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NRG Energy, Inc.$32.98($.40)(1.20%)

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 NRG Energy, Inc. Reports Full Year 2017 Results, Reaffirms 2018 Financial Guidance
   Thursday, March 01, 2018 6:59:01 AM ET

--Announced sale of NRG’s interest in NRG Yield, Renewables platform, ROFO assets and South Central business for $2.8 billion(1) on February 7, 2018

--Exceeded Transformation Plan targets for cost reductions and working capital improvement in 2017

--Reduced corporate debt by $604 million in 2017 and refinanced senior notes, resulting in approximately $55 million of recurring interest savings

--Authorized $1 billion in share repurchases; first $500 million program to be launched immediately

--Recorded $1.8 billion non-cash asset and goodwill impairment charge

NRG Energy, Inc. (NRG ) today reported a full year 2017 net loss of $1,548 million, or $6.79 per diluted common share. Adjusted EBITDA for the full year 2017 was $2.4 billion, cash from operations was $1.4 billion and FCFbG was $1.3 billion. The net loss and loss per share were driven by a $1.8 billion impairment of fixed assets, goodwill, and investments of which $1.2 billion was related to the South Texas Project (STP) nuclear generation facility, primarily due to the revised outlook of future commodity prices.



"Our business continued its strong performance in a year when we announced our Transformation Plan aimed at simplifying and enhancing the business to deliver increased shareholder value," said Mauricio Gutierrez, NRG President and Chief Executive Officer. "With this announcement, we are demonstrating measurable success towards achieving the goals of cost excellence, portfolio optimization and capital structure enhancements. I’m also proud to report that we did this while realizing our second best safety year in company history."

Consolidated Financial Results

                                                                                                                                                                                                                                 
                                                                                                                                                                                         Three Months Ended                                                                                                                                                                                                                   Twelve Months Ended
                                                                                                                ---------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                               ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
($ in millions)                                                                                                                       12/31/17                                                 12/31/16                                                                                                          12/31/17                                                 12/31/16
------------------------------------------------                                                                ----------------------------------------------------                                                               --------------------------------------------------                                                               ----------------------------------------------------                                                               ---------------------------------------------------
Income/(Loss) from Continuing Operations                                                                         $   (1,667 )                                                                                    $   (891 )                                                                                    $   (1,548 )                                                                                    $    (983 )
Cash From Continuing Operations                                                                                  $                         581                                                                                      $                       533                                                                                      $                       1,425                                                                                      $                      2,207
Adjusted EBITDA                                                                                                  $                         497                                                                                      $                       471                                                                                      $                       2,373                                                                                      $                      2,706
Free Cash Flow Before Growth Investments (FCFbG)                                                                 $      497                                                                   $    270                                                                   $    1,304                                                                   $   1,255  
------------------------------------------------                                                                -- -------------------- ------ --------------------                                                                -- -------------------- ---- --------------------                                                                -- -------------------- ------ --------------------                                                                -- -------------------- ----- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

Segment Results

Table 1: Income/(Loss) from Continuing Operations

                                                                                                                    
($ in millions)                                                                                                                 Three Months Ended                                                                                                 Twelve Months Ended
                                                                                                        ------------------------------------------------------------------                                          ---------------------------------------------------------------------------------
Segment                                                                                                   12/31/17        12/31/16                                              12/31/17                12/31/16
----------------------------------------                                                                -------------                                          -----------                                          -------------                                          --------------------------
Generation                                                                                              $    (1,700)                                           $    (774)                                           $    (1,498)                                           $                   (824)
Retail                                                                                                           506                                                  317                                                    886                                                               1,053
Renewables a.                                                                                                  (207)                                                (223)                                                  (266)                                                               (330)
NRG Yield a.                                                                                                    (98)                                                (115)                                                   (23)                                                                   2
Corporate                                                                                                      (168)                                                 (96)                                                  (647)                                                               (884)
----------------------------------------                                                                -------------                                          -----------                                          -------------                                          --------------------------
Income/(Loss) from Continuing Operations                                                                $    (1,667)                                           $    (891)                                           $    (1,548)                                           $                   (983)
----------------------------------------                                                                ==== =======                                           ==== =====                                           ==== =======                                           ==== ====================
                                                                                                                                                                                                                                                                                 

a. In accordance with GAAP, 2016 and 2017 results have been restated to include full impact of the assets in the NRG Yield Drop Down transactions which closed on September 1, 2016, March 27, 2017, and August 1, 2017

The net loss from continuing operations for the 12 months of 2017 was driven by a $1.8 billion impairment of fixed assets, goodwill, and investments of which $1.2 billion was related to the South Texas Project (STP) nuclear generation facility, primarily due to the revised outlook of future commodity prices. The net loss from continuing operations for the 12 months of 2016 includes a $970 million impairment of fixed assets and goodwill.

Table 2: Adjusted EBITDA

                                                                                          
($ in millions)                                                                                         Three Months Ended                                                                                    Twelve Months Ended
                                                                                  --------------------------------------------------------------                                          ----------------------------------------------------------
Segment                                                                            12/31/17      12/31/16                                             12/31/17            12/31/16
------------------                                                                ----------                                          ----------                                          -----------                     --------------------------
Generation                                                                           $  104                                              $  117                                              $   535                         $                  869
Retail                                                                                  214                                                 134                                                  825                                            811
Renewables a.                                                                            14                                                  19                                                  153                                            151
NRG Yield a.                                                                            204                                                 214                                                  933                                            932
Corporate                                                                              (39)                                                (13)                                                 (73)                                           (57)
------------------                                                                ----------                                          ----------                                          -----------                     --------------------------
Adjusted EBITDA b.                                                                   $  497                                              $  471                                              $ 2,373                         $                2,706
------------------                                                                ==== ====                                           ==== ====                                           ==== =====                      ==== ====================
                                                                                                                                                                                                                                

a. 2016 and 2017 results have been restated to include full impact of the assets in the NRG Yield Drop Down transactions, which closed on September 1, 2016, March 27, 2017, and August 1, 2017

b. See Appendices A-1 through A-4 for Operating Segment Reg G reconciliations

Generation: Full year 2017 Adjusted EBITDA was $535 million, $334 million lower than 2016 driven by:

-- Gulf Coast: $276 million decrease due to lower realized energy prices despite slightly higher generation, partially offset by lower operating expenses, net of outages due to flooding

-- East/West(2): $58 million decrease due to lower dispatch, realized energy prices and capacity revenues, partially offset by lower operating costs, property tax and overhead expenses

Fourth quarter Adjusted EBITDA was $104 million, $13 million lower than the fourth quarter 2016 driven by:

-- Gulf Coast: $51 million decrease due to lower realized energy prices, partially offset by lower operating expenses

-- East/West(2): $38 million increase due to higher capacity revenues, higher trading results at BETM and lower operating expenses

Retail: Full year 2017 Adjusted EBITDA was $825 million, $14 million higher than 2016 due to lower operating costs, partially offset by lower unit margins due to customer mix, milder weather and the impact of Hurricane Harvey.

Fourth quarter Adjusted EBITDA was $214 million, $80 million higher than the fourth quarter 2016 due to improved performance, customer growth and lower operating costs.

Renewables: Full year 2017 Adjusted EBITDA was $153 million, $2 million higher than 2016 due to increased generation and insurance recovery at Ivanpah, partially offset by lost margin from the sale of assets, a transmission outage at Agua Caliente, and increased development expenditures.

Fourth quarter Adjusted EBITDA was $14 million, $5 million lower than the fourth quarter 2016 due to lost margin from certain asset sales and plant outages, partially offset by lower operating and overhead expenses.

NRG Yield: Full year 2017 Adjusted EBITDA was $933 million, $1 million higher than 2016 due to contribution from Utah Solar assets acquired by NRG in the fourth quarter of 2016 and growth in distributed generation partnerships, partially offset by lower renewable production in 2017 driven by lower wind resources.

Fourth quarter Adjusted EBITDA was $204 million, $10 million lower than the fourth quarter 2016 due to lower wind production driven by lower wind resources, partially offset by growth in distributed generation partnerships.

Corporate: Full year 2017 Adjusted EBITDA was $(73) million, $16 million lower than 2016 due to the reduction in shared services income from GenOn, higher advisory fees, partially offset by lower corporate marketing expenses and the elimination of operating losses at Residential Solar and eVgo following their wind down of operations.

Fourth quarter Adjusted EBITDA was $(39) million, $26 million lower than the fourth quarter 2016 due to the reduction in shared services income from GenOn, partially offset by lower corporate marketing expenses and the elimination of operating losses at Residential Solar following its wind down of operations.

Liquidity and Capital Resources

Table 3: Corporate Liquidity

                                                       
($ in millions)                                                                                    12/31/17                                                     12/31/16
----------------------------------                                                                -----------                                          --------------------------
Cash at NRG-Level a.                                                                              $      769                                           $                     570
Revolver                                                                                               1,711                                                                 989
----------------------------------                                                                -----------                                          --------------------------
NRG-Level Liquidity                                                                               $    2,480                                           $                   1,559
Restricted cash                                                                                          508                                                                 446
Cash at Non-Guarantor Subsidiaries                                                                       222                                              368
----------------------------------                                                                -------------------------------                      --------------------------
Total Liquidity                                                                                   $    3,210                        $                   2,373
==================================                                                                ==== ===== ====================                      ==== ====================
                                                                                                                                                             

a. December 31, 2017 balance includes unrestricted cash held at Midwest Generation (a non-guarantor subsidiary) which can be distributed to NRG without limitation

NRG-Level cash as of December 31, 2017, was $769 million, an increase of $199 million from the end of 2016, and $1.7 billion was available under the Company’s credit facilities at the end of 2017. Total liquidity was $3.2 billion, including restricted cash and cash at non-guarantor subsidiaries (primarily NRG Yield).

NRG Transformation Plan Update

Cost Reductions

As of the end of the fourth quarter of 2017, NRG realized $150 million, or 231%, of its 2017 cost savings target as part of the previously announced Transformation Plan.

Asset Sales Program

To date, NRG has announced or closed approximately $3 billion in asset sales towards its revised Transformation Plan target of $3.2 billion.

Sale of BETM

Announced today, a subsidiary of NRG has entered into a purchase and sale agreement with a subsidiary of Diamond Generating Corporation, a subsidiary of Mitsubishi Corporation, to sell Boston Energy Trading and Marketing LLC (BETM). The transaction is expected to close in the second half of 2018 and is subject to closing conditions, approvals and consents including Federal Energy Regulatory Commission (FERC) and the Committee on Foreign Investment in the United States (CFIUS).

Sale of NRG Yield and Renewables Platform

On February 6, 2018, NRG and Global Infrastructure Partners, or GIP, entered into a purchase and sale agreement to sell NRG’s ownership in NRG Yield, Inc. and NRG’s renewable energy development and operations platform for cash of $1.375 billion, subject to certain adjustments, and upon closing, removal of approximately $6.7 billion of consolidated debt as of 12/31/2017. The transaction is expected to close in the second half of 2018 and is subject to various customary closing conditions, approvals and consents.

Sale of South Central Business

On February 7, 2018, NRG and Cleco Corporate Holdings LLC, or Cleco, entered into a purchase and sale agreement to sell NRG’s South Central business for a total cash purchase price of $1.0 billion, subject to certain adjustments. The transaction is expected to close in the second half of 2018 and is subject to various customary closing conditions, approvals and consents. Also, as part of the transaction, NRG will enter into a sale leaseback agreement for the Cottonwood plant through May of 2025.

Accelerated Drop Down Agreements

On January 24, 2018, the Company entered into an agreement with NRG Yield, Inc. to sell 100% of its ownership interest in Buckthorn Solar for cash consideration of $42 million, subject to other adjustments.

On February 6, 2018, the Company entered into an agreement with NRG Yield, Inc. to sell 100% of the membership interests in Carlsbad Energy Holdings LLC, which indirectly owns the Carlsbad project, a 527 MW natural gas fired project in Carlsbad, CA, pursuant to the ROFO Agreement. The purchase price for the transaction is $365 million in cash consideration, subject to customary working capital and other adjustments.

2018 Guidance

NRG is reaffirming its guidance range for 2018 with respect to Consolidated Adjusted EBITDA, Cash From Operations and FCFbG as set forth below.

Table 4: 2018 Adjusted EBITDA and FCF before Growth Guidance

                                  
                                                                                 2018
----------------------------                                                                --------------------
($ in millions)                                                                                   Guidance
----------------------------                                                                --------------------
Adjusted EBITDA a.                                                                               $2,800 - $3,000
Cash From Operations                                                                             $2,015 - $2,215
Free Cash Flow before Growth                                                                     $1,550 - $1,750
----------------------------                                                                --------------------
                                                                                             

a. Non-GAAP financial measure; see Appendix Tables A-1 through A-5 for GAAP Reconciliation to Net Income that excludes fair value adjustments related to derivatives. The Company is unable to provide guidance for Net Income due to the impact of such fair value adjustments related to derivatives in a given year

Capital Allocation Update

In 2017, NRG reduced corporate debt by $604 million(3) and refinanced and extended its 2023 senior notes realizing annual interest savings of approximately $55 million. Following the announced sale of NRG Yield and Renewables and the South Central businesses, NRG is also announcing corporate debt reduction of $640 million in 2018 and is temporarily reserving $1,200 million of additional cash to achieve it’s 3.0x corporate net debt to Adjusted EBITDA ratio as part of the previously announced capital allocation guidance under the Transformation Plan.

The NRG Board of Directors has authorized $1 billion for share repurchases, with the first $500 million program to begin immediately. Following the completion of the initial program, and as NRG progress towards the closing of the announced asset sales, NRG expects to execute the remaining $500 million of the $1 billion share repurchase program.

On January 18, 2018, NRG declared a quarterly dividend on the Company’s common stock of $0.03 per share, payable February 15, 2018, to stockholders of record as of February 1, 2018, representing $0.12 on an annualized basis.

The Company’s common stock dividend, corporate level debt reduction and share repurchases are subject to available capital, market conditions and compliance with associated laws and regulations.

Earnings Conference Call

On March 1, 2018, NRG will host a conference call at 8:00 a.m. Eastern to discuss these results. Investors, the news media and others may access the live webcast of the conference call and accompanying presentation materials by logging on to NRG’s website at http://www.nrg.com and clicking on "Investors." The webcast will be archived on the site for those unable to listen in real time.

About NRG

NRG is a leading integrated power company built on the strength of a diverse competitive electric generation portfolio and leading retail electricity platform. NRG aims to create a sustainable energy future by producing, selling and delivering electricity and related products and services in major competitive power markets in the U.S. in a manner that delivers value to all of NRG’s stakeholders. The Company owns and operates approximately 30,000 MW of generation; engages in the trading of wholesale energy, capacity and related products; transacts in and trades fuel and transportation services; and directly sells energy, services, and innovative, sustainable products and services to retail customers under the names "NRG", "Reliant" and other retail brand names owned by NRG. More information is available at www.nrg.com. Connect with NRG Energy on Facebook and follow us on Twitter @nrgenergy.

Safe Harbor Disclosure

In addition to historical information, the information presented in this communication 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 the Company’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, hazards customary in the power industry, weather conditions, competition in wholesale power markets, the volatility of energy and fuel prices, failure of customers to perform under contracts, changes in the wholesale power markets, changes in government regulations, the condition of capital markets generally, our ability to access capital markets, unanticipated outages at our generation facilities, adverse results in current and future litigation, failure to identify, execute or successfully implement acquisitions, repowerings or asset sales, our ability to implement value enhancing improvements to plant operations and companywide processes, our ability to implement and execute on our publicly announced transformation plan, including any cost savings, margin enhancement, asset sale, and net debt targets, our ability to proceed with projects under development or the inability to complete the construction of such projects on schedule or within budget, risks related to project siting, financing, construction, permitting, government approvals and the negotiation of project development agreements, our ability to progress development pipeline projects, the timing or completion of GenOn’s emergence from bankruptcy, the inability to maintain or create successful partnering relationships, our ability to operate our businesses efficiently, our ability to retain retail customers, our ability to realize value through our commercial operations strategy, the ability to successfully integrate businesses of acquired companies, our 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, our ability to close the Drop Down transactions with NRG Yield, and our ability to execute our Capital Allocation Plan. Debt and share repurchases may be made from time to time subject to market conditions and other factors, including as permitted by United States securities laws. Furthermore, any common stock dividend is subject to available capital and market conditions.

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 EBITDA and free cash flow guidance are estimates as of March 1, 2018. These estimates are based on assumptions the company 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 Earnings 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.

NRG ENERGY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                                      
                                                                                                                                                                                                                                  For the Year Ended December 31,
                                                                                                                                                ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In millions, except per share amounts)                                                                                                                         2017                                     2016                                     2015
--------------------------------------------------------------------------------                                                                ----------------------------------                                             ----------------------------------                                             ----------------------------------
Operating Revenues
   Total operating revenues                                                                                                                           $  10,629                                                   $  10,512                                                   $  12,328  
                                                                                                                                                ------- ------- --------------------                                           ------- ------- --------------------                                           ------- ------- --------------------
   Operating Costs and Expenses
   Cost of operations                                                                                                                                     7,536                                                                          7,301                                                                          9,000
   Depreciation and amortization                                                                                                                          1,056                                                                          1,172                                                                          1,351
   Impairment losses                                                                                                                                      1,709                                                                            702                                                                          4,860
   Selling, general and administrative                                                                                                                      907                                                                          1,095                                                                          1,228
   Reorganization costs                                                                                                                                      44                                                                 --                                                                 --
   Development costs                                                                                                                                         67                                                          89                                                         154  
                                                                                                                                                ------------------------------------                                           ------------------------------------                                           ------------------------------------
      Total operating costs and expenses                                                                                                                 11,319                                                      10,359                                                      16,593  
                                                                                                                                                ------------------------------------                                           ------------------------------------                                           ------------------------------------
   Other income - affiliate                                                                                                                                  87                                                                            193                                                                            193
   Gain/(loss) on sale of assets                                                                                                                             16                                                                            (80 )                                                               --
Gain on postretirement benefits curtailment                                                                                                      --                                              --                                                          21  
                                                                                                                                                ------------------------------------                                           ------------------------------------                                           ------------------------------------
Operating (Loss)/Income                                                                                                                                    (587 )                                                                          266                                                      (4,051 )
                                                                                                                                                ------------------------------------                                                           --------------------                                                           --------------------
Other Income/(Expense)
   Equity in earnings of unconsolidated affiliates                                                                                                           31                                                                             27                                                                             36
   Impairment losses on investments                                                                                                                         (79 )                                                                         (268 )                                                                          (56 )
   Other income, net                                                                                                                                         38                                                                             34                                                                             26
   Loss on sale of equity method investment                                                                                                      --                                                                 --                                                                            (14 )
   Net (loss)/gain on debt extinguishment                                                                                                                   (53 )                                                                         (142 )                                                                           10
   Interest expense                                                                                                                                        (890 )                                                                         (895 )                                                                         (937 )
                                                                                                                                                ------------------------------------                                           ------------------------------------                                           ------------------------------------
      Total other expense                                                                                                                                  (953 )                                                                       (1,244 )                                                                         (935 )
                                                                                                                                                ------------------------------------                                           ------------------------------------                                           ------------------------------------
Loss from Continuing Operations Before Income Taxes                                                                                                      (1,540 )                                                                         (978 )                                                                       (4,986 )
   Income tax expense                                                                                                                                         8                                        5                                    1,345  
                                                                                                                                                ------------------------------------                      -------------------- ------------------------------------ --------------------                      ------------------------------------
Net Loss from Continuing Operations                                                                                                                      (1,548 )                                                                         (983 )                                                                       (6,331 )
(Loss)/income from discontinued operations, net of income tax                                                                                              (789 )                                                                           92                                                        (105 )
                                                                                                                                                ------------------------------------                                           ------------------------------------                                           ------------------------------------
Net Loss                                                                                                                                                 (2,337 )                                                                         (891 )                                                                       (6,436 )
   Less: Net loss attributable to noncontrolling interests and                                                                                             (184 )                                                                         (117 )                                                                          (54 )
   redeemable noncontrolling interests
                                                                                                                                                --------------  --------------------                                           --------------  --------------------                                           --------------  --------------------
Net Loss Attributable to NRG Energy, Inc.                                                                                                                (2,153 )                                                                         (774 )                                                                       (6,382 )
   Dividends for preferred shares                                                                                                                --                                                                              5                                                                             20
   Gain on redemption of preferred shares                                                                                                        --                                                         (78 )                                                               --  
                                                                                                                                                ------------------------------------                                           ------------------------------------                                           ------------------------------------
Loss Available for Common Stockholders                                                                                                                $  (2,153 )                                                                    $    (701 )                                                                    $  (6,402 )
                                                                                                                                                                ====================                                                           ====================                                                           ====================
Loss Per Share Attributable to NRG Energy, Inc. Common
Stockholders
   Weighted average number of common shares outstanding -- basic and                                                                            317                                                                            316                                                                            329
   diluted
Loss from continuing operations per weighted average common share --                                                                      $   (4.30 )                                                                    $   (2.51 )                                                                    $  (19.14 )
basic and diluted
(Loss)/Income from discontinued operations per weighted average                                                                                       $   (2.49 )                                                                    $    0.29                                                   $   (0.32 )
common share -- basic and diluted
                                                                                                                                                ======= ======= ====================                                           ======= ======= ====================                                           ======= ======= ====================
Net Loss per Weighted Average Common Share -- Basic and Diluted                                                                           $   (6.79 )                                                                    $   (2.22 )                                                                    $  (19.46 )
                                                                                                                                                ======= ======= ====================                                           ======= ======= ====================                                           ======= ======= ====================
Dividends Per Common Share                                                                                                                            $    0.12                                                   $    0.24                                                   $    0.58  
                                                                                                                                                ======= ======= ====================                                           ======= ======= ====================                                           ======= ======= ====================
                                                                                                                                                                                                                                                                                                                               

NRG ENERGY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME

                                                                            
                                                                                                                                                                                                                    For the Year Ended December 31,
                                                                                                                                      -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                      2017                                 2016                                 2015
                                                                                                                                      -------------------------------------                                          -----------------------------                                          -------------------------------------
                                                                                                                                                                                                                             (In millions)
Net Loss                                                                                                                                    $  (2,337 )                                                               $ (891 )                                                                    $  (6,436 )
Other Comprehensive Income, net of tax
   Unrealized gain/(loss) on derivatives, net of income tax expense of                                                                             13                                                                     35                                                                            (15 )
   $1, $1, and $19
   Foreign currency translation adjustments, net of income tax benefit                                                                             12                                                                     (1 )                                                                          (11 )
   of $(2), $0, and $0
   Available-for-sale securities, net of income tax expense/(benefit)                                                                              (8 )                                                                    1                                                                             17
   of $10, $0, and $(3)
   Defined benefit plan, net of income tax (benefit)/expense of $(21),                                                                             46                                                   3                                                          10  
   $0 and $69
                                                                                                                                      --------------  --------------------                                           ------  --------------------                                           --------------  --------------------
      Other comprehensive income                                                                                                                   63                                                  38                                                           1  
                                                                                                                                      ------------------------------------                                           ----------------------------                                           ------------------------------------
Comprehensive Loss                                                                                                                             (2,274 )                                                                 (853 )                                                                       (6,435 )
   Less: Comprehensive loss attributable to noncontrolling interests                                                                             (179 )                                                                 (117 )                                                                          (73 )
   and redeemable noncontrolling interests
                                                                                                                                      --------------  --------------------                                           ------  --------------------                                           --------------  --------------------
Comprehensive Loss Attributable to NRG Energy, Inc.                                                                                            (2,095 )                                                                 (736 )                                                                       (6,362 )
   Dividends for preferred shares                                                                                                      --                                                                      5                                                                             20
   Gain on redemption of preferred shares                                                                                              --                                                 (78 )                                                               --  
                                                                                                                                      ------------------------------------                                           ----------------------------                                           ------------------------------------
Comprehensive Loss Available for Common Stockholders                                                                                        $  (2,095 )                                                               $ (663 )                                                                    $  (6,382 )
                                                                                                                                      ======= ======= ====================                                           == ==== ====================                                           ======= ======= ====================
                                                                                                                                                                                                                                                                                                             

NRG ENERGY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

                                                                    
                                                                                                                                                                           As of December 31,
                                                                                                                              ------------------------------------------------------------------------------------------------------------
                                                                                                                                              2017                                 2016
                                                                                                                              -------------------------------------                                          -----------------------------
                                                                                                                                                                              (In millions)
                            ASSETS
Current Assets
   Cash and cash equivalents                                                                                                        $     991                                                                      $                  938
   Funds deposited by counterparties                                                                                                       37                                                                                           2
   Restricted cash                                                                                                                        508                                                                                         446
   Accounts receivable -- trade                                                                                             1,079                                                                                       1,058
   Inventory                                                                                                                              532                                                                                         721
   Derivative instruments                                                                                                                 626                                                                                       1,067
   Cash collateral posted in support of energy risk management                                                                            171                                                                                         150
   activities
   Accounts receivable -- affiliate                                                                                            95                                                                              --
   Current assets held-for-sale                                                                                                           115                                                                                           9
   Prepayments and other current assets                                                                                                   261                                                                                         404
   Current assets - discontinued operations                                                                                    --                                                                    1,919
                                                                                                                              ------------------------------------                                           -----------------------------
      Total current assets                                                                                                              4,415                                                                    6,714
                                                                                                                              ------------------------------------                                           -----------------------------
Property, plant and equipment, net                                                                                                     13,908                                                                   15,369
                                                                                                                                              --------------------
Other Assets
   Equity investments in affiliates                                                                                                     1,038                                                                                       1,120
   Notes receivable, less current portion                                                                                                   2                                                                                          16
   Goodwill                                                                                                                               539                                                                                         662
   Intangible assets, net                                                                                                               1,746                                                                                       1,973
   Nuclear decommissioning trust fund                                                                                                     692                                                                                         610
   Derivative instruments                                                                                                                 172                                                                                         181
   Deferred income taxes                                                                                                                  134                                                                                         225
   Non-current assets held-for-sale                                                                                                        43                                                                                          10
   Other non-current assets                                                                                                               629                                                                                         841
   Non-current assets - discontinued operations                                                                                --                                                                    2,961
                                                                                                                              ------------------------------------                                           -----------------------------
      Total other assets                                                                                                                4,995                                                                    8,599
                                                                                                                              ------------------------------------                                           -----------------------------
Total Assets                                                                                                                        $  23,318                                                   $               30,682
                                                                                                                              ======= ======= ====================                                           ======= ====================
                                                                                                                                                                                                                      

NRG ENERGY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Continued)

                                                                         
                                                                                                                                                                                    As of December 31,
                                                                                                                                   --------------------------------------------------------------------------------------------------------------------
                                                                                                                                                   2017                                     2016
                                                                                                                                   -------------------------------------                                          -------------------------------------
                                                                                                                                                                             (In millions, except share data)
                LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
   Current portion of long-term debt and capital leases                                                                                  $     688                                                                      $     516
   Accounts payable                                                                                                                            881                                                                            782
   Accounts payable - affiliate                                                                                                                 33                                                                             31
   Derivative instruments                                                                                                                      555                                                                          1,092
   Cash collateral received in support of energy risk management                                                                                37                                                                             81
   activities
   Accrued interest expense                                                                                                                    156                                                                            180
   Current liabilities - held for sale                                                                                                          72                                                                 --
   Other accrued expenses and other current liabilities                                                                                        734                                                                            810
   Other accrued expenses and other current liabilities - affiliate                                                                            161                                                                 --
   Current liabilities - discontinued operations                                                                                    --                                                       1,210  
                                                                                                                                   ------------------------------------                                           ------------------------------------
      Total current liabilities                                                                                                              3,317                                                       4,702  
                                                                                                                                   ------------------------------------                                           ------------------------------------
Other Liabilities
   Long-term debt and capital leases                                                                                                        15,716                                                                         15,957
   Nuclear decommissioning reserve                                                                                                             269                                                                            287
   Nuclear decommissioning trust liability                                                                                                     415                                                                            339
   Postretirement and other benefit obligations                                                                                                458                                                                            510
   Deferred income taxes                                                                                                                        21                                                                             20
   Derivative instruments                                                                                                                      197                                                                            284
   Out-of-market contracts, net                                                                                                                207                                                                            230
   Non-current liabilities held-for-sale                                                                                                         8                                                                             11
   Other non-current liabilities                                                                                                               664                                                                            666
   Non-current liabilities - discontinued operations                                                                                --                                                       3,184  
                                                                                                                                   ------------------------------------                                           ------------------------------------
      Total non-current liabilities                                                                                                         17,955                                                      21,488  
                                                                                                                                   ------------------------------------                                           ------------------------------------
Total Liabilities                                                                                                                           21,272                                                      26,190  
                                                                                                                                   ------------------------------------                                           ------------------------------------
   Redeemable noncontrolling interest in subsidiaries                                                                                           78                                                                             46
Commitments and Contingencies
Stockholders’ Equity
   Common stock; $0.01 par value; 500,000,000 shares authorized;                                                                                 4                                                                              4
   418,323,134 and 417,583,825 shares issued; and 316,743,089 and
   315,443,011 shares outstanding at December 31, 2017 and 2016
   Additional paid-in capital                                                                                                                8,376                                                                          8,358
   Accumulated deficit                                                                                                                      (6,268 )                                                                       (3,787 )
   Treasury stock, at cost; 101,580,045 and 102,140,814 shares at                                                                           (2,386 )                                                                       (2,399 )
   December 31, 2017 and 2016
   Accumulated other comprehensive loss                                                                                                        (72 )                                                                         (135 )
   Noncontrolling interest                                                                                                                   2,314                                                       2,405  
                                                                                                                                   ------------------------------------                                           ------------------------------------
                                                                                                                                             1,968                                                       4,446  
      Total Stockholders’ Equity
                                                                                                                                   --------------  --------------------                                           --------------  --------------------
Total Liabilities and Stockholders’ Equity                                                                                               $  23,318                                                   $  30,682  
                                                                                                                                   ======= ======= ====================                                           ======= ======= ====================
                                                                                                                                                                                                                                   

NRG ENERGY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOW

                                                                           
                                                                                                                                                                                                    For the Year Ended December 31,
                                                                                                                  ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                  2017                                     2016                                     2015
                                                                                                                  -------------------------------------                                          -------------------------------------                                          -------------------------------------
                                                                                                                                                                                                             (In millions)
Cash Flows from Operating Activities
Net loss                                                                                                                   (2,337 )                                                                         (891 )                                                                       (6,436 )
(Loss)/income from discontinued operations, net of income tax                                                                (789 )                                                                           92                                                                           (105 )
Loss from continuing operations                                                                                         $  (1,548 )                                                                    $    (983 )                                                                    $  (6,331 )
Adjustments to reconcile net income/(loss) to net cash provided by
operating activities:
   Equity in earnings and distribution of unconsolidated affiliates                                                            55                                                                             54                                                                             37
   Depreciation and amortization                                                                                            1,056                                                                          1,172                                                                          1,351
   Provision for bad debts                                                                                                     68                                                                             48                                                                             64
   Amortization of nuclear fuel                                                                                                51                                                                             49                                                                             45
   Amortization of financing costs and debt discount/premiums                                                                  60                                                                             55                                                                             47
   Adjustment for debt extinguishment                                                                                          53                                                                            142                                                                            (10 )
   Amortization of intangibles and out-of-market contracts                                                                    108                                                                            167                                                                            151
   Amortization of unearned equity compensation                                                                                35                                                                             10                                                                             39
   Net (gain)/loss on sale of assets and equity method investments                                                            (34 )                                                                           70                                                                             14
   Gain on post retirement benefits curtailment                                                                    --                                                                 --                                                                            (21 )
   Impairment losses                                                                                                        1,788                                                                            972                                                                          4,916
   Changes in derivative instruments                                                                                         (171 )                                                                           32                                                                            235
   Changes in deferred income taxes and liability for uncertain tax                                                            91                                                                            (43 )                                                                        1,326
   benefits
   Changes in collateral deposits in support of risk management                                                               (80 )                                                                          398                                                                           (334 )
   activities
   Proceeds from sale of emission allowances                                                                                   25                                                                             34                                                                            (24 )
   Changes in nuclear decommissioning trust liability                                                                          11                                                                             41                                                                             (2 )
Cash provided/(used) by changes in other working capital, net of
acquisition and disposition effects:
   Accounts receivable - trade                                                                                                (99 )                                                                           (7 )                                                                          113
   Inventory                                                                                                                  143                                                                             71                                                                            (59 )
   Prepayments and other current assets                                                                                        12                                                                            (44 )                                                                          (21 )
   Accounts payable                                                                                                            77                                                                            (39 )                                                                         (180 )
   Accrued expenses and other current liabilities                                                                             (60 )                                                                          (35 )                                                                          (29 )
   Other assets and liabilities                                                                                              (216 )                                                                           43                                                         (40 )
                                                                                                                  ------------------------------------                                           ------------------------------------                                           ------------------------------------
Cash provided by continuing operations                                                                                      1,425                                                                          2,207                                                                          1,287
Cash (used)/provided by discontinued operations                                                                               (38 )                                                                         (119 )                                                                           62  
                                                                                                                  ------------------------------------                                           ------------------------------------                                           ------------------------------------
Net Cash Provided by Operating Activities                                                                                   1,387                                                       2,088                                                       1,349  
                                                                                                                  ------------------------------------                                           ------------------------------------                                           ------------------------------------
Cash Flows from Investing Activities
   Acquisition of businesses, net of cash acquired                                                                            (41 )                                                                         (209 )                                                                          (31 )
   Capital expenditures                                                                                                    (1,111 )                                                                         (976 )                                                                       (1,029 )
   Net cash proceeds from notes receivable                                                                                     17                                                                             17                                                                             18
   Proceeds from renewable energy grants                                                                                        8                                                                             36                                                                             82
   Proceeds from/(purchases) of emission allowances, net of purchases                                                          66                                                                             (1 )                                                                           41
   Investments in nuclear decommissioning trust fund securities                                                              (512 )                                                                         (551 )                                                                         (629 )
   Proceeds from sales of nuclear decommissioning trust fund securities                                                       501                                                                            510                                                                            631
   Proceeds from sale of assets, net                                                                                           87                                                                             73                                                                             27
   Investments in unconsolidated affiliates                                                                                   (40 )                                                                          (23 )                                                                         (395 )
   Other                                                                                                                       12                                                          35                                                          16  
                                                                                                                  ------------------------------------                                           ------------------------------------                                           ------------------------------------
Cash used by continuing operations                                                                                         (1,013 )                                                                       (1,089 )                                                                       (1,269 )
Cash (used)/provided by discontinued operations                                                                               (53 )                                                                          297                                                        (259 )
                                                                                                                  ------------------------------------                                           ------------------------------------                                           ------------------------------------
Net Cash Used by Investing Activities                                                                                      (1,066 )                                                                         (792 )                                                                       (1,528 )
                                                                                                                  ------------------------------------                                           ------------------------------------                                           ------------------------------------
Cash Flows from Financing Activities
   Payments of dividends to preferred and common stockholders                                                                 (38 )                                                                          (76 )                                                                         (201 )
   Net receipts from settlement of acquired derivatives that include                                                            2                                                                              6                                                                             14
   financing elements
   Payments for treasury stock                                                                                     --                                                                 --                                                                           (437 )
   Payments for preferred shares                                                                                   --                                                                           (226 )                                                               --
   Payments for debt extinguishment costs                                                                                     (42 )                                                                         (121 )                                                               --
   Distributions to, net of contributions from, noncontrolling                                                                 95                                                                           (156 )                                                                           47
   interests in subsidiaries
   Proceeds from sale of noncontrolling interests in subsidiaries                                                  --                                                                 --                                                                            600
   (Payments)/Proceeds from issuance of common stock                                                                           (2 )                                                                            1                                                                              1
   Proceeds from issuance of long-term debt                                                                                 2,270                                                                          5,527                                                                          1,004
   Payments of debt issuance and hedging costs                                                                                (63 )                                                                          (89 )                                                                          (21 )
   Payments for short and long-term debt                                                                                   (2,348 )                                                                       (5,908 )                                                                       (1,362 )
   Receivable from affiliate                                                                                                 (125 )                                                               --                                                                 --
   Other                                                                                                                      (10 )                                                                          (13 )                                                                          (22 )
                                                                                                                  ------------------------------------                                           ------------------------------------                                           ------------------------------------
Cash used by continuing operations                                                                                           (261 )                                                                       (1,055 )                                                                         (377 )
Cash (used)/provided by discontinued operations                                                                              (224 )                                                                          140                                                         (55 )
                                                                                                                  ------------------------------------                                           ------------------------------------                                           ------------------------------------
Net Cash Used by Financing Activities                                                                                        (485 )                                                                         (915 )                                                                         (432 )
                                                                                                                  ------------------------------------                                           ------------------------------------                                           ------------------------------------
   Effect of exchange rate changes on cash and cash equivalents                                                                (1 )                                                                            1                                                          10  
                                                                                                                  ------------------------------------                                           ------------------------------------                                           ------------------------------------
Change in Cash from discontinued operations                                                                                  (315 )                                                                          318                                                        (252 )
                                                                                                                  ------------------------------------                                           ------------------------------------                                           ------------------------------------
Net Increase/(Decrease) in Cash and Cash Equivalents, Funds                                                                   150                                                                             64                                                                           (349 )
Deposited by Counterparties and Restricted Cash
Cash and Cash Equivalents, Funds Deposited by Counterparties and                                                            1,386                                                       1,322                                                       1,671  
Restricted Cash at Beginning of Period
                                                                                                                  --------------  --------------------                                           --------------  --------------------                                           --------------  --------------------
Cash and Cash Equivalents, Funds Deposited by Counterparties and                                                        $   1,536                                                   $   1,386                                                   $   1,322  
Restricted Cash at End of Period
                                                                                                                  ======= ======= ====================                                           ======= ======= ====================                                           ======= ======= ====================
                                                                                                                                                                                                                                                                                                 

Appendix Table A-1: Fourth Quarter 2017 Adjusted EBITDA Reconciliation by Operating Segment

The following table summarizes the calculation of Adj. EBITDA and provides a reconciliation to income/(loss) from continuing operations:

                                                                                                                                                                                                                                                                                                                                                                      
($ in millions)                                                                             Gulf Coast                                 East/                                Generation                                Retail                                Renewables                               NRG Yield                                 Corp/                               Total
                                                                                                                                                                                                                                     West(1)                                                                                                                                                                                                                                                                                                                                                                                                Elim
------------------------------------------------------------------------ -------------------- -------------------- -------------------- ----------------------------------  -------------------- -------------------- ----------------------------------  -------------------- -------------------- ----------------------------------  -------------------- -------------------- ----------------------------------  -------------------- -------------------- ----------------------------------  -------------------- -------------------- ----------------------------------  -------------------- -------------------- ----------------------------------  -------------------- -------------------- --------------------------
Income/(Loss) from Continuing Operations                                               (1,486 )                                  (214 )                                (1,700 )                                   506                 (207 )                                   (98 )                                  (168 )                        (1,667 )
======================================================================== ==================== ==================== ==================== ============== ==================== ==================== ==================== ============== ==================== ==================== ==================== ============== ==================== ==================== ==================== ============== ==================== ==================== ==================== ============== ==================== ==================== ==================== ============== ==================== ==================== ==================== ============== ==================== ==================== ==================== ====== ====================
Plus:
    Interest expense, net                                                                                                               --                                                                             5                                                                             5                                                                             2                                                                            22                                                                            68                                                                            96                                                                   193
    Income tax                                                                                                                          --                                                                --                                                                --                                                                --                                                                            (7 )                                                                          57                                                                           (47 )                                                                   3
    Loss on debt extinguishment                                                                                                         --                                                                --                                                                --                                                                --                                                                --                                                                             1                                                                            49                                                                    50
    Depreciation and amortization                                                                                                                   63                                                                            27                                                                            90                                                                            31                                                                            51                                                                            88                                                                             7                                                                   267
    ARO expense                                                                                                                                     11                                                                            13                                                                            24                                                                --                                                                             1                                                                             1                                                                --                                                                    26
    Contract amortization                                                                                                                            6                                                                             1                                                                             7                                                                --                                                                --                                                                            17                                                                             1                                                                    25
    Lease amortization                                                         --                   (2 )                                    (2 )                        --       --       --       --           (2 )
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- ------ --------------------
EBITDA                                                                                                                                          (1,406 )                                                                        (170 )                                                                      (1,576 )                                                                         539                                                                          (140 )                                                                         134                                                                           (62 )                                                              (1,105 )
    Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated                                                                             2                                                                             6                                                                             8                                                                            (7 )                                                                           2                                                                            27                                                                             2                                                                    32
    affiliates
    Acquisition-related transaction & integration costs                                                                                 --                                                                --                                                                --                                                                --                                                                --                                                                             1                                                                             1                                                                     2
    Reorganization costs                                                                                                                             6                                                                             1                                                                             7                                                                             6                                                                             1                                                                --                                                                            12                                                                    26
    Legal Settlement                                                                                                                    --                                                                --                                                                --                                                                            (1 )                                                              --                                                                --                                                                --                                                                    (1 )
    Deactivation costs                                                                                                                               3                                                                             6                                                                             9                                                                --                                                                --                                                                --                                                                             2                                                                    11
    Gain on sale of business                                                                                                            --                                                                           (13 )                                                                         (13 )                                                              --                                                                             5                                                                --                                                                            (8 )                                                                 (16 )
    Other non recurring charges                                                                                                                      4                                                                            (7 )                                                                          (3 )                                                              --                                                                            (4 )                                                                          10                                                                            10                                                                    13
    Impairments                                                                                                                                  1,267                                                                           196                                                                         1,463                                                                             8                                                                           130                                                                            32                                                                            (1 )                                                               1,632
    Impairment losses on investments                                                                                                                69                                                                             5                                                                            74                                                                --                                                                             1                                                                --                                                                             4                                                                    79
    Mark to market (MtM) (gains)/losses on economic hedges                                100                   35                  135                 (331 )                                    19       --                    1         (176 )
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- ------ --------------------
Adjusted EBITDA                                                                            45                   59                  104                  214                   14                  204                  (39 )                           497  
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- ------ --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

(1) Includes International, BETM and generation eliminations

Fourth Quarter 2017 condensed financial information by Operating Segment:

                                                                                                                                                                                                                                                                               
($ in millions)                                                            Gulf Coast                        East/                           Generation                           Retail                       Renewables                      NRG Yield              Corp/                Total
                                                                                                                                                                                                          West (1)                                                                                                                                                                                                                                                                                                                                                 Elim
------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------------  -------------------- -------------------- ------------------------  -------------------- -------------------- ----------------------------------  -------------------- -------------------- -------------------------  -------------------- -------------------- -------------------------  -------------------- -------------------- ------------------------  -------------------- -------------------- ------  -------------------- -------------------- -------------------------
    Operating revenues                                                                                                        506                                                                 333                                                                           839                                                                1,508                                                                   90                                                                 248                                                                (227 )                                            2,458
    Cost of sales                                                    289        139                  428       1,099           4         17       (212 )      1,336  
------------------------------------------------------------ -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- ---- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- ---- -------------------- -------------------- -------------------- ---- -- -------------------- -------------------- ----- --------------------
Economic gross margin                                                                                                         217                                                                 194                                                                           411                                                                  409                                                                   86                                                                 231                                                                 (15 )                                            1,122
    Operations & maintenance and other cost of operations(2)                                                                  143                                                                 115                                                                           258                                                                   77                                                                   36                                                                  57                                                                  21                                                449
    Selling, marketing, general and administrative(3)                                                                          27                                                                  22                                                                            49                                                                  114                                                                   13                                                                   5                                                                  30                                                211
    Other expense/(income)(4)                                          2         (2 )                        --           4          23        (35 )                         (27 )        (35 )
------------------------------------------------------------ -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- ---- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- ---- -------------------- -------------------- -------------------- ---- -- -------------------- -------------------- ----- --------------------
Adjusted EBITDA                                                       45         59                  104         214          14        204        (39 )        497  
------------------------------------------------------------ -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- ---- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- ----- -------------------- -------------------- -------------------- ---- -------------------- -------------------- -------------------- ---- -- -------------------- -------------------- ----- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

(1) Includes International, BETM and generation eliminations

(2) Excludes deactivation costs of $11 million

(3) Excludes a legal settlement of $(1) million

(4) Excludes impairments of $1,711 million, gain on sale of business of $16 million, acquisition-related transaction & integration costs of $2 million, reorganization costs of $26 million and loss on debt extinguishment of $50 million

The following table reconciles the condensed financial information to Adjusted EBITDA:

                                                                                                                                                                                                                                                              
($ in millions)                                                          Condensed                        Interest, tax,                                MtM                                Deactivation                             Other adj.                        Adjusted EBITDA
                                                                                                                                  financial                                                               depr., amort.
                                                                                                                                 information
-------------------------------------------------------- -------------------- -------------------- -------------------- --------------------------  -------------------- -------------------- ----------------------------------  -------------------- -------------------- ----------------------------------  -------------------- -------------------- ----------------------------------  -------------------- -------------------- ----------------------------------  -------------------- -------------------- ---------------------------
   Operating revenues                                                                                                    2,497                                                                            15                                                                           (54 )                                                              --                                                                --                                                                  2,458
   Cost of operations                                           1,224                  (10 )                                   122       --       --         1,336  
-------------------------------------------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- ------- --------------------
Gross margin                                                                                                             1,273                                                                            25                                                                          (176 )                                                              --                                                                --                                                                  1,122
   Operations & maintenance and other cost of operations                                                                   460                                                                --                                                                --                                                                           (11 )                                                              --                                                                    449
   Selling, marketing, general & administrative (1)                                                                        210                                                                --                                                                --                                                                --                                                                             1                                                                    211
   Other expense/(income) (2)                                   2,270                 (487 )                        --       --               (1,818 )                            (35 )
-------------------------------------------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- ------- --------------------
Income/(Loss) from Continuing Operations                       (1,667 )                                   512                 (176 )                                    11                1,817           497  
-------------------------------------------------------- -------------------- -------------------- -------------------- ------ -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

(1) Other adj. includes a legal settlement of $(1) million

(2)Other adj, includes impairments of $1,711 million, gain on sale of business of $16 million, acquisition-related transaction & integration costs of $2 million, reorganization costs of $26 million and loss on debt extinguishment of $50 million

Appendix Table A-2: Fourth Quarter 2016 Adjusted EBITDA Reconciliation by Operating Segment

The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to income/(loss) from continuing operations:

                                                                             
($ in millions)                                                                            Gulf Coast                             East/                            Generation                            Retail                            Renewables                           NRG Yield                             Corp/                          Total
                                                                                                                                                                                          West(1)                                                                                                                                                                              Elim
----------------------------------------------------------------------- -------------------- -------------------- -------------------- ----------------------------------  ----------------------------------  ----------------------------------  ----------------------------------  ----------------------------------  ----------------------------------  ----------------------------------  ------------------------
Income/(Loss) from Continuing Operations                                                (671 )                              (103 )                              (774 )                               317             (223 )                              (115 )                               (96 )                    (891 )
======================================================================= ==================== ==================== ==================== ============== ==================== ============== ==================== ============== ==================== ============== ==================== ============== ==================== ============== ==================== ============== ==================== ==== ====================
Plus:
   Interest expense, net                                                                                                               --                                   1                                   1                      --                                  17                                  67                                                       91                       176
   Income tax                                                                                                                          --                                   1                                   1                      --                                  (6 )                               (26 )                               (39 )                     (70 )
   Loss on debt extinguishment                                                                                                         --                      --                      --                      --                      --                      --                                  23                        23
   Depreciation and amortization                                                                                                                  155                                  29                                 184                                  28                                  45                                  75                                  14                       346
   ARO Expense                                                                                                                                      3                                   2                                   5                      --                                   1                                   1                                   1                         8
   Contract amortization                                                                                                                            4                      --                                   4                                   1                      --                                  17                                   2                                             24
   Lease amortization                                                         --               (2 )                                (2 )                    --   --   --   --     (2 )
----------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- ---- --------------------
EBITDA                                                                                                                                           (509 )                               (72 )                              (581 )                               346                                (166 )                                19                                  (4 )                    (386 )
   Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated                                                                            (2 )                                 8                                   6                      --                                  44                                   7                                 (43 )                      14
   affiliates
   Acquisition-related transaction & integration costs                                                                                 --                      --                      --                      --                      --                                   1                      --                         1
   Deactivation costs                                                                                                                  --                                   2                                   2                      --                      --                      --                                   1                         3
      Gain on sale of business                                                                                                         --                      --                      --                      --                      --                      --                                   1                         1
   Other non recurring charges                                                                                                         --                                   3                                   3                                   1                                   1                                   2                                  (2 )                       5
   Impairments                                                                                                                                    368                                  36                                 404                                   1                                  28                                 185                                  19                       637
   Impairment loss on investment                                                                                                       --                      --                      --                      --                                 106                      --                                  15                       121
   Mark to market (MtM) (gains)/losses on economic hedges                                239               44              283             (214 )                                 6   --   --     75  
----------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- ---- --------------------
Adjusted EBITDA                                                                           96               21              117              134               19              214              (13 )                     471  
----------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- ---- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                         

(1) Includes International, BETM and generation eliminations

Fourth Quarter 2016 condensed financial information by Operating Segment:

                                                                  
($ in millions)                                                            Gulf Coast                   East/                       Generation                       Retail                   Renewables                  NRG Yield               Corp/                 Total
                                                                                                                                                                West(1)                                                                                                                                    Elim
------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------------  -----------------------  ----------------------------------  -------------------------  -------------------------  ------------------------  ----------------  -------------------------
   Operating revenues                                                                                                         607                      336                                 943                      1,418                         86                       252                                (218 )  2,481
   Cost of sales                                                     299   151              450   1,053       3     13             (218 )  1,301  
------------------------------------------------------------ -------------------- -------------------- -------------------- ----- -------------------- --- -------------------- -------------- -------------------- ----- -------------------- ----- -------------------- ---- -------------------- -------------- -- ----- --------------------
Economic gross margin                                                                                                         308                      185                                 493                        365                         83                       239                      --    1,180
   Operations & maintenance and other cost of operations (2)                                                                  174                      132                                 306                         91                         31                        52                                   4      484
   Selling, marketing, general and administrative                                                                              36                       34                                  70                        136                         17                         6                                  65      294
   Other expense/(income)(3)                                           2    (2 )                    --       4      16    (33 )                               (56 )    (69 )
------------------------------------------------------------ -------------------- -------------------- -------------------- ----- -------------------- --- -------------------- -------------- -------------------- ----- -------------------- ----- -------------------- ---- -------------------- -------------- -- ----- --------------------
Adjusted EBITDA                                                       96    21              117     134      19    214              (13 )    471  
------------------------------------------------------------ -------------------- -------------------- -------------------- ----- -------------------- --- -------------------- -------------- -------------------- ----- -------------------- ----- -------------------- ---- -------------------- -------------- -- ----- --------------------
                                                                                                                                                                                                                                                                                                                             

(1) Includes International, BETM and generation eliminations

(2) Excludes deactivation costs of $3 million

(3) Excludes impairments of $758 million, acquisition-related transaction & integration costs of $1 million and loss on debt extinguishment of $23 million

The following table reconciles the condensed financial information to Adjusted EBITDA:

                                                              
($ in millions)                                                   Condensed financial information       Interest, tax, depr., amort.                     MtM                            Deactivation                         Other adj.                    Adjusted EBITDA
-------------------------------------------------------- -------------------- -------------------- -------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
   Operating revenues                                                                                                             2,184                                  15                                 282                      --                      --                        2,481
   Cost of operations                                                    1,103               (9 )                               207   --   --     1,301  
-------------------------------------------------------- -------------------- -------------------- -------------------- --------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- ------- --------------------
Gross margin                                                                                                                      1,081                                  24                                  75                      --                      --                        1,180
   Operations & maintenance and other cost of operations                                                                            487                      --                      --                                  (3 )                    --                          484
   Selling, marketing, general & administrative                                                                                     294                      --                      --                      --                      --                          294
   Other expense/(income) (1)                                            1,191             (458 )                    --   --             (802 )                        (69 )
-------------------------------------------------------- -------------------- -------------------- -------------------- --------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- ------- --------------------
Income/(Loss) from Continuing Operations                                  (891 )                               482               75                3              802       471  
-------------------------------------------------------- -------------------- -------------------- -------------------- --------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                      

(1) Other adj. includes impairments of $758 million, acquisition-related transaction & integration costs of $1 million and loss on debt extinguishment of $23 million

Appendix Table A-3: Full Year 2017 Adjusted EBITDA Reconciliation by Operating Segment

The following table summarizes the calculation of Adj. EBITDA and provides a reconciliation to income/(loss) from continuing operations:

($ in millions)                                                                            Gulf Coast                             East/                            Generation                            Retail                            Renewables                           NRG Yield                             Corp/                           Total
                                                                                                                                                                                         West (1)                                                                                                                                                                              Elim
----------------------------------------------------------------------- -------------------- -------------------- -------------------- ----------------------------------  ----------------------------------  ----------------------------------  ----------------------------------  ----------------------------------  ----------------------------------  ----------------------------------  --------------------------
Income/(Loss) from Continuing Operations                                              (1,427 )                               (71 )                            (1,498 )                               886             (266 )                               (23 )                              (647 )                    (1,548 )
======================================================================= ==================== ==================== ==================== ============== ==================== ============== ==================== ============== ==================== ============== ==================== ============== ==================== ============== ==================== ============== ==================== ====== ====================
Plus:                                                                        
   Interest expense, net                                                                                                                            1                                  26                                  27                                   5                                  97                                 303                                 445                         877
   Income tax                                                                                                                          --                                   2                                   2                                  (9 )                               (20 )                                72                                 (37 )                         8
   Loss on debt extinguishment                                                                                                         --                      --                      --                      --                                   1                                   3                                  49                          53
   Depreciation and amortization                                                                                                                  270                                 107                                 377                                 117                                 196                                 334                                  32                       1,056
   ARO expense                                                                                                                                     22                                  22                                  44                                   1                                   2                                   4                                  (1 )                        50
   Contract amortization                                                                                                                           16                                   4                                  20                                   1                      --                                  69                      --                          90
   Lease amortization                                                         --               (8 )                                (8 )                    --   --   --   --       (8 )
----------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- ------ --------------------
EBITDA                                                                                                                                         (1,118 )                                82                              (1,036 )                             1,001                                  10                                 762                                (159 )                       578
   Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated                                                                            17                                  25                                  42                                 (17 )                               (12 )                               106                                   6                         125
   affiliates
   Acquisition-related transaction & integration costs                                                                                 --                      --                      --                      --                      --                                   3                                   1                           4
   Reorganization costs                                                                                                                             9                                   1                                  10                                  11                                   1                      --                                  22                          44
   Legal Settlement                                                                                                                    --                      --                      --                                  (1 )                    --                      --                      --                          (1 )
   Deactivation costs                                                                                                                               4                                   8                                  12                      --                      --                      --                                   9                          21
   Gain on sale of assets                                                                                                              --                                 (20 )                               (20 )                    --                                   5                      --                                  (1 )                       (16 )
   Other non recurring charges                                                                                                                    (21 )                                (2 )                               (23 )                                 1                                 (17 )                                18                                  44                          23
   Impairments                                                                                                                                  1,309                                 195                               1,504                                   7                                 154                                  44                      --                       1,709
   Impairment losses on investments                                                                                                                69                                   5                                  74                      --                      --                      --                                   5                          79
   Mark to market (MtM) (gains)/losses on economic hedges                                (52 )                                24              (28 )                              (177 )                                12   --   --     (193 )
----------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- ------ --------------------
Adjusted EBITDA                                                                          217              318              535              825              153              933              (73 )                     2,373  
----------------------------------------------------------------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- ------ --------------------

(1) Includes International, BETM and generation eliminations

Full Year 2017 condensed financial information by Operating Segment:

                                                                                                                                                                                                                                          
($ in millions)                                                      Gulf Coast                    East/                   Generation                   Retail                   Renewables                  NRG Yield            Corp/                Total
                                                                                                 West (1)                                                                                                                         Elim
------------------------------------------------------------ -------------------------  -------------------------  -------------------------  -------------------------  -------------------------  -------------------------  --------  ------------------------------
   Operating revenues                                        2,258                      1,464                      3,722                      6,385                        436                      1,078                      (1,175 )      10,446
   Cost of sales                                             1,338     639   1,977   4,768      15      63   (1,125 )       5,698  
------------------------------------------------------------ ----- -------------------- ----- -------------------- ----- -------------------- ----- -------------------- ----- -------------------- ----- -------------------- ------ -- ---------- --------------------
Economic gross margin                                          920                        825                      1,745                      1,617                        421                      1,015                         (50 )       4,748
   Operations & maintenance and other cost of operations (2)   612                        439                      1,051                        322                        139                        263                         (38 )       1,737
   Selling, marketing, general and administrative(3)           123                         84                        207                        453                         56                         22                         170           908
   Other expense/(income) (4)                                  (32 )                      (16 )                      (48 )                       17      73    (203 )                      (109 )        (270 )
------------------------------------------------------------ ----- -------------------- ----- -------------------- ----- -------------------- ----- -------------------- ----- -------------------- ----- -------------------- ------ -- ---------- --------------------
Adjusted EBITDA                                                217     318     535     825     153     933      (73 )       2,373  
------------------------------------------------------------ ----- -------------------- ----- -------------------- ----- -------------------- ----- -------------------- ----- -------------------- ----- -------------------- ------ -- ---------- --------------------
                                                                                                                                                                                                                                                     

(1) Includes International, BETM and generation eliminations

(2) Excludes deactivation costs of $21 million

(3) Excludes a legal settlement of $(1) million

(4) Excludes impairments of $1,788 million, gain on sale of assets of $16 million, reorganization costs of $44 million, acquisition-related transaction & integration costs of $4 million, and loss on debt extinguishment of $53 million

The following table reconciles the condensed financial information to Adjusted EBITDA:

                                                              
($ in millions)                                                   Condensed financial information       Interest, tax, depr., amort.                     MtM                            Deactivation                         Other adj.                    Adjusted EBITDA
-------------------------------------------------------- -------------------- -------------------- -------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
   Operating revenues                                                                                                            10,629                                  56                                (239 )                    --                      --                       10,446
   Cost of operations                                                    5,778              (34 )                               (46 )                    --   --     5,698  
-------------------------------------------------------- -------------------- -------------------- -------------------- --------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- ------- --------------------
Gross margin                                                                                                                      4,851                                  90                                (193 )                    --                      --                        4,748
   Operations & maintenance and other cost of operations                                                                          1,758                      --                      --                                 (21 )                    --                        1,737
   Selling, marketing, general & administrative (1)                                                                                 907                      --                      --                      --                                   1                          908
   Other expense/(income) (2)                                            3,734           (1,983 )                    --   --           (2,021 )                       (270 )
-------------------------------------------------------- -------------------- -------------------- -------------------- --------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- ------- --------------------
Income/(Loss) from Continuing Operations                                (1,548 )                             2,073             (193 )                                21            2,020     2,373  
-------------------------------------------------------- -------------------- -------------------- -------------------- --------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                      

(1) Other adj. includes a legal settlement of $(1) million

(2) Other adj. includes impairments of $1,788 million, gain on sale of assets of $16 million, reorganization costs of $44 million, acquisition-related transaction & integration costs of $4 million, and loss on debt extinguishment of $53 million

Appendix Table A-4: Full Year 2016 Adjusted EBITDA Reconciliation by Operating Segment

The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to income/(loss) from continuing operations:

                                                                                                                                                                                                                                                                                                                                                                                                  
($ in millions)                                                                             Gulf Coast                                         East/                                         Generation                                        Retail                                         Renewables                             NRG Yield                               Corp/                            Total
                                                                                                                                                                                                                         West (1)                                                                                                                                                                                                                                                                                                                       Elim
------------------------------------------------------------------------ -------------------- -------------------- -------------------- ----------------------------------  -------------------- ------------------------------------------------------   -------------------- ----------------------------------  -------------------- ------------------------------------------------------   -------------------- ----------------------------------  -------------------- ----------------------------------  -------------------- ----------------------------------  -------------------- -------------------------
Income/(Loss) from Continuing Operations                                                                                                          (920 )                                                     96                                    (824 )                                                  1,053                                    (330 )                                                      2                                  (884 )                                          (983 )
========================================================================                                                                ============== ====================                      ==============                      ====================                      ============== ====================                      ==============                      ====================                      ============== ====================                      ============== ====================                      ============== ====================                      ===== ====================
Plus:
   Interest expense, net                                                                                                                             1                                                       24                                                                            25                                           --                                                                            97                                                      283                                                                           481                                             886
   Income tax                                                                                                                                       (2 )                                                      1                                                                            (1 )                                                      1                                                                           (20 )                                                     (1 )                                                     26                                               5
   Loss on debt extinguishment                                                                                                          --                                           --                                                                --                                           --                                                                --                                           --                                                      142                                             142
   Depreciation and amortization                                                                                                                   406                                                      110                                                                           516                                                      111                                                                           185                                                      303                                                       57                                           1,172
   ARO Expense                                                                                                                                      11                                                        4                                                                            15                                           --                                                                             2                                                        3                                                        1                                              21
   Contract amortization                                                                                                                            14                                                        5                                                                            19                                                        7                                                                             1                                                       75                                                       (3 )                                                                 99
   Lease amortization                                                          --                 (8   )                                  (8 )                      --       --     --     --        (8 )                     
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- ----- -------------------- --------------------
EBITDA                                                                                                                                            (490 )                                                    232                                                                          (258 )                                                  1,172                                                                           (65 )                                                    665                                                     (180 )                                         1,334
    Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated                                                                             3                                                       27                                                                            30                                           --                                                                            42                                                       75                                                      (41 )                                           106
    affiliates
    Acquisition-related transaction & integration costs                                                                                 --                                           --                                                                --                                           --                                                                --                                                        1                                                        7                                               8
    Deactivation costs                                                                                                                  --                                                       15                                                                            15                                           --                                                                --                                           --                                                        2                                              17
    Loss on sale of assets                                                                                                              --                                           --                                                                --                                                        1                                                                --                                           --                                                       79                                              80
    Other non recurring charges                                                                                                                     19                                                       (2                      )                                                     17                                                        2                                                                             9                                                        6                                                       23                                              57
    Impairments                                                                                                                                    377                                                       53                                                                           430                                                        1                                                                            54                                                      185                                                       32                                             702
    Impairment losses on investments                                                                                                               137                                                        5                                                                           142                                           --                                                                           105                                           --                                                       21                                             268
    Mark to market (MtM) (gains)/losses on economic hedges                                447                 46                  493               (365   )                                   6     --     --       134    
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- ----- -------------------- --------------------
Adjusted EBITDA                                                                           493                376                  869                811                  151                932                (57 )                      2,706    
------------------------------------------------------------------------ -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- -------------- -------------------- -------------------- ----- -------------------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

(1) Includes International, BETM and generation eliminations

Full Year 2016 condensed financial information by Operating Segment:

                                                                  
($ in millions)                                                            Gulf Coast                    East/                   Generation                   Retail                   Renewables                  NRG Yield            Corp/              Total
                                                                                                                                                                 West(1)                                                                                                                         Elim
------------------------------------------------------------ -------------------- -------------------- -------------------- -------------------------  -------------------------  -------------------------  -------------------------  -------------------------  -------------------------  --------  --------------------------
   Operating revenues                                                                                                       2,603                      1,781                      4,384                      6,336                        413                      1,104                      (1,027 )  11,210
   Cost of sales                                                   1,325     768   2,093   4,687      14      61   (1,028 )   5,827  
------------------------------------------------------------ -------------------- -------------------- -------------------- ----- -------------------- ----- -------------------- ----- -------------------- ----- -------------------- ----- -------------------- ----- -------------------- ------ -- ------ --------------------
Economic gross margin                                                                                                       1,278                      1,013                      2,291                      1,649                        399                      1,043                           1     5,383
   Operations & maintenance and other cost of operations (2)                                                                  672                        539                      1,211                        338                        142                        241                         (10 )   1,922
   Selling, marketing, general and administrative                                                                             132                        133                        265                        498                         61                         17                         254     1,095
   Other expense/(income) (3)                                        (19 )                      (35 )                      (54 )                        2      45    (147 )                      (186 )    (340 )
------------------------------------------------------------ -------------------- -------------------- -------------------- ----- -------------------- ----- -------------------- ----- -------------------- ----- -------------------- ----- -------------------- ----- -------------------- ------ -- ------ --------------------
Adjusted EBITDA                                                      493     376     869     811     151     932      (57 )   2,706  
------------------------------------------------------------ -------------------- -------------------- -------------------- ----- -------------------- ----- -------------------- ----- -------------------- ----- -------------------- ----- -------------------- ----- -------------------- ------ -- ------ --------------------
                                                                                                                                                                                                                                                                                                                

(1) Includes International, BETM and generation eliminations

(2) Excludes deactivation costs of $17 million

(3) Excludes impairments of $970 million, loss on sale of assets of $80 million, acquisition-related transaction & integration costs of $8 million, and loss on debt extinguishment of $142 million

The following table reconciles the condensed financial information to Adjusted EBITDA:

                                                              
($ in millions)                                                   Condensed financial information       Interest, tax, depr., amort.                     MtM                            Deactivation                         Other adj.                    Adjusted EBITDA
-------------------------------------------------------- -------------------- -------------------- -------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
   Operating revenues                                                                                                            10,512                                  56                                 642                      --                      --                       11,210
   Cost of operations                                                    5,362              (43 )                               508   --   --     5,827  
-------------------------------------------------------- -------------------- -------------------- -------------------- --------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- ------- --------------------
Gross margin                                                                                                                      5,150                                  99                                 134                      --                      --                        5,383
   Operations & maintenance and other cost of operations                                                                          1,939                      --                      --                                 (17 )                    --                        1,922
   Selling, marketing, general & administrative                                                                                   1,095                      --                      --                      --                      --                        1,095
   Other expense/(income) (1)                                            3,099           (2,076 )                    --   --           (1,363 )                       (340 )
-------------------------------------------------------- -------------------- -------------------- -------------------- --------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- ------- --------------------
Income/(Loss) from Continuing Operations                                  (983 )                             2,175              134               17            1,363     2,706  
-------------------------------------------------------- -------------------- -------------------- -------------------- --------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- -------------- -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                      

(1) Other adj. includes impairments of $970 million, loss on sale of assets of $80 million, acquisition-related transaction & integration costs of $8 million, and loss on debt extinguishment of $142 million

Appendix Table A-5: 2017 and 2016 Three Months Ended December 31 and Full Year Adjusted Cash Flow from Operations Reconciliations

The following table summarizes the calculation of adjusted cash flow operating activities providing a reconciliation to net cash provided by operating activities:

                                                          
                                                                                                                                                   Three Months Ended
($ in millions)                                             December 31, 2017      December 31, 2016
---------------------------------------------------- -------------------- -------------------- -------------------- ----------------- -------------------- -------------------- --------------------
Net Cash Provided by Operating Activities                                                                                         581                      533
Sale of Land and other assets                                                                                                     (3)                                                 --
Merger, integration and cost-to-achieve expenses (1)                                                                               23                                                            (7)
Return of capital from equity investments                                                                                           4                                                             11
Adjustment for change in collateral (2)                                 (23)                    (137)
---------------------------------------------------- -------------------- -------------------- -------------------- ----------------- -------------------- -------------------- --------------------
Adjusted Cash Flow from Operating Activities                             582                      400
---------------------------------------------------- -------------------- -------------------- -------------------- ----------------- -------------------- -------------------- --------------------
Maintenance CapEx, net (3)                                                                                                       (39)                                                           (41)
Environmental CapEx, net                                                                                                            1                                                           (42)
Distributions to non-controlling interests                              (47)                     (47)
---------------------------------------------------- -------------------- -------------------- -------------------- ----------------- -------------------- -------------------- --------------------
Free Cash Flow - before Growth                                           497                      270
==================================================== ==================== ==================== ==================== ================= ==================== ==================== ====================
                                                                                                                                                                                 

1. 2017 includes cost-to-achieve expenses associated with the Transformation Plan announced on July 2017 call; 2016 includes cost-to achieve expenses associated with the $150 million savings announced on September 2015 call.

2. Reflects change in NRG’s cash collateral balance as of 4Q2017 including $79 million of collateral postings from our deconsolidated affiliate (GenOn)

3. Includes insurance proceeds of $7 million and $4 million in 2017 and 2016, respectively

                                                                          
                                                                                                                                                                   Twelve Months Ended
($ in millions)                                                             December 31, 2017      December 31, 2016
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ----------------- -------------------- -------------------- --------------------
Net Cash Provided by Operating Activities                                                                                                       1,425                    2,207
Reclassifying of net receipts for settlement of acquired derivatives                                                                                2                                                              6
that include financing elements
Sale of Land and other assets                                                                                                                       5                                                 --
Merger, integration and cost-to-achieve expenses (1)                                                                                               37                                                             40
Cash Contribution to GenOn pension plan (2)                                                                                                        13                                                 --
Return of capital from equity investments                                                                                                          26                                                             17
Adjustment for change in collateral (3)                                                  159                    (398)
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ----------------- -------------------- -------------------- --------------------
Adjusted Cash Flow from Operating Activities                                           1,667                    1,872
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ----------------- -------------------- -------------------- --------------------
Maintenance CapEx, net (4)                                                                                                                      (164)                                                          (212)
Environmental CapEx, net                                                                                                                         (24)                                                          (240)
Preferred dividends                                                                                                                    --                                                            (2)
Distributions to non-controlling interests                                             (175)                    (163)
-------------------------------------------------------------------- -------------------- -------------------- -------------------- ----------------- -------------------- -------------------- --------------------
Free Cash Flow - before Growth                                                         1,304                    1,255
==================================================================== ==================== ==================== ==================== ================= ==================== ==================== ====================
                                                                                                                                                                                                 

(1.) 2017 includes cost-to-achieve expenses associated with the Transformation Plan announced on July 2017 call; 2016 includes cost-to achieve expenses associated with the $150 million savings announced on September 2015 call.

(2.)Reflects cash contribution related to Legacy GenOn pension liability retained by NRG

(3.)Reflects change in NRG’s cash collateral balance as of 4Q2017 including $79 million of collateral postings from our deconsolidated affiliate (GenOn)

(4.) Includes insurance proceeds of $29 million and $35 million in 2017 and 2016, respectively

Appendix Table A-6: Full Year 2017 Sources and Uses of Liquidity

The following table summarizes the sources and uses of liquidity for the full year 2017:

                                                   
($ in millions)                                      Twelve Months Ended
                                                                                            December 31, 2017
----------------------------------------------- -------------------- -------------------- --------------------
Sources:
   Adjusted cash flow from operations                                                                    1,667
   Increase in credit facility                                                                             722
   Issuance of Agua Caliente HoldCo debt                                                                   130
   Divestitures                                                                                             81
   NYLD Equity Issuance                                               34
----------------------------------------------- -------------------- -------------------- --------------------
Uses:
   Debt repayments, net of proceeds                                                                    (1,207)
   Collateral (1)                                                                                        (159)
   Maintenance and environmental capex, net (2)                                                          (188)
   Distributions to non-controlling interests                                                            (175)
   Common Stock Dividends                                                                                 (38)
   Cost-to-achieve(3)                                                                                     (43)
   Growth investments and acquisitions, net                                                                (9)
   Other Investing and Financing                                      22
----------------------------------------------- -------------------- -------------------- --------------------
Change in Total Liquidity                                            837
----------------------------------------------- -------------------- -------------------- --------------------
                                                                                           

(1.)Reflects change in NRG’s cash collateral balance as of 4Q2017 including $79MM of collateral postings from our deconsolidated affiliate (GenOn)

(2.) Includes insurance proceeds of $29 million

(3.) 2017 includes cost-to-achieve expenses associated with the Transformation Plan announced on July 2017 call

Appendix Table A-7: 2018 Adjusted EBITDA Guidance Reconciliation

The following table summarizes the calculation of Adjusted EBITDA providing reconciliation to net income:

                                                                          
                                                                                                                                                  2018 Adjusted EBITDA
                                                                                                                                    -------------------------------------------------
($ in millions)                                                                                                                       Low            High
                                                                                                                                    ------                      --------------------
Income from Continuing Operations (1)                                                                                                  410                                       610
Income Tax                                                                                                                              20                                        20
Interest Expense                                                                                                                       785                                       785
Depreciation, Amortization, Contract Amortization and ARO Expense                                                                    1,180                                     1,180
Adjustment to reflect NRG share of adjusted EBITDA in unconsolidated                                                                   135                                       135
affiliates
Other Costs (2)                                                                                                                        270                                       270
--------------------------------------------------------------------                                                                ------                      --------------------
Adjusted EBITDA                                                                                                                      2,800                                     3,000
                                                                                                                                                                 

(1.)For purposes of guidance, discontinued operations are excluded and fair value adjustments related to derivatives are assumed to be zero.

(2.) Includes deactivation costs and cost-to-achieve expenses

Appendix Table A-8: 2018 FCFbG Guidance Reconciliation

The following table summarizes the calculation of Free Cash Flow before Growth providing reconciliation to Cash from Operations:

                                                                   
                                                                                                                                         2018
-------------------------------------------------------------                                                                ----------------------------------
($ in millions)                                                                                                                            Guidance
-------------------------------------------------------------                                                                ------------------------------------
Adjusted EBITDA                                                                                                                                  $2,800 - $3,000
Cash Interest payments                                                                                                                 (785 )
Cash Income tax                                                                                                                         (40 )
Collateral / working capital / other                                                                                                     40  
-------------------------------------------------------------                                                                -------------- --------------------
Cash From Operations                                                                                                                             $2,015 - $2,215
Adjustments: Acquired Derivatives, Cost-to-Achieve, Return of                                                                --  
Capital Dividends, Collateral and Other
-------------------------------------------------------------                                                                -------------- --------------------
Adjusted Cash flow from operations                                                                                                               $2,015 - $2,215
Maintenance capital expenditures, net                                                                                                              (210) - (240)
Environmental capital expenditures, net                                                                                                                (0) - (5)
Distributions to non-controlling interests                                                                                                         (220) - (250)
-------------------------------------------------------------                                                                ------------------------------------
Free Cash Flow - before Growth                                                                                                                   $1,550 - $1,750
-------------------------------------------------------------                                                                ------------------------------------
                                                                                                                              

EBITDA and Adjusted EBITDA are non-GAAP financial measures. These measurements are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance. The presentation of Adjusted EBITDA should not be construed as an inference that NRG’s future results will be unaffected by unusual or non-recurring items.

EBITDA represents net income before interest (including loss on debt extinguishment), taxes, depreciation and amortization. EBITDA is presented because NRG considers it an important supplemental measure of its performance and believes debt-holders frequently use EBITDA to analyze operating performance and debt service capacity. EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Some of these limitations are:

-- EBITDA does not reflect cash expenditures, or future requirements for capital expenditures, or contractual commitments;

-- EBITDA does not reflect changes in, or cash requirements for, working capital needs;

-- EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt or cash income tax payments;

-- Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; and

-- Other companies in this industry may calculate EBITDA differently than NRG does, limiting its usefulness as a comparative measure.

Because of these limitations, EBITDA should not be considered as a measure of discretionary cash available to use to invest in the growth of NRG’s business. NRG compensates for these limitations by relying primarily on our GAAP results and using EBITDA and Adjusted EBITDA only supplementally. See the statements of cash flow included in the financial statements that are a part of this news release.

Adjusted EBITDA is presented as a further supplemental measure of operating performance. As NRG defines it, Adjusted EBITDA represents EBITDA excluding impairment losses, gains or losses on sales, dispositions or retirements of assets, any mark-to-market gains or losses from accounting for derivatives, adjustments to exclude the Adjusted EBITDA related to the non-controlling interest, 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. The reader is encouraged to evaluate each adjustment and the reasons NRG considers it appropriate for supplemental analysis. As an analytical tool, Adjusted EBITDA is subject to all of the limitations applicable to EBITDA. In addition, in evaluating Adjusted EBITDA, the reader should be aware that in the future NRG may incur expenses similar to the adjustments in this news release.

Management believes Adjusted EBITDA is useful to investors and other users of NRG’s financial statements in evaluating its operating performance because it provides an additional tool to compare business performance across companies and across periods and adjusts for items that we do not consider indicative of NRG’s future operating performance. This measure is widely used by debt-holders to analyze operating performance and debt service capacity and by equity investors to measure our operating performance without regard to items such as interest expense, taxes, depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired. Management uses Adjusted EBITDA as a measure of operating performance to assist in comparing 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.

Adjusted cash flow from operating activities is a non-GAAP measure NRG provides to show cash from operations with the reclassification of net payments of derivative contracts acquired in business combinations from financing to operating cash flow, as well as the add back of merger, integration and related restructuring costs. The Company provides the reader with this alternative view of operating cash flow because the cash settlement of these derivative contracts materially impact operating revenues and cost of sales, while GAAP requires NRG to treat them as if there was a financing activity associated with the contracts as of the acquisition dates. The Company adds back merger, integration related restructuring costs as they are one time and unique in nature and do not reflect ongoing cash from operations and they are fully disclosed to investors.

Free cash flow (before Growth) is adjusted cash flow from operations less maintenance and environmental capital expenditures, net of funding, preferred stock dividends and distributions to non-controlling interests and is used by NRG predominantly as a forecasting tool to estimate cash available for debt reduction and other capital allocation alternatives. The reader is encouraged to evaluate each of these adjustments and the reasons NRG considers them appropriate for supplemental analysis. Because we have mandatory debt service requirements (and other non-discretionary expenditures) investors should not rely on free cash flow before Growth as a measure of cash available for discretionary expenditures.

Free Cash Flow before Growth is utilized by Management in making decisions regarding the allocation of capital. Free Cash Flow before Growth is presented because the Company believes it is a useful tool for assessing the financial performance in the current period. In addition, NRG’s peers evaluate cash available for allocation in a similar manner and accordingly, it is a meaningful indicator for investors to benchmark NRG’s performance against its peers. Free Cash Flow before Growth is a performance measure and is not intended to represent net income (loss), cash from operations (the most directly comparable U.S. GAAP measure), or liquidity and is not necessarily comparable to similarly titled measures reported by other companies.

(1) Excluding transaction costs, working capital, and other purchase price adjustments

(2) Includes International and BETM

(3) Cash cost of $646 million, including $42 million of debt extinguishment fees

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20180301005719r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20180301005719/en/

SOURCE: NRG Energy, Inc.

Media: 
Marijke Shugrue, 609-524-5262 
or 
Investors: 
Kevin L. Cole, CFA, 609-524-4526 
or 
Lindsey Puchyr, 609-524-4527


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