sustainable Sustainable Sustainable Sustainable Sustainable Business Customers Workplace Operations Suppliers Industry-Leading Disclosure Environmental Leadership1 Diversity & Inclusion Focus U.S. CO2e Emissions (MMtCO2e2) 64% Board Diversity
Slide 16: Mature Risk Strategy
Mature Risk Strategy Managing Through-Cycle Stability 1 Forecast & Price 2 Retail Sale & Hedge 3 Optimize • Proprietary forecasting • Fully hedge priced load to firm • Perfect hedge profile to program models expected gross margin incorporate additional data load and variability (i.e. weather) • Part
Slide 17: Recourse Long-Term Debt Maturity Schedule
Recourse Long-Term Debt Maturity Schedule Balance as of 06/30/2022 ($ 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 $821 5.25% Senior
Slide 18: Direct Energy Integration
Direct Energy Integration Advancing Customer Focused Strategy ($ millions) Direct Energy Integration Scorecard On Track 2021 2022 2023 / As of 06/30/2022 Realized Target Run Rate Accretive & Recurring: Synergies 175 225 300 Total Recurring EBITDA & FCFbG $175 $225 $300 –Accretion Non-Recurring: Inte
Slide 19: 2Q22 Business Metrics
2Q22 Business Metrics Home & Business Volumes Texas East / Other Electric Natural Gas 77% 15 23% 41% 25 59% 27 361 TWh TWh MMDth MMDth Home / Residential Business / C&I Home / Residential Business / C&I 40 TWh 388 MMDth Electricity Natural Gas Strong Retail Performance – Ending Quarter at 5.6 MM Hom
Slide 20: Appendix: Reg. G Schedules
Appendix: Reg. G Schedules 20 | NRG 2Q22 Earnings
Slide 21: Reg. G: 2022 Guidance
Reg. G ($ 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 1 Net Income $350 - $650 Interest expense, net 380 Income tax 165 Depreciation, amort
Slide 22: Reg. G: Three Months Adjusted EBITDA Reconciliation
Reg. G ($ millions) Appendix Table A-2: Three months ended 6/30/22 and 6/30/21 Adjusted EBITDA Reconciliation by Operating Segment The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Net Income/(Loss): Three Months ended 6/30/22 Three Months ended 6/30/
Slide 23: Reg. G: Six Months Adjusted EBITDA Reconciliation
Reg. G ($ millions) Appendix Table A-3: Six months ended 6/30/22 and 6/30/21 Adjusted EBITDA Reconciliation by Operating Segment The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Net Income: Six Months ended 6/30/22 Six Months ended 6/30/21 West/ West
Slide 24: Reg. G: Free Cash Flow before Growth
Reg. G ($ millions) Appendix Table A-4: Six months ended 6/30/2022 and 6/30/2021 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: Six Months Ended Six Months Ended 6/30/
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