Nrg Energy, Inc. · NYSE:NRG
Nrg Energy — Q2 2020 Earnings Presentation
30 slides from Nrg Energy's earnings presentation, Aug 9, 2020
Slide 1: Second Quarter 2020 Earnings Presentation
NRG Energy Inc. Second Quarter 2020 Earnings Presentation August 06, 2020 © [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: Key Messages
NRG 2Q20 Earnings Key Messages Business Review Financial Review Closing Remarks Appendix Integrated Platform Delivers Predictable Results; Reaffirming 2020 & 2021 Guidance Comprehensive Response to COVID-19; Maintain Full Operational Status and Well-Prepared for Summer Execution on Disciplined Capit
Slide 4: Business Highlights
NRG 2Q20 Earnings Business Highlights Business Review Financial Review Closing Remarks Appendix 2Q Business Highlights Year over Year Results ($ millions) Adjusted EBITDA Strong Financial and Operational Results Top decile safety performance Second Quarter First Half of Year Resilient financia
Slide 5: COVID-19 - Comprehensive Response
NRG 2Q20 Earnings COVID-19 - Comprehensive Response Business Review Financial Review Closing Remarks Appendix Employees Operations Community • Activated Crisis Management • COVID-19 safety protocols • Pledged $2 million towards local Team on January 21st; closed remain active through the frontline r
Slide 6: COVID-19 - Market Impact
NRG 2Q20 Earnings COVID-19 - Market Impact Business Review Financial Review Closing Remarks Appendix …Load Impacts Vary Significantly By COVID-19 Impacting 2020 Load and Prices… Subregion and Customer Type 2020 Load Reductions by ISO1 • Power Demand Declines Across All Regions April July • ERCOT con
Slide 7: Perfecting Customer-Focused Platform
Perfecting Customer-Focused Platform NRG 2Q20 Earnings Business Review Financial Review Direct Energy Transaction Overview Closing Remarks Appendix On July 24th, Announced Definitive Agreement to Acquire Direct Energy • Advances Our Strategy as a Customer-Focused Brands Organization; Moving Closer t
Slide 8: Executing Our Strategy
Executing Our Strategy NRG 2Q20 Earnings Business Review Financial Review Strengthening Platform and Investment Proposition Closing Remarks Appendix Redefining: Objectives Redefining: Current Steps 1 • New: Direct Energy - Enhances North American Grow Retail Multi-Brand / Multi-Product Platform Bala
Slide 9: Capital Allocation Plan and Framework
Capital Allocation Plan and Framework NRG 2Q20 Earnings Business Review Financial Review Returning to 50% / 50% Objective in 2022 Closing Remarks Appendix Stabilize Right-Size Redefine Capital Allocation Priorities Maintain top decile safety 50/ 50 and operational excellence $3.0 Bn $5.6 Bn1 ~$3.1 B
Slide 10: Financial Review
Financial Review © [year] NRG Energy, Inc. All rights reserved. / Proprietary and Confidential Information 9
Slide 11: 2Q 2020 Results
NRG 2Q20 Earnings 2Q 2020 Results Business Review Financial Review Closing Remarks Appendix ($ millions) 6/30/2020 Reaffirming 2020 Three Months Six Months Guidance Ended Ended Texas $378 $573 $1,350-1,500 East/West/Other1 196 349 $550-600 Adjusted EBITDA $574 $922 $1,900 - $2,100 Free Cash Flow bef
Slide 12: 2020 Capital Allocation
NRG 2Q20 Earnings 2020 Capital Allocation Business Review Financial Review Closing Remarks Appendix ($ millions) No change from Prior Quarter Indicates change from Prior Quarter $1,410 $295 $228 $223 $162 $1,375 2020 FCFbG (mid-point) $61 $664 $35 2019 CAFA1 Total 2020 Dividend2 Completed Share Iden
Slide 13: 2021 Capital Allocation
NRG 2Q20 Earnings 2021 Capital Allocation Business Review Financial Review Closing Remarks Appendix ($ millions) $1,720 $120 Agua Sale Proceeds1 $150 $1,570 $1,053 $1,6002 2021 Pro-forma FCFbG (mid-point) $317 $200 2021 Increase in 2021 Debt Dividend4 Identified Excess Cash Min Cash3 CAFA Reduction
Slide 14: Corporate Credit Profile
NRG 2Q20 Earnings Corporate Credit Profile Business Review Financial Review Closing Remarks Appendix ($ millions) 2021 NRG Acquisition Pro Forma Standalone 2021 Corporate Debt $6,0731 $2,361 $8,434 Equity linked facility2 375 375 Debt reduction (1,053) (1,053) Minimum cash balance (500)3 (150) (650)
Slide 15: Closing Remarks
Closing Remarks © [year] NRG Energy, Inc. All rights reserved. / Proprietary and Confidential Information 14
Slide 16: 2020 Priorities
NRG 2Q20 Earnings 2020 Priorities Business Review Financial Review Closing Remarks Appendix Deliver on Financial and Operational Objectives Reaffirming 2020 & 2021 guidance Strong year-to-date financial, operational and safety performance Complete 3-Year Transformation Plan $215 MM cumulat
Slide 17: Appendix
Appendix © [year] NRG Energy, Inc. All rights reserved. / Proprietary and Confidential Information 16
Slide 18: Committed to Sustainability
NRG 2Q20 Earnings Committed to Sustainability Business Review Financial Review Closing Remarks Appendix NRG Sustainability Framework Sustainable Sustainable Sustainable Sustainable Sustainable Business Operations Customers Suppliers Workplace Industry-Leading Disclosure Environmental Leadership1 Div
Slide 19: Capacity Clears & Unsold
NRG 2Q20 Earnings Capacity Clears & Unsold Business Review Financial Review Closing Remarks Appendix Capacity Revenue by Calendar1 Year ($ MM) Market 2020 2021 PJM $282 $299 ISO-NE $111 $90 Illustrative: NYISO2 $151 $169 Assumes uncleared capacity clears at current CAISO2 $58 $54 market levels Estim
Slide 20: Integrated Portfolio
Integrated Portfolio NRG 2Q20 Earnings Business Review Financial Review Additional Modeling Data Closing Remarks Appendix 2020E 2021E Guidance Drivers Business Statistics ERCOT East/West ERCOT East/West Operational Statistics Retail Sales – Current Portfolio1,3 Electric Estimated Sales (TWhs) 58-60
Slide 21: Integrated Portfolio Footnotes
Integrated Portfolio NRG 2Q20 Earnings Business Review Financial Review Footnotes Closing Remarks Appendix 1 2020 numbers are estimated components in isolation to the current guidance range, established as of 9/30/2019 and reaffirmed on 8/6/2020 2 Annualized equivalents represent realized actuals th
Slide 22: Recourse Debt Maturity Schedule
NRG 2Q20 Earnings Recourse Debt Maturity Schedule Business Review Financial Review Closing Remarks Appendix (millions) $1,230 $1,233 $1,000 $1,041 $821 $600 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Therafter Recourse Debt Principle 7.25% Senior notes, due 2026 $1,000 6.625% Senior notes, du
Slide 23: Appendix: Reg. G Schedules
Appendix: Reg. G Schedules © [year] NRG Energy, Inc. All rights reserved. / Proprietary and Confidential Information 22
Slide 24: Reg. G - Table A-1: NRG Guidance
NRG 2Q20 Earnings Reg. G Business Review Financial Review Closing Remarks Appendix Appendix Table A-1: NRG Guidance The following table summarizes the calculation of Free Cash Flow before Growth and provides a reconciliation to Adjusted EBITDA and to Income from Continuing Operations: 2020 2021 ($ m
Slide 25: Reg. G - Table A-2: Adjusted EBITDA Reconciliation
NRG 2Q20 Earnings Reg. G Business Review Financial Review Closing Remarks Appendix Appendix Table A-2: 3 months ended 6/30/20 Adjusted EBITDA Reconciliation by Operating Segment The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Income/(Loss) from Cont
Slide 26: Reg. G - Table A-3: Adjusted EBITDA Reconciliation
NRG 2Q20 Earnings Reg. G Business Review Financial Review Closing Remarks Appendix Appendix Table A-3: 6 months ended 6/30/20 Adjusted EBITDA Reconciliation by Operating Segment The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Income/(Loss) from Cont
Slide 27: Reg. G - Table A-4: Free Cash Flow before Growth
NRG 2Q20 Earnings Reg. G Business Review Financial Review Closing Remarks Appendix Appendix Table A-4: 3 months and 6 months ended 6/30/20 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 con
Slide 28: Reg. G - Table A-5: Direct Energy Run-Rate Adjusted EBITDA
NRG 2Q20 Earnings Reg. G Business Review Financial Review Closing Remarks Appendix Appendix Table A-5: Direct Energy 2023 Run-Rate Adjusted EBITDA Reconciliation The following table summarizes the calculation of Adj. EBITDA and provides a reconciliation to income from continuing operations Direct En
Slide 29: Reg. G
NRG 2Q20 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 30: Reg. G
NRG 2Q20 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