Nrg Energy, Inc. · NYSE:NRG
Nrg Energy — Q1 2020 Earnings Presentation
34 slides from Nrg Energy's earnings presentation, May 7, 2020
Slide 1: First Quarter 2020 Earnings Presentation
NRG Energy Inc. First Quarter 2020 Earnings Presentation May 07, 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: Agenda
Agenda Business Review Mauricio Gutierrez, President and CEO Financial Review Kirk Andrews, EVP and 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 1Q20 Earnings Key Messages Business Review Financial Review Closing Remarks Appendix Comprehensive COVID-19 Response to Maintain Safe and Reliable Operations Reaffirming 2020 Guidance Integrated Platform to Provide Stable Results Enhanced Disclosures Aligned with Business Model © [year] NRG Ener
Slide 5: COVID-19 Comprehensive Response
COVID-19 NRG 1Q20 Earnings Business Review Financial Review Comprehensive Response Closing Remarks Appendix Employees Operations Community • Activated Crisis Management Team • No material financial impact to • Pledged $2 million towards front on January 21st planned plant maintenance line relief eff
Slide 6: Business Highlights
NRG 1Q20 Earnings Business Highlights Business Review Financial Review Closing Remarks Appendix Q1 Business Highlights Year over Year Results and Drivers ($ millions) Strong Financial and Operational Results Adjusted EBITDA Top decile safety performance Resilient financial and operational resu
Slide 7: COVID-19 Market Impact / Outlook
COVID-19 NRG 1Q20 Earnings Business Review Financial Review Market Impact / Outlook Closing Remarks Appendix COVID-19 Impacting 2020 …Load Impacts Varying Significantly By Load and Prices… Subregion and Customer Type Load Reductions by ISO1 • Power demand declines across all regions with April 2020
Slide 8: Strengthened Platform = Stable Results
COVID-19 NRG 1Q20 Earnings Business Review Financial Review Strengthened Platform = Stable Results Closing Remarks Appendix 20201 Positioned To Thrive 1 • Multi-Brand / Multi-Channel Retail Platform Balanced Portfolio • Texas Residential Retail Focused • Limited Direct Exposure to Oil / West Texas
Slide 9: Enhancing Disclosures
Enhancing Disclosures NRG 1Q20 Earnings Business Review Financial Review Segments Aligned with Integrated Strategy Closing Remarks Appendix ERCOT East / West Earnings Mix ~70% ~30% Adj EBITDA Adj EBITDA Stability through Grow Retail / Streamline Strategy Integrated Platform Generation • Integration
Slide 10: Financial Review
Financial Review © [year] NRG Energy, Inc. All rights reserved. / Proprietary and Confidential Information 9
Slide 11: 2020 Segment Update
NRG 1Q20 Earnings 2020 Segment Update Business Review Financial Review Closing Remarks Appendix ($ millions) 2019 2019 2020 Old Segments New Segments Results Results1 Guidance2 Retail Texas $729 $ 920 Texas $1,339 $1,350-1,500 East 191 Generation Texas 610 1,057 East/West/Other3 638 $550-600 East/Ot
Slide 12: 1Q 2020 Results
NRG 1Q20 Earnings 1Q 2020 Results Business Review Financial Review Closing Remarks Appendix ($ millions) Three Months Three Months 2020 Ended Ended Guidance 3/31/2019 3/31/2020 Texas $179 $195 $1,350-1,500 East/West/Other1 154 154 $550-600 Adjusted EBITDA $333 $349 $1,900 - $2,100 Free Cash Flow bef
Slide 13: 2020 Capital Allocation
NRG 1Q20 Earnings 2020 Capital Allocation Business Review Financial Review Closing Remarks Appendix ($ millions) No change from Prior Quarter Indicates change from Prior Quarter Return to Shareholders: $675 $1,410 $60 $1,350 $295 $1,375 $216 Investments: $675 2020 FCFbG (mid-point) $164 $61 $614 $35
Slide 14: Closing Remarks
Closing Remarks © [year] NRG Energy, Inc. All rights reserved. / Proprietary and Confidential Information 13
Slide 15: 2020 Priorities
NRG 1Q20 Earnings 2020 Priorities Business Review Financial Review Closing Remarks Appendix Deliver on Financial and Operational Objectives Reaffirming 2020 guidance Strong year-to-date financial, operational and safety performance Complete 3-Year Transformation Plan $215 MM cumulative EBI
Slide 16: Appendix
Appendix © [year] NRG Energy, Inc. All rights reserved. / Proprietary and Confidential Information 15
Slide 17: Committed to Sustainability
NRG 1Q20 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 10t
Slide 18: 2020 Capital Allocation Plan
NRG 1Q20 Earnings 2020 Capital Allocation Plan Business Review Financial Review Closing Remarks Appendix Stabilize Right-Size Redefine Capital Allocation Priorities $3.0 Bn $5.6 Bn1 ~$1.4 Bn Maintain top decile safety 6% and operational excellence 20% 20% $614 MM Uncommitted 4% 44% Maintain Investme
Slide 19: Capacity Clears & Unsold
NRG 1Q20 Earnings Capacity Clears & Unsold Business Review Financial Review Closing Remarks Appendix Capacity Revenue by Calendar1 Year ($ MM) Market 2020 2021 PJM $282 $299 ISO-NE $110 $90 Illustrative: NYISO2 $151 $195 Assumes uncleared capacity clears at current CAISO2 $58 $52 market levels Estim
Slide 20: Integrated Portfolio Modeling Data
Integrated Portfolio NRG 1Q20 Earnings Business Review Financial Review Additional Modeling Data Closing Remarks Appendix 2020E 2021E Guidance Drivers Business Statistics ERCOT East/West ERCOT East/West Operational Statistics Retail Sales – Current Portfolio1,3 Electric Estimated Sales (TWhs) 57-59
Slide 21: Modeling Data Footnotes
NRG 1Q20 Earnings Modeling Data Footnotes Business Review Financial Review Closing Remarks Appendix 1 2020 numbers are estimated components in isolation to the current guidance range, established as of 9/30/19 and reaffirmed on 5/7/20 2 Annualized equivalents represent realized actuals through 3/31/
Slide 22: Historical Adjusted EBITDA
Historical Adjusted EBITDA NRG 1Q20 Earnings Business Review Financial Review New Segments Closing Remarks Appendix ($ millions) 2017 2018 2019 1Q19 2Q19 3Q19 4Q19 Texas $755 $1,008 $1,339 $179 $326 $584 $251 East 326 447 484 144 93 143 103 West/Other 386 361 166 15 51 70 30 Corp/Eliminations (78) (
Slide 23: Corporate Credit Profile/Targets
NRG 1Q20 Earnings Corporate Credit Profile/Targets Business Review Financial Review Closing Remarks Appendix ($ millions) 2020 Guidance Illustrative NRG Credit Profile Corporate Debt1 $5,925 0.9999 Strong Investment Grade Cash & Cash Equivalents2 (500) Rating Corporate Net Debt ~$5,425 Business Risk
Slide 24: Recourse Debt Maturity Schedule
NRG 1Q20 Earnings Recourse Debt Maturity Schedule Business Review Financial Review Closing Remarks Appendix (millions) Corp Secured $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 $1,000 6.625% Sen
Slide 25: Appendix: Reg. G Schedules
Appendix: Reg. G Schedules © [year] NRG Energy, Inc. All rights reserved. / Proprietary and Confidential Information 24
Slide 26: Reg. G: 2020 Guidance
NRG 1Q20 Earnings Reg. G Business Review Financial Review Closing Remarks Appendix Appendix Table A-1: 2020 Guidance The following table summarizes the calculation of Free Cash Flow before Growth and provides a reconciliation to Adjusted EBITDA and to Income from Continuing Operations: 2020 ($ milli
Slide 27: Reg. G: Q1 Adjusted EBITDA Reconciliation
NRG 1Q20 Earnings Reg. G Business Review Financial Review Closing Remarks Appendix Appendix Table A-2: First Quarter Adjusted EBITDA Reconciliation by Operating Segment The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Income/(Loss) from Continuing Op
Slide 28: Reg. G: 2020 YTD Free Cash Flow before Growth
NRG 1Q20 Earnings Reg. G Business Review Financial Review Closing Remarks Appendix Appendix Table A-3: 2020 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 3 Months
Slide 29: Reg. G: 2017-19 Adjusted EBITDA
NRG 1Q20 Earnings Reg. G Business Review Financial Review Closing Remarks Appendix Appendix Table A-4: 2017-19 Adjusted EBITDA : The following table summarizes the calculation of Adjusted EBITDA providing reconciliation to Income/(Loss) from Continuing Operations: 2017 2018 2019 West/ Corp/ West/ Co
Slide 30: Reg. G: 2019 Quarterly Adjusted EBITDA
NRG 1Q20 Earnings Reg. G Business Review Financial Review Closing Remarks Appendix Appendix Table A-5: 2019 Quarterly Adjusted EBITDA : The following table summarizes the calculation of Adjusted EBITDA providing reconciliation to Income/(Loss) from Continuing Operations: 1Q219 2Q19 3Q19 4Q19 West/ C
Slide 31: Reg. G: 2019 Adjusted EBITDA by Prior Segment
NRG 1Q20 Earnings Reg. G Business Review Financial Review Closing Remarks Appendix Appendix Table A-6: 2019 Adjusted EBITDA Reconciliation by Prior Operating Segment The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Income from Continuing Operations G
Slide 32: Reg. G: Midwest Gen Adjusted EBITDA
NRG 1Q20 Earnings Reg. G Business Review Financial Review Closing Remarks Appendix Appendix Table A-7: 2019 and 2020 Adjusted EBITDA Reconciliation for Midwest Gen The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Income from Continuing Operations ($
Slide 33: Reg. G
NRG 1Q20 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 34: Reg. G
NRG 1Q20 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