NRG (NYSE: NRG) 2025 earnings, LS Power acquisition and 2026 guidance
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
NRG Energy reported strong full-year 2025 results while transforming its power portfolio. Revenue was $30.7 billion and GAAP net income was $864 million, down from $1.1 billion mainly due to non-cash mark-to-market hedge losses. Adjusted EBITDA rose to $4.1 billion and Adjusted EPS increased to $8.24 from $6.83, and Free Cash Flow before Growth reached $2.2 billion.
The company completed the acquisition of 13 GW of gas and dual-fuel generation assets plus CPower from LS Power, effectively doubling its generation capacity and expanding demand response capabilities. It closed $1.15 billion of low-interest Texas Energy Fund financing to support 1.5 GW of new Texas projects, with the first unit expected online in June 2026.
NRG returned $1.6 billion to shareholders in 2025 through $1.3 billion of share repurchases and $344 million of dividends, funded in part by issuing $4.9 billion of new notes and other debt activity. Total liquidity increased to $9.6 billion at year-end. For 2026, NRG reaffirmed guidance with Adjusted EBITDA of $5.3–$5.8 billion, Adjusted EPS of $7.90–$9.90, and Free Cash Flow before Growth of $2.8–$3.3 billion.
Positive
- Transformative LS Power acquisition: Closed purchase of 13 GW of generation assets plus CPower, which the company states doubles its generation footprint and expands demand response capabilities, potentially strengthening earnings power through the current power demand supercycle.
- Stronger adjusted performance and cash generation: 2025 Adjusted EBITDA rose to $4.1 billion from $3.8 billion, Adjusted EPS increased to $8.24 from $6.83, and Free Cash Flow before Growth improved to $2.2 billion, supporting $1.6 billion of capital returns.
Negative
- Higher leverage to fund growth: Total liquidity rose to $9.6 billion largely because of $4.9 billion of newly issued secured and unsecured debt, increasing total liabilities and interest expense as NRG finances the LS Power acquisition and other needs.
- GAAP earnings pressure from hedging: GAAP net income declined to $864 million from $1.1 billion in 2024, primarily due to unrealized non-cash mark-to-market losses on economic hedges reversing prior gains, highlighting ongoing earnings volatility from derivative valuation swings.
Insights
NRG delivers strong adjusted 2025 results, funds a transformative acquisition with higher leverage, and reaffirms robust 2026 guidance.
NRG posted solid operating performance in 2025: Adjusted EBITDA increased to $4.1 billion, Adjusted Net Income to $1.6 billion, and Adjusted EPS to $8.24. Free Cash Flow before Growth of $2.2 billion supported $1.6 billion of capital returns via buybacks and dividends.
The company closed the LS Power transaction, adding 13 GW of generation and the CPower demand response platform, which it describes as doubling its generation footprint. This was primarily funded with $4.9 billion of new notes and other debt actions, lifting total liquidity to $9.6 billion but also increasing total liabilities.
Management reaffirmed 2026 guidance with Adjusted EBITDA of $5.325–$5.825 billion and Adjusted EPS of $7.90–$9.90, incorporating roughly 11 months of LS Power contributions. Actual outcomes will depend on integration execution, hedge performance, Texas project delivery, and maintaining satisfactory credit metrics while continuing share repurchases and dividends.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (date of earliest event reported)
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of Principal Executive Offices) | (Zip Code) | |||||||||||||
(713 ) 537-3000
Registrant's telephone number, including area code
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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Item 2.02 Results of Operations and Financial Condition
On February 24, 2026 , NRG Energy, Inc. issued a press release announcing its financial results for the full year and quarter ended December 31, 2025. A copy of the press release is furnished as Exhibit 99.1 to this report on Form 8-K and is hereby incorporated by reference.
Item 9.01 Financial Statements and Exhibits
Exhibits
| Exhibit Number | Document | |||||||
| 99.1 | Press Release, dated February 24, 2026. | |||||||
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
NRG Energy, Inc.
(Registrant)
By: /s/ Christine A. Zoino
Christine A. Zoino
Corporate Secretary
Dated: February 24, 2026
Exhibit 99.1
NRG Energy, Inc. Reports Full Year 2025 Financial Results
•Exceeded 2025 raised financial guidance ranges; returned $1.6 billion of capital to shareholders
•Completed acquisition of 13 GW of power generation assets and CPower from LS Power; doubles generation footprint, expands demand response capabilities, and strengthens affordability and reliability solutions for customers
•Adjusted Earnings per Share (Adjusted EPS) growth rate target of 14%+ extended through 2030
•Closed Texas Energy Fund (TEF) loan agreement for Greens Bayou 443 MW CCGT facility; 1.5 GW across three projects supported by $1.15 Bn in low-interest financing; first project expected online in June 2026
•Exceeded raised 2025 Texas residential VPP target
HOUSTON—February 24, 2026—NRG Energy, Inc. (NYSE: NRG) today reported GAAP Net Income of $66 million for the three months ended December 31, 2025 and $0.9 billion for the full year 2025. GAAP EPS — basic was $4.09, Cash Provided by Operating Activities was $1.9 billion, Adjusted Net Income was $1.6 billion, Adjusted EPS was $8.24, Adjusted EBITDA was $4.1 billion, and Free Cash Flow before Growth (FCFbG) was $2.2 billion for the full year 2025.
“We've doubled our generation footprint, advanced 1.5 GW of new generation through three Texas Energy Fund projects, and expanded our demand response and residential VPP capabilities,” said Larry Coben, NRG Chair and Chief Executive Officer. “This enhances NRG’s ability to provide resilient and affordable solutions to our customers during this power demand supercycle. We expect to add significant new capacity for data centers through our bring your own power strategy and new innovative, affordable products for everyone from the household to the hyperscaler.”
Consolidated Financial Results
Table 1
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||
| (In millions, except per share amounts) | 12/31/25 | 12/31/24 | 12/31/25 | 12/31/24 | ||||||||||||||||||||||
| GAAP Net Income | $ | 66 | $ | 643 | $ | 864 | $ | 1,125 | ||||||||||||||||||
Adjusted Net Incomea b | $ | 200 | $ | 316 | $ | 1,606 | $ | 1,408 | ||||||||||||||||||
GAAP EPS — basicc | $ | 0.26 | $ | 3.10 | $ | 4.09 | $ | 5.14 | ||||||||||||||||||
Adjusted EPSa d | $ | 1.04 | $ | 1.56 | $ | 8.24 | $ | 6.83 | ||||||||||||||||||
Adjusted EBITDAa | $ | 847 | $ | 902 | $ | 4,087 | $ | 3,789 | ||||||||||||||||||
| Cash Provided/(Used) by Operating Activities | $ | 123 | $ | 952 | $ | 1,913 | $ | 2,306 | ||||||||||||||||||
Free Cash Flow Before Growth Investments (FCFbG)a | $ | 175 | $ | 624 | $ | 2,210 | $ | 2,062 | ||||||||||||||||||
a Adjusted Net Income, Adjusted EPS, Adjusted EBITDA, and FCFbG are non-GAAP financial measures; see Appendix tables A-1 through A-6 for GAAP reconciliations. Adjusted Net Income, Adjusted EPS, and Adjusted EBITDA exclude fair value adjustments related to derivatives
b Adjusted Net Income as shown here is 'Adjusted Net Income available for common stockholders'; see Appendix tables A-1 through A-4
c GAAP Income per Weighted Average Common Share - Basic
d Adjusted EPS calculated based on Adjusted Net Income divided by weighted average number of common shares outstanding - basic
NRG's GAAP Net Income for the full year 2025 was $261 million lower than prior year. The year-over-year change was primarily driven by unrealized non-cash mark-to-market losses on open positions related to economic hedges compared to gains in 2024. Certain economic hedge positions that impact NRG’s GAAP Net Income are required to be marked-to-market every period, while the customer contracts related to these items are not, resulting in temporary unrealized non-cash losses or gains on the economic hedges that are not reflective of the expected economics at future settlement. The decrease was also driven by the sale of Airtron in 2024 and the termination of the Cottonwood lease in 2025, partially offset by strong Texas and Vivint Smart Home performance in 2025 and a loss on debt extinguishment recorded in 2024.
Adjusted Net Income for the full year 2025 was $1.6 billion, $198 million higher than prior year, primarily driven by $298 million improvement in Adjusted EBITDA described in the segment results below. This was partially offset by increased interest expense primarily driven by the funding of the acquisition of assets and CPower from LS Power. Adjusted EPS was $8.24 for full year 2025, $1.41 higher than prior year as a result of strong financial and operating performance, as well as reduction of 11 million in the weighted average number of basic common shares outstanding.
Reaffirming 2026 Guidance
On February 2, 2026, NRG announced updated guidance following the close of its acquisition of a portfolio of assets and CPower from LS Power on January 30, 2026. The updated guidance reflects approximately 11 months of ownership of these assets in 2026.
NRG is reaffirming its guidance for 2026 as set forth below.
Table 2: Adjusted Net Income, Adjusted EPS, Adjusted EBITDA, and FCFbG Guidance for 2026a,b
| 2026 | 2026 | |||||||||||||
| (In millions, except per share amounts) | Guidance | Guidance Midpoint | ||||||||||||
| Adjusted Net Income | $1,685 - $2,115 | $1,900 | ||||||||||||
| Adjusted EPS | $7.90 - $9.90 | $8.90 | ||||||||||||
| Adjusted EBITDA | $5,325 - $5,825 | $5,575 | ||||||||||||
| FCFbG | $2,800 - $3,300 | $3,050 | ||||||||||||
a Adjusted Net Income, Adjusted EPS, Adjusted EBITDA, and FCFbG are non-GAAP financial measures; see Appendix tables A-8 and A-9 for GAAP reconciliations. Adjusted Net Income, Adjusted EPS, and Adjusted EBITDA exclude fair value adjustments related to derivatives. The Company does not guide to GAAP Net Income due to the impact of such fair value adjustments related to derivatives in a given year
b Reflects the Company’s previously communicated 2026 outlook, updated to incorporate approximately 11 months of ownership of the portfolio acquired from LS Power. The updated guidance therefore includes approximately 90% of the acquired portfolio’s estimated full-year 2026 contribution.
Capital Allocation
In 2025, the Company returned $1.6 billion to shareholders through $1.3 billion in share repurchases and $344 million in common stock dividends. On October 8, 2025, the Company issued $4.9 billion of Notes to partially fund the acquisition of assets and CPower from LS Power and refinance its Senior Secured First Lien Notes due in 2025. In addition, the Company executed $310 million in liability management.
For 2026, the Company reiterates its previously announced capital allocation plan, which includes $1.0 billion in share repurchases, and common stock dividends of approximately $400 million. As of January 31, 2026, the Company has executed $100 million in share repurchases.
On January 23, 2026, NRG declared a quarterly dividend of $0.475 per common share, or $1.90 per share on an annualized basis. This dividend represented an 8% increase, in line with the Company's annual dividend target growth rate of 7-9% per share. The dividend was paid on February 17, 2026, to common stockholders of record as of February 2, 2026.
NRG's share repurchase program and common stock dividend are subject to maintaining satisfactory credit metrics, available capital, market conditions, and compliance with associated laws and regulations. The timing and amount of any shares of NRG’s common stock repurchased under the share repurchase authorization will be determined by NRG’s management based
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on market conditions and other factors. NRG will only repurchase shares when management believes it would not jeopardize the Company’s ability to maintain satisfactory credit ratings.
NRG Strategic Developments
Completed Acquisition of 13 GW of Power Generation Assets and CPower from LS Power
On January 30, 2026, NRG closed on the acquisition of assets and CPower from LS Power. The transaction included 18 natural‑gas and dual fuel facilities totaling 13 GW across nine states and CPower's C&I demand response platform. Combined, this highly accretive transaction doubles NRG's generation capacity, boosts upside opportunities from the power demand supercycle, and expands the Company's broad range of affordable and resilient solutions for customers large and small.
Texas Energy Fund (TEF)
On November 20, 2025, NRG entered into a $370 million loan agreement with the Public Utility Commission of Texas (PUCT) under the TEF for a low-interest rate loan at 3% to support development of its 443 MW Greens Bayou generation facility. Initial disbursement of funds occurred in November 2025 and is expected to continue through the projected mid-2028 commercial operations date.
NRG now has three projects funded through the program totaling 1.5 GW of new generation in Texas, supported by $1.15 Bn in low-interest financing. Construction is underway, with all three projects on time and on budget. The Company expects commercial operations at the first project, T.H. Wharton, in June 2026. These projects underscore NRG's commitment to delivering high-quality dispatchable generation to meet the growing energy needs of Texas consumers.
Texas Residential VPP
On August 6, 2025, NRG raised its 2025 Texas Residential Virtual Power Plant target to 150 MW, up from 20 MW, following strong customer adoption of the Home Essentials and other offerings. The program exceeded its 2025 target and remains on track to achieve 650 MW in Texas by 2030 and 1 GW by 2035.
Segment Results
Table 3: Adjusted EBITDAa
| (In millions) | Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||
| Segment | 12/31/25 | 12/31/24 | 12/31/25 | 12/31/24 | ||||||||||||||||||||||
| Texas | $ | 259 | $ | 327 | $ | 1,877 | $ | 1,582 | ||||||||||||||||||
| East | 301 | 282 | 981 | 1,006 | ||||||||||||||||||||||
West/Otherb | 12 | 18 | 137 | 190 | ||||||||||||||||||||||
| Vivint Smart Home | 275 | 275 | 1,092 | 1,011 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 847 | $ | 902 | $ | 4,087 | $ | 3,789 | ||||||||||||||||||
a Adjusted EBITDA is a non-GAAP financial measure; see Appendix tables A-1 through A-4 for GAAP reconciliation of Adjusted EBITDA (by operating segment) to GAAP Net Income (by operating segment). Adjusted EBITDA excludes fair value adjustments related to derivatives
b Includes Corporate activities
Texas: Full year 2025 Adjusted EBITDA was $1,877 million, $295 million higher than the prior year. The increase is primarily driven by improved margins and supply cost optimization, partially offset by higher planned plant maintenance expenditure.
East: Full year 2025 Adjusted EBITDA was $981 million, $25 million lower than prior year. This decrease is primarily driven by higher cost to serve retail load, higher planned plant maintenance expenditure, and retirement of the Indian River facility, partially offset by higher natural gas wholesale margins and higher capacity prices for owned generation.
West/Other: Full year 2025 Adjusted EBITDA was $137 million, $53 million lower than prior year. This decrease is primarily driven by the sale of Airtron in September 2024 and termination of the Cottonwood lease in May 2025, partially offset by higher retail power margins.
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Vivint Smart Home: Full year Adjusted EBITDA was $1,092 million, $81 million higher than prior year. The increase is attributable to growth in customer count, driven by record new customer adds and continued strong customer retention, and an increase in monthly recurring service margin per customer.
Liquidity and Capital Resources
Table 4: Corporate Liquidity
| (In millions) | 12/31/25 | 12/31/24 | ||||||||||||
| Cash and Cash Equivalents | $ | 4,708 | $ | 966 | ||||||||||
| Restricted Cash | 30 | 8 | ||||||||||||
| Total | $ | 4,738 | $ | 974 | ||||||||||
| Total credit facility availability | 4,890 | 4,469 | ||||||||||||
| Total Liquidity, excluding collateral received | $ | 9,628 | $ | 5,443 | ||||||||||
As of December 31, 2025, NRG's unrestricted cash was $4.7 billion, and $4.9 billion was available under the Company’s credit facilities. Total liquidity was $9.6 billion, which was $4.2 billion higher than December 31, 2024. The increase was driven by $4.9 billion of newly-issued secured and unsecured corporate debt primarily to fund the acquisition of assets and CPower from LS Power.
Earnings Conference Call
On February 24, 2026, NRG will host a conference call at 9:00 a.m. Eastern (8:00 a.m. Central) to discuss these results. Investors, the news media and others may access the live webcast of the conference call and accompanying presentation materials through the investor relations website under “presentations and webcasts” on investors.nrg.com. The webcast will be archived on the site for those unable to listen in real-time.
About NRG
NRG is a leading provider of electricity, natural gas, and smart home solutions to eight million customers across North America. The company operates a customer‑first platform supported by a diversified supply strategy and the safe, reliable operation of approximately 25 GW of power generation. NRG plays a meaningful role in competitive energy markets and our innovative team is creating the flexible and affordable solutions that households and large businesses need today and in the future. Visit nrg.com for more information, and connect with us on Facebook, Instagram, LinkedIn, and X.
Safe Harbor
In addition to historical information, the information presented in this press release 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, expectations, projections, goals, assumptions, known and unknown risks and uncertainties and can typically be identified by terminology such as “may,” “should,” “could,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “expect,” “intend,” “seek,” “plan,” “think,” “anticipate,” “estimate,” “predict,” “target,” “potential” or “continue” or the negative of these terms or other comparable terminology. Such forward-looking statements include, but are not limited to, statements about NRG’s future revenues, income, indebtedness, capital structure, plans, expectations, objectives, projected financial performance and/or business results and other future events, and views of economic and market conditions.
Although NRG believes that its expectations are reasonable, it can give no assurance that these expectations will prove to be correct, and actual results may vary materially. Factors that could cause actual results to differ materially from those contemplated herein include, among others, general economic conditions, the imposition of tariffs and escalation of international trade disputes (and inflationary impacts resulting therefrom), risks associated with the integration of the assets acquired from LS Power, including potential disruption to ongoing operations and other transition difficulties, the inability of the combined company to realize expected synergies and benefits of integration (or that it takes longer than expected) which may result in the combined company not operating as effectively as expected, hazards customary in the power industry, weather conditions and extreme weather events, competition in wholesale power, gas and smart home markets, the volatility of energy and fuel prices, the volatility in demand for power and gas, customer affordability concerns that may constrain the pricing of the Company’s products and services and limit its ability to recover costs, failure of customers or counterparties to perform under contracts, changes in the wholesale power and gas markets, the failure of NRG’s expectations regarding load growth to
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materialize, changes in government or market regulations, the condition of capital markets generally and NRG’s ability to access capital markets, NRG’s ability to execute its market operations and supply strategy, risks related to data privacy, cyberterrorism and inadequate cybersecurity, the loss of data, unanticipated outages at NRG’s generation facilities, operational and reputational risks related to the use of artificial intelligence and the adherence to developing laws and regulations related to the use thereof, NRG’s ability to achieve its net debt targets, adverse results in current and future litigation, complaints, product liability claims and/or adverse publicity, failure to identify, execute or successfully implement acquisitions or asset sales, risks of the smart home and security industry, including risks of and publicity surrounding the sales, customer origination and retention process, the impact of changes in consumer spending patterns, consumer preferences, geopolitical tensions, demographic trends, supply chain disruptions, NRG’s ability to implement value enhancing improvements to plant operations and company-wide processes, NRG’s ability to achieve or maintain investment grade credit metrics, NRG’s ability to proceed with projects under development or the inability to complete the construction of such projects on schedule or within budget, the inability to maintain or create successful partnering relationships, NRG’s ability to operate its business efficiently, NRG’s ability to retain retail customers, the ability to successfully integrate businesses of acquired assets or companies, NRG’s ability to realize anticipated benefits of transactions (including expected cost savings and other synergies) or the risk that anticipated benefits may take longer to realize than expected, NRG’s ability to execute its capital allocation plan, and the other risks and uncertainties discussed in this release and in our Forms 10-K, 10-Q, and 8-K filed with or furnished to the SEC.
NRG undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. The Adjusted Net Income, Adjusted EPS, Adjusted EBITDA and Free Cash Flow before Growth guidance are estimates as of February 24, 2026. These estimates are based on assumptions NRG believed to be reasonable as of that date. NRG disclaims any current intention to update such guidance, except as required by law. The foregoing review of factors that could cause NRG’s actual results to differ materially from those contemplated in the forward-looking statements included in this press release should be considered in connection with information regarding risks and uncertainties that may affect NRG's future results included in NRG's filings with the Securities and Exchange Commission at www.sec.gov. For a more detailed discussion of these factors, see the information under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in NRG’s most recent Annual Report on Form 10-K, and in subsequent SEC filings. NRG’s forward-looking statements speak only as of the date of this communication or as of the date they are made.
Contacts:
Media: | Investors: | ||||||||||
Ann Duhon | Brendan Mulhern | ||||||||||
NRGMediaRelations@nrg.com | 609.524.4767 | ||||||||||
5
NRG ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
| For the Year Ended December 31, | |||||||||||||||||
| (In millions, except per share amounts) | 2025 | 2024 | 2023 | ||||||||||||||
| Revenue | |||||||||||||||||
| Revenue | $ | 30,713 | $ | 28,130 | $ | 28,823 | |||||||||||
| Operating Costs and Expenses | |||||||||||||||||
| Cost of operations (excluding depreciation and amortization shown below) | 24,761 | 22,100 | 26,483 | ||||||||||||||
| Depreciation and amortization | 1,406 | 1,403 | 1,295 | ||||||||||||||
| Impairment losses | — | 36 | 26 | ||||||||||||||
| Selling, general and administrative costs (excluding amortization of customer acquisition costs of $295, $204 and $125, respectively, which are included in depreciation and amortization shown separately above) | 2,602 | 2,345 | 2,094 | ||||||||||||||
| Acquisition-related transaction and integration costs | 74 | 30 | 119 | ||||||||||||||
| Total operating costs and expenses | 28,843 | 25,914 | 30,017 | ||||||||||||||
| (Loss)/Gain on sale of assets | (25) | 208 | 1,578 | ||||||||||||||
| Operating Income | 1,845 | 2,424 | 384 | ||||||||||||||
| Other Income/(Expense) | |||||||||||||||||
| Equity in earnings of unconsolidated affiliates | 11 | 20 | 16 | ||||||||||||||
| Impairment losses on investments | (39) | (7) | (102) | ||||||||||||||
| Other income, net | 68 | 44 | 47 | ||||||||||||||
| (Loss)/Gain on debt extinguishment | (10) | (382) | 109 | ||||||||||||||
| Interest expense | (741) | (651) | (667) | ||||||||||||||
| Total other expense | (711) | (976) | (597) | ||||||||||||||
| Income/(Loss) Before Income Taxes | 1,134 | 1,448 | (213) | ||||||||||||||
| Income tax expense/(benefit) | 270 | 323 | (11) | ||||||||||||||
| Net Income/(Loss) | 864 | 1,125 | (202) | ||||||||||||||
| Less: Cumulative dividends attributable to Series A Preferred Stock | 67 | 67 | 54 | ||||||||||||||
| Net Income/(Loss) Available for Common Stockholders | $ | 797 | $ | 1,058 | $ | (256) | |||||||||||
| Income/(Loss) Per Share | |||||||||||||||||
| Weighted average number of common shares outstanding — basic | 195 | 206 | 228 | ||||||||||||||
| Income/(Loss) per Weighted Average Common Share — Basic | $ | 4.09 | $ | 5.14 | $ | (1.12) | |||||||||||
| Weighted average number of common shares outstanding — diluted | 199 | 212 | 228 | ||||||||||||||
| Income/(Loss) per Weighted Average Common Share — Diluted | $ | 4.01 | $ | 4.99 | $ | (1.12) | |||||||||||
6
NRG ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
| For the Year Ended December 31, | |||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Net Income/(Loss) | $ | 864 | $ | 1,125 | $ | (202) | |||||||||||
| Other Comprehensive Income/(Loss), net of tax | |||||||||||||||||
| Foreign currency translation adjustments | 21 | (22) | 9 | ||||||||||||||
| Defined benefit plans | 15 | (4) | 30 | ||||||||||||||
| Other comprehensive income/(loss) | 36 | (26) | 39 | ||||||||||||||
| Comprehensive Income/(Loss) | $ | 900 | $ | 1,099 | $ | (163) | |||||||||||
7
NRG ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| As of December 31, | |||||||||||
| (In millions) | 2025 | 2024 | |||||||||
| ASSETS | |||||||||||
| Current Assets | |||||||||||
| Cash and cash equivalents | $ | 4,708 | $ | 966 | |||||||
| Funds deposited by counterparties | 260 | 199 | |||||||||
| Restricted cash | 30 | 8 | |||||||||
| Accounts receivable, net | 4,065 | 3,488 | |||||||||
| Inventory | 461 | 478 | |||||||||
| Derivative instruments | 2,189 | 2,686 | |||||||||
| Cash collateral paid in support of energy risk management activities | 365 | 309 | |||||||||
| Prepayments and other current assets | 1,069 | 830 | |||||||||
| Total current assets | 13,147 | 8,964 | |||||||||
| Property, plant and equipment, net | 3,632 | 2,021 | |||||||||
| Other Assets | |||||||||||
| Equity investments in affiliates | 16 | 45 | |||||||||
| Operating lease right-of-use assets, net | 130 | 151 | |||||||||
| Goodwill | 5,017 | 5,011 | |||||||||
| Customer relationships, net | 1,203 | 1,538 | |||||||||
| Other intangible assets, net | 1,106 | 1,370 | |||||||||
| Derivative instruments | 1,568 | 1,710 | |||||||||
| Deferred income taxes | 1,843 | 2,067 | |||||||||
| Other non-current assets | 1,478 | 1,145 | |||||||||
| Total other assets | 12,361 | 13,037 | |||||||||
| Total Assets | $ | 29,140 | $ | 24,022 | |||||||
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NRG ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
| As of December 31, | |||||||||||
| (In millions, except share data) | 2025 | 2024 | |||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Current Liabilities | |||||||||||
| Current portion of long-term debt and finance leases | $ | 31 | $ | 996 | |||||||
| Current portion of operating lease liabilities | 35 | 66 | |||||||||
| Accounts payable | 2,834 | 2,513 | |||||||||
| Derivative instruments | 2,257 | 2,297 | |||||||||
| Cash collateral received in support of energy risk management activities | 260 | 199 | |||||||||
| Deferred revenue current | 748 | 711 | |||||||||
| Accrued expenses and other current liabilities | 1,864 | 2,031 | |||||||||
| Total current liabilities | 8,029 | 8,813 | |||||||||
| Other Liabilities | |||||||||||
| Long-term debt and finance leases | 16,412 | 9,812 | |||||||||
| Non-current operating lease liabilities | 144 | 117 | |||||||||
| Derivative instruments | 1,103 | 1,107 | |||||||||
| Deferred income taxes | 15 | 12 | |||||||||
| Deferred revenue non-current | 895 | 862 | |||||||||
| Other non-current liabilities | 861 | 821 | |||||||||
| Total other liabilities | 19,430 | 12,731 | |||||||||
| Total Liabilities | 27,459 | 21,544 | |||||||||
| Commitments and Contingencies | |||||||||||
| Stockholders' Equity | |||||||||||
| Preferred stock; 10,000,000 shares authorized; 650,000 Series A shares issued and outstanding at December 31, 2025 and 2024 (aggregate liquidation preference $650) | 650 | 650 | |||||||||
| Common stock; $0.01 par value; 500,000,000 shares authorized; 199,828,615 and 205,064,058 shares issued; and 190,376,607 and 198,604,003 shares outstanding at December 31, 2025 and 2024, respectively | 2 | 2 | |||||||||
| Additional paid-in capital | 215 | 705 | |||||||||
| Retained earnings | 1,982 | 1,535 | |||||||||
| Treasury stock, at cost; 9,452,008 and 6,460,055 shares at December 31, 2025 and 2024, respectively | (1,087) | (297) | |||||||||
| Accumulated other comprehensive loss | (81) | (117) | |||||||||
| Total Stockholders' Equity | 1,681 | 2,478 | |||||||||
| Total Liabilities and Stockholders' Equity | $ | 29,140 | $ | 24,022 | |||||||
9
NRG ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Year Ended December 31, | |||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Cash Flows from Operating Activities | |||||||||||||||||
| Net Income/(Loss) | $ | 864 | $ | 1,125 | $ | (202) | |||||||||||
| Adjustments to reconcile net income/(loss) to cash provided by operating activities: | |||||||||||||||||
| Depreciation of property, plant and equipment and amortization of customer relationships and other intangible assets | 896 | 1,071 | 1,127 | ||||||||||||||
| Amortization of capitalized contract costs | 510 | 332 | 168 | ||||||||||||||
| Accretion of asset retirement obligations | 29 | 34 | 27 | ||||||||||||||
| Provision for credit losses | 272 | 314 | 251 | ||||||||||||||
| Amortization of nuclear fuel | — | — | 47 | ||||||||||||||
| Amortization of financing costs and debt discounts | 51 | 39 | 52 | ||||||||||||||
| Loss/(gain) on debt extinguishment | 10 | 382 | (109) | ||||||||||||||
| Amortization of in-the-money contracts and emissions allowances | 97 | 105 | 137 | ||||||||||||||
| Amortization of unearned equity compensation | 134 | 102 | 101 | ||||||||||||||
| Net loss/(gain) on sale of assets and disposal of assets | 25 | (192) | (1,559) | ||||||||||||||
| Gain on proceeds from insurance recoveries for property, plant and equipment, net | (100) | — | (164) | ||||||||||||||
| Impairment losses | 39 | 43 | 128 | ||||||||||||||
| Changes in derivative instruments | 450 | (337) | 2,455 | ||||||||||||||
| Changes in current and deferred income taxes and liability for uncertain tax benefits | 213 | 165 | (92) | ||||||||||||||
| Changes in collateral deposits in support of risk management activities | 7 | 245 | (1,806) | ||||||||||||||
| Equity in and distributions from earnings of unconsolidated affiliates | (8) | (13) | (6) | ||||||||||||||
| Cash (used)/provided by changes in other working capital: | |||||||||||||||||
| Accounts receivable - trade | (760) | (366) | 1,004 | ||||||||||||||
| Inventory | 30 | 111 | 189 | ||||||||||||||
| Prepayments and other current assets | (757) | (539) | (401) | ||||||||||||||
| Accounts payable | 192 | 170 | (1,455) | ||||||||||||||
| Accrued expenses and other current liabilities | 28 | 136 | 360 | ||||||||||||||
| Other assets and liabilities | (309) | (621) | (473) | ||||||||||||||
| Cash provided/(used) by operating activities | $ | 1,913 | $ | 2,306 | $ | (221) | |||||||||||
| Cash Flows from Investing Activities | |||||||||||||||||
| Payments for acquisitions of businesses and assets, net of cash acquired | $ | (596) | $ | (38) | $ | (2,523) | |||||||||||
| Capital expenditures | (1,147) | (472) | (598) | ||||||||||||||
| Proceeds from sales of assets, net of cash disposed | 6 | 501 | 2,007 | ||||||||||||||
| Net purchases of emissions allowances | (1) | (18) | (24) | ||||||||||||||
| Proceeds from insurance recoveries for property, plant and equipment, net | 100 | 3 | 240 | ||||||||||||||
| Investments in nuclear decommissioning trust fund securities | — | — | (367) | ||||||||||||||
| Proceeds from the sale of nuclear decommissioning trust fund securities | — | — | 355 | ||||||||||||||
| Cash used by investing activities | $ | (1,638) | $ | (24) | $ | (910) | |||||||||||
10
| For the Year Ended December 31, | |||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Cash Flows from Financing Activities | |||||||||||||||||
| Proceeds from issuance of preferred stock, net of fees | $ | — | $ | — | $ | 635 | |||||||||||
| Equivalent shares purchased in lieu of tax withholdings | (92) | (50) | (22) | ||||||||||||||
Payments for share repurchase activity and excise tax(a) | (1,311) | (935) | (1,150) | ||||||||||||||
Payment for settlement of capped call options(b) | (292) | — | — | ||||||||||||||
| Payments of dividends to preferred and common stockholders | (411) | (405) | (381) | ||||||||||||||
| Proceeds from issuance of long-term debt | 6,676 | 3,200 | 731 | ||||||||||||||
| Repayments of long-term debt and finance leases | (1,005) | (3,255) | (523) | ||||||||||||||
| Payments for debt extinguishment costs | — | (262) | — | ||||||||||||||
| Payments of deferred financing costs | (78) | (45) | (32) | ||||||||||||||
| Net receipts/(payments) from settlement of acquired derivatives that include financing elements | 59 | (3) | 342 | ||||||||||||||
| Proceeds from credit facilities | 1,575 | 1,050 | 3,020 | ||||||||||||||
| Repayments to credit facilities | (1,575) | (1,050) | (3,020) | ||||||||||||||
| Cash provided/(used) by financing activities | $ | 3,546 | $ | (1,755) | $ | (400) | |||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 4 | (3) | 2 | ||||||||||||||
| Net Increase/(Decrease) in Cash and Cash Equivalents, Funds Deposited by Counterparties and Restricted Cash | 3,825 | 524 | (1,529) | ||||||||||||||
| Cash and Cash Equivalents, Funds Deposited by Counterparties and Restricted Cash at Beginning of Period | 1,173 | 649 | 2,178 | ||||||||||||||
| Cash and Cash Equivalents, Funds Deposited by Counterparties and Restricted Cash at End of Period | $ | 4,998 | $ | 1,173 | $ | 649 | |||||||||||
(a)Includes excise tax paid of $9 million during the year ended December 31, 2025
(b)Includes $16 million of payments for shares received from the exercise of the Capped Call Options.
11
Appendix Table A-1: Fourth Quarter 2025 Adjusted EBITDA and Adjusted Net Income Reconciliation by Operating Segment and Consolidated Adjusted EPS Reconciliation
The following table summarizes the calculation of Adjusted EBITDA, Adjusted Net Income and Adjusted EPS and provides a reconciliation from Net Income/(Loss) Available for Common Stockholders:
| (In millions, except per share amounts) | Texas | East | West/ Other | Vivint Smart Home | Corp/Elim | Total | Earnings Per Share, Basic 7,8 | Earnings Per Share, Diluted 7,8 | |||||||||||||||||||||
| Net Income/(Loss) Available for Common Stockholders | $ | 106 | $ | 228 | $ | (69) | $ | 34 | $ | (249) | $ | 50 | $ | 0.26 | $ | 0.26 | |||||||||||||
| Cumulative dividends attributable to Series A Preferred Stock | 16 | 16 | 0.08 | 0.08 | |||||||||||||||||||||||||
| Net Income/(Loss) | $ | 106 | $ | 228 | $ | (69) | $ | 34 | $ | (233) | $ | 66 | $ | 0.34 | $ | 0.34 | |||||||||||||
| Plus: | |||||||||||||||||||||||||||||
| Interest expense, net | — | — | — | — | 191 | 191 | 0.99 | 0.98 | |||||||||||||||||||||
| Income tax (benefit) | — | — | — | — | (2) | (2) | (0.01) | (0.01) | |||||||||||||||||||||
| Depreciation and amortization | 103 | 38 | 8 | 218 | 9 | 376 | 1.96 | 1.94 | |||||||||||||||||||||
| ARO expense | 3 | 4 | — | — | — | 7 | 0.04 | 0.04 | |||||||||||||||||||||
| Contract and emission credit amortization, net | 2 | 6 | 4 | — | — | 12 | 0.06 | 0.06 | |||||||||||||||||||||
Stock-based compensation1 | 31 | 12 | 3 | 7 | — | 53 | 0.28 | 0.27 | |||||||||||||||||||||
| Acquisition and divestiture integration and transaction costs | — | — | — | 1 | 15 | 16 | 0.08 | 0.08 | |||||||||||||||||||||
Cost to achieve1 | — | — | — | — | 8 | 8 | 0.04 | 0.04 | |||||||||||||||||||||
| Deactivation costs | 1 | 5 | — | — | — | 6 | 0.03 | 0.03 | |||||||||||||||||||||
| Loss on sale of assets | 18 | — | — | — | — | 18 | 0.09 | 0.09 | |||||||||||||||||||||
Other and non-recurring charges2 | — | 50 | (24) | 15 | (2) | 39 | 0.20 | 0.20 | |||||||||||||||||||||
| Impairments | — | — | 39 | — | — | 39 | 0.20 | 0.20 | |||||||||||||||||||||
Mark-to-market (MtM) (gain)/loss on economic hedges3 | (5) | (42) | 65 | — | — | 18 | 0.09 | 0.09 | |||||||||||||||||||||
| Adjusted EBITDA | $ | 259 | $ | 301 | $ | 26 | $ | 275 | $ | (14) | $ | 847 | $ | 4.41 | $ | 4.37 | |||||||||||||
Adjusted interest expense, net4 | — | — | — | — | (194) | (194) | (1.01) | (1.00) | |||||||||||||||||||||
| Depreciation and amortization | (103) | (38) | (8) | (218) | (9) | (376) | (1.96) | (1.94) | |||||||||||||||||||||
| Adjusted Income before income taxes | 156 | 263 | 18 | 57 | (217) | 277 | 1.44 | 1.43 | |||||||||||||||||||||
Adjusted income tax expense5 | — | — | — | — | (61) | (61) | (0.32) | (0.31) | |||||||||||||||||||||
| Adjusted Net Income before Preferred Stock dividends | 156 | 263 | 18 | 57 | (278) | 216 | 1.13 | 1.11 | |||||||||||||||||||||
| Cumulative dividends attributable to Series A Preferred Stock | — | — | — | — | (16) | (16) | (0.08) | (0.08) | |||||||||||||||||||||
Adjusted Net Income6 | $ | 156 | $ | 263 | $ | 18 | $ | 57 | $ | (294) | $ | 200 | $ | 1.04 | $ | 1.03 | |||||||||||||
1 Stock-based compensation of $2 million is reflected in cost to achieve. Stock-based compensation includes employee stock purchase plan expense
2 Includes reserves for legal matters
3 Loss of $18 million was primarily driven by unrealized non-cash mark-to-market losses on economic hedges due to decreases in natural gas and power prices in the West
4 Excludes mark-to-market gain on interest hedges of $3 million
5 Income tax calculated using Adjusted effective tax rate (ETR) on Adjusted Income before income taxes. Adjusted ETR includes impact of NRG’s tax credits as well as non-recurring tax items, using CAMT rate to accrue tax. Other adjustments are shown on pre-tax basis
6 Adjusted Net Income as shown here is 'Adjusted Net Income available for common stockholders'
7 Items may not sum due to rounding
8 Earnings per share amounts are based on weighted average number of common shares outstanding - basic of 192 million and on weighted average number of common shares outstanding - diluted of 194 million for the three months ended December 31, 2025
12
Fourth Quarter 2025 condensed financial information by Operating Segment:
| (In millions, except per share amounts) | Texas | East | West/ Other | Vivint Smart Home | Corp/Elim | Total | ||||||||||||||
Revenue1 | $ | 2,479 | $ | 3,925 | $ | 804 | $ | 559 | $ | (6) | $ | 7,761 | ||||||||
Cost of fuel, purchased energy and other cost of sales2 | 1,674 | 3,316 | 722 | 52 | (1) | 5,763 | ||||||||||||||
Economic gross margin | 805 | 609 | 82 | 507 | (5) | 1,998 | ||||||||||||||
Operations & maintenance and other cost of operations3 | 306 | 145 | 15 | 75 | 8 | 549 | ||||||||||||||
Selling, marketing, general and administrative4 | 240 | 162 | 46 | 157 | 5 | 610 | ||||||||||||||
Other | — | 1 | (5) | — | (4) | (8) | ||||||||||||||
| Adjusted EBITDA | $ | 259 | $ | 301 | $ | 26 | $ | 275 | $ | (14) | $ | 847 | ||||||||
Adjusted interest expense, net5 | — | — | — | — | (194) | (194) | ||||||||||||||
| Depreciation and amortization | (103) | (38) | (8) | (218) | (9) | (376) | ||||||||||||||
| Adjusted Income before income taxes | 156 | 263 | 18 | 57 | (217) | 277 | ||||||||||||||
Adjusted income tax expense5 | — | — | — | — | (61) | (61) | ||||||||||||||
| Adjusted Net Income before Preferred Stock dividends | 156 | 263 | 18 | 57 | (278) | 216 | ||||||||||||||
| Cumulative dividends attributable to Series A Preferred Stock | — | — | — | — | (16) | (16) | ||||||||||||||
Adjusted Net Income5 | $ | 156 | $ | 263 | $ | 18 | $ | 57 | $ | (294) | $ | 200 | ||||||||
| Weighted average number of common shares outstanding - basic | 192 | |||||||||||||||||||
| Adjusted EPS | $ | 1.04 | ||||||||||||||||||
1 Excludes MtM loss of $6 million and contract amortization of $2 million
2 Includes TDSP expense, capacity and emission credits
3 Excludes ARO expense of $7 million, deactivation costs of $6 million, stock-based compensation of $4 million and other and non-recurring charges of $(21) million
4 Excludes stock-based compensation of $49 million, other and non-recurring charges of $49 million, cost to achieve of $8 million and acquisition and divestiture integration and transaction costs of $1 million
5 See previous table for details
13
The following table reconciles the Condensed Consolidated Results of Operations to Adjusted EBITDA and Adjusted Net Income:
| (In millions) | Condensed Consolidated Results of Operations | Interest, tax, depr., amort. | MtM | Deact. | Other adj.2 | Adjusted EBITDA | Adj. to arrive at Adj Net Income3 | Adjusted Net Income4 | ||||||||||||||||||
| Revenue | $ | 7,753 | $ | 2 | $ | 6 | $ | — | $ | — | $ | 7,761 | $ | — | $ | 7,761 | ||||||||||
Cost of operations (excluding depreciation and amortization shown below)1 | 5,785 | (10) | (12) | — | — | 5,763 | — | 5,763 | ||||||||||||||||||
| Depreciation and Amortization | 376 | (376) | — | — | — | — | 376 | 376 | ||||||||||||||||||
| Gross margin | 1,592 | 388 | 18 | — | — | 1,998 | (376) | 1,622 | ||||||||||||||||||
| Operations & maintenance and other cost of operations | 545 | — | — | (6) | 10 | 549 | — | 549 | ||||||||||||||||||
Selling, marketing, general & administrative | 717 | — | — | — | (107) | 610 | — | 610 | ||||||||||||||||||
Other | 264 | (189) | — | — | (83) | (8) | 255 | 247 | ||||||||||||||||||
| Net Income/(Loss) | $ | 66 | $ | 577 | $ | 18 | $ | 6 | $ | 180 | $ | 847 | $ | (631) | $ | 216 | ||||||||||
| Less: Cumulative dividends attributable to Series A Preferred Stock | 16 | (16) | — | 16 | 16 | |||||||||||||||||||||
| Net Income/(Loss) available for common stockholders | $ | 50 | $ | 577 | $ | 18 | $ | 6 | $ | 196 | $ | 847 | $ | (647) | $ | 200 | ||||||||||
1 Excludes operations & maintenance and other cost of operations of $545 million
2 Other adj. includes stock-based compensation of $53 million, other and non-recurring charges of $39 million, impairments of $39 million, loss on sale of assets $18 million, acquisition and divestiture integration and transaction costs of $16 million, cost to achieve of $8 million, and ARO expense of $7 million
3 Other includes adjusted interest expense, net of $194 million and adjusted income tax expense of $61 million
4 See previous table for details
14
Appendix Table A-2: Fourth Quarter 2024 Adjusted EBITDA and Adjusted Net Income Reconciliation by Operating Segment and Consolidated Adjusted EPS Reconciliation
The following table summarizes the calculation of Adjusted EBITDA, Adjusted Net Income and Adjusted EPS and provides a reconciliation from Net Income/(Loss) Available for Common Stockholders:
| (In millions, except per share amounts) | Texas | East | West/ Other | Vivint Smart Home | Corp/Elim | Total | Earnings Per Share, Basic 7,8 | Earnings Per Share, Diluted 7,8 | |||||||||||||||||||||
| Net Income/(Loss) Available for common stockholders | $ | 273 | $ | 686 | $ | 8 | $ | 10 | $ | (350) | $ | 627 | $ | 3.10 | $ | 3.01 | |||||||||||||
| Cumulative Dividends attributable to Series A Preferred Stock | 16 | 16 | 0.08 | 0.08 | |||||||||||||||||||||||||
| Net Income/(Loss) | $ | 273 | $ | 686 | $ | 8 | $ | 10 | $ | (334) | $ | 643 | $ | 3.18 | $ | 3.09 | |||||||||||||
| Plus: | |||||||||||||||||||||||||||||
| Interest expense, net | — | — | — | — | 109 | 109 | 0.54 | 0.52 | |||||||||||||||||||||
| Income tax expense | — | — | — | — | 72 | 72 | 0.36 | 0.35 | |||||||||||||||||||||
| Loss on debt extinguishment | — | — | — | — | 122 | 122 | 0.60 | 0.59 | |||||||||||||||||||||
| Depreciation and amortization | 83 | 41 | 14 | 210 | 10 | 358 | 1.77 | 1.72 | |||||||||||||||||||||
| ARO Expense | 3 | 2 | — | — | — | 5 | 0.02 | 0.02 | |||||||||||||||||||||
| Contract and emission credit amortization, net | 2 | 4 | 4 | — | — | 10 | 0.05 | 0.05 | |||||||||||||||||||||
| Stock-based compensation | 5 | 1 | 1 | 13 | — | 20 | 0.10 | 0.10 | |||||||||||||||||||||
| Acquisition and divestiture integration and transaction costs | — | — | — | 2 | 6 | 8 | 0.04 | 0.04 | |||||||||||||||||||||
| Cost to achieve | — | — | — | — | 5 | 5 | 0.02 | 0.02 | |||||||||||||||||||||
| Deactivation costs | — | 7 | — | — | — | 7 | 0.03 | 0.03 | |||||||||||||||||||||
Loss on sale of assets1 | — | — | 4 | — | — | 4 | 0.02 | 0.02 | |||||||||||||||||||||
Other and non-recurring charges2 | (23) | (9) | (7) | 40 | (1) | — | — | — | |||||||||||||||||||||
| Impairments | 7 | — | 21 | — | — | 28 | 0.14 | 0.13 | |||||||||||||||||||||
Mark-to-market (MtM) (gain) on economic hedges3 | (23) | (450) | (16) | — | — | (489) | (2.42) | (2.35) | |||||||||||||||||||||
| Adjusted EBITDA | $ | 327 | $ | 282 | $ | 29 | $ | 275 | $ | (11) | $ | 902 | $ | 4.47 | $ | 4.34 | |||||||||||||
Adjusted interest expense, net4 | — | — | — | — | (143) | (143) | (0.71) | (0.69) | |||||||||||||||||||||
| Depreciation and amortization | (83) | (41) | (14) | (210) | (10) | (358) | (1.77) | (1.72) | |||||||||||||||||||||
| Adjusted Income before income taxes | 244 | 241 | 15 | 65 | (164) | 401 | 1.99 | 1.93 | |||||||||||||||||||||
Adjusted income tax expense5 | — | — | — | — | (69) | (69) | (0.34) | (0.33) | |||||||||||||||||||||
| Adjusted Net Income before Preferred Stock dividends | 244 | 241 | 15 | 65 | (233) | 332 | 1.64 | 1.60 | |||||||||||||||||||||
| Cumulative dividends attributable to Series A Preferred Stock | — | — | — | — | (16) | (16) | (0.08) | (0.08) | |||||||||||||||||||||
Adjusted Net Income6 | $ | 244 | $ | 241 | $ | 15 | $ | 65 | $ | (249) | $ | 316 | $ | 1.56 | $ | 1.52 | |||||||||||||
1 Excludes sale of land not associated with a generating asset
2 Includes reserves for legal matters, offset by one-time gain from change in benefits in 2024
3 Gain of $(489) million was primarily driven by unrealized non-cash mark-to-market gains on economic hedges in the East due to large movements in natural
gas and power prices
4 Excludes mark-to-market gain on interest hedges of $34 million
5 Income tax calculated using Adjusted ETR on Adjusted Income before income taxes. Adjusted ETR includes impact of NRG’s tax credits as well as non-recurring tax items, using CAMT rate to accrue tax. Other adjustments are shown on pre-tax basis
6 Adjusted Net Income as shown here is 'Adjusted Net Income available for common stockholders'
7 Items may not sum due to rounding
8 Earnings per share amounts are based on weighted average number of common shares outstanding - basic of 202 million and on weighted average number of common shares outstanding - diluted of 208 million for the three months ended December 31, 2024
15
Fourth Quarter 2024 condensed financial information by Operating Segment:
| (In millions, except per share amounts) | Texas | East | West/ Other | Vivint Smart Home | Corp/Elim | Total | ||||||||||||||
Revenue1 | $ | 2,356 | $ | 3,102 | $ | 898 | $ | 514 | $ | (12) | $ | 6,858 | ||||||||
Cost of fuel, purchased energy and other cost of sales2 | 1,549 | 2,536 | 772 | 38 | (5) | 4,890 | ||||||||||||||
Economic gross margin | 807 | 566 | 126 | 476 | (7) | 1,968 | ||||||||||||||
Operations & maintenance and other cost of operations3 | 253 | 128 | 43 | 68 | (2) | 490 | ||||||||||||||
Selling, marketing, general & administrative4 | 229 | 159 | 52 | 133 | 1 | 574 | ||||||||||||||
Other | (2) | (3) | 2 | — | 5 | 2 | ||||||||||||||
| Adjusted EBITDA | $ | 327 | $ | 282 | $ | 29 | $ | 275 | $ | (11) | $ | 902 | ||||||||
Adjusted interest expense, net5 | — | — | — | — | (143) | (143) | ||||||||||||||
| Depreciation and amortization | (83) | (41) | (14) | (210) | (10) | (358) | ||||||||||||||
| Adjusted Income before income taxes | 244 | 241 | 15 | 65 | (164) | 401 | ||||||||||||||
Adjusted income tax expense5 | — | — | — | — | (69) | (69) | ||||||||||||||
| Adjusted Net Income before Preferred Stock dividends | 244 | 241 | 15 | 65 | (233) | 332 | ||||||||||||||
| Cumulative dividends attributable to Series A Preferred Stock | — | — | — | — | (16) | (16) | ||||||||||||||
Adjusted Net Income5 | $ | 244 | $ | 241 | $ | 15 | $ | 65 | $ | (249) | $ | 316 | ||||||||
| Weighted average number of common shares outstanding - basic | 202 | |||||||||||||||||||
| Adjusted EPS | $ | 1.56 | ||||||||||||||||||
1 Excludes MtM loss of $35 million and contract amortization of $4 million
2 Includes TDSP expense, capacity and emission credits
3 Excludes deactivation costs of $7 million, ARO expense of $5 million, stock-based compensation of $2 million and other and non-recurring charges of $(5) million
4 Excludes stock-based compensation of $18 million and acquisition, other and non-recurring charges of $9 million and cost to achieve of $5 million
5 See previous table for details
The following table reconciles the Condensed Consolidated Results of Operations to Adjusted EBITDA and Adjusted Net Income:
| (In millions) | Condensed Consolidated Results of Operations | Interest, tax, depr., amort. | MtM | Deact. | Other adj.2 | Adjusted EBITDA | Adj. to arrive at Adj Net Income3 | Adjusted Net Income4 | ||||||||||||||||||
| Revenue | $ | 6,819 | $ | 4 | $ | 35 | $ | — | $ | — | $ | 6,858 | $ | — | $ | 6,858 | ||||||||||
Cost of operations (excluding depreciation and amortization shown below)1 | 4,372 | (6) | 524 | — | — | 4,890 | — | 4,890 | ||||||||||||||||||
| Depreciation and amortization | 358 | (358) | — | — | — | — | 358 | 358 | ||||||||||||||||||
| Gross margin | 2,089 | 368 | (489) | — | — | 1,968 | (358) | 1,610 | ||||||||||||||||||
| Operations & maintenance and other cost of operations | 499 | — | — | (7) | (2) | 490 | — | 490 | ||||||||||||||||||
Selling, marketing, general & administrative | 606 | — | — | — | (32) | 574 | — | 574 | ||||||||||||||||||
Other | 341 | (181) | — | — | (158) | 2 | 212 | 214 | ||||||||||||||||||
| Net Income/(Loss) | $ | 643 | $ | 549 | $ | (489) | $ | 7 | $ | 192 | $ | 902 | $ | (570) | $ | 332 | ||||||||||
| Less: Cumulative dividends attributable to Series A Preferred Stock | 16 | (16) | — | 16 | 16 | |||||||||||||||||||||
| Net Income/(Loss) available for common stockholders | $ | 627 | $ | 549 | $ | (489) | $ | 7 | $ | 208 | $ | 902 | $ | (586) | $ | 316 | ||||||||||
1 Excludes operations & maintenance and other cost of operations of $499 million
2 Other adj. includes loss on debt extinguishment of $122 million, impairments of $28 million, stock-based compensation of $20 million, acquisition and divestiture integration and transaction costs of $8 million, cost to achieve of $5 million, ARO expense of $5 million, and loss on sale of assets of $4 million
3 Other includes adjusted interest expense, net of $143 million and adjusted income tax expense of $69 million
16
4 See previous table for details
17
Appendix Table A-3: Full Year 2025 Adjusted EBITDA and Adjusted Net Income Reconciliation by Operating Segment and Consolidated Adjusted EPS Reconciliation
The following table summarizes the calculation of Adjusted EBITDA, Adjusted Net Income and Adjusted EPS and provides a reconciliation from Net Income/(Loss) Available for Common Stockholders:
| (In millions, except per share amounts) | Texas | East | West/ Other | Vivint Smart Home | Corp/Elim | Total | Earnings Per Share, Basic 7,8 | Earnings Per Share, Diluted 7,8 | |||||||||||||||||||||
| Net Income/(Loss) Available for common stockholders | $ | 1,112 | $ | 710 | $ | 120 | $ | 33 | $ | (1,178) | $ | 797 | $ | 4.09 | $ | 4.01 | |||||||||||||
| Cumulative Dividends attributable to Series A Preferred Stock | 67 | 67 | 0.34 | 0.34 | |||||||||||||||||||||||||
| Net Income/(Loss) | $ | 1,112 | $ | 710 | $ | 120 | $ | 33 | $ | (1,111) | $ | 864 | $ | 4.43 | $ | 4.34 | |||||||||||||
| Plus: | |||||||||||||||||||||||||||||
| Interest expense, net | — | — | — | — | 658 | 658 | 3.37 | 3.31 | |||||||||||||||||||||
| Income tax expense | — | — | — | — | 270 | 270 | 1.38 | 1.36 | |||||||||||||||||||||
| Loss on debt extinguishment | — | — | — | — | 10 | 10 | 0.05 | 0.05 | |||||||||||||||||||||
| Depreciation and amortization | 374 | 148 | 32 | 810 | 42 | 1,406 | 7.21 | 7.07 | |||||||||||||||||||||
| ARO expense | 24 | 5 | — | — | — | 29 | 0.15 | 0.15 | |||||||||||||||||||||
| Contract and emission credit amortization, net | 13 | 37 | 9 | — | — | 59 | 0.30 | 0.30 | |||||||||||||||||||||
Stock-based compensation1 | 55 | 23 | 6 | 45 | — | 129 | 0.66 | 0.65 | |||||||||||||||||||||
Acquisition and divestiture integration and transaction costs1 | — | — | — | 3 | 72 | 75 | 0.38 | 0.38 | |||||||||||||||||||||
Cost to achieve1 | — | — | — | — | 17 | 17 | 0.09 | 0.09 | |||||||||||||||||||||
| Deactivation costs | 11 | 18 | — | — | — | 29 | 0.15 | 0.15 | |||||||||||||||||||||
| Loss on sale of assets | 18 | — | 7 | — | — | 25 | 0.13 | 0.13 | |||||||||||||||||||||
Other and non-recurring charges2 | (100) | 48 | (17) | 201 | (1) | 131 | 0.67 | 0.66 | |||||||||||||||||||||
| Impairments | — | — | 39 | — | — | 39 | 0.20 | 0.20 | |||||||||||||||||||||
Mark-to-market (MtM) loss/(gain) on economic hedges3 | 370 | (8) | (16) | — | — | 346 | 1.77 | 1.74 | |||||||||||||||||||||
| Adjusted EBITDA | $ | 1,877 | $ | 981 | $ | 180 | $ | 1,092 | $ | (43) | $ | 4,087 | $ | 20.96 | $ | 20.54 | |||||||||||||
Adjusted interest expense, net4 | — | — | — | — | (648) | (648) | (3.32) | (3.26) | |||||||||||||||||||||
| Depreciation and amortization | (374) | (148) | (32) | (810) | (42) | (1,406) | (7.21) | (7.07) | |||||||||||||||||||||
| Adjusted Income before income taxes | 1,503 | 833 | 148 | 282 | (733) | 2,033 | 10.43 | 10.22 | |||||||||||||||||||||
Adjusted income tax expense5 | — | — | — | — | (360) | (360) | (1.85) | (1.81) | |||||||||||||||||||||
| Adjusted Net Income before Preferred Stock dividends | 1,503 | 833 | 148 | 282 | (1,093) | 1,673 | 8.58 | 8.41 | |||||||||||||||||||||
| Cumulative dividends attributable to Series A Preferred Stock | — | — | — | — | (67) | (67) | (0.34) | (0.34) | |||||||||||||||||||||
Adjusted Net Income6 | $ | 1,503 | $ | 833 | $ | 148 | $ | 282 | $ | (1,160) | $ | 1,606 | $ | 8.24 | $ | 8.07 | |||||||||||||
1 Stock-based compensation of $6 million is reflected in acquisition and divestiture integration and transaction costs and $3 million is reflected in cost to achieve. Stock-based compensation includes employee stock purchase plan expense
2 Includes $(100) million of property insurance proceeds and $210 million of reserves for legal matters
3 Loss of $346 million was primarily driven by reversal of previously recognized unrealized gains on contracts that settled during the period and unrealized non-cash mark-to-market losses on economic hedges due to decreases in CAISO power prices, partially offset by increases in Northeast and ERCOT power prices
4 Excludes mark-to-market loss on interest hedges of $10 million
5 Income tax calculated using Adjusted ETR on Adjusted Income before income taxes. Adjusted ETR includes impact of NRG’s tax credits as well as non-recurring tax items, using CAMT rate to accrue tax. Other adjustments are shown on pre-tax basis
6Adjusted Net Income as shown here is 'Adjusted Net Income available for common stockholders'
7 Items may not sum due to rounding
8 Earnings per share amounts are based on weighted average number of common shares outstanding - basic of 195 million and on weighted average number of common shares outstanding - diluted of 199 million for the twelve months ended December 31, 2025
18
Full Year 2025 condensed financial information by Operating Segment:
| (In millions, except per share amounts) | Texas | East | West/ Other | Vivint Smart Home | Corp/Elim | Total | ||||||||||||||
Revenue1 | 11,139 | 14,262 | 3,192 | 2,144 | (30) | 30,707 | ||||||||||||||
Cost of fuel, purchased energy and other cost of sales2 | 7,267 | 12,155 | 2,773 | 201 | (7) | 22,389 | ||||||||||||||
Economic gross margin | 3,872 | 2,107 | 419 | 1,943 | (23) | 8,318 | ||||||||||||||
Operations & maintenance and other cost of operations3 | 1,098 | 532 | 107 | 265 | 13 | 2,015 | ||||||||||||||
Selling, marketing, general and administrative4 | 896 | 598 | 146 | 586 | 9 | 2,235 | ||||||||||||||
Other | 1 | (4) | (14) | — | (2) | (19) | ||||||||||||||
| Adjusted EBITDA | $ | 1,877 | $ | 981 | $ | 180 | $ | 1,092 | $ | (43) | $ | 4,087 | ||||||||
Adjusted interest expense, net5 | — | — | — | — | (648) | (648) | ||||||||||||||
| Depreciation and amortization | (374) | (148) | (32) | (810) | (42) | (1,406) | ||||||||||||||
| Adjusted Income before income taxes | 1,503 | 833 | 148 | 282 | (733) | 2,033 | ||||||||||||||
Adjusted income tax expense5 | — | — | — | — | (360) | (360) | ||||||||||||||
| Adjusted Net Income before Preferred Stock dividends | 1,503 | 833 | 148 | 282 | (1,093) | 1,673 | ||||||||||||||
| Cumulative dividends attributable to Series A Preferred Stock | — | — | — | — | (67) | (67) | ||||||||||||||
Adjusted Net Income5 | $ | 1,503 | $ | 833 | $ | 148 | $ | 282 | $ | (1,160) | $ | 1,606 | ||||||||
| Weighted average number of common shares outstanding - basic | 195 | |||||||||||||||||||
| Adjusted EPS | $ | 8.24 | ||||||||||||||||||
1 Excludes MtM gain of $(12) million and contract amortization of $6 million
2 Includes TDSP expense, capacity and emission credits
3 Excludes ARO expense of $29 million, deactivation costs of $29 million, stock-based compensation of $10 million and other and non-recurring charges of $(122) million
4 Excludes other and non-recurring charges of $230 million, stock-based compensation of $119 million, cost to achieve of $17 million and acquisition and divestiture integration and transaction costs of $1 million
5 See previous table for details
The following table reconciles the Condensed Consolidated Results of Operations to Adjusted EBITDA and Adjusted Net Income:
| (In millions) | Condensed Consolidated Results of Operations | Interest, tax, depr., amort. | MtM | Deact. | Other adj.2 | Adjusted EBITDA | Adj. to arrive at Adj Net Income3 | Adjusted Net Income4 | ||||||||||||||||||
| Revenue | $ | 30,713 | $ | 6 | $ | (12) | $ | — | $ | — | $ | 30,707 | $ | 0 | $ | 30,707 | ||||||||||
Cost of operations (excluding depreciation and amortization shown below)1 | 22,800 | (53) | (358) | — | — | 22,389 | 0 | 22,389 | ||||||||||||||||||
| Depreciation and amortization | 1,406 | (1,406) | — | — | — | — | 1,406 | 1,406 | ||||||||||||||||||
| Gross margin | 6,507 | 1,465 | 346 | — | — | 8,318 | (1,406) | 6,912 | ||||||||||||||||||
| Operations & maintenance and other cost of operations | 1,961 | — | — | (29) | 83 | 2,015 | 0 | 2,015 | ||||||||||||||||||
Selling, marketing, general & administrative | 2,602 | — | — | — | (367) | 2,235 | 0 | 2,235 | ||||||||||||||||||
Other | 1,080 | (928) | — | — | (171) | (19) | 1,008 | 989 | ||||||||||||||||||
| Net Income/(Loss) | $ | 864 | $ | 2,393 | $ | 346 | $ | 29 | $ | 455 | $ | 4,087 | $ | (2,414) | $ | 1,673 | ||||||||||
| Less: Cumulative dividends attributable to Series A Preferred Stock | 67 | (67) | — | 67 | 67 | |||||||||||||||||||||
| Net Income/(Loss) available for common stockholders | $ | 797 | $ | 2,393 | $ | 346 | $ | 29 | $ | 522 | $ | 4,087 | $ | (2,481) | $ | 1,606 | ||||||||||
1 Excludes operations & maintenance and other cost of operations of $1,961 million
19
2 Other adj. includes other and non-recurring charges of $131 million, stock-based compensation of $129 million, acquisition and divestiture integration and transaction costs of $75 million, impairments of $39 million, ARO expenses of $29 million, loss on sale of assets $25 million, cost to achieve of $17 million and loss on debt extinguishment of $10 million
3 Other includes adjusted interest expense, net of $648 million and adjusted income tax expense of $360 million
4 See previous table for details
20
Appendix Table A-4: Full Year 2024 Adjusted EBITDA and Adjusted Net Income Reconciliation by Operating Segment and Consolidated Adjusted EPS Reconciliation
The following table summarizes the calculation of Adjusted EBITDA, Adjusted Net Income and Adjusted EPS and provides a reconciliation from Net Income/(Loss) Available for Common Stockholders:
| (In millions, except per share amounts) | Texas | East | West/ Other | Vivint Smart Home | Corp/Elim | Total | Earnings Per Share, Basic 8, 9 | Earnings Per Share, Diluted 8, 9 | |||||||||||||||||||||
| Net Income/(Loss) Available for Common Stockholders | $ | 534 | $ | 1,805 | $ | 101 | $ | 109 | $ | (1,491) | $ | 1,058 | $ | 5.14 | $ | 4.99 | |||||||||||||
| Cumulative dividends attributable to Series A Preferred Stock | 67 | 67 | 0.33 | 0.32 | |||||||||||||||||||||||||
| Net Income/(Loss) | $ | 534 | $ | 1,805 | $ | 101 | $ | 109 | $ | (1,424) | $ | 1,125 | $ | 5.46 | $ | 5.31 | |||||||||||||
| Plus: | |||||||||||||||||||||||||||||
| Interest expense, net | — | — | — | — | 595 | 595 | 2.89 | 2.81 | |||||||||||||||||||||
| Income tax expense | — | — | — | — | 323 | 323 | 1.57 | 1.52 | |||||||||||||||||||||
| Loss on debt extinguishment | — | — | — | — | 382 | 382 | 1.85 | 1.80 | |||||||||||||||||||||
| Depreciation and amortization | 323 | 158 | 99 | 782 | 41 | 1,403 | 6.81 | 6.62 | |||||||||||||||||||||
| ARO Expense | 18 | 15 | 1 | — | — | 34 | 0.17 | 0.16 | |||||||||||||||||||||
| Contract and emission credit amortization, net | 9 | 58 | 11 | — | — | 78 | 0.38 | 0.37 | |||||||||||||||||||||
Stock-based compensation1 | 25 | 10 | 5 | 59 | — | 99 | 0.48 | 0.47 | |||||||||||||||||||||
Acquisition and divestiture integration and transaction costs1 | — | — | — | 11 | 24 | 35 | 0.17 | 0.17 | |||||||||||||||||||||
Cost to achieve1 | — | — | — | — | 28 | 28 | 0.14 | 0.13 | |||||||||||||||||||||
| Deactivation costs | — | 20 | 2 | — | — | 22 | 0.11 | 0.10 | |||||||||||||||||||||
Loss/(gain) on sale of assets2 | 4 | — | (204) | — | — | (200) | (0.97) | (0.94) | |||||||||||||||||||||
Other and non-recurring charges3 | (22) | — | 9 | 50 | (9) | 28 | 0.14 | 0.13 | |||||||||||||||||||||
| Impairments | 7 | — | 36 | — | — | 43 | 0.21 | 0.20 | |||||||||||||||||||||
Mark to market (MtM) loss/(gain) on economic hedges4 | 684 | (1,060) | 170 | — | — | (206) | (1.00) | (0.97) | |||||||||||||||||||||
| Adjusted EBITDA | $ | 1,582 | $ | 1,006 | $ | 230 | $ | 1,011 | $ | (40) | $ | 3,789 | $ | 18.39 | $ | 17.87 | |||||||||||||
Adjusted interest expense, net5 | — | — | — | — | (598) | (598) | (2.90) | (2.82) | |||||||||||||||||||||
| Depreciation and amortization | (323) | (158) | (99) | (782) | (41) | (1,403) | (6.81) | (6.62) | |||||||||||||||||||||
| Adjusted Income before income taxes | 1,259 | 848 | 131 | 229 | (679) | 1,788 | 8.68 | 8.43 | |||||||||||||||||||||
Adjusted income tax expense6 | — | — | — | — | (313) | (313) | (1.52) | (1.48) | |||||||||||||||||||||
| Adjusted Net Income before Preferred Stock dividends | 1,259 | 848 | 131 | 229 | (992) | 1,475 | 7.16 | 6.96 | |||||||||||||||||||||
| Cumulative dividends attributable to Series A Preferred Stock | — | — | — | — | (67) | (67) | (0.33) | (0.32) | |||||||||||||||||||||
Adjusted Net Income7 | $ | 1,259 | $ | 848 | $ | 131 | $ | 229 | $ | (1,059) | $ | 1,408 | $ | 6.83 | $ | 6.64 | |||||||||||||
1 Stock-based compensation of $2 million is reflected in cost to achieve and $1 million is reflected in acquisition and divestiture integration and transaction costs
2 Excludes sale of land not associated with a generating asset
3 Includes reserves for legal matters, offset by one-time gain from change in benefits in 2024
4 Gain of $(206) million was primarily driven by roll-off of 2024 positions as well as gains on economic hedges in the East due to large movements in natural
gas and power prices, partially offset by losses on economic hedges in Texas and West due to movements in power prices
5 Excludes mark-to-market gain on interest hedges of $3 million
6 Income tax calculated using Adjusted ETR on Adjusted Income before income taxes. Adjusted ETR includes impact of NRG’s tax credits as well as non-recurring tax items, using CAMT rate to accrue tax. Other adjustments are shown on pre-tax basis
7 Adjusted Net Income as shown here is 'Adjusted Net Income available for common stockholders'
8 Items may not sum due to rounding
9 Earnings per share amounts are based on weighted average number of common shares outstanding - basic of 206 million and on weighted average number of
common shares outstanding - diluted of 212 million for the twelve months ended December 31, 2024
21
Full Year 2024 condensed financial information by Operating Segment:
| (In millions, except per share amounts) | Texas | East | West/ Other | Vivint Smart Home | Corp/Elim | Total | ||||||||||||||
Revenue1 | $ | 10,651 | $ | 11,759 | $ | 3,805 | $ | 1,991 | $ | (44) | $ | 28,162 | ||||||||
Cost of fuel, purchased energy and other cost of sales2 | 7,230 | 9,714 | 3,188 | 151 | (22) | 20,261 | ||||||||||||||
Economic gross margin | 3,421 | 2,045 | 617 | 1,840 | (22) | 7,901 | ||||||||||||||
Operations & maintenance and other cost of operations3 | 1,007 | 455 | 213 | 253 | 1 | 1,929 | ||||||||||||||
Selling, marketing, general & administrative4 | 832 | 585 | 211 | 576 | 6 | 2,210 | ||||||||||||||
Other | — | (1) | (37) | — | 11 | (27) | ||||||||||||||
| Adjusted EBITDA | $ | 1,582 | $ | 1,006 | $ | 230 | $ | 1,011 | $ | (40) | $ | 3,789 | ||||||||
Adjusted interest expense, net5 | — | — | — | — | (598) | (598) | ||||||||||||||
| Depreciation and amortization | (323) | (158) | (99) | (782) | (41) | (1,403) | ||||||||||||||
| Adjusted Income before income taxes | 1,259 | 848 | 131 | 229 | (679) | 1,788 | ||||||||||||||
Adjusted income tax expense5 | — | — | — | — | (313) | (313) | ||||||||||||||
| Adjusted Net Income before Preferred Stock dividends | 1,259 | 848 | 131 | 229 | (992) | 1,475 | ||||||||||||||
| Cumulative dividends attributable to Series A Preferred Stock | — | — | — | — | (67) | (67) | ||||||||||||||
Adjusted Net Income5 | $ | 1,259 | $ | 848 | $ | 131 | $ | 229 | $ | (1,059) | $ | 1,408 | ||||||||
| Weighted average number of common shares outstanding - basic | 206 | |||||||||||||||||||
| Adjusted EPS | $ | 6.83 | ||||||||||||||||||
1 Excludes MtM loss of $3 million and contract amortization of $29 million
2 Includes TDSP expenses, capacity and emissions credits
3 Excludes ARO expense of $34 million, deactivation costs of $22 million, stock-based compensation of $9 million and other and non-recurring charges of $5 million
4 Excludes stock-based compensation of $90 million, cost to achieve of $28 million, other and non-recurring charges of $12 million and acquisition and divestiture integration and transaction costs of $5 million
5 See previous table for details
The following table reconciles the Condensed Consolidated Results of Operations to Adjusted EBITDA and Adjusted Net Income:
| (In millions) | Condensed Consolidated Results of Operations | Interest, tax, depr., amort. | MtM | Deact. | Other adj.2 | Adjusted EBITDA | Adj. to arrive at Adj Net Income3 | Adjusted Net Income4 | ||||||||||||||||||
| Revenue | $ | 28,130 | $ | 29 | $ | 3 | $ | — | $ | — | $ | 28,162 | — | $ | 28,162 | |||||||||||
Cost of operations (excluding depreciation and amortization shown below)1 | 20,101 | (49) | 209 | — | — | 20,261 | — | 20,261 | ||||||||||||||||||
| Depreciation and amortization | 1,403 | (1,403) | — | — | — | — | 1,403 | 1,403 | ||||||||||||||||||
| Gross margin | 6,626 | 1,481 | (206) | — | — | 7,901 | (1,403) | 6,498 | ||||||||||||||||||
| Operations & maintenance and other cost of operations | 1,999 | — | — | (22) | (48) | 1,929 | — | 1,929 | ||||||||||||||||||
| Selling, marketing, general & administrative | 2,345 | — | — | — | (135) | 2,210 | — | 2,210 | ||||||||||||||||||
Other | 1,157 | (918) | — | — | (266) | (27) | 911 | 884 | ||||||||||||||||||
| Net Income/(Loss) | $ | 1,125 | $ | 2,399 | $ | (206) | $ | 22 | $ | 449 | $ | 3,789 | $ | (2,314) | $ | 1,475 | ||||||||||
| Less: Cumulative dividends attributable to Series A Preferred Stock | 67 | (67) | — | 67 | 67 | |||||||||||||||||||||
| Net Income/(Loss) available for common stockholders | $ | 1,058 | $ | 2,399 | $ | (206) | $ | 22 | $ | 516 | $ | 3,789 | $ | (2,381) | $ | 1,408 | ||||||||||
1 Excludes operations & maintenance and other cost of operations of $1,999 million
22
2 Other adj. includes loss on debt extinguishment $382 million, stock-based compensation of $99 million, impairments of $43 million, acquisition and divestiture integration and transaction costs of $35 million, ARO expense of $34 million, cost to achieve of $28 million, other and non-recurring charges of $28 million and gain on sale of assets of $(200) million
3 Other includes adjusted interest expense, net of $598 million and adjusted income tax expense of $313 million
4 See previous table for details
23
Appendix Table A-5: Three Months Ended December 31, 2025 and 2024 Free Cash Flow before Growth Investments (FCFbG)
The following table summarizes the calculation of FCFbG providing a reconciliation from Adjusted EBITDA and Cash provided by operating activities:
| Three Months Ended | ||||||||||||||
| (In millions) | 12/31/25 | 12/31/24 | ||||||||||||
| Adjusted EBITDA | $ | 847 | $ | 902 | ||||||||||
| Interest payments, net | (67) | (118) | ||||||||||||
| Income tax payments | (10) | (70) | ||||||||||||
| Gross capitalized contract costs | (183) | (147) | ||||||||||||
| Collateral/working capital/other assets and liabilities | (464) | 385 | ||||||||||||
| Cash provided by operating activities | 123 | 952 | ||||||||||||
| Net receipts/(payments) from settlement of acquired derivatives that include financing elements | 8 | (1) | ||||||||||||
Acquisition and divestiture integration and transaction costs1 | 20 | 50 | ||||||||||||
| Adjustment for change in collateral | 69 | (325) | ||||||||||||
Other2 | 60 | (1) | ||||||||||||
| Adjusted cash provided by operating activities | 280 | 675 | ||||||||||||
Maintenance capital expenditures, net3 | (110) | (62) | ||||||||||||
| Environmental capital expenditures | (12) | (6) | ||||||||||||
| Cost of acquisition | 17 | 17 | ||||||||||||
| Free Cash Flow before Growth Investments (FCFbG) | $ | 175 | $ | 624 | ||||||||||
1 Three months ended 12/31/25 includes $16 million acquisition and divestiture integration and transaction costs, $8 million cost to achieve payments
(see Table A-1) less $4 million non-cash adjustments; three months ended 12/31/2024 includes $55 million cash taxes from the sale of Airtron,
$8 million acquisition and divestiture integration and transaction costs and $5 million cost to achieve payments (see Table A-2), less $18 million non-cash adjustments
(see Table A-1) less $4 million non-cash adjustments; three months ended 12/31/2024 includes $55 million cash taxes from the sale of Airtron,
$8 million acquisition and divestiture integration and transaction costs and $5 million cost to achieve payments (see Table A-2), less $18 million non-cash adjustments
2 Three months ended 12/31/25 includes a $36 million payment for a legal matter
24
Appendix Table A-6: Twelve Months Ended December 31, 2025 and 2024 Free Cash Flow before Growth Investments (FCFbG)
The following table summarizes the calculation of FCFbG providing a reconciliation from Adjusted EBITDA and Cash provided by operating activities:
| Twelve Months Ended | ||||||||||||||
| (In millions) | 12/31/25 | 12/31/24 | ||||||||||||
| Adjusted EBITDA | $ | 4,087 | $ | 3,789 | ||||||||||
| Interest payments, net | (489) | (570) | ||||||||||||
| Income tax payments | (70) | (184) | ||||||||||||
| Gross capitalized contract costs | (970) | (846) | ||||||||||||
| Collateral/working capital/other assets and liabilities | (645) | 117 | ||||||||||||
| Cash provided by operating activities | 1,913 | 2,306 | ||||||||||||
| Net receipts/(payments) from settlement of acquired derivatives that include financing elements | 59 | (3) | ||||||||||||
Acquisition and divestiture integration and transaction costs1 | 79 | 113 | ||||||||||||
| Adjustment for change in collateral | (7) | (245) | ||||||||||||
Other2 | 269 | 27 | ||||||||||||
| Adjusted cash provided by operating activities | 2,313 | 2,198 | ||||||||||||
Maintenance capital expenditures, net3 | (229) | (240) | ||||||||||||
| Environmental capital expenditures | (38) | (21) | ||||||||||||
| Cost of acquisition | 164 | 125 | ||||||||||||
| Free Cash Flow before Growth Investments (FCFbG) | $ | 2,210 | $ | 2,062 | ||||||||||
1 Twelve months ended 12/31/25 includes $75 million acquisition and divestiture integration and transaction costs and $17 million cost to achieve payments (see table A-3), less $13 million non-cash adjustments; twelve months ended 12/31/24 includes $55 million cash taxes from the sale of Airtron, $35 million acquisition and divestiture integration and transaction costs and $28 million cost to achieve payments (see table A-4), less $5 million non-cash adjustments
2 Twelve months ended 12/31/2025 includes payment of $224 million for the satisfaction of the CPI legal matter and a $36 million payment for another legal matter; twelve months ended 12/31/24 primarily includes $21 million GenOn pension payments
3 Twelve months ended 12/31/25 is presented net of W.A. Parish Unit 8 insurance recoveries related to property, plant and equipment of $100 million; twelve months ended 12/31/24 is presented net of W.A. Parish Unit 8 insurance recoveries related to the property, plant and equipment of $3 million
25
Appendix Table A-7: Twelve Months Ended December 31, 2025 Sources and Uses of Liquidity
The following table summarizes the sources and uses of liquidity for the twelve months ending December 31, 2024:
| ($ in millions) | Twelve Months Ended December 31, 2025 | ||||
| Sources: | |||||
| Adjusted cash provided by operating activities | $ | 2,313 | |||
| Proceeds from issuance of long-term debt | 6,676 | ||||
| Increase and change in availability under revolving credit facility and collective collateral facilities | 421 | ||||
| Proceeds from sale of assets, net of cash disposed | 6 | ||||
| Uses: | |||||
| Payments for share repurchase activity and excise tax | (1,311) | ||||
| Repayments of long-term debt and finance leases | (1,005) | ||||
| Investment and integration capital expenditures | (780) | ||||
| Payments for acquisitions of businesses and assets, net of cash acquired | (596) | ||||
| Payments of dividends to preferred and common stockholders | (411) | ||||
| Payment for settlement of capped call options | (292) | ||||
Maintenance and environmental capital expenditures, net1 | (267) | ||||
| Payments for shares repurchased in lieu of tax withholdings | (92) | ||||
Acquisition and divestiture integration and transaction costs2 | (79) | ||||
| Payments of deferred financing costs | (78) | ||||
| Cash collateral paid in support of energy risk management activities | (56) | ||||
| Net purchases of emission allowances | (1) | ||||
Other investing and financing3 | (263) | ||||
| Change in Total Liquidity | $ | 4,185 | |||
1 Net of $100 million of W.A. Parish Unit 8 insurance recoveries related to property, plant and equipment
2 Twelve months ended 12/31/25 includes $75 million acquisition and divestiture integration and transaction costs and $17 million cost to achieve payments (see table A-3), less $13 million non-cash acquisition costs and non-cash stock-based compensation
3 Includes payment of $224 million for the satisfaction of the CPI legal matter and a $36 million payment for another legal matter
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Appendix Table A-8: 2026 Guidance Reconciliation
The following table summarizes the 2026 Guidance calculations of Adjusted EBITDA, Adjusted Net Income and Adjusted EPS and provides a reconciliation from Net Income:
| 2026 | ||||||||
| (In millions, except per share amounts) | Guidance8,9 | |||||||
Net Income1 | $1,325 - $1,755 | |||||||
| Interest expense, net | 1,195 | |||||||
Income tax expense2 | 490 - 560 | |||||||
Depreciation and amortization3 | 1,955 | |||||||
| ARO expense | 30 | |||||||
| Stock-based compensation | 120 | |||||||
| Acquisition and divestiture integration and transaction costs | 110 | |||||||
Other4 | 100 | |||||||
| Adjusted EBITDA | $5,325 - $5,825 | |||||||
Adjusted interest expense, net5 | (1,195) | |||||||
Depreciation and amortization3 | (1,955) | |||||||
| Adjusted Income before income taxes | $2,175 - $2,675 | |||||||
Adjusted income tax expense6 | (423) - (493) | |||||||
| Adjusted Net Income before Preferred Stock dividends | $1,752 - $2,182 | |||||||
| Cumulative dividends attributable to Series A Preferred Stock | (67) | |||||||
Adjusted Net Income7 | $1,685 - $2,115 | |||||||
| Weighted average number of common shares outstanding - basic | 214 | |||||||
| Adjusted EPS | $7.90 - $9.90 | |||||||
1 The Company does not guide to Net Income due to the impact of fair value adjustments related to derivatives in a given year. For purposes of guidance, fair value adjustments related to derivatives are assumed to be zero
2 Represents anticipated GAAP income tax
3 Estimates for the acquired LS Power assets are provisional and subject to revisions until evaluations are completed to assess the fair value of long-lived assets
4 Includes adjustments for sale of assets, deactivation costs, and other and non-recurring charges
5 Excludes mark-to-market gains/losses on interest hedges
6 Income tax calculated using Adjusted ETR on Adjusted Income before income taxes. Adjusted ETR includes impact of NRG’s tax credits as well as non-recurring tax items, using CAMT rate to accrue tax. Other adjustments are shown on pre-tax basis
7 Adjusted Net Income as shown here is 'Adjusted Net Income available for common stockholders'
8 Items may not sum due to rounding
9 Reflects the Company’s previously communicated 2026 outlook, updated to incorporate approximately 11 months of ownership of the portfolio acquired from LS Power. The updated guidance therefore includes approximately 90% of the acquired portfolio’s estimated full-year 2026 contribution
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Appendix Table A-9: 2026 Guidance Reconciliation
The following table summarizes the calculation of FCFbG providing a reconciliation from Adjusted EBITDA and Cash provided by operating activities:
| 2026 | ||||||||
| (In millions) | Guidance | |||||||
| Adjusted EBITDA | $5,325 - $5,825 | |||||||
Interest payments, net1 | (1,100) | |||||||
| Income tax payments | (70) - (90) | |||||||
| Gross capitalized contract costs | (1,020) | |||||||
Working capital/other assets and liabilities2 | (135) | |||||||
Cash provided by operating activities3 | $3,000 - $3,480 | |||||||
Acquisition and other costs2 | 110 | |||||||
| Adjusted cash provided by operating activities | $3,110 - $3,590 | |||||||
| Maintenance capital expenditures | (450) - (480) | |||||||
| Environmental capital expenditures | (10) - (20) | |||||||
| Cost of acquisition | 180 | |||||||
| Free Cash Flow before Growth Investments (FCFbG) | $2,800 - $3,300 | |||||||
1 Interest payments, net represents Interest expense, net of $(1,195) million on Appendix Table A-8 plus $95 million accrued interest expense not yet paid
2 Working capital/other assets and liabilities includes payments for Acquisition and divestiture integration and transition costs, which is adjusted in Acquisition and other costs, and includes net deferred revenues
3 Excludes fair value adjustments related to derivatives and changes in collateral deposits in support of risk management activities
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Non-GAAP Financial Measures
NRG reports its financial results in accordance with the accounting principles generally accepted in the United States (GAAP) and supplements with certain non-GAAP financial measures. These measures are not recognized in accordance with GAAP and should not be viewed in isolation or as an alternative to GAAP measures of performance. In addition, other companies may calculate non-GAAP financial measures differently than NRG does, limiting their usefulness as a comparative measure.
NRG uses the following non-GAAP measures to provide additional insight into financial performance:
•Adjusted EBITDA: Defined as EBITDA (earnings before interest, taxes, depreciation, and amortization, impact of asset retirement obligation expenses and contract amortization consisting of amortization of power and fuel contracts and amortization of emission allowances) with further adjustments for stock-based compensation, impairment losses, deactivation costs, gains or losses on sales, dispositions or retirements of assets, any mark-to-market gains or losses from forward position of economic hedges, gains or losses on the repurchase, modification or extinguishment of debt, restructuring costs, and other non-recurring items plus adjustments to reflect the Adjusted EBITDA from our unconsolidated investments or non-controlling interests. Adjusted EBITDA is intended to facilitate period-to-period comparisons and is widely used by investors for performance assessment.
•Adjusted Net Income: Defined as net income available to common shareholders excluding the impact of asset retirement obligation expenses, contract amortization consisting of amortization of power and fuel contracts and amortization of emission allowances, stock-based compensation, impairment losses, deactivation costs, gains or losses on sales, dispositions or retirements of assets, any mark-to-market gains or losses from forward position of economic hedges, gains or losses on the repurchase, modification or extinguishment of debt, the impact of restructuring and any extraordinary, unusual or non-recurring items plus adjustments to reflect the Adjusted EBITDA from our unconsolidated investments and non-controlling interests.
•Adjusted Earnings per Share (EPS): Defined as Adjusted Net Income, divided by the average basic common shares outstanding.
•Adjusted Cash Provided/(Used) by Operating Activities: Defined as cash provided/(used) by operating activities 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, integration, related restructuring costs, adjustment for change in collateral, and the impact of extraordinary, unusual or non-recurring items.
•Free Cash Flow before Growth Investments: Defined as Adjusted Cash provided/(used) by operating activities less maintenance and environmental capital expenditures, net of funding and insurance recoveries related to property, plant and equipment, and adjustments to exclude cost of acquisition related to growth.
Management believes these non-GAAP financial measures are useful to investors and other users of NRG's financial statements in evaluating the Company’s operating performance and growth, as well as the impact of the Company’s capital allocation program. They provide an additional tool to compare business performance across periods and adjust for items that management does not consider indicative of NRG’s future operating performance. Management uses these non-GAAP financial measures to assist in comparing financial performance from period to period on a consistent basis and to readily view operating trends, as a measure for planning and forecasting overall expectations, and for evaluating actual results against such expectations, and in communications with NRG's Board of Directors, shareholders, creditors, analysts and investors concerning its financial performance.
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FAQ
How did NRG (NRG) perform financially in full-year 2025?
NRG delivered solid 2025 results, with revenue of $30.7 billion and GAAP net income of $864 million. Adjusted EBITDA rose to $4.1 billion, Adjusted Net Income reached $1.6 billion, and Adjusted EPS increased to $8.24, reflecting stronger underlying operations.
Why did NRG’s GAAP net income decline in 2025 versus 2024?
GAAP net income fell to $864 million from $1.1 billion mainly due to unrealized non-cash mark-to-market losses on economic hedges, compared with gains in 2024. These hedge positions are revalued each period, while related customer contracts are not, creating temporary accounting volatility.
What is significant about NRG’s acquisition from LS Power?
On January 30, 2026, NRG closed the acquisition of 13 GW of gas and dual-fuel generation plus CPower’s demand response platform from LS Power. The company says this doubles its generation capacity, enhances exposure to the power demand supercycle, and broadens customer reliability solutions.
What 2026 guidance has NRG (NRG) reaffirmed?
For 2026, NRG reaffirmed Adjusted EBITDA guidance of $5.325–$5.825 billion, Adjusted Net Income of $1.685–$2.115 billion, Adjusted EPS of $7.90–$9.90, and Free Cash Flow before Growth of $2.8–$3.3 billion, including about 11 months of LS Power portfolio contribution.
What does NRG’s liquidity and debt profile look like after 2025?
As of December 31, 2025, NRG held $4.7 billion of unrestricted cash and had $4.9 billion of available credit facilities, for total liquidity of $9.6 billion. The increase was driven primarily by $4.9 billion of newly issued secured and unsecured corporate debt.