Nrg Energy, Inc. · NYSE:NRG
Nrg Energy — Q4 2020 Earnings Presentation
31 slides from Nrg Energy's earnings presentation, Mar 1, 2021
Slide 1: Fourth Quarter and Full Year 2020 Earnings Presentation
NRG Energy Inc. Fourth Quarter and Full Year 2020 Earnings Presentation March 1, 2021 © [year] NRG Energy, Inc. All rights reserved. / Proprietary and Confidential Information
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 and CEO Financial Review Gaetan Frotte, SVP and Interim CFO Closing Remarks Mauricio Gutierrez, President and CEO Q&A © [year] NRG Energy, Inc. All rights reserved. / Proprietary and Confidential Information 2
Slide 4: Key Messages
NRG 4Q20 Earnings Key Messages Business Review Financial Review Closing Remarks Appendix Focused on Aiding Texas Communities and Strengthening System Reliability Integrated Platform Delivers Stable Results through Unprecedented Events Advancing Customer-Centric Strategy; Closed Direct Energy Acquisi
Slide 5: Winter Storm Uri: Preliminary Review & Response
Winter Storm Uri NRG 4Q20 Earnings Business Review Financial Review Preliminary Review & Response Closing Remarks Appendix Unprecedented Weather Conditions NRG’s Preparedness and Performance • Extreme winter weather conditions • Winter readiness program • Historical winter storm - temperature, scale
Slide 6: Winter Storm Uri: Customer Focused Response
Winter Storm Uri NRG 4Q20 Earnings Business Review Financial Review Preliminary Review & Response Closing Remarks Appendix Customer Focused Response Expect to Deliver Stable Results • Balanced retail load and supply strategy • Preliminary financial impact expected to be provides stability within cur
Slide 7: Business Highlights & Results
NRG 4Q20 Earnings Business Highlights & Results Business Review Financial Review Closing Remarks Appendix 2020 Scorecard Financial Update ($ millions) Strong Financial and Operational Results • Top decile safety performance Adj. EBITDA FCFbG • Comprehensive COVID-19 response enabled resilient oper
Slide 8: Direct Energy Integration
Direct Energy Integration NRG 4Q20 Earnings Business Review Financial Review Advancing Customer Focused Strategy Closing Remarks Appendix Integration Plan On Track Introducing Direct Energy Scorecard • Cost Savings As of 12/31/2020 2021 2022 2023 / Reaffirming full plan targets: $300 MM of recurri
Slide 9: Perfecting Customer-Focused Platform: Streamlining Non-Core Generation
Perfecting Customer-Focused Platform NRG 4Q20 Earnings Business Review Financial Review Streamlining Non-Core Generation Closing Remarks Appendix Asset Sale Highlights NYISO, ISO-NE & CAISO Assets Asset Sale Footprint Assets Sold 4.8 GW1 Fossil Generation Generation Bridge, Buyer an affiliate of Arc
Slide 10: Financial Review
Financial Review © [year] NRG Energy, Inc. All rights reserved. / Proprietary and Confidential Information 9
Slide 11: 2020 Results & 2021 Guidance
NRG 4Q20 Earnings 2020 Results & 2021 Guidance Business Review Financial Review Closing Remarks Appendix ($ millions) 2020 Full Year Maintaining Results 2021 Guidance Texas $1,319 $1,425-1,575 East/West/Other1 685 975-1,025 Adjusted EBITDA $2,004 $2,400-$2,600 Free Cash Flow before Growth (“FCFbG”)
Slide 12: Direct Energy Acquisition
NRG 4Q20 Earnings Direct Energy Acquisition Business Review Financial Review Closing Remarks Appendix ($ millions) Changes Previous Plan Acquired cash & Decrease in ‘20 Lower fees, debt Purchase price Final Plan1 (3Q20 Earnings) margin Cash Reserve discount adjustment collateral New Bonds (Secured &
Slide 13: 2021 Capital Allocation
NRG 4Q20 Earnings 2021 Capital Allocation Business Review Financial Review Closing Remarks Appendix ($ millions) No change from Prior Quarter Indicates change from Prior Quarter $2,375 $150 $120 Agua Sale Proceeds1 $496 $1,172 Excess cash $219 allocated to $1,5402 deleveraging 2021 FCFbG (mid-point)
Slide 14: Corporate Credit Profile & Liquidity
NRG 4Q20 Earnings Corporate Credit Profile & Liquidity Business Review Financial Review Closing Remarks Appendix ($ millions) 2021 NRG 2021 As of Direct Energy February 26, Pre- Post- Acquisition Liquidity Position 2021 acquisition acquisition Corporate Debt $5,9251 $2,930 $8,855 Cash and cash equiv
Slide 15: Closing Remarks
Closing Remarks © [year] NRG Energy, Inc. All rights reserved. / Proprietary and Confidential Information 14
Slide 16: 2021 Priorities
NRG 4Q20 Earnings 2021 Priorities Business Review Financial Review Closing Remarks Appendix Deliver on Financial and Operational Objectives Execute on Direct Energy Objectives $135 MM EBITDA-accretive synergies ($300 MM 2021-2023) Perfect and Grow Integrated Platform Advance Texas system-w
Slide 17: Appendix
Appendix © [year] NRG Energy, Inc. All rights reserved. / Proprietary and Confidential Information 16
Slide 18: Committed to Sustainability
NRG 4Q20 Earnings Committed to Sustainability Business Review Financial Review Closing Remarks Appendix NRG Sustainability Framework Sustainable Sustainable Sustainable Sustainable Sustainable Business Operations Customers Suppliers Workplace Industry-Leading Disclosure Environmental Leadership1 Div
Slide 19: Market & COVID-19 Review
NRG 4Q20 Earnings Market & COVID-19 Review Business Review Financial Review Closing Remarks Appendix System Load Negatively Impacted by …Signs of Measured Recovery Mild Weather and COVID-19… Texas Degree Days 800 10 Year Range 2019 2020 700 • NRG’s Comprehensive Response to COVID-19; 600 Prioritizin
Slide 20: Capacity Clears & Unsold
NRG 4Q20 Earnings Capacity Clears & Unsold Business Review Financial Review Closing Remarks Appendix Capacity Revenue by Calendar1 Year ($ MM) Market 2021 PJM $299 ISO-NE $89 Illustrative: NYISO 2 $157 Assumes uncleared capacity clears at current CAISO2 $58 market levels Estimated Planning Average P
Slide 21: Recourse Debt Maturity Schedule
NRG 4Q20 Earnings Recourse Debt Maturity Schedule Business Review Financial Review Closing Remarks Appendix ($ millions) $2,130 $2,071 $1,733 $1,000 $821 $600 500 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Therafter Recourse Debt Principal 7.25% Senior notes, due 2026 $1,000 6.625% Senior not
Slide 22: Business Metrics: Home & Business Volumes
NRG 4Q20 Earnings Business Metrics Business Review Financial Review Closing Remarks Appendix Home & Business Volumes1 Texas East / Other Electric Natural Gas 25% 32% 62 90 153 761 TWh TWh MMDth MMDth 68% 75% Home / Residential Business / C&I Home / Residential Business / C&I 152 TWh 914 MMDth Electr
Slide 23: 2020 Capital Allocation
NRG 4Q20 Earnings 2020 Capital Allocation Business Review Financial Review Closing Remarks Appendix ($ millions) No change from Prior Quarter Indicates change from Prior Quarter $1,616 $51 $295 $228 $378 $34 Distributed Solar $151 sale Proceeds, net $1,565 $227 Previous update $715 (3Q)1 Total 2020
Slide 24: Appendix: Reg. G Schedules
Appendix: Reg. G Schedules © [year] NRG Energy, Inc. All rights reserved. / Proprietary and Confidential Information 23
Slide 25: Reg. G: Table A-1: 2021 NRG Guidance
NRG 4Q20 Earnings Reg. G Business Review Financial Review Closing Remarks Appendix Appendix Table A-1: 2021 NRG Guidance The following table summarizes the calculation of Free Cash Flow before Growth and provides a reconciliation to Adjusted EBITDA and to Income from Continuing Operations: 2021 ($ m
Slide 26: Reg. G: Table A-2: 2021 Midpoint Guidance for Credit Profile
NRG 4Q20 Earnings Reg. G Business Review Financial Review Closing Remarks Appendix Appendix Table A-2: 2021 NRG and Direct Energy Midpoint Guidance for Credit Profile The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Income from Continuing Operations:
Slide 27: Reg. G: Table A-3: Free Cash Flow before Growth
NRG 4Q20 Earnings Reg. G Business Review Financial Review Closing Remarks Appendix Appendix Table A-3: 2020 and 2019 YTD 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 continuing operations
Slide 28: Reg. G: Table A-4: Adjusted EBITDA Reconciliation by Segment
NRG 4Q20 Earnings Reg. G Business Review Financial Review Closing Remarks Appendix Appendix Table A-4: 12 months ended 12/31/20 Adjusted EBITDA Reconciliation by Operating Segment The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Income/(Loss) from Co
Slide 29: Reg. G: Table A-5: 4.8GW Generation Assets Reconciliation
NRG 4Q20 Earnings Reg. G Business Review Financial Review Closing Remarks Appendix Appendix Table A-5: 2021 Adjusted EBITDA and Free Cash Flow before Growth Reconciliation for 4.8GW of generation assets in the East/West region The following table summarizes the calculation of Free Cash Flow before G
Slide 30: Reg. G
NRG 4Q20 Earnings Reg. G Business Review Financial Review Closing Remarks Appendix 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
Slide 31: Reg. G
NRG 4Q20 Earnings Reg. G Business Review Financial Review Closing Remarks Appendix 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 fin