NRG ENERGY, INC. - Annual Report: 2023 (Form 10-K)

BTUBritish Thermal UnitBusinessNRG Business, which serves business customersCAAClean Air ActCAISOCalifornia Independent System OperatorCAMT15% Corporate Alternative Minimum Tax enacted by the IRA on August 16, 2022CDDCooling Degree DayCFTCU.S. Commodity Futures Trading Commission

CO2

Carbon Dioxide

CO2e

Carbon Dioxide EquivalentsCompanyNRG Energy, Inc.Convertible Senior Notes

As of December 31, 2023, consists of NRG’s $575 million unsecured 2.75% Convertible Senior Notes due 2048

CottonwoodCottonwood Generating Station, a 1,166 MW natural gas-fueled plantCPPClean Power PlanCPUCCalifornia Public Utilities CommissionCWAClean Water ActD.C. CircuitU.S. Court of Appeals for the District of Columbia CircuitDSIDry Sorbent Injection DSUDeferred Stock UnitDthDekathermsDual fuel customersCustomer that have both electricity and natural gas service with the CompanyEconomic gross marginSum of retail revenue, energy revenue, capacity revenue and other revenue, less cost of fuels, purchased energy and other cost of salesEGUElectric Generating UnitEPAU.S. Environmental Protection AgencyEPCEngineering, Procurement and ConstructionERCOTElectric Reliability Council of Texas, the Independent System Operator and the regional reliability coordinator of the various electricity systems within TexasESPElectrostatic PrecipitatorESPPNRG Energy, Inc. Amended and Restated Employee Stock Purchase PlanExchange ActThe Securities Exchange Act of 1934, as amendedFASBFinancial Accounting Standards BoardFERCFederal Energy Regulatory CommissionFGDFlue gas desulfurizationFPAFederal Power Act


FTRs						Financial Transmission Rights
GAAP						Generally accepted accounting principles in the United States
GHG						Greenhouse Gas
Green Mountain Energy						Green Mountain Energy Company
GW						Gigawatts
GWh						Gigawatt Hours
HDD						Heating Degree Day
Heat Rate						A measure of thermal efficiency computed by dividing the total BTU content of the fuel burned by the resulting kWhs generated. Heat rates can be expressed as either gross or net heat rates, depending whether the electricity output measured is gross or net generation and is generally expressed as BTU per net kWh
Home						NRG Home, which serves residential customers
ICE						Intercontinental Exchange
IoT						Internet of Things
IRA						Inflation Reduction Act
ISO						Independent System Operator, also referred to as RTOs
ISO-NE						ISO New England Inc.
Ivanpah						Ivanpah Solar Electric Generation Station, a 391 MW solar thermal power plant located in California's Mojave Desert in which NRG owns 54.5% interest
kWh						Kilowatt-hours
LaGen						Louisiana Generating LLC
LIBOR						London Inter-Bank Offered Rate
LSEs						Load Serving Entities
LTIPs						Collectively, the NRG LTIP and the Vivint LTIP
MDth						Thousand Dekatherms
Midwest Generation						Midwest Generation, LLC
MISO						Midcontinent Independent System Operator, Inc.
MMBtu						Million British Thermal Units
MMDth						Million Dekatherms
MW						Megawatts
MWh						Saleable megawatt hour net of internal/parasitic load megawatt-hour
NAAQS						National Ambient Air Quality Standards
NEPOOL						New England Power Pool
NERC						North American Electric Reliability Corporation
NERC-CIP						North American Electric Reliability Corporation Critical Infrastructure Protection
Net Capacity Factor						The net amount of electricity that a generating unit produces over a period of time divided by the net amount of electricity it could have produced if it had run at full power over that time period. The net amount of electricity produced is the total amount of electricity generated minus the amount of electricity used during generation
Net Exposure						Counterparty credit exposure to NRG, net of collateral
Net Generation						The net amount of electricity produced, expressed in kWhs or MWhs, that is the total amount of electricity generated (gross) minus the amount of electricity used during generation
NIST						National Institute of Standards and Technology
Nodal						Nodal Exchange is a derivatives exchange
NOL						Net Operating Loss
NOx						Nitrogen Oxides
NPNS						Normal Purchase Normal Sale
NRC						U.S. Nuclear Regulatory Commission
NRG						NRG Energy, Inc.


NRG LTIP						NRG Energy, Inc. Amended and Restated Long-Term Incentive Plan
Nuclear Decommissioning Trust Fund						NRG's nuclear decommissioning trust fund assets, which were for the Company's portion of the decommissioning of the STP, units 1 & 2 through the sale of STP on November 1, 2023
NYISO						New York Independent System Operator
NYMEX						New York Mercantile Exchange
OCI/OCL						Other Comprehensive Income/(Loss)
ORDC						Operating Reserve Demand Curve
ORDPA						Online Reliability Deployment Price Adder
PCI DSS						Payment Card Industry Data Security Standard
Peaking						Units expected to satisfy demand requirements during the periods of greatest or peak load on the system
Petra Nova						Petra Nova Parish Holdings, LLC
PJM						PJM Interconnection, LLC
PM2.5						Particulate Matter that has a diameter of less than 2.5 micrometers
PPA						Power Purchase Agreement
PUCT						Public Utility Commission of Texas
RCRA						Resource Conservation and Recovery Act of 1976
Receivables Facility						NRG Receivables LLC, a bankruptcy remote, special purpose, wholly-owned indirect subsidiary of the Company's $1.4 billion accounts receivables securitization facility due 2024, which was last amended on October 6, 2023
Receivables Securitization Facilities						Collectively, the Receivables Facility and the Repurchase Facility
RECs						Renewable Energy Certificates
Renewable PPA						A third-party PPA entered into directly with a renewable generation facility for the offtake of the RECs or other similar environmental attributes generated by such facility, coupled with the associated power generated by that facility
Renewables						Consists of the following projects in which NRG has an ownership interest: Ivanpah and solar generating stations located at various NFL Stadiums
Renewables Platform						The renewable operating and development platform sold to Global Infrastructure Partners with NRG's interest in NRG Yield
REP						Retail electric provider
Repurchase Facility						NRG's $150 million uncommitted repurchase facility related to the Receivables Facility due 2024, which was last amended on October 6, 2023
Revolving Credit Facility						The Company's $4.3 billion revolving credit facility due 2028, which was last modified on March 13, 2023
RGGI						Regional Greenhouse Gas Initiative
RMR						Reliability Must-Run
RPS						Renewable Portfolio Standards
RPSU						Relative Performance Stock Unit
RSU						Restricted Stock Unit
RTO						Regional Transmission Organization
SCR						Selective Catalytic Reduction Control System
SEC						U.S. Securities and Exchange Commission
Securities Act						The Securities Act of 1933, as amended
Senior Notes						As of December 31, 2023, NRG's $4.0 billion outstanding unsecured senior notes consisting of $375 million of the 6.625% senior notes due 2027, $821 million of 5.75% senior notes due 2028, $733 million of the 5.25% senior notes due 2029, $500 million of the 3.375% senior notes due 2029, $1.0 billion of the 3.625% senior notes due 2031 and $480 million of the 3.875% senior notes due 2032

Senior Secured First Lien Notes

As of December 31, 2023, NRG’s $3.2 billion outstanding Senior Secured First Lien Notes consists of $600 million of the 3.75% Senior Secured First Lien Notes due 2024, $500 million of the 2.0% Senior Secured First Lien Notes due 2025, $900 million of the 2.45% Senior Secured First Lien Notes due 2027, $500 million of the 4.45% Senior Secured First Lien Notes due 2029 and $740 million of the 7.000% Senior Secured First Lien Notes due 2033

Series A Preferred Stock

As of December 31, 2023, NRG's Series A Preferred Stock consists of 650,000 outstanding shares of the 10.25% Series A Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock, with a $1,000 liquidation preference per share

Services

NRG Services, which primarily includes the services businesses acquired in the Direct Energy acquisition and the Goal Zero business

SO2

Sulfur Dioxide

SOFR

Secured overnight financing rate

South Central Portfolio

NRG's South Central Portfolio, which owned and operated a portfolio of generation assets consisting of Bayou Cove, Big Cajun-I, Big Cajun-II, Cottonwood and Sterlington, was sold on February 4, 2019. NRG is leasing back the Cottonwood facility through May 2025

S&P

Standard & Poor's

STP

South Texas Project — nuclear generating facility located near Bay City, Texas in which NRG owned a 44% interest. NRG closed on the sale of its interest in STP on November 1, 2023

STPNOC

South Texas Project Nuclear Operating Company

Tax Act

The Tax Cuts and Jobs Act of 2017

TDSP

Transmission/distribution service provider

Texas Genco

Texas Genco LLC

TSR

Total Shareholder Return

TWh

Terawatt Hours

U.S.

United States of America

VaR

Value at Risk

(a)Utility Scale Solar is described in MW on an alternating current basis. MW figures provided represent nominal summer net MW capacity of power generated as adjusted for the Company's owned interest

(b)Includes proportionate share of equity owned investments

Plant Operations is responsible for operating the Company's generation facilities at the highest standards of safety and regulatory compliance, and includes (i) operations and maintenance, (ii) asset management, and (iii) development, engineering and construction.

Operations & Maintenance

NRG operates and maintains its generation portfolio, as well as approximately 6,500 MW of additional coal, natural gas and wind generation capacity at 15 plants operated on behalf of third parties, as of December 31, 2023, using prudent industry practices for the safe, reliable and economic generation of electricity in compliance with all local, state and federal requirements. The Company follows a consistent set of operating requirements, including a solid base of training, required adherence to specific safety and environmental limits, procedure and checklist usage, and the implementation of continuous process improvement through incident investigations.

NRG uses best-in-class maintenance practices for preventive, predictive, and corrective maintenance planning. The Company’s strategic planning process evaluates equipment condition, performance, and obsolescence to support the development of a comprehensive work scope and schedule for long-term performance.

Asset Management

NRG manages all aspects of its generation portfolio to optimize the lifecycle value of the assets, consistent with the Company’s goals. The Company evaluates capital projects required for continued operation and strategic enhancement of the assets, provides quality assurance on capital outlays, and assesses the impact of rules, regulations, and laws on business profitability. In addition, the Company manages its long-term contracts, PPAs, and real estate holdings and provides third-party asset management services.

Development, Engineering & Construction

NRG develops, engineers and executes major plant modifications, “new build” generation and energy storage projects that enhance the value of its generation portfolio and provide options to meet generation growth needs in the retail markets it serves, in accordance with the Company’s strategic goals. These projects have included gas-fired generation development and

construction, coal to gas conversions, grid scale energy storage development, grid scale renewable construction, and asset demolition, remediation and reclamation work.

Vivint Smart Home

In March 2023, NRG completed the acquisition of Vivint Smart Home, which is a leading smart home platform that provides subscribers with technology, products and services to create a smarter, greener, safer home. A smart home has multiple devices integrated into a single expandable platform that incorporates artificial intelligence and machine-learning in its operating system allowing customers to interact with and manage their home from anywhere via the Vivint app on their smart device. Vivint Smart Home enables a customized solution for the home using integrated smart cameras (indoor, outdoor and doorbell), locks, lights, thermostats, garage door control and a host of other safety and security sensors.

Vivint Smart Home provides a fully integrated solution for consumers, including hardware, software, sales, installation by trained and experienced in-home service professionals, customer service, technical support and professional monitoring. This seamless integration of high-quality products and services resulted in an average subscriber lifetime of approximately nine years as of December 31, 2023. The Company believes its ability to offer related or adjacent products and services that leverage the existing smart home platform, as well as energy services, can extend the average subscriber lifetime and increase the lifetime value of subscribers. Vivint Smart Home's cloud-based home platform currently manages more than 30 million in-home devices as of December 31, 2023. The average subscriber on Vivint Smart Home's cloud-based home platform engages with the smart home app approximately 16 times per day and has approximately 15 devices in its home.

Through the addition of Vivint Smart Home, NRG identified opportunities to improve gross margin, customer retention and customer lifetime value.

Operational Statistics

The following statistics represent the Company's retail load and customer count:


	Year ended December 31,
	2023	2022	2021
Sales volumes - Electricity (in GWh)
Home - Texas	40,032	43,155	42,397
Home - East	12,838	13,269	14,108
Home - West/Services/Other	2,243	2,250	2,252
Business - Texas	40,250	38,447	34,367
Business - East	46,438	47,724	53,204
Business - West/Services/Other	10,393	10,231	10,625
Total Load	152,194	155,076	156,953

Sales volumes - Natural gas (in MDth)
Home - East	49,990	53,051	50,417
Home - West/Services/Other	75,150	92,035	97,272
Business - East	1,587,052	1,618,946	1,620,036
Business - West/Services/Other	179,888	154,074	109,021
Total Load	1,892,080	1,918,106	1,876,746


	Year ended December 31,
	2023	2022	2021
Customer count - Electricity customers(a)(b) (in thousands)
Home - Texas
Average retail	2,878	2,961	3,040
Ending retail	2,928	2,859	3,010
Home - East
Average retail	1,466	1,408	1,484
Ending retail	1,752	1,381	1,402
Home - West/Services/Other
Average retail(c)	393	383	525
Ending retail(c)	404	390	512

Customer count - Natural gas customers(b) (in thousands)
Home - East
Average retail	390	375	360
Ending retail	385	380	364
Home - West/Services/Other
Average retail	381	416	452
Ending retail	358	396	434

Total Customer count (in thousands)
Average retail - Home - Electricity and Natural gas	5,508	5,543	5,861
Average - Vivint Smart Home(d)	2,008	—	—

Ending retail - Home - Electricity and Natural gas	5,827	5,406	5,722
Ending - Vivint Smart Home(d)	2,043	—	—
Total Ending retail and Vivint Smart Home	7,870	5,406	5,722
(a) Includes Services customers
(b) Dual fuel customers are included within electricity customer counts only
(c) Includes 135 thousand whole home warranty customers as of December 31, 2021. The whole home warranty business was sold in January 2022
(d) Vivint Smart Home subscribers includes customers that also purchase other NRG products

The following are industry statistics for the Company's fossil and nuclear plants, as defined by the NERC:

Annual Equivalent Availability Factor, or EAF — Measures the percentage of maximum generation available over time as the fraction of net maximum generation that could be provided over a defined period of time after all types of outages and deratings, including seasonal deratings, are taken into account.

Net Heat Rate — The net heat rate represents the total amount of fuel in BTU required to generate one net kWh provided.

Net Capacity Factor — The net amount of electricity that a generating unit produces over a period of time divided by the net amount of electricity it could have produced if it had run at full power over that time period. The net amount of electricity produced is the total amount of electricity generated minus the amount of electricity used during generation by the station.

The tables below present these performance metrics for the Company's generation portfolio, including leased facilities, for the years ended December 31, 2023 and 2022:

Year Ended December 31, 2023

Fossil and Nuclear Plants (a)

Net Owned
Capacity (MW)

Net Generation (In thousands of MWh) (a)

Annual Equivalent Availability Factor

Average Net Heat Rate BTU/kWh

Net Capacity

Factor

(a)MW capacity of the facility without taking into account NRG ownership percentage

(b)Actual capacity can vary depending on factors including weather conditions, operational conditions, and other factors. Additionally, ERCOT and PJM require periodic demonstration of capability, and the capacity may vary individually and in the aggregate from time to time

(c)In May 2022, W.A. Parish Unit 8 came offline as a result of damage to the steam turbine/generator. The extended forced outage ended in September 2023 and the unit has returned to service

(d)The Company previously announced the shut down of the Indian River facility. However, PJM identified reliability impacts resulting from the proposed deactivation and Indian River Unit 4 currently remains active under a RMR agreement that ends December 31, 2026

(e)Powerton is projected to close by December 31, 2028 to comply with ELG regulations

(f)A retirement notice was filed with PJM that the Vienna facility will retire in June 2025

(g)NRG leases 100% interests in the Cottonwood facility through a facility lease agreement expiring in May 2025 and operates the Cottonwood facility

The following table summarizes the primary changes that occurred during 2023:

Name of Facility

Power Market

Plant Type

Primary Fuel

Status

Location

Rated MW Capacity

Net MW Capacity

% Owned

Texas

Gregory

ERCOT

Fossil

Natural Gas

Sold

365

100.0

South Texas Project

ERCOT

Nuclear

Uranium

Sold

2,572

1,132

44.0

East

Astoria Turbines

NYISO

Fossil

Natural Gas

Retired

420

100.0

Joliet

PJM

Fossil

Natural Gas

Retired

1,381

100.0

Total

4,738

3,298

Other Properties

NRG owns several real properties and facilities related to its generation assets, other vacant real property unrelated to its generation assets, and properties not used for operational purposes. NRG believes it has satisfactory title to its plants and facilities in accordance with standards generally accepted in the electric power industry, subject to exceptions that, in the Company's opinion, would not have a material adverse effect on the use or value of its portfolio.

NRG leases its operational and corporate headquarters in Houston, Texas, its financial and commercial corporate offices in Princeton, New Jersey, its smart home corporate offices in Provo, Utah, as well as its retail operations offices, smart home monitoring stations, call centers, warehouses and various other office space.

Item 3 — Legal Proceedings

See Item 15 — Note 23, Commitments and Contingencies, to the Consolidated Financial Statements for discussion of the material legal proceedings to which NRG is a party.

Item 4 — Mine Safety Disclosures

There have been no events that are required to be reported under this Item.

PART II

Item 5 — Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information and Holders

NRG's common stock trades on the New York Stock Exchange under the symbol "NRG". NRG's authorized capital stock consists of 500,000,000 shares of common stock and 10,000,000 shares of preferred stock. A total of 25,000,000 shares of the Company's common stock are authorized for issuance under the NRG LTIP, and a total of 17,500,000 shares of common stock are authorized for issuance under the Vivint LTIP. For more information about the LTIPs, refer to Item 12 — Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters and Item 15 — Note 21, Stock-Based Compensation, to the Consolidated Financial Statements.

As of February 1, 2024, there were 15,102 common stockholders of record.

On June 22, 2023, the Company updated its capital allocation framework, and plans, after debt reduction, to return approximately 80% of excess cash to shareholders and invest 20% in growth initiatives. The Company expects to return the capital to shareholders through share repurchases and dividends on its common stock.

Consistent with its capital allocation framework, in 2021, 2022 and 2023, the Company increased the annual dividend on its common stock to $1.30, $1.40 and $1.51 per share, respectively, representing an 8% increase each year. The Company further increased the annual dividend by 8% to $1.63 per share beginning in the first quarter of 2024. The long-term capital allocation policy targets an annual dividend growth rate of 7-9% per share.

Issuer Purchases of Equity Securities

NRG engages in share repurchase programs with the goal of returning excess cash to shareholders. The share repurchase plan permits the execution of the plan through open-market purchases, private transactions, accelerated share repurchases and other similar transactions. The timing, price and volume of repurchases is based on a number of factors, including available capital, market conditions, and compliance with associated laws and regulations.

On June 22, 2023, as part of the updated capital allocation framework, the Company announced that the Board of Directors has increased the share repurchase authorization of its common stock to $2.7 billion to be executed through 2025. Through December 31, 2023, the Company completed $1.2 billion of share repurchases under the $2.7 billion authorization. For further information regarding share repurchases, see Item 15 — Note 16, Capital Structure in this Form 10-K.

The table below sets forth the information with respect to purchases made by or on behalf of NRG or any "affiliated purchaser" (as defined in Rule 10b-18(a)(3) under the Exchange Act) of NRG's common stock during the quarter ended December 31, 2023.


For the three months ended December 31, 2023	Total Number of Shares Purchased	Average Price Paid per Share(a)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions)(b)
Month #1
(October 1, 2023 to October 31, 2023	3,732,657	$	40.17	3,732,657	$	2,500
Month #2
(November 1, 2023 to November 30, 2023)	4,494,224	(c)		4,494,224	$	1,550
Month #3
(December 1, 2023 to December 31, 2023)	13,181,918	(c)		13,181,918	$	1,550

Total at December 31, 2023	21,408,799			21,408,799

(a)The average price paid per share excludes excise taxes and commissions per share paid in connection with the open market share repurchases

(b)Includes commissions of $0.015 per share paid in connection with the open market share repurchases

(c)Represents shares delivered under the November 6, 2023 ASR agreements. The total number of shares delivered and the average price per share under the ASR agreements will be determined at the end of the ASR period which is expected to occur in March of 2024. See Item 15—Note 16, Capital Structure for additional information on the ASR agreements

Director and Officer Trading Arrangements

The Company’s officers and directors are required to comply with the Company’s Securities Trading and Non-Disclosure Policy at all times, including during a share repurchase program. The securities trading and non-disclosure policy, among other things, prohibits trading in the Company’s securities when in possession of material non-public information and restricts the ability of certain officers or directors from transacting in the Company’s securities during specific blackout periods, subject to certain limited exceptions, including transactions pursuant to a Rule 10b5-1 trading plan that complies with the conditions of Securities Exchange Act Rule 10b5-1. The Company’s policy also requires officers and directors to obtain preclearance in advance of effecting any purchase, sale or other trading of Company stock. See Item 9B — Other Information, for details of any "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" by any director or officer of the Company during the three months ended December 31, 2023.

Stock Performance Graph

The performance graph below compares the cumulative total stockholder return on NRG's common stock for the period December 31, 2018 through December 31, 2023, with the cumulative total return of the Standard & Poor's 500 Composite Stock Price Index ("S&P 500") and the Philadelphia Utility Sector Index ("UTY").

The performance graph shown below is being furnished and compares each period assuming that $100 was invested on December 31, 2018, in each of the common stock of NRG, the stocks included in the S&P 500 and the stocks included in the UTY, and that all dividends were reinvested.

Comparison of Cumulative Total Return


	12/31/2018		12/31/2019		12/31/2020		12/31/2021		12/31/2022		12/31/2023
NRG Energy, Inc.	$	100.00	$	100.69	$	98.53	$	116.81	$	89.40	$	151.29
S&P 500	100.00		131.49		155.68		200.37		164.08		207.21
UTY	100.00		126.82		130.27		154.04		155.04		140.83

Item 6 — Reserved

Item 7 — Management's Discussion and Analysis of Financial Condition and Results of Operations

The discussion and analysis below has been organized as follows:

•Executive Summary, including the business environment in which the Company operates, a discussion of regulation, weather, competition and other factors that affect the business, and other significant events that are important to understanding the results of operations and financial condition;

•Results of operations for the years ended December 31, 2023 and December 31, 2022, including an explanation of significant differences between the periods in the specific line items of NRG's Consolidated Statements of Operations;

•Liquidity and capital resources including liquidity position, financial condition addressing credit ratings, material cash requirements and commitments, and other obligations; and

•Critical accounting estimates that are most important to both the portrayal of the Company's financial condition and results of operations, and require management's most difficult, subjective, or complex judgments.

As you read this discussion and analysis, refer to NRG's Consolidated Statements of Operations in this Form 10-K, which present the results of the Company's operations for the years ended December 31, 2023 and 2022, and also refer to Item 1 — Business to this Form 10-K for more detail discussion about the Company's business. A discussion and analysis of fiscal year 2021 may be found in Part II, Item 7 — Management's Discussion and Analysis of Financial Condition and Results of Operations of the Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Executive Summary

NRG Energy, Inc., or NRG or the Company, sits at the intersection of energy and home services. NRG is a leading energy and home services company fueled by market-leading brands, proprietary technologies and complementary sales channels. Across the U.S. and Canada, NRG delivers innovative, sustainable solutions, predominately under the brand names such as NRG, Reliant, Direct Energy, Green Mountain Energy, and Vivint, while also advocating for competitive energy markets and customer choice. The Company has a customer base that includes approximately 8 million residential consumers in addition to commercial, industrial, and wholesale customers, supported by approximately 13 GW of generation as of December 31, 2023.

Business Environment

The industry dynamics and external influences affecting the Company, its businesses, and the retail energy and power generation industry in 2023 and for the future medium term include:

Market Dynamics — The price of natural gas plays an important role in setting the price of electricity in many of the regions where NRG operates. Natural gas prices are driven by variables including demand from the industrial, residential, and electric sectors, productivity across natural gas supply basins, costs of natural gas production, changes in pipeline infrastructure, global LNG demand, exports of natural gas, and the financial and hedging profile of natural gas customers and producers. In 2023, the average natural gas price at Henry Hub was $2.74 per MMBtu compared to $6.64 per MMBtu in 2022, representing a decrease of 59%.

NRG may experience impacts to gross margins due to significant, rapid changes in current natural gas prices, the impact those prices have on power prices, and the lag in its ability to make a corresponding adjustment to the retail rates it charges customers on term and month to month contracts. The Company hedges its load commitments in order to mitigate the impact of changes in commodity prices, and as a result, these gross margin impacts would be realized in future periods until it is able to make the corresponding adjustments to the retail customer rates.

The relative price of natural gas as compared to coal and prevailing power prices are the primary driver of coal demand. Coal commodity prices decreased slightly in 2023.

Electricity Prices — The price of electricity is a key determinant of the profitability of the Company. Many variables such as the price of different fuels, weather, load growth and unit availability all coalesce to impact the final price for electricity and the Company's profitability. An increase in supply cost volatility in the competitive retail markets may result in smaller companies choosing to exit the market, which may result in further consolidation in the competitive retail space. The following table summarizes average on-peak power prices for each of the major markets in which NRG operates. For the year ended December 31, 2023, as compared to the same period in 2022, Texas, East and West average on-peak power prices decreased as a result of lower natural gas prices.


	Average On-Peak Power Price ($/MWh)
	Year Ended December 31,				2023 vs 2022
Region	2023		2022		Change %
Texas
ERCOT - Houston(a)	$	74.32	$	90.62	(18)	%
ERCOT - North(a)	72.89		78.34		(7)	%
East
NY J/NYC(b)	38.95		93.58		(58)	%
NEPOOL(b)	41.36		92.42		(55)	%
COMED (PJM)(b)	32.72		71.86		(54)	%
PJM West Hub(b)	39.34		83.48		(53)	%
West
CAISO - SP15(b)	60.17		87.67		(31)	%
MISO - Louisiana Hub(b)	33.64		71.12		(53)	%

(a)Average on-peak power prices based on real time settlement prices as published by the respective ISOs

(b)Average on-peak power prices based on day-ahead settlement prices as published by the respective ISOs

Increased Awareness of, and Action to Combat, Climate Change —Diverse groups of stakeholders, including investors, asset managers, financial institutions, non-government organizations, industry coalitions, individual companies, consumer groups and academic institutions, are increasingly engaged in efforts to limit global warming in the post-industrial era to 1.5 degrees Celsius. As a result, policymakers and regulators at regional, national, sub-national and local levels of government, both in the U.S. and other parts of the world, are increasingly focused on actions to combat climate change.

NRG actively monitors climate change related developments that could impact its business and regularly engages with a diverse set of stakeholders on these issues. Such engagement helps the Company identify and pursue potential opportunities both to decarbonize its business and better serve its customers. NRG is committed to providing transparent disclosures of its climate risks and opportunities to stakeholders. The Company was an early supporter of the Task Force on Climate-related Financial Disclosures ("TCFD") recommendations after they were issued in 2017, published a TCFD mapping disclosure in December 2020 and issued a stand-alone TCFD report in December 2021.

Lower Carbon Infrastructure Development — Policy mechanisms at the state and federal level, including production and investment tax credits, cash grants, loan guarantees, accelerated depreciation tax benefits, RPS, and carbon trading plans, have supported and continue to support the development of renewable generation, demand-side and smart grid, and other lower carbon infrastructure technologies. The U.S. Inflation Reduction Act, signed into law in August 2022, is intended to further support the deployment of lower carbon energy technologies. As costs associated with the development of lower carbon infrastructure, such as wind and solar generating facilities, continue to evolve and impact the development of lower carbon infrastructure in the markets where the Company participates, it may impact the ability of the Company's generating facilities to participate in those markets. According to ERCOT, 41% of 2023 energy consumption in the ERCOT market was generated from carbon emission-free resources, with wind power contributing 24%. In addition, as subsidies and incentives contribute to increases in renewable power sources, customer awareness and preferences are shifting toward sustainable solutions. Increased demand for sustainable energy products from both residential and commercial customers creates opportunities for diversified product offerings in competitive retail markets.

Digitization and Customization — The electric industry is experiencing major technological changes in the way power is distributed and consumed by end-use customers. The electric grid is shifting from a centralized analog system, where power is generated from limited sources and flows in one direction, to a decentralized multidirectional system, where power can be generated from a number of distributed resources and stored or dispatched on an as-needed basis. In addition, customers are seeking new ways to engage with their power providers. Technologies like smart thermostats, smart appliances and electric vehicles are giving individuals more choice and control over their electricity usage. Power providers are starting to engage with customers who have transitioned to smart homes with new offerings, including but not limited to behind-the-meter demand

response, or virtual power plant products. Companies with large customer bases in competitive market places are poised to create further engagement with their customer bases and help their customers further integrate their smart home into their daily lives.

Weather — Weather conditions in the regions of the U.S. in which NRG conducts business influence the Company's financial results. Weather conditions can affect the supply and demand for electricity and fuels and may also impact the availability of the Company's generating assets. Changes in energy supply and demand may impact the price of these energy commodities in both the spot and forward markets, which may affect the Company's results in any given period. Typically, demand for and the price of electricity is higher in the summer and the winter seasons, when temperatures and resultant demand are more extreme. The demand for and price of natural gas is also generally higher in the winter. However, all regions of the U.S. typically do not experience extreme weather conditions at the same time, thus NRG's operations are typically not exposed to the effects of extreme weather in all parts of its business at once.

Other Factors — A number of other factors significantly influence the level and volatility of prices for energy commodities and related derivative products for NRG's business. These factors include:

•seasonal, daily and hourly changes in demand;

•extreme peak demands;

•performance of renewable generation;

•available supply resources;

•transportation and transmission availability and reliability within and between regions;

•location of NRG's generating facilities relative to the location of its load-serving opportunities;

•procedures used to maintain the integrity of the physical electricity system during extreme conditions; and

•changes in the nature and extent of federal and state regulations.

These factors can affect energy commodity and derivative prices in different ways and to different degrees. These effects may vary throughout the country as a result of regional differences in:

•weather conditions;

•market liquidity;

•capability and reliability of the physical electricity and gas systems;

•local transportation systems; and

•the nature and extent of electricity deregulation.

Environmental Matters, Regulatory Matters and Legal Proceedings — Details of environmental matters are presented in Item 15 — Note 25, Environmental Matters, to the Consolidated Financial Statements and Item 1 — Business, Environmental Matters. Details of regulatory matters are presented in Item 15 — Note 24, Regulatory Matters, to the Consolidated Financial Statements and Item 1 — Business, Regulatory Matters. Details of legal proceedings are presented in Item 15 — Note 23, Commitments and Contingencies, to the Consolidated Financial Statements. Some of this information relates to costs that may be material to the Company's financial results.

Significant Events

The following significant events occurred during 2023 and through the filing date, as further described within this Management's Discussion and Analysis and the Consolidated Financial Statements:

Vivint Smart Home Acquisition and related financings

On March 10, 2023, the Company completed the acquisition of Vivint Smart Home. The Company paid $12 per share, or $2.6 billion in cash. See Item 15 — Note 4, Acquisitions and Dispositions, to the Consolidated Financial Statements for further discussion.

On March 9, 2023, the Company issued 650,000 shares of 10.25% Series A Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock. The proceeds, net of issuance costs, of $635 million were used to partially fund the Vivint Smart Home acquisition.

On March 9, 2023, the Company issued $740 million of aggregate principal amount of 7.000% senior secured first lien notes due 2033. The net proceeds of $724 million, net of issuance costs, were used to partially fund the Vivint Smart Home acquisition.

Dispositions

On November 1, 2023, the Company closed on the previously announced sale of its 44% equity interest in STP to Constellation. Proceeds of $1.75 billion were reduced by working capital and other adjustments of $96 million, resulting in net proceeds of $1.654 billion.

On October 2, 2023, the Company closed on the sale of its 100% ownership in the Gregory natural gas generating facility in Texas for $102 million.

On January 6, 2023, NRG closed on the sale of land and related assets from the Astoria site, within the East region of operations, for proceeds of $212 million subject to transaction fees of $3 million and certain indemnifications. NRG recognized a gain on the sale of $199 million. As part of the transaction, NRG entered into an agreement to lease the land back for the purpose of operating the Astoria gas turbines. Decommissioning was completed in December 2023 and the lease agreement has been terminated.

Operations

In May 2022, W.A. Parish Unit 8 came offline as a result of damage to the steam turbine/generator. The extended forced outage ended in September 2023 and the unit has returned to service.

During the second quarter of 2022, the Company announced the planned retirement of the Joliet generating facility in 2023. On September 1, 2023, the Joliet generating facility fully retired.

The Company's strategy is to procure mid to long-term renewable generation through power purchase agreements. As of December 31, 2023, NRG has entered into Renewable PPAs totaling approximately 1.9 GW with third-party project developers and other counterparties, of which approximately 1.1 GW are operational. The average tenor of these agreements is eleven years. The Company expects to continue evaluating and executing similar agreements that support the needs of the business. The total GW entered into through Renewable PPAs may be impacted by contract terminations when they occur.

Capital Allocation

In June 2023, NRG revised its long-term capital allocation policy to target allocating approximately 80% of cash available for allocation after debt reduction to be returned to shareholders. As part of the revised capital allocation framework, the Company announced an increase to its share repurchase authorization to $2.7 billion, to be executed through 2025.

On November 6, 2023, the Company executed Accelerated Share Repurchase agreements to repurchase a total of $950 million of NRG's outstanding common stock. Under the ASR, the Company paid a total of $950 million and will receive shares of NRG's common stock on specified settlement dates.

During the year ended December 31, 2023, the Company completed $1.2 billion of share repurchases, including the $950 million ASR and $200 million of open market repurchases, under the $2.7 billion authorization. See Item 15 - Note 16, Capital Structure, to the Consolidated Financial Statements for additional discussion.

In the first quarter of 2023, NRG increased the annual dividend on its common stock to $1.51 from $1.40 per share, representing an 8% increase from 2022. Beginning in the first quarter of 2024, NRG increased the annual dividend by 8% to $1.63 per share. The Company expects to target an annual dividend growth rate of 7-9% per share in subsequent years.

During 2023, the Company reduced its debt by $900 million using funds from cash from operations. Additionally, the Company redeemed $620 million in aggregate principal amount of its 3.875% Senior Notes, due 2032, for $502 million using a portion of the proceeds from the sale of STP.

The Company intends to spend approximately $500 million reducing debt during 2024 to maintain its targeted credit metrics. The Company intends to fund the debt reduction from cash from operations.

Consolidated Results of Operations for the years ended December 31, 2023 and 2022

The following table provides selected financial information for the Company:


	Year Ended December 31,
(In millions)	2023		2022		Change
Revenue
Retail revenue	$	27,467	$	29,722	$	(2,255)
Energy revenue(a)	553		1,250		(697)
Capacity revenue(a)	197		272		(75)
Mark-to-market for economic hedging activities	144		(83)		227
Contract amortization	(32)		(39)		7
Other revenues(a)(b)	494		421		73
Total revenue	28,823		31,543		(2,720)
Operating Costs and Expenses
Cost of fuel	992		1,919		927
Purchased energy and other cost of sales(c)	20,647		24,984		4,337
Mark-to-market for economic hedging activities	3,007		(1,331)		(4,338)
Contract and emissions credit amortization(c)	93		111		18
Operations and maintenance	1,397		1,352		(45)
Other cost of operations	390		411		21
Cost of operations (excluding depreciation and amortization shown below)	26,526		27,446		920
Depreciation and amortization	1,127		634		(493)
Impairment losses	26		206		180
Selling, general and administrative costs	1,968		1,228		(740)
Provision for credit losses	251		11		(240)
Acquisition-related transaction and integration costs	119		52		(67)
Total operating costs and expenses	30,017		29,577		(440)

Gain on sale of assets	1,578		52		1,526
Operating Income	384		2,018		(1,634)
Other Income/(Expense)
Equity in earnings of unconsolidated affiliates	16		6		10
Impairment losses on investments	(102)		—		(102)
Other income, net	47		56		(9)

Gain on debt extinguishment	109		—		109
Interest expense	(667)		(417)		(250)
Total other expenses	(597)		(355)		(242)
(Loss)/Income Before Income Taxes	(213)		1,663		(1,876)
Income tax (benefit)/expense	(11)		442		(453)


Net (Loss)/Income	$	(202)	$	1,221	$	(1,423)

Other(20)

Increase in economic gross margin

$965 Decrease in mark-to-market for economic hedging primarily due to net unrealized gains/losses on open positions related to economic hedges(298)Increase in contract and emissions credit amortization(11)Decrease in depreciation and amortization16

Increase in gross margin

$672

East


	(In millions)
Lower gross margin due to a decrease in generation and capacity as a result of asset retirements	$	(116)
Lower natural gas gross margin including the impact of transportation and storage contract optimization, reflects lower net revenue rates from changes in customer term, product and mix of $2.35 per Dth, or $3.86 billion, partially offset by lower supply costs of $2.30 per Dth, or $3.78 billion	(82)
Lower gross margin from the sales of NOx emissions credits	(24)
Lower natural gas gross margin from a decrease in load of 6.9 MMDth due to weather and changes in customer mix	(16)
Lower electric gross margin from a decrease in load of 686 GWhs primarily due to weather	(16)
Higher electric gross margin due to higher net revenue rates as a result of changes in customer term, product and mix of $2.50 per MWh, or $155 million, as well as lower supply costs of $1.50 per MWh, or $86 million driven primarily by decreases in power prices	241
Higher gross margin due to an increase in average realized pricing and a decrease in supply costs at Midwest Generation, offset by lower gross margin as a result of a 74% decrease in generation volumes due to dark spread contractions	56
Higher gross margin primarily due to net capacity performance penalties resulting from Winter Storm Elliott in 2022 and an increase in NYISO capacity pricing, partially offset by a decrease in PJM capacity prices	16
Other	(7)
Increase in economic gross margin	$	52
Decrease in mark-to-market for economic hedging primarily due to net unrealized gains/losses on open positions related to economic hedges	(2,602)
Decrease in contract amortization	31
Decrease in depreciation and amortization	92
Decrease in gross margin	$	(2,427)

West/Services/Other


	(In millions)
Lower gross margin at Cottonwood driven by lower average realized power prices, planned outages in 2023 and capacity performance bonus resulting from PJM Winter Storm Elliott in 2022	$	(76)
Lower gross margin primarily due to lower Services sales	(51)
Lower electric gross margin due to an increase in supply costs of $6.50 per MWh, or $82 million, partially offset by higher revenue rates of $5.25 per MWh, or $64 million, and changes in customer mix of $2 million	(16)
Higher gross margin from market optimization activities	28
Higher natural gas gross margin due to a decrease in supply costs of $0.90 per Dth, or $228 million, and changes in customer mix of $4 million, partially offset by lower revenue rates of $0.85 per Dth, or $218 million	14
Decrease in economic gross margin	$	(101)
Decrease in mark-to-market for economic hedges primarily due to net unrealized gains/losses on open positions related to economic hedges	(1,211)
Decrease in contract amortization	5
Increase in depreciation and amortization	(10)
Decrease in gross margin	$	(1,317)

Vivint Smart Home(a)


	(In millions)
Increase due to the acquisition of Vivint Smart Home	$	1,396
Increase in economic gross margin	$	1,396
Increase in depreciation and amortization	(586)
Increase in gross margin	$	810

(a) Includes results of operations following the acquisition date of March 10, 2023

Mark-to-market for Economic Hedging Activities

Mark-to-market for economic hedging activities includes asset-backed hedges that have not been designated as cash flow hedges. Total net mark-to-market results decreased by $4.1 billion during the year ended December 31, 2023, compared to the same period in 2022.

The breakdown of gains and losses included in revenues and operating costs and expenses by segment is as follows:


	Year Ended December 31, 2023
(In millions)	Texas		East		West/Services/Other		Eliminations		Total
Mark-to-market results in revenues
Reversal of previously recognized unrealized (gains)/losses on settled positions related to economic hedges	$	—	$	(25)	$	56	$	(12)	$	19
Reversal of acquired (gain) positions related to economic hedges	—		(2)		—		—		(2)
Net unrealized gains on open positions related to economic hedges	—		84		47		(4)		127
Total mark-to-market gains in revenues	$	—	$	57	$	103	$	(16)	$	144
Mark-to-market results in operating costs and expenses
Reversal of previously recognized unrealized (gains) on settled positions related to economic hedges	$	(473)	$	(812)	$	(480)	$	12	$	(1,753)
Reversal of acquired loss/(gain) positions related to economic hedges	17		11		(6)		—		22
Net unrealized gains/(losses) on open positions related to economic hedges	771		(1,670)		(381)		4		(1,276)
Total mark-to-market gains/(losses) in operating costs and expenses	$	315	$	(2,471)	$	(867)	$	16	$	(3,007)


	Year Ended December 31, 2022
(In millions)	Texas		East		West/Services/Other		Eliminations		Total
Mark-to-market results in revenues
Reversal of previously recognized unrealized losses/(gains) on settled positions related to economic hedges	$	2	$	(5)	$	40	$	(8)	$	29
Reversal of acquired (gain) positions related to economic hedges	—		(3)		—		—		(3)
Net unrealized (losses) on open positions related to economic hedges	—		(22)		(96)		9		(109)
Total mark-to-market gains/(losses) in revenues	$	2	$	(30)	$	(56)	$	1	$	(83)
Mark-to-market results in operating costs and expenses
Reversal of previously recognized unrealized (gains) on settled positions related to economic hedges	$	(366)	$	(738)	$	(165)	$	8	$	(1,261)
Reversal of acquired loss/(gain) positions related to economic hedges	29		(5)		(19)		—		5
Net unrealized gains on open positions related to economic hedges	948		961		687		(9)		2,587
Total mark-to-market gains in operating costs and expenses	$	611	$	218	$	503	$	(1)	$	1,331

Mark-to-market results consist of unrealized gains and losses on contracts that are yet to be settled. The settlement of these transactions is reflected in the same revenue or cost caption as the items being hedged.

The reversals of acquired gain or loss positions were valued based upon the forward prices on the acquisition date.

For the year ended December 31, 2023, the $144 million gain in revenues from economic hedge positions was driven by an increase in the value of open positions as a result of decreases in power prices. The $3.0 billion loss in operating costs and expenses from economic hedge positions was driven primarily by the reversal of previously recognized unrealized gains on contracts that settled during the period, as well as a decrease in the value of East and West/Other open positions as a result of decreases in natural gas and power prices. This was partially offset by an increase in the value of Texas open positions as a result of increases in ERCOT power prices.

For the year ended December 31, 2022, the $83 million loss in revenues from economic hedge positions was driven by a decrease in the value of open positions as a result of increases in power prices across all segments, partially offset by the reversal of previously recognized unrealized losses on contracts that settled during the period. The $1.3 billion gain in operating costs and expenses from economic hedge positions was driven primarily by an increase in the value of open positions as a result of increases in natural gas and power prices across all segments partially offset by the reversal of previously recognized unrealized gains on contracts that settled during the period.

In accordance with ASC 815, the following table represents the results of the Company's financial and physical trading of energy commodities for the years ended December 31, 2023 and 2022. The realized and unrealized financial and physical trading results are included in revenue. The Company's trading activities are subject to limits within the Company's Risk Management Policy.


	Year ended December 31,
(In millions)	2023		2022
Trading gains/(losses)
Realized	$	11	$	6
Unrealized	38		(4)
Total trading gains	$	49	$	2

Operations and Maintenance Expenses

Operations and maintenance expenses are comprised of the following:

(a)

(In millions)

Texas

East

West/Services/Other

Vivint Smart Home(a)

Corporate

Eliminations

Total

411

(a) Includes results of operations following the acquisition date of March 10, 2023

Other cost of operations decreased by $21 million for the year ended December 31, 2023, compared to the same period in 2022, due to the following:


	(In millions)
Decrease due to changes in current year ARO cost estimates, primarily at Jewett Mine	$	(28)
Decrease in retail gross receipt taxes due to lower revenue in the East offset by higher revenues in Texas	(10)
Decrease driven by the disposition of STP and Gregory in 2023	(5)
Increase due to higher property insurance premiums	18
Other	4
Decrease in other cost of operations	$	(21)

Depreciation and Amortization

Depreciation and amortization expenses are comprised of the following:


(In millions)	Texas		East		West/Services/Other		Vivint Smart Home(a)		Corporate		Total
Year Ended December 31, 2023	$	294	$	116	$	95	$	586	$	36	$	1,127
Year Ended December 31, 2022	310		208		85		—		31		634

(a) Includes results of operations following the acquisition date of March 10, 2023

Depreciation and amortization expense increased by $493 million for the year ended December 31, 2023, compared to the same period in 2022, primarily due to higher amortization of intangible assets due to the acquisition of Vivint Smart Home in March 2023, partially offset by lower depreciation at Midwest Generation as a result of asset impairments and retirements in 2022.

Impairment Losses

During the year ended December 31, 2023, the Company recorded impairment losses related to property plant and equipment and leases of $2 million, $4 million and $20 million in the Texas, East and West/Services/Other segments, respectively.

During the year ended December 31, 2022, the Company recorded impairment losses of $206 million, of which $150 million were related to the decline in PJM capacity prices and the near-term retirement date of the Joliet facility, $43 million related to the purchase and sale agreement for the sale of the land and related assets at the Astoria generating site and the planned withdrawal and cancellation of its proposed Astoria redevelopment project, and an additional $13 million in the East segment.

Refer to Item 15 — Note 11, Asset Impairments, to the Consolidated Financial Statements for further discussion.

Selling, General and Administrative Costs

Selling, general and administrative costs are comprised of the following:

(a)

(In millions)

Texas

East

West/Services/Other

Vivint Smart Home(a)

Corporate/ Eliminations

Total

(a) Includes results of operations following the acquisition date of March 10, 2023

Provision for credit losses increased by $240 million for the year ended December 31, 2023, compared to the same period in 2022, due to the following:


	(In millions)
Increase due to Winter Storm Uri loss mitigation recognized as income in 2022	$	126
Increase due to higher Home retail revenues, deteriorated customer payment behavior and the longer duration of the Texas disconnect moratorium in 2023 as compared to 2022	80
Increase due to the acquisition of Vivint Smart Home	34
Increase in provision for credit losses	$	240

Acquisition-Related Transaction and Integration Costs

Acquisition-related transaction and integration costs were $119 million and $52 million for the years ended December 31, 2023 and 2022, respectively, include:


	As of December 31,
(In millions)	2023		2022
Vivint Smart Home acquisition costs	$	38	$	17
Vivint Smart Home integration costs	52		—
Other integration costs, primarily related to Direct Energy	29		35
Acquisition-related transaction and integration costs	$	119	$	52

Gain on Sale of Assets

The gain on sale of assets of $1.6 billion and $52 million recorded for the years ended December 31, 2023 and 2022, respectively, include:


	As of December 31,
(In millions)	2023		2022
Sale of the Company's 44% equity interest in STP	$	1,236	$	—
Sale of Astoria land and related assets	199		—
Sale of the Company's 100% ownership in the Gregory natural gas generating facility	82		—
Sale of the Company's 49% ownership in the Watson natural gas generating facility	—		46
Sale of land and structures at the Company's deactivated Norwalk Harbor, LLC site	38		—
Sale of the Company's 50% ownership in Petra Nova	—		22
Sale of land at the Company's Indian River Power, LLC site	19		—
Other asset sales	4		(16)
Gain on sale of assets	$	1,578	$	52

Impairment Losses on Investments

During the year ended December 31, 2023, the Company recorded other-than-temporary impairment losses of $102 million on the Company's equity method investment in Gladstone generation facility in Queensland, Australia, as further described in Item 15 — Note 11, Asset Impairments, to the Consolidated Financial Statements.

Gain on Debt Extinguishment

A gain on debt extinguishment of $109 million was recorded for the year ended December 31, 2023, driven by a partial redemption of the 3.875% Senior Notes, due 2032, as further discussed in Item 15 — Note 13, Long-term Debt and Finance Leases, to the Consolidated Financial Statements.

Interest Expense

Interest expense increased by $250 million for the year ended December 31, 2023, compared to the same period in 2022, primarily due to the Vivint Smart Home acquisition including the impact of newly issued Senior Secured First Lien Notes, the acquired debt of Vivint Smart Home, the borrowings on the Revolving Credit Facility and the Receivables Securitization Facilities, as well as the write-off of the deferred financing costs associated with the cancellation of the bridge facility.

Income Tax Expense

For the year ended December 31, 2023, NRG recorded an income tax benefit of $11 million on a pre-tax loss of $213 million. For the same period in 2022, NRG recorded income tax expense of $442 million on pre-tax income of $1.7 billion. The effective tax rate was 5.2% and 26.6% for the years ended December 31, 2023 and 2022, respectively.

For the year ended December 31, 2023, NRG's overall effective tax rate was lower than the federal statutory tax rate of 21%, primarily due to permanent differences and changes in state valuation allowances.


	Year Ended December 31,
(In millions, except effective income tax rate)	2023			2022
(Loss)/Income before income taxes	$	(213)		$	1,663
Tax at federal statutory tax rate	(45)			349
State taxes	(22)			69
Foreign rate differential	(10)			7
Changes in state valuation allowances	42			(3)
Permanent differences	31			17
Recognition of uncertain tax benefits	12			8
Deferred impact of state tax rate changes	3			14

Foreign tax refunds	(17)			—


Return to provision adjustments	(5)			—
Carbon capture tax credits	—			(19)




Income tax (benefit)/expense	$	(11)		$	442
Effective income tax rate	5.2		%	26.6		%

The effective income tax rate may vary from period to period depending on, among other factors, the geographic and business mix of earnings and losses and changes in valuation allowances in accordance with ASC 740, Income Taxes ("ASC 740"). These factors and others, including the Company's history of pre-tax earnings and losses, are taken into account in assessing the ability to realize deferred tax assets.

Liquidity and Capital Resources

Liquidity Position

As of December 31, 2023 and 2022, NRG's liquidity, excluding collateral funds deposited by counterparties, was approximately $4.8 billion and $2.8 billion, respectively, comprised of the following:


	As of December 31,
(In millions)	2023		2022

Cash and cash equivalents	$	541	$	430
Restricted cash - operating	21		5
Restricted cash - reserves (a)	3		35
Total	565		470
Total availability under Revolving Credit Facility and collective collateral facilities(b)	4,278		2,324
Total liquidity, excluding collateral funds deposited by counterparties	$	4,843	$	2,794

(a)Includes reserves primarily for debt service, performance obligations and capital expenditures

(b)Total capacity of Revolving Credit Facility and collective collateral facilities was $7.4 billion and $6.4 billion as of December 31, 2023 and December 31, 2022, respectively

As of December 31, 2023, total liquidity, excluding collateral funds deposited by counterparties, increased by $2.0 billion. Changes in cash and cash equivalent balances are further discussed under the heading Cash Flow Discussion. Cash and cash equivalents at December 31, 2023, were predominantly held in bank deposits.

Management believes that the Company's liquidity position and cash flows from operations will be adequate to finance operating and maintenance capital expenditures, to fund dividends, and to fund other liquidity commitments in the short and long-term. Management continues to regularly monitor the Company's ability to finance the needs of its operating, financing and investing activity within the dictates of prudent balance sheet management.

The consolidated statement of cash flows includes certain draws from, and payments to, the revolving credit facility and other credit facilities which are not eligible for net reporting. These transactions are for short term liquidity purposes.

Credit Ratings

On March 1, 2023, following the Vivint Smart Home acquisition financing launch, Standard and Poor's downgraded the Company's issuer credit to BB with a Stable outlook from BB+. There was no change to Moody's and Fitch ratings at the time.

The following table summarizes the Company's current credit ratings:

S&P

Moody's

Fitch

NRG Energy, Inc.

BB Stable

Ba1 Stable

BB+ Stable

3.75% Senior Secured Notes, due 2024

BBB-

Baa3

BBB-

2.00% Senior Secured Notes, due 2025

BBB-

Baa3

BBB-

2.45% Senior Secured Notes, due 2027

BBB-

Baa3

BBB-

6.625% Senior Notes, due 2027

Ba2

BB+

6.75% Vivint Smart Home Senior Secured Notes, due 2027

Ba2

n/a

5.75% Senior Notes, due 2028

Ba2

BB+

3.375% Senior Notes, due 2029

Ba2

BB+

4.45% Senior Secured Notes, due 2029

BBB-

Baa3

BBB-

5.25% Senior Notes, due 2029

Ba2

BB+

5.75% Vivint Smart Home Senior Notes, due 2029

Ba3

n/a

3.625% Senior Notes, due 2031

Ba2

BB+

3.875% Senior Notes, due 2032

Ba2

BB+

7.00% Senior Secured Notes, due 2033

BBB-

Baa3

BBB-

Revolving Credit Facility, due 2028

BBB-

Baa3

BBB-

Vivint Smart Home Senior Secured Term Loan, due 2028

Ba2

n/a

Liquidity

The principal sources of liquidity for NRG's operating and capital expenditures are expected to be derived from cash on hand, cash flows from operations and financing arrangements. As described in Item 15 — Note 13, Long-term Debt and Finance Leases, to the Consolidated Financial Statements, the Company's financing arrangements consist mainly of the Senior Notes, Convertible Senior Notes, Senior Secured First Lien Notes, Revolving Credit Facility, the Receivables Securitization Facilities and tax-exempt bonds. The Company also issues letters of credit through bilateral letter of credit facilities and the P-Caps letter of credit facility. As part of the acquisition of Vivint Smart Home on March 10, 2023, NRG acquired Vivint Smart Home's existing debt, which includes senior secured notes, senior notes and a senior secured term-loan.

The Company's requirements for liquidity and capital resources, other than for operating its facilities, can generally be categorized by the following: (i) market operations activities; (ii) debt service obligations, as described more fully in Item 15 — Note 13, Long-term Debt and Finance Leases, to the Consolidated Financial Statements; (iii) capital expenditures, including maintenance, environmental, and investments and integration; and (iv) allocations in connection with acquisition opportunities, debt repayments, share repurchases and dividend payments to stockholders, as described in Item 15 — Note 16, Capital Structure, to the Consolidated Financial Statements.

The Company remains committed to maintaining a strong balance sheet and continues to work to achieve investment grade credit metrics over time primarily through debt reduction and the realization of growth initiatives.

Sale of the 44% equity interest in STP

On November 1, 2023, the Company closed on the sale of its 44% equity interest in STP to Constellation. Proceeds of $1.75 billion were reduced by working capital and other adjustments of $96 million, resulting in net proceeds of $1.654 billion.

Sale of Gregory

On October 2, 2023, the Company closed on the sale of its 100% ownership in the Gregory natural gas generating facility in Texas for $102 million.

Debt Reduction

The Company intends to spend approximately $500 million reducing debt during 2024 to maintain its targeted credit metrics. The Company intends to fund the debt reduction from cash from operations.

Vivint Smart Home Acquisition

On March 10, 2023, the Company completed the acquisition of Vivint Smart Home. The Company paid $12 per share, or $2.6 billion in cash. The Company funded the acquisition using a combination of $740 million in newly-issued secured corporate debt, $650 million in newly-issued preferred stock, $900 million drawn from its Revolving Credit Facility and Receivables Facilities, and cash on hand.

Issuance of 2033 Senior Notes

On March 9, 2023, the Company issued $740 million of aggregate principal amount of 7.000% senior notes due 2033. The 2033 Senior Notes are senior secured obligations of NRG and are guaranteed by certain of its subsidiaries. Interest is paid semi-annually beginning on September 15, 2023 until the maturity date of March 15, 2033. For further discussion, see Note 13, Long-term Debt and Finance Leases.

Series A Preferred Stock

On March 9, 2023, the Company issued 650,000 shares of 10.25% Series A Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock. For further discussion, see Note 16, Capital Structure.

Revolving Credit Facility

On February 14, 2023, the Company amended its Revolving Credit Facility to: (i) increase the existing revolving commitments thereunder by $600 million, (ii) extend the maturity date of a portion of the revolving commitments thereunder to February 14, 2028, (iii) transition the benchmark rate applicable to revolving loans from LIBOR to SOFR and (iv) make certain other amendments to the terms of the Revolving Credit Facility for purposes of, among other things, providing additional flexibility.

On March 13, 2023, the Company further amended its Revolving Credit Facility to increase the existing revolving commitments by an additional $45 million. As of December 31, 2023, there were no outstanding borrowings and there were $883 million in letters of credit issued under the Revolving Credit Facility.

Receivables Securitization Facilities

On June 22, 2023, NRG Receivables amended its existing Receivables Facility to, among other things, (i) extend the scheduled termination date to June 21, 2024, (ii) increase the aggregate commitments from $1.0 billion to $1.4 billion (adjusted seasonally) and (iii) add a new originator. On October 6, 2023, the Receivables Facility was further amended to replace the benchmark interest rate of the Receivable Facility's subordinated note from LIBOR to SOFR. As of December 31, 2023, there were no outstanding borrowings and there were $1.0 billion in letters of credit issued.

In addition, in connection with the amendments to the Receivables Facility, on June 22, 2023, the Company and the originators thereunder renewed the existing uncommitted Repurchase Facility that provides short-term financing secured by a subordinated note issued by NRG Receivables LLC. Such renewal, among other things, extends the maturity date to June 21, 2024 and joins an additional originator to the Repurchase Facility. On October 6, 2023, the Repurchase Facility was further amended to reflect the concurrent amendment to the Receivables Facility's subordinated note. As of December 31, 2023, there were no outstanding borrowings.

Bilateral Letter of Credit Facilities

On May 19, 2023, May 30, 2023 and October 17, 2023 the Company increased the size of its bilateral letter of credit facilities by $25 million, $100 million and $50 million, respectively, to provide additional liquidity, allowing for the issuance of up to $850 million of letters of credit. These facilities are uncommitted. As of December 31, 2023, $671 million was issued under these facilities.

Pre-Capitalized Trust Securities Facility

On August 29, 2023, the Company entered into a Facility Agreement with the Trust, in connection with the sale by the Trust of $500 million P-Caps. The P-Caps are to be redeemed by the Trust on July 31, 2028 or earlier upon an early redemption of the P-Caps Secured Notes. The P-Caps replaced the Company’s existing pre-capitalized trust securities redeemable 2023 issued by Alexander Funding Trust, which matured on November 15, 2023.

The Facility Agreements allows for the issuance of the P-Caps Secured Notes by the Company to the Trust. In addition, the Company entered into a LC Agreement for the issuance of letters of credit in an aggregate amount not to exceed $485 million.

Sale of Astoria

On January 6, 2023, the Company closed on the sale of land and related assets from the Astoria site, within the East region of operations, for proceeds of $212 million, subject to transactions fees of $3 million and certain indemnifications. As part of the transaction, NRG entered into an agreement to lease the land back for the purpose of operating the Astoria gas turbines. Decommissioning was completed in December 2023 and the lease agreement has been terminated.

Pension and Other postretirement benefit contributions

As of December 31, 2023, the Company’s estimated pension minimum funding requirements for the next 5 years were $142 million, of which $43 million are required to be made within the next 12 months. As of December 31, 2023, the Company’s estimated other postretirement benefits minimum funding requirements for the next 5 years were $28 million, of which $6 million are required to be made within the next 12 months. These amounts represent estimates based on assumptions that are subject to change. For further discussion, see Item 15 — Note 15, Benefit Plans and Other Postretirement Benefits, to the Consolidated Financial Statements.

Debt Service Obligations

Principal payments on debt and finance leases as of December 31, 2023, are due in the following periods:


(In millions)
Description	2024		2025		2026		2027		2028		Thereafter		Total
Recourse Debt:
Senior Notes, due 2027	$	—	$	—	$	—	$	375	$	—	$	—	$	375
Senior Notes, due 2028	—		—		—		—		821		—		821
Senior Notes, due 2029	—		—		—		—		—		733		733
Senior Notes, due 2029	—		—		—		—		—		500		500
Senior Notes, due 2031	—		—		—		—		—		1,030		1,030
Senior Notes, due 2032	—		—		—		—		—		480		480
Convertible Senior Notes, due 2048	—		—		—		—		—		575		575
Senior Secured First Lien Notes, due 2024	600		—		—		—		—		—		600
Senior Secured First Lien Notes, due 2025	—		500		—		—		—		—		500
Senior Secured First Lien Notes, due 2027	—		—		—		900		—		—		900
Senior Secured First Lien Notes, due 2029	—		—		—		—		—		500		500
Senior Secured First Lien Notes, due 2033	—										740		740

Tax-exempt bonds	—		247		—		—		59		160		466
Subtotal Recourse Debt	600		747		—		1,275		880		4,718		8,220
Non-Recourse Debt:
Vivint Smart Home Senior Secured Notes, due 2027	—		—		—		600		—		—		600
Vivint Smart Home Senior Notes, due 2029	—		—		—		—		—		800		800
Vivint Smart Home Senior Secured Term Loan, due 2028	14		14		14		14		1,264		—		1,320
Subtotal Vivint Smart Home Non-Recourse Debt	14		14		14		614		1,264		800		2,720
Subtotal Debt	614		761		14		1,889		2,144		5,518		10,940
Finance Leases:
Finance leases	6		8		2		1		1		1		19

Total Debt and Finance Leases	$	620	$	769	$	16	$	1,890	$	2,145	$	5,519	$	10,959

Interest Payments	$	609	$	595	$	587	$	521	$	403	$	806	$	3,521

For further discussion, see Item 15 — Note 13, Long-term Debt and Finance Leases.

Market Operations

The Company's market operations activities require a significant amount of liquidity and capital resources. These liquidity requirements are primarily driven by: (i) margin and collateral posted with counterparties; (ii) margin and collateral required to participate in physical markets and commodity exchanges; (iii) timing of disbursements and receipts (e.g. buying power before receiving retail revenues); and (iv) initial collateral for large structured transactions. As of December 31, 2023, market operations had total cash collateral outstanding of $441 million and $3.1 billion outstanding in letters of credit to third parties primarily to support its market activities. As of December 31, 2023, total funds deposited by counterparties were $84 million in cash and $478 million of letters of credit.

The Company has entered into long-term contractual arrangements related to energy purchases, gas transportation and storage, and fuel and transportation services. As of December 31, 2023, the Company had minimum payment obligations under such outstanding agreements of $3.4 billion, with $573 million payable within the next 12 months and an additional $978 million of short-term purchase energy commitments. For further discussion, see Item 15 — Note 23, Commitments and Contingencies.

Future liquidity requirements may change based on the Company's hedging activities and structures, fuel purchases, and future market conditions, including forward prices for energy and fuel and market volatility. In addition, liquidity requirements are dependent on the Company's credit ratings and general perception of its creditworthiness.

First Lien Structure

NRG has the capacity to grant first liens to certain counterparties on a substantial portion of the Company's assets, subject to various exclusions including NRG's assets that have project-level financing and the assets of certain non-guarantor subsidiaries, to reduce the amount of cash collateral and letters of credit that it would otherwise be required to post from time to time to support its obligations under out-of-the-money hedge agreements. The first lien program does not limit the volume that can be hedged or the value of underlying out-of-the-money positions. The first lien program also does not require NRG to post collateral above any threshold amount of exposure. The first lien structure is not subject to unwind or termination upon a ratings downgrade of a counterparty and has no stated maturity date.

The Company's first lien counterparties may have a claim on its assets to the extent market prices exceed the hedged prices. As of December 31, 2023, all hedges under the first liens were in-the-money on a counterparty aggregate basis.

Capital Expenditures

The following table summarizes the Company's capital expenditures for maintenance, environmental and growth investments for the year ended December 31, 2023:


(In millions)	Maintenance		Environmental		Investments and Integration		Total
Texas	$	455	$	3	$	37	$	495
East	4		—		1		5
West/Services/Other	21		—		6		27
Vivint Smart Home(a)	17		—		1		18
Corporate	19		—		34		53
Total cash capital expenditures for 2023	516		3		79		598
Integration operating expenses and cost to achieve	—		—		81		81
Investments	—		—		164		164
Total cash capital expenditures and investments for the year ended December 31, 2023	$	516	$	3	$	324	$	843

(a)Includes expenditures following the acquisition date of March 10, 2023

Investments and Integration for the year ended December 31, 2023, include growth expenditures, integration, small book acquisitions and other investments.

Environmental Capital Expenditures Estimate

NRG estimates that environmental capital expenditures from 2024 through 2028 required to comply with environmental laws will be approximately $66 million. The largest component is the cost of complying with ELG at the Company's coal units in Texas.

The table below summarizes the status of NRG's coal fleet with respect to air quality controls. NRG uses an integrated approach to fuels, controls and emissions markets to meet environmental requirements.

SO2

NOx

Mercury

Particulate

Units

State

Control Equipment

Install Date

Control Equipment

Install Date

Control Equipment

Install Date

Control Equipment

Install Date

Indian River 4

CDS

2011

LNBOFA/SCR

1999/2011

ACI/CDS/FF

2008/2011

ESP/FF

1980/2011

Share Repurchases

Dividend Increase on Common Stock

In the first quarter of 2023, NRG increased the annual dividend on its common stock to $1.51 from $1.40 per share. The Company returned $352 million of capital to shareholders in the year ended 2023 through a $1.51 dividend per common share. In 2024, NRG further increased the annual dividend to $1.63 per share, representing an 8% increase from 2023. The Company expects to target an annual dividend growth rate of 7-9% per share in subsequent years.

On January 19, 2024, NRG declared a quarterly dividend on the Company's common stock of $0.4075 per share, or $1.63 per share on an annualized basis, payable on February 15, 2024, to stockholders of record as of February 1, 2024. The Company's common stock dividends are subject to available capital, market conditions, and compliance with associated laws and regulations.

Series A Preferred Stock Dividends

In September 2023, the Company declared and paid a semi-annual dividend of $52.96 per share on its outstanding Series A Preferred Stock, totaling $34 million. Cumulative cash dividends on the Series A Preferred Stock are payable semiannually, in arrears, on each March 15 and September 15, when, as and if declared by the Board of Directors.

Additional Material Cash Requirements Not Discussed Above

Operating leases — The Company leases generating facilities, land, office and equipment, railcars, fleet vehicles and storefront space at retail stores. As of December 31, 2023, the Company had lease payment obligations of $311 million, of which $118 million is payable within the next 12 months. For further discussion, see Item 15 — Note 10, Leases.

Other liabilities — Other liabilities includes water right agreements, service and maintenance agreements, stadium naming rights, stadium sponsorships, long-term service agreements and other contractual obligations. As of December 31, 2023, the Company had total of $213 million under such commitments, of which $40 million are payable within the next 12 months.

Contingent obligations for guarantees — NRG and its subsidiaries enter into various contracts that include indemnifications and guarantee provisions as a routine part of the Company’s business activities. For further discussion, see Item 15 —Note 27, Guarantees.

Obligations Arising Out of a Variable Interest in an Unconsolidated Entity

Variable interest in Equity investments — NRG's investment in Ivanpah is a variable interest entity for which NRG is not the primary beneficiary. See also Item 15 — Note 17, Investments Accounted for by the Equity Method and Variable Interest Entities, to the Consolidated Financial Statements for additional discussion. NRG's pro-rata share of non-recourse debt was approximately $461 million as of December 31, 2023. This indebtedness may restrict the ability of Ivanpah to issue dividends or distributions to NRG.

Cash Flow Discussion

2023 compared to 2022

The following table reflects the changes in cash flows for the comparative years:


	Year ended December 31,
(In millions)	2023		2022		Change
Cash (used)/provided by operating activities	$	(221)	$	360	$	(581)
Cash used by investing activities	(910)		(332)		(578)
Cash (used)/provided by financing activities	(400)		1,043		(1,443)

Cash (used)/provided by operating activities

Changes to cash (used)/provided by operating activities were driven by:


	(In millions)
Increase in operating income adjusted for other non-cash items	$	2,892
Changes in cash collateral in support of risk management activities due to change in commodity prices	(2,702)
Decrease due to receipt of uplift securitization proceeds from ERCOT in 2022	(689)
Decrease in working capital primarily driven by Vivint Smart Home capitalized contract costs partially offset by deferred revenues	(361)
Increase in working capital related to accrued personnel costs primarily due to the Company's annual incentive plan reflecting financial outperformance for 2023	188
Increase in working capital related to accounts receivable and inventory primarily due to lower gas and power market pricing coupled with lower gas volumes, partially offset by a decrease in accounts payable	91
	$	(581)

Cash used by investing activities

Changes to cash (used)/provided by investing activities were driven by:


	(In millions)
Increase in cash paid for acquisitions primarily due to the acquisition of Vivint Smart Home in March 2023	$	(2,461)
Increase in proceeds from the sale of assets primarily due to the sale of the Company's 44% equity interest in STP in November 2023	1,898
Increase from insurance proceeds for property, plant and equipment, net, in 2023	240
Increase in capital expenditures	(231)
Decrease in proceeds from sales of emissions allowances, net of purchases	(18)
Increase due to fewer purchases of investments in nuclear decommissioning trust fund securities, net of sales	(6)
	$	(578)

Cash (used)/provided by financing activities

Changes in cash (used)/provided by financing activities were driven by:


	(In millions)
Decrease in net receipts from settlement of acquired derivatives	$	(1,653)
Increase in proceeds from issuance of long-term debt in 2023	731
Increase in proceeds from issuance of preferred stock in 2023	635
Increase in share repurchase activity	(566)
Increase of repayments of long-term debt and finance leases	(518)
Increase in payments of dividends primarily due to preferred stock issued in 2023	(49)
Increase in payments of deferred issuance costs	(23)
	$	(1,443)

NOLs, Deferred Tax Assets and Uncertain Tax Position Implications

For the year ended December 31, 2023, the Company had domestic pre-tax book income of $261 million and foreign pre-tax book loss of $474 million. For the year ended December 31, 2023, the Company utilized U.S. federal NOLs of $1.9 billion, and tax credits of $73 million. As of December 31, 2023, the Company has cumulative U.S. federal NOL carryforwards of $8.4 billion, of which $6.4 billion do not have an expiration date, and cumulative state NOL carryforwards of $6.4 billion for financial statement purposes. NRG also has cumulative foreign NOL carryforwards of $411 million, most of which have no expiration date. In addition to the above NOLs, NRG has a $517 million indefinite carryforward for interest deductions, as well as $317 million of tax credits to be utilized in future years. As a result of the Company's tax position, including the utilization of federal and state NOLs, and based on current forecasts, the Company anticipates income tax payments, due to federal, state and foreign jurisdictions, of up to $160 million in 2024. There is no impact on the Company's provision for income taxes from the CAMT for the year ended December 31, 2023.

The Company has $73 million of tax effected uncertain federal, state and foreign tax benefits for which the Company has recorded a non-current tax liability of $76 million (inclusive of accrued interest) until such final resolution with the related taxing authority.

The Company is no longer subject to U.S. federal income tax examinations for years prior to 2020. With few exceptions, state and Canadian income tax examinations are no longer open for years before 2015.

Guarantor Financial Information

As of December 31, 2023, the Company's outstanding registered senior notes consisted of $375 million of the 2027 Senior Notes and $821 million of the 2028 Senior Notes, as shown in Note 13, Long-term Debt and Finance Leases. These Senior Notes are guaranteed by certain of NRG's current and future 100% owned domestic subsidiaries, or guarantor subsidiaries (the “Guarantors”). See Exhibit 22.1 for a listing of the Guarantors. These guarantees are both joint and several.

NRG conducts much of its business through and derives much of its income from its subsidiaries. Therefore, the Company's ability to make required payments with respect to its indebtedness and other obligations depends on the financial results and condition of its subsidiaries and NRG's ability to receive funds from its subsidiaries. There are no restrictions on the ability of any of the Guarantors to transfer funds to NRG. Other subsidiaries of the Company do not guarantee the registered

debt securities of either NRG Energy, Inc. or the Guarantors (such subsidiaries are referred to as the “Non-Guarantors”). The Non-Guarantors include all of NRG's foreign subsidiaries and certain domestic subsidiaries.

The tables below present summarized financial information of NRG Energy, Inc. and the Guarantors in accordance with Rule 3-10 under the SEC's Regulation S-X. The financial information may not necessarily be indicative of results of operations or financial position of NRG Energy, Inc. and the Guarantors in accordance with U.S. GAAP.

The following table presents the summarized statement of operations:


(In millions)	For the Year Ended December 31, 2023
Revenue(a)	$	24,202
Operating income(b)	600
Total other expense	(286)
Income before income taxes	314
Net Income	182

(a)Intercompany transactions with Non-Guarantors include revenue of $9 million during the year ended December 31, 2023

(b)Intercompany transactions with Non-Guarantors including cost of operations of $50 million and selling, general and administrative of $209 million during the year ended December 31, 2023

The following table presents the summarized balance sheet information:


(In millions)	December 31, 2023
Current assets(a)	$	7,239
Property, plant and equipment, net	1,217
Non-current assets	11,843
Current liabilities(b)	7,997
Non-current liabilities	9,706

(a)Includes intercompany receivables due from Non-Guarantors of $92 million as of December 31, 2023

(b)Includes intercompany payables due to Non-Guarantors of $4 million as of December 31, 2023

Fair Value of Derivative Instruments

NRG may enter into energy purchase and sales contracts, fuel purchase contracts and other energy-related financial instruments to mitigate variability in earnings due to fluctuations in spot market prices and to hedge fuel requirements at power plants or retail load obligations. In order to mitigate interest risk associated with the issuance of the Company's variable rate debt, NRG enters into interest rate swap agreements. In addition, in order to mitigate foreign exchange rate risk primarily associated with the purchase of USD denominated natural gas for the Company's Canadian business, NRG enters into foreign exchange contract agreements.

Under Flex Pay, offered by Vivint Smart Home, subscribers pay for smart home products by obtaining financing from a third-party financing provider under the Consumer Financing Program. Vivint Smart Home pays certain fees to the financing providers and shares in credit losses depending on the credit quality of the subscriber.

NRG's trading activities are subject to limits in accordance with the Company's Risk Management Policy. These contracts are recognized on the balance sheet at fair value and changes in the fair value of these derivative financial instruments are recognized in earnings.

The tables below disclose the activities that include both exchange and non-exchange traded contracts accounted for at fair value in accordance with ASC 820, Fair Value Measurements and Disclosures ("ASC 820"). Specifically, these tables disaggregate realized and unrealized changes in fair value; disaggregate estimated fair values at December 31, 2023, based on their level within the fair value hierarchy defined in ASC 820; and indicate the maturities of contracts at December 31, 2023. For a full discussion of the Company's valuation methodology of its contracts, see Derivative Fair Value Measurements in Item 15 — Note 5, Fair Value of Financial Instruments, to the Consolidated Financial Statements.


Derivative Activity Gains/(Losses)	(In millions)
Fair value of contracts as of December 31, 2022	$	3,553
Contracts realized or otherwise settled during the period	(1,629)
Vivint Smart Home contracts acquired during the period	(112)
Other changes in fair value	(1,164)
Fair value of contracts as of December 31, 2023	$	648


	Fair Value of Contracts as of December 31, 2023
(In millions)	Maturity
Fair Value Hierarchy (Losses)/Gains	1 Year or Less		Greater Than 1 Year to 3 Years		Greater Than 3 Years to 5 Years		Greater Than 5 Years		Total Fair Value
Level 1	$	(120)	$	45	$	(5)	$	1	$	(79)
Level 2	(2)		424		172		148		742
Level 3	(35)		19		(3)		4		(15)
Total	$	(157)	$	488	$	164	$	153	$	648

The Company has elected to disclose derivative assets and liabilities on a trade-by-trade basis and does not offset amounts at the counterparty master agreement level. Also, collateral received or posted on the Company's derivative assets or liabilities are recorded on a separate line item on the balance sheet. Consequently, the magnitude of the changes in individual current and non-current derivative assets or liabilities is higher than the underlying credit and market risk of the Company's portfolio. As discussed in Item 7A — Quantitative and Qualitative Disclosures About Market Risk, Commodity Price Risk, NRG measures the sensitivity of the Company's portfolio to potential changes in market prices using VaR, a statistical model which attempts to predict risk of loss based on market price and volatility. NRG's risk management policy places a limit on one-day holding period VaR, which limits the Company's net open position. As the Company's trade-by-trade derivative accounting results in a gross-up of the Company's derivative assets and liabilities, the net derivative assets and liability position is a better indicator of NRG's hedging activity. As of December 31, 2023, NRG's net derivative asset was $648 million, a decrease to total fair value of $2.9 billion as compared to December 31, 2022. This decrease was primarily driven by roll-off of trades that settled during the period, losses in fair value, and Vivint Smart Home contracts acquired during the period.

Based on a sensitivity analysis using simplified assumptions, the impact of a $0.50 per MMBtu increase or decrease in natural gas prices across the term of the derivative contracts would result in a change of approximately $2.0 billion in the net value of derivatives as of December 31, 2023.

Critical Accounting Estimates

The Company's discussion and analysis of the financial condition and results of operations are based upon the Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these financial statements and related disclosures in compliance with GAAP requires the application of appropriate technical accounting rules and guidance as well as the use of estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. The application of appropriate technical accounting rules and guidance involves judgments regarding future events, including the likelihood of success of particular projects, legal and regulatory challenges, and the fair value of certain assets and liabilities. These judgments, in and of themselves, could materially affect the financial statements and disclosures based on varying assumptions, which may be appropriate to use. In addition, the financial and operating environment may also have a significant effect, not only on the operation of the business, but on the results reported through the application of accounting measures used in preparing the financial statements and related disclosures, even if the accounting guidance has not changed.

NRG evaluates these estimates, on an ongoing basis, utilizing historic experience, consultation with experts and other methods the Company considers reasonable. In any event, actual results may differ substantially from the Company's estimates. Any effects on the Company's business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the information that gives rise to the revision becomes known.

The Company identifies its most critical accounting estimates as those that are the most pervasive and important to the portrayal of the Company's financial position and results of operations, and require the most difficult, subjective, and/or complex judgments by management about matters that are inherently uncertain.

Such accounting estimates include:


Accounting Estimate			Judgments/Uncertainties Affecting Application
Derivative Instruments			Assumptions used in valuation techniques
			Market maturity and economic conditions
			Contract interpretation
			Market conditions in the energy industry, especially the effects of price volatility on contractual commitments
Income Taxes and Valuation Allowance for Deferred Tax Assets			Interpret existing tax statute and regulations upon application to transactions
			Ability to utilize tax benefits through carry backs to prior periods and carry forwards to future periods
Evaluation of Assets for Impairment			Regulatory and political environments and requirements
			Estimated useful lives of assets
			Environmental obligations and operational limitations
			Estimates of future cash flows
			Estimates of fair value
			Judgment about impairment triggering events
Goodwill and Other Intangible Assets			Estimated useful lives for finite-lived intangible assets
			Judgment about impairment triggering events
			Estimates of reporting unit's fair value
			Fair value estimate of intangible assets acquired in business combinations
Business Combinations			Fair value of assets acquired and liabilities assumed in business combinations
			Estimated future cash flow
			Estimated useful lives of assets
Contingencies			Estimated financial impact of event(s)
			Judgment about likelihood of event(s) occurring
			Regulatory and political environments and requirements

Derivative Instruments

The Company follows the guidance of ASC 815, Derivatives and Hedging "(ASC 815"), to account for derivative instruments. ASC 815 requires the Company to mark-to-market all derivative instruments on the balance sheet and recognize fair value change in earnings, unless they qualify for the NPNS exception. ASC 815 applies to NRG's energy related commodity contracts, interest rate swaps, foreign exchange contracts and Consumer Financing Program.

Energy-Related Commodities

As of December 31, 2023, for purposes of measuring the fair value of derivative instruments, the Company primarily uses quoted exchange prices and consensus pricing. Consensus pricing is provided by independent pricing services which are compiled from market makers with longer dated tenors as compared to broker quotes. Prior to the fourth quarter of 2023, the Company valued derivatives based on price quotes from brokers in active markets who regularly facilitate those transactions. The Company started using consensus pricing as it offers data from more market makers and for longer dated tenors as compared to broker quotes, enhances data integrity, and increases transparency. When external prices are not available, NRG uses internal models to determine the fair value. These internal models include assumptions of the future prices of energy commodities based on the specific market in which the energy commodity is being purchased or sold, using externally available forward market pricing curves for all periods possible under the pricing model. These estimations are considered to be critical accounting estimates.

Interest Rate Swaps

NRG is exposed to changes in interest rate through the Company's issuance of variable rate debt. To manage the Company's interest rate risk, NRG enters into interest rate swap agreements. In order to qualify the derivative instruments for hedged transactions, NRG estimates the forecasted borrowings for interest rate swaps occurring within a specified time period.

Foreign Exchange Contracts

In order to mitigate foreign exchange risk primarily associated with the purchase of USD denominated natural gas for the Company's Canadian business, the Company enters into foreign exchange contract agreements.

Consumer Financing Program

The derivative positions for the Company's Consumer Financing Program are valued using a discounted cash flow model, with inputs consisting of available market data, such as market yield discount rates, as well as unobservable internally derived assumptions, such as collateral prepayment rates, collateral default rates and credit loss rates. In summary, the fair value represents an estimate of the present value of the cash flows Vivint Smart Home will be obligated to pay to the third-party financing provider for each component of the derivative.

Certain derivative instruments that meet the criteria for derivative accounting treatment also qualify for a scope exception to derivative accounting, as they are considered to be NPNS. The availability of this exception is based upon the assumption that the Company has the ability and it is probable to deliver or take delivery of the underlying item. These assumptions are based on expected load requirements, internal forecasts of sales and generation and historical physical delivery on contracts. Derivatives that are considered to be NPNS are exempt from derivative accounting treatment and are accounted for under accrual accounting. If it is determined that a transaction designated as NPNS no longer meets the scope exception due to changes in estimates, the related contract would be recorded on the balance sheet at fair value combined with the immediate recognition through earnings.

Income Taxes and Valuation Allowance for Deferred Tax Assets

As of December 31, 2023, NRG’s deferred tax assets were primarily the result of U.S. federal and state NOLs, the difference between book and tax basis in property, plant, and equipment, deferred revenues and tax credit carryforwards. The realization of deferred tax assets is dependent upon the Company's ability to generate sufficient future taxable income during the periods in which those temporary differences become deductible, prior to the expiration of the tax attributes. The evaluation of deferred tax assets requires judgment in assessing the likely future tax consequences of events that have been recognized in the Company's financial statements or tax returns and forecasting future profitability by tax jurisdiction.

The Company evaluates its deferred tax assets quarterly on a jurisdictional basis to determine whether adjustments to the valuation allowance are appropriate considering changes in facts or circumstances. As of each reporting date, management considers new evidence, both positive and negative, when determining the future realization of the Company’s deferred tax assets. Given the Company’s current level of pre-tax earnings and forecasted future pre-tax earnings, the Company expects to generate income before taxes in the U.S. in future periods at a level that would fully utilize its U.S. federal NOL carryforwards and the majority of its state NOL carryforwards prior to their expiration.

The Company continues to maintain a valuation allowance of $275 million as of December 31, 2023 against deferred tax assets consisting of state NOL carryforwards and foreign NOL carryforwards in jurisdictions where the Company does not currently believe that the realization of deferred tax assets is more likely than not. As of December 31, 2022, the Company's valuation allowance balance was $224 million.

Considerable judgment is required to determine the tax treatment of a particular item that involves interpretations of complex tax laws. The Company is subject to examination by taxing authorities for income tax returns filed in the U.S. federal jurisdiction and various state and foreign jurisdictions, including operations located in Australia and Canada. The Company continues to be under audit for multiple years by taxing authorities in various jurisdictions.

NRG does not intend, nor currently foresee a need, to repatriate funds held at its international operations into the U.S. These funds are deemed to be indefinitely reinvested in its foreign operations and the Company has not changed its assertion with respect to distributions of funds that would require the accrual of U.S. income tax.

Evaluation of Assets for Impairment

In accordance with ASC 360, Property, Plant, and Equipment ("ASC 360"), the Company evaluates property, plant and equipment and certain intangible assets for impairment whenever indicators of impairment exist. Examples of such indicators or events include:

•Significant decrease in the market price of a long-lived asset;

•Significant adverse change in the manner an asset is being used or its physical condition;

•Adverse business climate;

•Accumulation of costs significantly in excess of the amounts originally expected for the construction or acquisition of an asset;

•Current period loss combined with a history of losses or the projection of future losses; and

•Change in the Company's intent about an asset from an intent to hold to a greater than 50% likelihood that an asset will be sold, or disposed of before the end of its previously estimated useful life.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future net cash flows expected to be generated by the asset, through considering project specific assumptions for long-term power and natural gas prices, escalated future project operating costs and expected plant operations. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets by factoring in the different courses of action available to the Company. Generally, fair value will be determined using valuation techniques, such as the present value of expected future cash flows. NRG uses its best estimates in making these evaluations and considers various factors, including forward price curves for energy, fuel and operating costs. However, actual future market prices and project costs could vary from the assumptions used in the Company's estimates and the impact of such variations could be material.

For assets to be held and used, if the Company determines that the undiscounted cash flows from the asset are less than the carrying amount of the asset, NRG must estimate fair value to determine the amount of any impairment loss. Assets held-for-sale are reported at the lower of the carrying amount or fair value less the cost to sell. The estimation of fair value, whether in conjunction with an asset to be held and used or with an asset held-for-sale, and the evaluation of asset impairment are, by their nature, subjective. The Company considers quoted market prices in active markets to the extent they are available. In the absence of such information, NRG may consider prices of similar assets, consult with brokers or employ other valuation techniques. The Company will also discount the estimated future cash flows associated with the asset using a single interest rate representative of the risk involved with such an investment or asset. The use of these methods involves the same inherent uncertainty of future cash flows as previously discussed with respect to undiscounted cash flows. Actual future market prices and project costs could vary from those used in NRG's estimates and the impact of such variations could be material.

Annually, during the fourth quarter, the Company revises its views of power and fuel prices including the Company's fundamental view for long-term prices, forecasted generation and operating and capital expenditures, in connection with the preparation of its annual budget. Changes to the Company's views of long-term power and fuel prices impact the Company’s projections of profitability, based on management's estimate of supply and demand within the sub-markets for its operations and the physical and economic characteristics of each of its businesses.

For further discussion, see Item 15 — Note 11, Asset Impairments.

Goodwill and Other Intangible Assets

At December 31, 2023, the Company reported goodwill of $5.1 billion, consisting of $3.5 billion from the acquisition of Vivint in 2023, $1.3 billion from the acquisition of Direct Energy in 2021 and $0.3 billion from other retail acquisitions.

The Company applies ASC 805, Business Combinations ("ASC 805"), and ASC 350, Intangibles-Goodwill and Other ("ASC 350") to account for its goodwill and intangible assets. Under these standards, the Company amortizes all finite-lived intangible assets over their respective estimated weighted-average useful lives, while goodwill has an indefinite life and is not amortized. Goodwill is tested for impairment at least annually, or more frequently whenever an event or change in circumstances occurs that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company tests goodwill for impairment at the reporting unit level, which is identified by assessing whether the components of the Company's operating segments constitute businesses for which discrete financial information is available and whether segment management regularly reviews the operating results of those components. The Company performs the annual goodwill impairment assessment as of December 31 or when events or changes in circumstances indicate that the fair value of the reporting unit may be below the carrying amount. The Company may first assess qualitative factors to determine whether it is more likely than not that an impairment has occurred. In the absence of sufficient qualitative factors, the Company performs a quantitative assessment by determining the fair value of the reporting unit and comparing to its book value. If it is determined that the fair value of a reporting unit is below its carrying amount, the Company's goodwill will be impaired at that time.

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the annual goodwill impairment test will prove to be accurate predictions of the future.

For further discussion, see Evaluation of Assets for Impairment caption above, and Item 15 — Note 11, Asset Impairments.

Business Combinations

NRG accounts for business acquisitions using the acquisition method of accounting prescribed under ASC 805. Under this method, the Company is required to record on its Consolidated Balance Sheets the estimated fair values of the acquired company’s assets and liabilities assumed at the acquisition date. The excess of the consideration transferred over the fair value of the net identifiable assets acquired and liabilities assumed is recorded as goodwill. Determining fair values of assets acquired and liabilities assumed requires significant estimates and judgments. Fair value is determined based on the estimated price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The acquired assets and assumed liabilities from the Vivint Smart Home acquisition that involved the most subjectivity in determining fair value consisted of customer relationships, developed technology, trade names, acquired debt and derivative instruments. NRG describes in detail its acquisitions in Item 15 — Note 4, Acquisitions and Dispositions, to the Consolidated Financial Statements.

The fair value of the customer relationships, technology and trade names are measured using income-based valuation methodologies, which include certain assumptions such as forecasted future cash flows, customer attrition rates, royalty rates and discount rates. Customer relationships and technology are amortized to depreciation and amortization, ratably based on discounted future cash flows. Trade names are amortized to depreciation and amortization, on a straight line basis.

The acquired Vivint Smart Home debt was measured at fair value using observable market inputs based on interest rates at the acquisition closing date. The difference between the fair value at the acquisition closing date and the principal outstanding is being amortized through interest expense over the remaining term of the debt.

The derivative liabilities in connection with the contractual future payment obligations with the financing providers under Vivint Smart Home’s Consumer Financing Program were measured at fair value at the acquisition closing date using a discounted cash flow model, with inputs consisting of available market data, such as market yield discount rates, as well as unobservable internally derived assumptions, such as collateral prepayment rates, collateral default rates and credit loss rates. Changes to the fair value are recorded each period through other income, net in the consolidated statement of operations.

Contingencies

NRG records reserves for estimated losses from contingencies when information available indicates that a loss is probable and the amount of the loss, or range of loss, can be reasonably estimated. Gain contingencies are not recorded until management determines it is certain that the future event will become or does become a reality. Such determinations are subject to interpretations of current facts and circumstances, forecasts of future events, and estimates of the financial impacts of such events. NRG describes in detail its contingencies in Item 15 — Note 23, Commitments and Contingencies, to the Consolidated Financial Statements.

Recent Accounting Developments

See Item 15 — Note 2, Summary of Significant Accounting Policies, to the Consolidated Financial Statements for a discussion of recent accounting developments.

Item 7A — Quantitative and Qualitative Disclosures About Market Risk

NRG is exposed to several market risks in the Company's normal business activities. Market risk is the potential loss that may result from market changes associated with the Company's retail operations, merchant power generation, or with an existing or forecasted financial or commodity transactions. The types of market risks the Company is exposed to are commodity price risk, credit risk, liquidity risk, interest rate risk and currency exchange risk. In order to manage these risks, the Company uses various fixed-price forward purchase and sales contracts, futures and option contracts traded on NYMEX and other exchanges, and swaps and options traded in the over-the-counter financial markets to:

•Manage and hedge fixed-price purchase and sales commitments;

•Reduce exposure to the volatility of cash market prices, and

•Hedge fuel requirements for the Company's generating facilities.

Commodity Price Risk

Commodity price risks result from exposures to changes in spot prices, forward prices, volatilities, and correlations between various commodities, such as natural gas, electricity, coal, oil, and emissions credits. NRG manages the commodity price risk of the Company's load servicing obligations and merchant generation operations by entering into various derivative or non-derivative instruments to hedge the variability in future cash flows from forecasted sales and purchases of power and fuel. NRG measures the risk of the Company's portfolio using several analytical methods, including sensitivity tests, scenario tests, stress tests, position reports and VaR. NRG uses a Monte Carlo simulation based VaR model to estimate the potential loss in the fair value of its energy assets and liabilities, which includes generation assets, gas transportation and storage assets, load obligations and bilateral physical and financial transactions, based on historical and forward values for factors such as customer demand, weather, commodity availability and commodity prices. The Company's VaR model is based on a one-day holding period at a 95% confidence interval for the forward 36 months, not including the spot month. The VaR model is not a complete picture of all risks that may affect the Company's results. Certain events such as counterparty defaults, regulatory changes, and extreme weather and prices that deviate significantly from historically observed values are not reflected in the model.

The following table summarizes average, maximum and minimum VaR for NRG's commodity portfolio, calculated using the VaR model for the years ended December 31, 2023 and 2022:


(In millions)	2023		2022
VaR as of December 31,	$	51	$	74
For the year ended December 31,
Average	$	62	$	51
Maximum	82		86
Minimum	41		26

The Company also uses VaR to estimate the potential loss of derivative financial instruments that are subject to mark-to-market accounting. These derivative instruments include transactions that were entered into for both asset management and trading purposes. The VaR for the derivative financial instruments calculated using the diversified VaR model for the entire term of these instruments entered into for both asset management and trading was $185 million as of December 31, 2023, primarily driven by asset-backed transactions.

Credit Risk

Credit risk relates to the risk of loss resulting from non-performance or non-payment by counterparties pursuant to the terms of their contractual obligations. NRG is exposed to counterparty credit risk through various activities including wholesale sales, fuel purchases and retail supply arrangements, and retail customer credit risk through its retail load activities. Counterparty credit risk and retail customer credit risk are discussed below. See Note 6, Accounting for Derivative Instruments and Hedging Activities, to this Form 10-K for discussion regarding credit risk contingent features.

Counterparty Credit Risk

Credit risk relates to the risk of loss resulting from non-performance or non-payment by counterparties pursuant to the terms of their contractual obligations. The Company monitors and manages credit risk through credit policies that include: (i) an established credit approval process; (ii) a daily monitoring of counterparties' credit limits; (iii) the use of credit mitigation measures such as margin, collateral, prepayment arrangements, or volumetric limits; (iv) the use of payment netting agreements; and (v) the use of master netting agreements that allow for the netting of positive and negative exposures of various contracts associated with a single counterparty. Risks surrounding counterparty performance and credit could ultimately impact the amount and timing of expected cash flows. The Company seeks to mitigate counterparty risk by having a diversified portfolio of counterparties. The Company also has credit protection within various agreements to call on additional collateral support if and when necessary. Cash margin is collected and held at the Company to cover the credit risk of the counterparty until positions settle.

As of December 31, 2023, counterparty credit exposure, excluding credit exposure from RTOs, ISOs, registered commodity exchanges and certain long-term agreements, was $1.6 billion, of which the Company held collateral (cash and letters of credit) against those positions of $426 million resulting in a net exposure of $1.2 billion. NRG periodically receives collateral from counterparties in excess of their exposure. Collateral amounts shown include such excess while net exposure shown excludes excess collateral received. Approximately 63% of the Company's exposure before collateral is expected to roll off by the end of 2025. The following table highlights the net counterparty credit exposure by industry sector and by counterparty credit quality. Net counterparty credit exposure is defined as the aggregate net asset position for NRG with counterparties where netting is permitted under the enabling agreement and includes all cash flow, mark-to-market, NPNS, and non-derivative transactions. As of December 31, 2023, the aggregate credit exposure is shown net of collateral held, and includes amounts net of receivables or payables.


Category	Net Exposure (a) (b) (% of Total)
Utilities, energy merchants, marketers and other	80	%
Financial institutions	20
Total	100	%


Category	Net Exposure (a) (b) (% of Total)
Investment grade	44	%
Non-Investment grade/Non-Rated	56
Total	100	%

(a)Counterparty credit exposure excludes coal transportation contracts because of the unavailability of market prices

(b)The figures in the tables above exclude potential counterparty credit exposure related to RTOs, ISOs, registered commodity exchanges and certain long-term contracts

The Company has exposure to one wholesale counterparty in excess of 10% of the total net exposure discussed above as of December 31, 2023. Changes in hedge positions and market prices will affect credit exposure and counterparty concentration.

RTOs and ISOs

The Company participates in the organized markets of CAISO, ERCOT, AESO, IESO, ISO-NE, MISO, NYISO and PJM, known as RTOs or ISOs. Trading in the majority of these markets is approved by FERC, whereas in the case of ERCOT, it is approved by the PUCT, and whereas in the case of AESO and IESO, both exist provincially with AESO primarily subject to Alberta Utilities Commission and the IESO subject to the Ontario Energy Board. These ISOs may include credit policies that, under certain circumstances, require that losses arising from the default of one member on spot market transactions be shared by the remaining participants. As a result, the counterparty credit risk to these markets is limited to NRG’s share of the overall market and are excluded from the above exposures.

Exchange Traded Transactions

The Company enters into commodity transactions on registered exchanges, notably ICE, NYMEX and Nodal. These clearinghouses act as the counterparty and transactions are subject to extensive collateral and margining requirements. As a result, these commodity transactions have limited counterparty credit risk.

Long-Term Contracts

Counterparty credit exposure described above excludes credit risk exposure under certain long-term contracts, primarily solar under Renewable PPAs. As external sources or observable market quotes are not available to estimate such exposure, the Company values these contracts based on various techniques including, but not limited to, internal models based on a fundamental analysis of the market and extrapolation of observable market data with similar characteristics. Based on these valuation techniques, as of December 31, 2023, aggregate credit risk exposure managed by NRG to these counterparties was approximately $882 million for the next five years.

Retail Customer Credit Risk

NRG is exposed to retail credit risk through the Company's retail electricity and gas providers as well as through Vivint Smart Home. Retail credit risk results in losses when a customer fails to pay for services rendered. The losses may result from both nonpayment of customer accounts receivable and the loss of in-the-money forward value. The Company manages retail credit risk through the use of established credit policies, which include monitoring of the portfolio and the use of credit mitigation measures such as deposits or prepayment arrangements.

As of December 31, 2023, the Company's retail customer credit exposure to Home and Business customers was diversified across many customers and various industries, as well as government entities. Current economic conditions may affect the Company's customers' ability to pay bills in a timely manner, which could increase customer delinquencies and may lead to an increase in credit losses. The Company's provision for credit losses resulting from credit risk was $251 million, $11 million and $698 million for the years ended December 31, 2023, 2022 and 2021, respectively. During the year ended December 31, 2022, the provision for credit losses included the Company's loss mitigation efforts recognized as income of $126 million related to Winter Storm Uri. During the year ended December 31, 2021, the provision for credit losses included $596 million of expenses due to the impacts of Winter Storm Uri.

Liquidity Risk

Liquidity risk arises from the general funding needs of the Company's activities and the management of the Company's assets and liabilities. The Company is currently exposed to additional collateral posting if natural gas prices decline, primarily due to the long natural gas equivalent position at various exchanges used to hedge NRG's retail supply load obligations.

Based on a sensitivity analysis for power and gas positions under marginable contracts as of December 31, 2023, a $0.50 per MMBtu decrease in natural gas prices across the term of the marginable contracts would cause an increase in margin collateral posted of approximately $1.5 billion and a 1.00 MMBtu/MWh decrease in heat rates for heat rate positions would result in an increase in margin collateral posted of approximately $350 million. This analysis uses simplified assumptions and is calculated based on portfolio composition and margin-related contract provisions as of December 31, 2023.

Interest Rate Risk

NRG is exposed to fluctuations in interest rates through its issuance of variable rate debt. Exposures to interest rate fluctuations may be mitigated by entering into derivative instruments known as interest rate swaps, caps, collars and put or call options. These contracts reduce exposure to interest rate volatility and result in primarily fixed rate debt obligations when taking into account the combinations of the variable rate debt and the interest rate derivative instrument. NRG's risk management policies allow the Company to reduce interest rate exposure from variable rate debt obligations. In the first quarter of 2023, the Company entered into $1.0 billion of interest rate swaps through 2027 to hedge the floating rate on the Term Loan acquired with the Vivint Smart Home acquisition. Additionally, in the first quarter of 2023, the Company had entered into interest rate swaps to hedge the floating rate on the Revolving Credit Facility extending through 2024, which was fully terminated in conjunction with the pay down of the Revolving Credit Facility.

As of December 31, 2023, the Company's debt fair value was $10.6 billion and carrying value was $10.8 billion. NRG estimates that a 1% decrease in market interest rates would have increased the fair value of the Company's long-term debt by $602 million.

Currency Exchange Risk

NRG is subject to transactional exchange rate risk from transactions with customers in countries outside of the U.S., primarily within Canada, as well as from intercompany transactions between affiliates. Transactional exchange rate risk arises from the purchase and sale of goods and services in currencies other than the Company's functional currency or the functional currency of an applicable subsidiary. NRG hedges a portion of its forecasted currency transactions with foreign exchange forward contracts. As of December 31, 2023, NRG is exposed to changes in foreign currency primarily associated with the purchase of U.S. dollar denominated natural gas for its Canadian business and entered into foreign exchange contracts with a notional amount of $548 million.

The Company is subject to translation exchange rate risk related to the translation of the financial statements of its foreign operations into U.S. dollars. Costs incurred and sales recorded by subsidiaries operating outside of the U.S. are translated into U.S. dollars using exchange rates effective during the respective period. As a result, the Company is exposed to movements in the exchange rates of various currencies against the U.S. dollar, primarily the Canadian and Australian dollars. A hypothetical 10% appreciation in major currencies relative to the U.S. dollar as of December 31, 2023, would have resulted in a decrease of $36 million to net income within the Consolidated Statement of Operations.

Item 8 — Financial Statements and Supplementary Data

The financial statements and schedules are included in Part IV, Item 15 of this Form 10-K.

Item 9 — Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A — Controls and Procedures

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures and Internal Control Over Financial Reporting

Under the supervision and with the participation of NRG's management, including its principal executive officer, principal financial officer and principal accounting officer, NRG conducted an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures, as such term is defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act. Based on this evaluation, the Company's principal executive officer, principal financial officer and principal accounting officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this Annual Report on Form 10-K. Management's report on the Company's internal control over financial reporting and the report of the Company's independent registered public accounting firm are incorporated under the caption "Management's Report on Internal Control over Financial Reporting" and under the caption "Report of Independent Registered Public Accounting Firm" in this Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Changes in Internal Control over Financial Reporting

During the year ended December 31, 2023, the Company completed its acquisition of Vivint Smart Home, Inc. As part of integration, the Company designed and implemented a control structure over Vivint Smart Home's operations. Other than the Vivint Smart Home acquisition, there were no changes in NRG’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that occurred in the fourth quarter of 2023 that materially affected, or are reasonably likely to materially affect, NRG’s internal control over financial reporting.

Inherent Limitations over Internal Controls

NRG's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with GAAP. The Company's internal control over financial reporting includes those policies and procedures that:

1.Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company's assets;

2.Provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with GAAP, and that the Company's receipts and expenditures are being made only in accordance with authorizations of its management and directors; and

3.Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the consolidated financial statements.

Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations, including the possibility of human error and circumvention by collusion or overriding of controls. Accordingly, even an effective internal control system may not prevent or detect material misstatements on a timely basis. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Management's Report on Internal Control over Financial Reporting

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of the Company's management, including its principal executive officer, principal financial officer and principal accounting officer, the Company conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the Company's evaluation under the framework in Internal Control — Integrated Framework (2013), the Company's management concluded that its internal control over financial reporting was effective as of December 31, 2023.

On March 10, 2023, NRG acquired Vivint Smart Home, Inc., and management excluded from its assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2023, Vivint Smart Home, Inc.'s internal control over financial reporting associated with total assets (excluding acquired goodwill and intangible assets) of 5% and total revenues of 5% included in the consolidated financial statements of the Company as of and for the year ended December 31, 2023.

The effectiveness of the Company's internal control over financial reporting as of December 31, 2023 has been audited by KPMG LLP, the Company's independent registered public accounting firm, as stated in its report which is included in this Annual Report on Form 10-K.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

NRG Energy, Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited NRG Energy, Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive (loss)/income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes and financial statement schedule II (collectively, the consolidated financial statements), and our report dated February 28, 2024 expressed an unqualified opinion on those consolidated financial statements.

The Company acquired Vivint Smart Home, Inc. during 2023, and management excluded from its assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2023, Vivint Smart Home, Inc.'s internal control over financial reporting associated with total assets (excluding acquired goodwill and intangible assets) of 5% and total revenues of 5% included in the consolidated financial statements of the Company as of and for the year ended December 31, 2023. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Vivint Smart Home, Inc.

Basis for Opinion

The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

Philadelphia, Pennsylvania

February 28, 2024

Item 9B — Other Information

Director and Officer Trading Arrangements

or a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement,' as each term is defined in Item 408(a) of Regulation S-K, as described in the table below:

Name

Title

Date Adopted

Character of Trading Arrangement

Aggregate Number of Shares of Common Stock to be Purchased or Sold Pursuant to Trading Arrangement(a)

Duration

Date Terminated

Rule 10b5-1 Trading Arrangement

shares to be Sold(b)

3/15/2024-1/31/2025

N/A

Rule 10b5-1 Trading Arrangement

Up to shares to be Sold

3/14/2024-11/01/2024

N/A

(a)Potential sales may be subject to certain price limitations set forth in the 10b5-1 plans and therefore actual number of shares sold could vary if certain minimum stock prices are not met

(b)Represents approximate number of shares to be sold based on outstanding awards expected to vest during the period, where any underlying performance share awards are being calculated at target. Actual number of shares to be sold will depend on actual vesting, the number of shares withheld by NRG to satisfy tax withholding obligations and vesting of dividend equivalent rights

Item 9C — Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

PART III

Item 10 — Directors, Executive Officers and Corporate Governance

Directors and Executive Officers

Information required by this Item is incorporated by reference to the similarly named section of NRG's Definitive Proxy Statement for its 2024 Annual Meeting of Stockholders.

Code of Ethics

NRG has adopted a code of ethics entitled "NRG Code of Conduct" that applies to directors, officers and employees, including the chief executive officer and senior financial officers of NRG. It may be accessed through the "Governance" section of the Company's website at www.nrg.com. NRG also elects to disclose the information required by Form 8-K, Item 5.05, "Amendments to the Registrant's Code of Ethics, or Waiver of a Provision of the Code of Ethics," through the Company's website, and such information will remain available on this website for at least a 12-month period. A copy of the "NRG Code of Conduct" is available in print to any stockholder who requests it.

Other information required by this Item is incorporated by reference to the similarly named section of NRG's Definitive Proxy Statement for its 2024 Annual Meeting of Stockholders.

Item 11 — Executive Compensation

Information required by this Item is incorporated by reference to the similarly named section of NRG's Definitive Proxy Statement for its 2024 Annual Meeting of Stockholders.

Item 12 — Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Securities Authorized for Issuance under Equity Compensation Plans


Plan Category	(a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights		(b) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights		(c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
Equity compensation plans approved by security holders	2,997,640	(1)	$	—	14,419,264
Equity compensation plans not approved by security holders	3,970,872	(2)	$	—	12,749,736
Total	6,968,512		$	—	27,169,000	(3)

(1)Consists of shares issuable under the NRG LTIP and the ESPP. On April 27, 2023, NRG stockholders approved an increase of 4,400,000 shares available for issuance under the ESPP. As of December 31, 2023, there were 6,702,125 shares reserved from the Company's treasury shares for the ESPP

(2)Consists of shares issuable under the Vivint LTIP. On March 10, 2023, in connection with the Acquisition, NRG assumed the Vivint Smart Home, Inc. 2020 Omnibus Incentive Plan. While the Vivint Smart Home, Inc. 2020 Omnibus Incentive Plan was previously approved by stockholders of Vivint Smart Home, Inc., the plan is listed as "not approved" because it was assumed as part of the Acquisition and not subject to approval by NRG stockholders. The Company intends to make subsequent grants under the Vivint LTIP. See Note 21, Stock-Based Compensation for a discussion of the Vivint LTIP

(3)Consists of 7,717,139 shares of common stock under the NRG LTIP, 12,749,736 shares of common stock under the Vivint LTIP and 6,702,125 shares of treasury stock reserved for issuance under the ESPP

The NRG LTIP currently provides for grants of restricted stock units, relative performance stock units, deferred stock units and dividend equivalent rights. The Vivint LTIP currently provides for grants of restricted stock units and performance stock units. The Company's directors, officers and employees, as well as other individuals performing services for, or to whom an offer of employment has been extended by the Company, are eligible to receive grants under the LTIPs. The purpose of the LTIPs is to promote the Company's long-term growth and profitability by providing these individuals with incentives to maximize stockholder value and otherwise contribute to the Company's success and to enable the Company to attract, retain and reward the best available persons for positions of responsibility. The Compensation Committee of the Board of Directors administers the LTIPs.

Other information required by this Item is incorporated by reference to the similarly named section of NRG's Definitive Proxy Statement for its 2024 Annual Meeting of Stockholders.

Item 13 — Certain Relationships and Related Transactions, and Director Independence

Information required by this Item is incorporated by reference to the similarly named section of NRG's Definitive Proxy Statement for its 2024 Annual Meeting of Stockholders.

Item 14 — Principal Accounting Fees and Services

Information required by this Item is incorporated by reference to the similarly named section of NRG's Definitive Proxy Statement for its 2024 Annual Meeting of Stockholders.

PART IV

Item 15 — Exhibits, Financial Statement Schedules

(a)(1) Financial Statements

The following consolidated financial statements of NRG Energy, Inc. and related notes thereto, together with the reports thereon of , , Auditor Firm ID: , are included herein:

Consolidated Statements of Operations — Years ended December 31, 2023, 2022, and 2021

Consolidated Statements of Comprehensive (Loss)/Income — Years ended December 31, 2023, 2022, and 2021

Consolidated Balance Sheets — As of December 31, 2023 and 2022

Consolidated Statements of Cash Flows — Years ended December 31, 2023, 2022, and 2021

Consolidated Statements of Stockholders' Equity — Years ended December 31, 2023, 2022, and 2021

Notes to Consolidated Financial Statements

(a)(2) Financial Statement Schedule

The following Consolidated Financial Statement Schedule of NRG Energy, Inc. is filed as part of Item 15 of this report and should be read in conjunction with the Consolidated Financial Statements.

Schedule II — Valuation and Qualifying Accounts

All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore, have been omitted.

(a)(3) Exhibits: See Exhibit Index submitted as a separate section of this report.

(b) Exhibits

See Exhibit Index submitted as a separate section of this report.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

NRG Energy, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of NRG Energy, Inc. and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive (loss)/income, stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes and financial statement schedule II (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 28, 2024 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Evaluation of the sufficiency of audit evidence over revenues

As discussed in Note 3 to the consolidated financial statements, the Company had $ million of revenues. Revenue is derived from various revenue streams in different geographic markets and the Company’s processes and related information technology (IT) systems used to record revenue differ for each of these revenue streams.

We identified the evaluation of the sufficiency of audit evidence over revenues as a critical audit matter which required a high degree of auditor judgment due to the number of revenue streams and IT systems involved in the revenue recognition process. This included determining the revenue streams over which procedures were to be performed and evaluating the nature and extent of evidence obtained over the individual revenue streams as well as revenue in the aggregate. It also included the involvement of IT professionals with specialized skills and knowledge to assist in the performance of certain procedures.

The following are the primary procedures we performed to address this critical audit matter. We, with the assistance of IT professionals, applied auditor judgment to determine the revenue streams over which procedures were performed as well as the nature and extent of such procedures. For certain revenue streams over which procedures were performed,

we evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s revenue recognition processes. For certain revenue streams, we involved IT professionals, who assisted in testing certain IT applications used by the Company in its revenue recognition processes. In addition, we assessed recorded revenue for a selection of transactions by comparing the amounts recognized to underlying documentation, including contracts with customers, and for certain revenue streams, we performed a software-assisted data analysis to assess certain relationships among revenue transactions. In addition, we evaluated the sufficiency of audit evidence obtained over revenues by assessing the results of procedures performed, including the appropriateness of such evidence.

Fair value of certain acquired intangible assets

As discussed in Note 4 to the consolidated financial statements, the Company acquired Vivint Smart Home, Inc. on March 10, 2023 for total consideration of $ million. In connection with the business combination, the Company recorded various intangible assets, which included customer relationships and technology intangible assets with an acquisition-date fair value of $ million and $ million, respectively.

We identified the evaluation of the acquisition-date fair value of the customer relationships and technology intangible assets as a critical audit matter. A high degree of subjective and complex auditor judgment was required to evaluate key assumptions used to value these acquired intangible assets. We performed sensitivity analyses to determine the key assumptions used to value the intangible assets acquired which required challenging auditor judgment. Specifically, key assumptions included the customer attrition for the customer relationships intangible asset and the discount rate for the customer relationships and technology intangible assets. Changes to these assumptions could have had a significant impact on the fair value of such assets. In addition, valuation professionals with specialized skills and knowledge were needed to assist in the evaluation of the discount rate.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s acquisition-date valuation process, including controls related to the selection of the customer attrition used in the customer relationships intangible asset and the discount rate used in the customer relationships and technology intangible assets. We evaluated the customer attrition used by the Company by comparing it to historical attrition experienced by the acquired company and comparable company attrition. We involved valuation professionals with specialized skills and knowledge, who assisted in evaluating the discount rate by assessing the relative risk profile of the customer relationships and technology intangible assets compared to the required rate of return of all acquired assets in the business combination.

/s/ KPMG LLP

We have served as the Company's auditor since 2004.

Philadelphia, Pennsylvania

February 28, 2024

NRG ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS


	For the Year Ended December 31,
(In millions, except per share amounts)	2023		2022	2021
Revenue
Revenue	$		$	$
Operating Costs and Expenses
Cost of operations (excluding depreciation and amortization shown below)
Depreciation and amortization
Impairment losses
Selling, general and administrative costs
Provision for credit losses
Acquisition-related transaction and integration costs
Total operating costs and expenses

Gain on sale of assets
Operating Income
Other Income/(Expense)
Equity in earnings of unconsolidated affiliates
Impairment losses on investments	()
Other income, net

Gain/(Loss) on debt extinguishment				()
Interest expense	()		()	()
Total other expense	()		()	()
(Loss)/Income Before Income Taxes	()
Income tax (benefit)/expense	()


Net (Loss)/Income	()
Less: Cumulative dividends attributable to Series A Preferred Stock
Net (Loss)/Income Available for Common Stockholders	$	()	$	$
(Loss)/Income Per Share
Weighted average number of common shares outstanding — basic and diluted


(Loss)/Income per Weighted Average Common Share — Basic and Diluted	$	()	$	$

See notes to Consolidated Financial Statements

NRG ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME


	For the Year Ended December 31,
(In millions)	2023		2022	2021
Net (Loss)/Income	$	()	$	$
Other Comprehensive Income/(Loss), net of tax

Foreign currency translation adjustments			()	()

Defined benefit plans			()
Other comprehensive income/(loss)			()
Comprehensive (Loss)/Income	$	()	$	$

See notes to Consolidated Financial Statements

NRG ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	As of December 31,
(In millions)	2023	2022
ASSETS
Current Assets
Cash and cash equivalents	$	$
Funds deposited by counterparties
Restricted cash
Accounts receivable, net

Inventory
Derivative instruments
Cash collateral paid in support of energy risk management activities

Prepayments and other current assets


Total current assets
Property, plant and equipment, net
Other Assets
Equity investments in affiliates
Operating lease right-of-use assets, net

Goodwill
Customer relationships, net
Other intangible assets, net
Nuclear decommissioning trust fund
Derivative instruments
Deferred income taxes
Other non-current assets


Total other assets
Total Assets	$	$

NRG ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Continued)


	As of December 31,
(In millions, except share data)	2023	2022
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt and finance leases	$	$
Current portion of operating lease liabilities
Accounts payable

Derivative instruments
Cash collateral received in support of energy risk management activities
Deferred revenue current
Accrued expenses and other current liabilities



Total current liabilities
Other Liabilities
Long-term debt and finance leases
Non-current operating lease liabilities
Nuclear decommissioning reserve
Nuclear decommissioning trust liability

Derivative instruments
Deferred income taxes
Deferred revenue non-current
Other non-current liabilities


Total other liabilities
Total Liabilities

Commitments and Contingencies
Stockholders' Equity
Preferred stock; shares authorized; Series A shares issued and outstanding at December 31, 2023 (aggregate liquidation preference $); shares issued and outstanding at December 31, 2022
Common stock; $ par value; shares authorized; and shares issued; and and shares outstanding at December 31, 2023 and 2022, respectively
Additional paid-in capital
Retained earnings
Treasury stock, at cost; and shares at December 31, 2023 and 2022, respectively	()	()
Accumulated other comprehensive loss	()	()
Total Stockholders' Equity
Total Liabilities and Stockholders' Equity	$	$

See notes to Consolidated Financial Statements

NRG ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the Year Ended December 31,
(In millions)	2023		2022		2021
Cash Flows from Operating Activities
Net (loss)/income	$	()	$		$


Adjustments to reconcile net income to net cash provided by operating activities:
Equity in and distributions from (earnings)/losses of unconsolidated affiliates	()
Depreciation and amortization
Accretion of asset retirement obligations
Provision for credit losses
Amortization of nuclear fuel
Amortization of financing costs and debt discounts
(Gain)/Loss on debt extinguishment	()
Amortization of in-the-money contracts and emissions allowances
Amortization of unearned equity compensation
Net gain on sale of assets and disposal of assets	()		()		()

Impairment losses
Changes in derivative instruments			()		()
Changes in deferred income taxes and liability for uncertain tax benefits	()

Changes in collateral deposits in support of risk management activities	()

Changes in nuclear decommissioning trust liability

Uplift securitization proceeds received/(receivable) from ERCOT					()


Cash (used)/provided by changes in other working capital, net of acquisition and disposition effects:
Accounts receivable - trade			()		()
Inventory			()		()
Prepayments and other current assets	()
Accounts payable	()
Accrued expenses and other current liabilities			()		()
Other assets and liabilities	()		()		()
Cash (used)/provided by operating activities	$	()	$		$


Cash Flows from Investing Activities
Payments for acquisitions of businesses and assets, net of cash acquired	$	()	$	()	$	()
Capital expenditures	()		()		()


Net purchases of emissions allowances	()		()
Investments in nuclear decommissioning trust fund securities	()		()		()
Proceeds from sales of nuclear decommissioning trust fund securities
Proceeds from sale of assets, net of cash disposed
Proceeds from insurance recoveries for property, plant and equipment, net



Cash used by investing activities	$	()	$	()	$	()


	For the Year Ended December 31,
(In millions)	2023		2022	2021
Cash Flows from Financing Activities
Proceeds from issuance of preferred stock, net of fees	$		$	$
Net receipts from settlement of acquired derivatives that include financing elements
Payments for share repurchase activity(a)	()		()	()
Payments of dividends to preferred and common stockholders	()		()	()
Proceeds from issuance of long-term debt
Payments for short and long-term debt	()		()	()

Payments for debt extinguishment costs				()
Payments of debt issuance costs	()		()	()
Proceeds from issuance of common stock
Proceeds from credit facilities
Repayments to credit facilities	()			()


Cash (used)/provided by financing activities	$	()	$	$	()


Effect of exchange rate changes on cash and cash equivalents			()	()

Net (Decrease)/Increase in Cash and Cash Equivalents, Funds Deposited by Counterparties and Restricted Cash	()			()
Cash and Cash Equivalents, Funds Deposited by Counterparties and Restricted Cash at Beginning of Period
Cash and Cash Equivalents, Funds Deposited by Counterparties and Restricted Cash at End of Period	$		$	$

(a)) million, $() million and $() million of equivalent shares purchased in lieu of tax withholdings on equity compensation issuances for the years ended December 31, 2023, 2022 and 2021, respectively

For further discussion of supplemental cash flow information see Note 26, Cash Flow Information

See notes to Consolidated Financial Statements

NRG ENERGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY ) ) ) ) )

(In millions)

Preferred Stock

Common
Stock

Additional
Paid-In
Capital

(Accumulated Deficit)/Retained Earnings

Treasury
Stock

Accumulated
Other
Comprehensive
Loss

Total
Stock-holders'
Equity

Balance at December 31, 2020

()

Net income

Other comprehensive income

Shares reissuance for ESPP

Share repurchases

()

Equity-based awards activity, net(a)

Issuance of common stock

Common stock dividends and dividend equivalents declared(b)

()

Balance at December 31, 2021

()

Net income

Other comprehensive loss

()

Shares reissuance for ESPP

Share repurchases

()

Equity-based awards activity, net(a)

(d) Revenue relates entirely to unrealized gains and losses on derivative instruments accounted for under ASC 815

Contract Balances

$ Accounts receivable, net - Contracts with customers Accounts receivable, net - Accounted for under topics other than ASC 606 Accounts receivable, net - Affiliate Total accounts receivable, net$ $ Unbilled revenues (included within Accounts receivable, net - Contracts with customers)$ $

Deferred revenues (b)

$ $

(a)Amortization of capitalized contract costs for the years ended December 31, 2023, 2022 and 2021 were $ million, $ million and $ million, respectively

(b)Deferred revenues from contracts with customers for the years ended December 31, 2023 and 2022 were approximately $ billion and $ million, respectively. The increase in deferred revenue balances from December 31, 2023 to 2022 was primarily due to the acquisition of Vivint Smart Home

The revenue recognized from contracts with customers during the years ended December 31, 2023 and 2022 relating to the deferred revenue balance at the beginning of each period was $ million and $ million, respectively. The change in the revenue recognized from contracts with customers relating to the deferred revenue balances at the beginning of the years ended December 31, 2023 and 2022 was primarily due to the timing difference of when consideration was received and when the performance obligation was transferred.

102

. As a practical expedient, the Company expenses the incremental costs of obtaining a contract if the amortization period of the asset would have been one year or less.

. Energy contract liabilities are generally recognized to revenue in the next period as the Company satisfies its performance obligations.

Note 4 —

million subscribers to NRG. Vivint Smart Home's single, expandable platform incorporates artificial intelligence and machine learning into its operating system and its vertically integrated business model includes hardware, software, sales, installation, customer service and technical support and professional monitoring, enabling superior subscriber experiences and a complete end-to-end smart home experience. The acquisition accelerated the realization of NRG's consumer-focused growth strategy and creates a leading essential home services platform fueled by market-leading brands, unparalleled insights, proprietary technologies and complementary sales channels.

NRG paid $ per share, or approximately $ billion in cash. The Company funded the acquisition using:

•proceeds of $ million from newly issued $ million % Senior Secured First Lien Notes due 2033, net of issuance costs and discount;

•proceeds of $ million from newly issued $ million % Series A Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock, net of issuance costs;

•proceeds of approximately $ million drawn from its Revolving Credit Facility and Receivables Securitization Facilities; and

•cash on hand.

In February 2023, the Company increased its Revolving Credit Facility by $ million to meet the additional liquidity requirements related to the acquisition. For further discussion, see Note 13, Long-term Debt and Finance Leases.

Acquisition costs of $ million and $ million for the years ended December 31, 2023 and 2022, respectively, are included in acquisition-related transaction and integration costs in the Company's consolidated statement of operations.

The acquisition has been recorded as a business combination under ASC 805, with identifiable assets and liabilities acquired recorded at their estimated Acquisition Closing Date fair value. billion includes:

at $ per share$ Other Vivint Smart Home, Inc. equity instruments (Cash out RSUs and PSUs, Stock Appreciation Rights, Private Placement Warrants) Total Cash Consideration$ Fair value of acquired Vivint Smart Home, Inc. equity awards attributable to pre-combination service Total Consideration$

103

Accounts receivable, net Inventory Prepayments and other current assets Total current assets Property, plant and equipment, net Other AssetsOperating lease right-of-use assets, net

Goodwill(a)

Intangible assets, net(b):

Customer relationships Technology Trade names Sales channel contract Intangible assets, net Deferred income taxes Other non-current assets Total other assets Total Assets $ Current LiabilitiesCurrent portion of long-term debt and finance leases$ Current portion of operating lease liabilities Accounts payable Derivative instruments Deferred revenue current Accrued expenses and other current liabilities Total current liabilities Other LiabilitiesLong-term debt and finance leases Non-current operating lease liabilities Derivative instruments Deferred income taxes Deferred revenue non-current Other non-current liabilities Total other liabilities Total Liabilities$ Vivint Smart Home Purchase Price$

(a)Goodwill arising from the acquisition is attributed to the value of the platform acquired, cross-selling opportunities, subscriber growth and the synergies expected from combining the operations of Vivint Smart Home with NRG's existing businesses. of the goodwill recorded will be deductible for tax purposes

(b)The weighted average amortization period for total amortizable intangible assets is approximately

104

Technology – Developed technology was valued using a "relief from royalty" method of the income approach, and is classified as Level 3. Under this approach, the fair value was estimated to be the present value of royalties saved which assumed the value of the asset based on discounted cash flows of the amount that would be paid by a hypothetical market participant had they not owned the asset and instead licensed the asset from another company. The estimated cash flows from the developed technology considered the obsolescence factor and was discounted based on the required rate of return on the acquired intangible asset. The developed technology is amortized to depreciation and amortization, ratably based on discounted future cash flows. The weighted average amortization period is .

Trade names – Trade names were valued using a "relief from royalty" method of the income approach, and is classified as Level 3. Under this approach, the fair value is estimated to be the present value of royalties saved which assumed the value of the asset based on discounted cash flows of the amount that would be paid by a hypothetical market participant had they not owned the asset and instead licensed the asset from another company. The estimated cash flows from the trade names considered the expected probable use of the asset and was discounted based on the required rate of return on the acquired intangible asset. The trade names are amortized to depreciation and amortization, on a straight line basis, over an amortization period of .

Fair Value Measurement of Acquired Vivint Smart Home Debt

The Company acquired $ billion in aggregate principal of Vivint Smart Home’s 2027 Senior Secured Notes, 2029 Senior notes and 2028 Senior Secured Term Loan (together, the "Acquired Vivint Smart Home Debt") which were recorded at fair value as of the Acquisition Closing Date. The difference between the fair value at the Acquisition Closing Date and the principal outstanding of the Acquired Vivint Smart Home Debt, of $ million, is being amortized through interest expense over the remaining term of the debt. The Acquired Vivint Smart Home Debt is classified as Level 2 and were measured at fair value using observable market inputs based on interest rates at the Acquisition Closing Date. For additional discussion, see Note 13, Long-term Debt and Finance Leases.

Fair Value Measurement of Derivatives Liabilities

The derivative liabilities are recorded in connection with the contractual future payment obligations with the financing providers under Vivint Smart Home’s Consumer Financing Program. The fair values of the derivatives liabilities as of the Acquisition Closing Date were valued using a discounted cash flow model, with inputs consisting of available market data, such as market yield discount rates, as well as unobservable internally derived assumptions, such as collateral prepayment rates, collateral default rates and credit loss rates. These derivatives are classified as Level 3 and changes to the fair value are recorded through other income, net in the consolidated statement of operations. For additional discussion, see Note 6, Accounting for Derivative Instruments and Hedging Activities.

Supplemental Pro Forma Financial Information

The following table provides unaudited pro forma combined financial information of NRG and Vivint Smart Home, after giving effect to the Vivint Smart Home acquisition and related financing transactions as if they had occurred on January 1, 2021.

$ $ Net (loss)/income()

105

U.S. states and Canadian provinces. The acquisition increased NRG's retail portfolio by over million customers and strengthened its integrated model. It also broadened the Company's presence in the Northeast and into states and locales where it did not previously operate, supporting NRG's objective to diversify its business.

The Company paid an aggregate purchase price of $ billion in cash and total purchase price adjustment of $ million, resulting in an adjusted purchase price of $ billion.

Acquisition costs of $ million for the year ended December 31, 2021 are included in acquisition-related transaction and integration costs in the Company's consolidated statement of operations.

106

Funds deposited by counterparties Restricted cash Accounts receivable, net Inventory Derivative instruments Cash collateral paid in support of energy risk management activities Prepayments and other current assets Total current assets Property, plant and equipment, net Other Assets

Goodwill(a)

Intangible assets, net:

Customer relationships(b)

Customer and supply contracts(b)

Trade names(b)

Renewable energy credits Total intangible assets, net Derivative instruments Other non-current assets Total other assets Total Assets $ Current LiabilitiesAccounts payable$ Derivative instruments Cash collateral received in support of energy risk management activities Accrued expenses and other current liabilities Total current liabilities Other LiabilitiesDerivative instruments Deferred income taxes Other non-current liabilities Total other liabilities Total Liabilities$ Direct Energy Purchase Price$

(a)Goodwill arising from the acquisition was attributed to the value of the platform acquired and the synergies expected from combining the operations of Direct Energy with NRG's existing businesses. Goodwill was allocated to the Texas, East, and West/Services/Other segments of $ million, $ million and $ million, respectively. Goodwill deductible for tax purposes was $ million

(b)As of January 5, 2021, the weighted average amortization period for total amortizable intangible assets was years

107

% equity interest in STP

On November 1, 2023, the Company closed on the sale of its % equity interest in STP to Constellation Energy Generation ("Constellation"). Proceeds of $ billion were reduced by working capital and other adjustments of $ million, resulting in net proceeds of $ billion. The Company recorded a gain on the sale of $ billion within the Texas region of operations. For discussion of the litigation matter related to the transaction, see Note 23, Commitments and Contingencies.

% equity interest in STP as follows:


	For the Year Ended December 31,
(In millions)	2023	2022	2021
Income before income taxes(a)	$	$	$

(a)Excludes the impact of the Company's hedges at the portfolio level

Sale of Gregory

On October 2, 2023, the Company closed on the sale of its % ownership in the Gregory natural gas generating facility in Texas for $ million. The Company recorded a gain on the sale of $ million.

Sale of Astoria

On January 6, 2023, the Company closed on the sale of land and related generation assets from the Astoria site, within the East region of operations, for proceeds of $ million, subject to transaction fees of $ million and certain indemnifications, resulting in a $ million gain. As part of the transaction, NRG entered into an agreement to lease the land back for the purpose of operating the Astoria gas turbines. Decommissioning was completed in December 2023 and the lease agreement has been terminated.

2022 Dispositions

Sale of Watson

On June 1, 2022, the Company closed on the sale of its % ownership in the Watson natural gas generating facility for $ million. The Company recorded a gain on the sale of $ million.

2021 Dispositions

Sale of MW of Fossil generating assets

On December 1, 2021, the Company closed the previously announced sale of approximately MWs of fossil generating assets from its East and West regions to Generation Bridge, an affiliate of ArcLight Capital Partners. Proceeds of $ million were reduced by working capital and other adjustments of $ million, resulting in net proceeds of $ million. The Company recorded a gain of $ million from the sale, which includes the $ million indemnification liability recorded as discussed below. As part of the transaction, NRG entered into a tolling agreement for the MW Arthur Kill plant in New York City through April 2025.

As part of the agreement to sell the fossil generating assets, NRG has agreed to indemnify Generation Bridge for certain future environmental compliance costs up to $ million. The indemnity term will expire on December 1, 2028. The Company has recorded the liability within accrued expenses and other current liabilities and other non-current liabilities.

Sale of Agua Caliente

On February 3, 2021, the Company closed on the sale of its % ownership in the Agua Caliente solar project to Clearway Energy, Inc. for $ million. NRG recognized a gain on the sale of $ million, including cash disposed of $ million.

108

Note 5 —

$ $ $ Other long-term debt, including current portion

Total long-term debt, including current portion(a)

$ $ $ $

(a)Excludes deferred financing costs, which are recorded as a reduction to long-term debt on the Company's consolidated balance sheets

The fair value of the Company's publicly-traded long-term debt and the Vivint Smart Home Senior Secured Term Loan are based on quoted market prices and are classified as Level 2 within the fair value hierarchy.

Fair Value Accounting under ASC 820

ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:

•Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. NRG's financial assets and liabilities utilizing Level 1 inputs include active exchange-traded securities, energy derivatives, and trust fund investments.

•Level 2 — inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. NRG's financial assets and liabilities utilizing Level 2 inputs include fixed income securities, exchange-based derivatives, and over the counter derivatives such as swaps, options and forward contracts.

•Level 3 — unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. NRG's financial assets and liabilities utilizing Level 3 inputs include infrequently-traded, non-exchange-based derivatives and commingled investment funds, and are measured using present value pricing models.

In accordance with ASC 820, the Company determines the level in the fair value hierarchy within which each fair value measurement in its entirety falls, based on the lowest level input that is significant to the fair value measurement in its entirety.

109

$ $ $ Derivative assets: Interest rate contracts Foreign exchange contracts Commodity contracts Equity securities measured using net asset value practical expedient (classified within other non-current assets)

Total assets

$ $ $ $ Derivative liabilities: Interest rate contracts$ $ $ $ Foreign exchange contracts

Commodity contracts

Consumer Financing Program Total liabilities$ $ $ $

110

$ $ $ Nuclear trust fund investments:Cash and cash equivalents U.S. government and federal agency obligations Federal agency mortgage-backed securities Commercial mortgage-backed securities Corporate debt securities Equity securities Foreign government fixed income securities Other trust fund investments (classified within other non-current assets):U.S. government and federal agency obligations Derivative assets:Foreign exchange contracts Commodity contracts Measured using net asset value practical expedient:Equity securities - nuclear trust fund investments Equity securities (classified within other non-current assets) Total assets$ $ $ $ Derivative liabilities:Foreign exchange contracts$ $ $ $ Commodity contracts Total liabilities$ $ $ $

Total (losses)/gains realized/unrealized included in earnings

() Purchases ())) )()

Gains and losses that are related to the Consumer Financing Program derivative are recorded in other income, net.

Non-derivative fair value measurements

For the year ended December 31, 2022 and through the sale of STP on November 1, 2023, the trust fund investments were held primarily to satisfy NRG's nuclear decommissioning obligations. These trust fund investments held debt and equity securities directly and equity securities indirectly through commingled funds. The fair values of equity securities held directly by the trust funds were based on quoted prices in active markets and were categorized in Level 1. In addition, U.S. government and federal agency obligations were categorized as Level 1 because they traded in a highly liquid and transparent market. The fair values of corporate debt securities were based on evaluated prices that reflected observable market information, such as actual trade information of similar securities, adjusted for observable differences and were categorized in Level 2. Certain equity securities, classified as commingled funds, were analogous to mutual funds, were maintained by investment companies, and held certain investments in accordance with a stated set of fund objectives. The fair value of the equity securities classified as commingled funds were based on net asset values per fund share (the unit of account), derived from the quoted prices in active markets of the underlying equity securities. However, because the shares in the commingled funds were not publicly quoted and not traded in an active market, the commingled funds were measured using net asset value practical expedient. See also Note 7, Nuclear Decommissioning Trust Fund.

Derivative fair value measurements

The Company's contracts consist of non-exchange-traded contracts valued using prices provided by external sources and exchange-traded contracts with readily available quoted market prices. Beginning in of the fourth quarter of 2023 and as of December 31, 2023, the fair value of non-exchange traded contracts were based on consensus pricing provided by independent pricing services. The pricing data was compiled from market makers with longer dated tenors as compared to broker quotes, enhancing reliability and increasing transparency.

Prior to the fourth quarter of 2023, the Company valued derivatives based on price quotes from brokers in active markets who regularly facilitate those transactions. For the majority of markets that NRG participates in, the Company would receive broker quotes from multiple sources and reflected the average of the bid-ask mid-point prices. The terms for which such price information is available vary by commodity, region and product. The Company believes both sources of price quotes are executable.

The remainder of the assets and liabilities represents contracts for which external sources or observable market quotes are not available. These contracts are valued based on various valuation techniques including but not limited to internal models based on a fundamental analysis of the market and extrapolation of observable market data with similar characteristics. As of December 31, 2023, contracts valued with prices provided by models and other valuation techniques make up % of derivative assets and % of derivative liabilities. As a result of NRG switching to consensus pricing as of December 31, 2023, there was a significant decrease in the number of contracts valued with prices provided by models and other valuation techniques. The fair value of each contract is discounted using a risk free interest rate. In addition, the Company applies a credit reserve to reflect credit risk, which for foreign exchange contracts and interest rate swaps is calculated utilizing the bilateral method based on published default probabilities. For commodities, to the extent that NRG's net exposure under a specific master agreement is an asset, the Company uses the counterparty's default swap rate. If the exposure under a specific master agreement is a liability, the Company uses NRG's default swap rate. For foreign exchange contracts, interest rate swaps, and commodities, the credit reserve is added to the discounted fair value to reflect the exit price that a market participant would be willing to receive to assume NRG's liabilities or that a market participant would be willing to pay for NRG's assets. As of December 31, 2023, the credit reserve resulted in a $ million decrease primarily within cost of operations. As of December 31, 2022, the credit reserve resulted in $ million decrease primarily within cost of operations.

112

$ Discounted Cash FlowForward Market Price ($ per MMBtu)$ $ $ Power Contracts Discounted Cash FlowForward Market Price ($ per MWh) Capacity Contracts Discounted Cash FlowForward Market Price ($ per MW/Day) Renewable Energy Certificates Discounted Cash FlowForward Market Price ($ per Certificate) FTRs Discounted Cash FlowAuction Prices ($ per MWh)() Consumer Financing Program Discounted Cash FlowCollateral Default Rates % % %Discounted Cash FlowCollateral Prepayment Rates % % %Discounted Cash FlowCredit Loss Rates % % %$ $

113

$ Discounted Cash FlowForward Market Price ($ per MMBtu)$ $ $ Power Contracts Discounted Cash FlowForward Market Price ($ per MWh) FTRs Discounted Cash FlowAuction Prices ($ per MWh)() $ $

Under the guidance of ASC 815, entities may choose to offset cash collateral posted or received against the fair value of derivative positions executed with the same counterparties under the same master netting agreements. The Company has chosen not to offset positions as defined in ASC 815. As of December 31, 2023, the Company recorded $ million of cash collateral posted and $ million of cash collateral received on its balance sheet.

Concentration of Credit Risk

In addition to the credit risk discussion as disclosed in Note 2, Summary of Significant Accounting Policies, the following item is a discussion of the concentration of credit risk for the Company's financial instruments. Credit risk relates to the risk of loss resulting from non-performance or non-payment by counterparties pursuant to the terms of their contractual obligations. The Company monitors and manages credit risk through credit policies that include: (i) an established credit approval process; (ii) a daily monitoring of counterparties' credit limits; (iii) the use of credit mitigation measures such as margin, collateral, prepayment arrangements, or volumetric limits; (iv) the use of payment netting agreements; and (v) the use of master netting agreements that allow for the netting of positive and negative exposures of various contracts associated with a single counterparty. Risks surrounding counterparty performance and credit could ultimately impact the amount and timing of expected cash flows. The Company seeks to mitigate counterparty risk by having a diversified portfolio of counterparties. The Company also has credit protection within various agreements to call on additional collateral support if and when necessary. Cash margin is collected and held at the Company to cover the credit risk of the counterparty until positions settle.

114

billion and NRG held collateral (cash and letters of credit) against those positions of $ million, resulting in a net exposure of $ billion. NRG periodically receives collateral from counterparties in excess of their exposure. Collateral amounts shown include such excess while net exposure shown excludes excess collateral received. Approximately % of the Company's exposure before collateral is expected to roll off by the end of 2025. Counterparty credit exposure is valued through observable market quotes and discounted at a risk free interest rate. %Financial institutions

Total


Category	Net Exposure (a) (b) (% of Total)
Investment grade		%
Non-Investment grade/Non-Rated
Total		%

(a)Counterparty credit exposure excludes coal transportation contracts because of the unavailability of market prices

(b)The figures in the tables above exclude potential counterparty credit exposure related to RTOs, ISOs, registered commodity exchanges and certain long term contracts

The Company currently has exposure to one wholesale counterparty in excess of % of the total net exposure discussed above as of December 31, 2023. Changes in hedge positions and market prices will affect credit exposure and counterparty concentration.

RTOs and ISOs

Exchange Traded Transactions

Long-Term Contracts

Counterparty credit exposure described above excludes credit risk exposure under certain long term contracts, primarily solar under Renewable PPAs. As external sources or observable market quotes are not always available to estimate such exposure, the Company values these contracts based on various techniques including, but not limited to, internal models based on a fundamental analysis of the market and extrapolation of observable market data with similar characteristics. Based on these valuation techniques, as of December 31, 2023, aggregate credit risk exposure managed by NRG to these counterparties was approximately $ million for the next five years.

Retail Customer Credit Risk

The Company is exposed to retail credit risk through the Company's retail electricity and gas providers, which serve Home and Business customers. Retail credit risk results in losses when a customer fails to pay for services rendered. The losses may result from both nonpayment of customer accounts receivable and the loss of in-the-money forward value. The Company manages retail credit risk through the use of established credit policies that include monitoring of the portfolio and the use of credit mitigation measures such as deposits or prepayment arrangements.

115

million, $ million, and $ million for the years ended December 31, 2023, 2022, and 2021, respectively. During the year ended December 31, 2022, the provision for credit losses included the Company's loss mitigation efforts recognized as income of $ million related to Winter Storm Uri. During the year ended December 31, 2021, the provision for credit losses included $ million of expenses due to the impacts of Winter Storm Uri.

Note 6 —

116

billion of interest rate swaps through 2027 to hedge the floating rate on the Term Loan acquired with the Vivint Smart Home acquisition. Additionally, in the first quarter of 2023, the Company had entered into interest rate swaps to hedge the floating rate on the Revolving Credit Facility extending through 2024, which was fully terminated in conjunction with the pay down of the Revolving Credit Facility.

Consumer Financing Program

Under the Consumer Financing Program, Vivint Smart Home pays a monthly fee to Financing Providers based on either the average daily outstanding balance of the loans or the number of outstanding loans. For certain loans, Vivint Smart Home incurs fees at the time of the loan origination and receives proceeds that are net of these fees. Vivint Smart Home also shares the liability for credit losses, depending on the credit quality of the subscriber. Due to the nature of certain provisions under the Consumer Financing Program, the Company records a derivative liability that is not designated as a hedging instrument and is adjusted to fair value, measured using the present value of the estimated future payments. Changes to the fair value are recorded through other income, net in the consolidated statement of operations. The following represent the contractual future payment obligations with the Financing Providers under the Consumer Financing Program that are components of the derivative:

• Vivint Smart Home pays either a monthly fee based on the average daily outstanding balance of the loans, or the number of outstanding loans, depending on the Financing Provider;

• Vivint Smart Home shares the liability for credit losses depending on the credit quality of the subscriber; and

• Vivint Smart Home pays transactional fees associated with subscriber payment processing.

The derivative is classified as a Level 3 instrument. The derivative positions are valued using a discounted cash flow model, with inputs consisting of available market data, such as market yield discount rates, as well as unobservable internally derived assumptions, such as collateral prepayment rates, collateral default rates and credit loss rates. In summary, the fair value represents an estimate of the present value of the cash flows Vivint Smart Home will be obligated to pay to the Financing Provider for each component of the derivative.

117

Renewables Energy CertificatesCertificates CoalShort Ton Natural GasMMBtu OilBarrels PowerMWh InterestDollars Foreign ExchangeDollars Consumer Financing ProgramDollars

Fair Value of Derivative Instruments

$ $ $ Interest rate contracts - long-term Foreign exchange contracts - current Foreign exchange contracts - long-term Commodity contracts- current Commodity contracts- long-term Consumer Financing Program - current Consumer Financing Program - long-term

Total Derivatives Not Designated as Cash Flow or Fair Value Hedges

$ $ $ $

118

$()$ $ Derivative liabilities() Total interest rate contracts Foreign exchange contracts:Derivative assets$ $()$ $ Derivative liabilities() ()Total foreign exchange contracts$()$ $ $()Commodity contracts:Derivative assets$ $()$()$ Derivative liabilities() ()Total commodity contracts$ $ $ $ Consumer Financing Program:Derivative liabilities$()$ $ $()Total derivative instruments$ $ $ $

Gross Amounts Not Offset in the Statement of Financial Position

(In millions)

Gross Amounts of Recognized Assets/Liabilities

Derivative Instruments

Cash Collateral (Held)/Posted

Net Amount

As of December 31, 2022

Foreign exchange contracts:

Derivative assets

()

Derivative liabilities

()

Total foreign exchange contracts

Commodity contracts:

Derivative assets

()

Derivative liabilities

()

Total commodity contracts

()

Total derivative instruments

()

119

)$()$()

Reversal of acquired loss positions related to economic hedges

Net unrealized (losses)/gains on open positions related to economic hedges

()

Total unrealized mark-to-market (losses)/gains for economic hedging activities

()

Reversal of previously recognized unrealized losses/(gains) on settled positions related to trading activity

()

Reversal of acquired (gain) positions related to trading activity

() $ $ $ $ Realized losses()()()Proceeds from sale of securities

121

Note 8 —

$ Coal Natural gas Spare parts Finished goods Total Inventory$ $

Note 9 —

- years

Land and improvements Nuclear fuel

years

Hardware and office equipment and furnishings

- years

Construction in progress Total property, plant, and equipment Accumulated depreciation()() Net property, plant, and equipment $ $

Depreciation expense of property, plant and equipment recorded during the years ended December 31, 2023, 2022 and 2021 was $ million, $ million and $ million, respectively.

Note 10 —

122

$ $ Amortization of right-of-use assets Interest on lease liabilities Operating lease cost Short-term lease cost Variable lease cost Sublease income()()()Total lease cost$ $ $

Other information:


	For the Year Ended December 31,
(In millions)	2023	2022	2021

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	$	$

Financing cash flows from finance leases
Right-of-use assets obtained in exchange for new finance lease liabilities
Right-of-use assets obtained in exchange for new operating lease liabilities

Lease Term and Discount Rate for leases:


	December 31, 2023		December 31, 2022
Finance leases:
Weighted average remaining lease term (in years)
Weighted average discount rate		%		%

Operating leases:
Weighted average remaining lease term (in years)
Weighted average discount rate		%		%

2025 2026 2027 2028 Thereafter Total undiscounted lease payments$ Less: present value adjustment()Total discounted lease payments$

123

Note 11 —

million on its equity method investment in Gladstone within the West/Services/Other segment as a result of changes in the long-term outlook of the Gladstone facility, prompted by evolving energy policy conditions in Australia and an assessment of the long-term operational landscape of the facility, which concluded with the annual budget process. For further discussion of the Gladstone investment, see Note 17, Investments Accounted for by the Equity Method and Variable Interest Entities.

Other Impairments — The Company additionally recorded impairment losses related to property plant and equipment and leases of $ million, $ million and $ million in the Texas, East and West/Services/Other segments, respectively.

2022 Impairment Losses

Astoria Redevelopment Impairment — During the third quarter of 2022, the Company entered into a purchase and sale agreement for the sale of the land and related assets at the Astoria generating site and the planned withdrawal and cancellation of its proposed Astoria redevelopment project. As a result, the Company impaired $ million of Astoria project spend in the East segment. For further discussion of the transaction, see Note 4, Acquisitions and Dispositions.

PJM Asset Impairments — During the second quarter of 2022, the results of the PJM Base Residual Auction for the 2023/2024 delivery year were released leading the Company to revise its long-term view of certain facilities and announce the planned retirement of the Joliet generating facility. The Company considered the near-term retirement date of Joliet and the decline in PJM capacity prices to be a trigger for impairment and performed impairment tests on the PJM generating assets and the goodwill associated with Midwest Generation. The Company measured the impairment losses on the PJM generating assets and Midwest Generation goodwill as the difference between the carrying amount and the fair value of the PJM generating assets and Midwest Generation reporting unit, respectively. Fair values were determined using an income approach in which the Company applied a discounted cash flow methodology to the long-term budgets for the plants and reporting unit. Significant inputs impacting the income approach include the Company's long-term view of capacity and fuel prices, projected generation, the physical and economic characteristics of each plant and the reporting unit as a whole, and the discount rate applied to the after-tax cash flow projections. Impairment losses of $ million and $ million were recorded in the East segment on the PJM generating assets and Midwest Generation goodwill, respectively.

Other Impairments — The Company additionally recorded impairment losses of $ million in the East segment.

2021 Impairment Losses

During the fourth quarter of 2021, the Company completed its annual budget and analyzed the corresponding impact on estimated cash flows associated with its long-lived assets. The fair value of the assets was determined using an income approach by applying a discounted cash flow methodology to the long-term budget for the facility. The income approach utilized estimates of after-tax cash flows, which were Level 3 fair value measurements, and included key inputs such as forecasted power prices, fuel costs, operating and maintenance costs, plant investment capital expenditures and discount rates.

Joliet —The Company recognized an impairment loss of $ million in the East segment as a result of changes in the long-term outlook of the Joliet facility prompted by market conditions and an assessment of various alternatives for the long-term operational landscape of the facility including the impact of the CEJA in Illinois, which concluded with the annual budget process.

Other Impairments — The Company additionally recorded impairment losses of $ million and $ million related to various power plants in the East and West/Service/Other segments, respectively.

The Company also recorded the following impairment in 2021 based on a specific triggering event that occurred using the same methodology previously discussed:

PJM Asset Impairments — During the second quarter of 2021, the results of the PJM Base Residual Auction for the 2022/2023 delivery year were released leading the Company to announce the near-term retirement of a significant portion of its PJM coal generating assets in June 2022. The Company considered the decline in PJM capacity prices and the near-term retirement dates of certain assets to be a trigger for impairment and performed impairment tests on the PJM generating assets and the goodwill associated with Midwest Generation. Impairment losses of $ million and $ million were recorded in the East segment on the PJM generating assets and Midwest Generation goodwill, respectively.

124

Note 12 —

$ $ $ $ Impairment losses () — ()Asset sales() — ()Foreign currency translation ()— ()

Balance as of December 31, 2022

$ $ $ $ $ Goodwill resulted from the acquisition of Vivint ) ()() ) ()) )

Intangible assets held-for-sale — From time to time, management may authorize the transfer from the Company's emission bank of emission allowances held-for-use to intangible assets held-for-sale. Emission allowances held-for-sale are included in other non-current assets on the Company's consolidated balance sheet and are not amortized, but rather expensed as sold. As of December 31, 2023 and 2022, the value of emission allowances held-for-sale was $ million and $ million, respectively, within the Corporate segment. Once transferred to held-for-sale, these emission allowances are prohibited from moving back to held-for-use.

127

Note 13 —

$ Senior Notes, due 2028 Senior Notes, due 2029 Senior Notes, due 2029 Senior Notes, due 2031 Senior Notes, due 2032

Convertible Senior Notes, due 2048(a)

Senior Secured First Lien Notes, due 2024 Senior Secured First Lien Notes, due 2025 Senior Secured First Lien Notes, due 2027 Senior Secured First Lien Notes, due 2029 Senior Secured First Lien Notes, due 2033 Tax-exempt bonds

Subtotal recourse debt Non-recourse debt:Vivint Smart Home Senior Notes, due 2029 Vivint Smart Home Senior Secured Notes, due 2027 Vivint Smart Home Senior Secured Term Loan, due 2028

SOFR +

Subtotal all non-recourse debt

Subtotal long-term debt (including current maturities)

Finance leases variousSubtotal long-term debt and finance leases (including current maturities) Less current maturities()()Less debt issuance costs()()Discounts()()Total long-term debt and finance leases$ $

(a)As of the ex-dividend date of January 31, 2024, the Convertible Senior Notes were convertible at a price of $, which is equivalent to a conversion rate of approximately 24.0763 shares of common stock per $1,000 principal amount

Debt includes the following discounts:


	As of December 31,
(In millions)	2023		2022
Senior Secured First Lien Notes, due 2024, 2025, 2027, 2029 and 2033	$	()	$	()
Vivint Smart Home Senior Notes, due 2029	()
Vivint Smart Home Senior Secured Notes, due 2027	()
Vivint Smart Home Senior Secured Term Loan, due 2028	()
Total discounts	$	()	$	()

128

2025 2026 2027 2028 Thereafter Total$

Recourse Debt

Revolving Credit Facility

On February 14, 2023 (the “Revolving Credit Facility Sixth Amendment Effective Date”), the Company amended its Revolving Credit Facility to: (i) increase the existing revolving commitments thereunder by $ million (the “Initial Incremental Commitment”), (ii) extend the maturity date of a portion of the revolving commitments thereunder to February 14, 2028, (iii) transition the benchmark rate applicable to revolving loans from LIBOR to SOFR and (iv) make certain other amendments to the terms of the Revolving Credit Facility for purposes of, among other things, providing additional flexibility.

On March 13, 2023 (the “Revolving Credit Facility Seventh Amendment Effective Date”), the Company further amended its Revolving Credit Facility to increase the existing revolving commitments by an additional $ million (together with the Initial Incremental Commitment, the "Incremental Commitment").

After giving effect to the Incremental Commitment, the Company had a total of $ billion of revolving commitments available under the Revolving Credit Facility. The full amount of the Initial Incremental Commitment was made available from and after the Revolving Credit Facility Sixth Amendment Effective Date and the full amount of the Incremental Commitment was made available from and after the Revolving Credit Facility Seventh Amendment Effective Date. A portion of the non-extended revolving commitments terminated on July 5, 2023, with the remaining portion thereof terminating on May 28, 2024, unless otherwise extended.

The Revolving Credit Facility is guaranteed by NRG’s existing and future direct and indirect subsidiaries, with customary and agreed-upon exceptions for, among other exceptions, unrestricted subsidiaries, foreign subsidiaries, project subsidiaries, immaterial subsidiaries, captive insurance subsidiaries and securitization vehicles. The Revolving Credit Facility is also secured by a first priority (subject to certain customary permitted liens) perfected security interest in a substantial portion of the property and assets owned by NRG and its subsidiaries that are guarantors under the Revolving Credit Facility, subject to certain exceptions that include, among other things, the capital stock of certain specified subsidiaries, including unrestricted subsidiaries and certain excluded subsidiaries, equity interests in excess of % of the total outstanding voting equity interests of certain foreign subsidiaries, equity interests the pledge of which is prohibited by applicable agreements binding on such subsidiaries and other assets that may be designated by NRG as excluded from the collateral that, when taken together with all other assets so designated since the Revolving Credit Facility Sixth Amendment Effective Date, have an aggregate fair market value not exceeding $ million. The Revolving Credit Facility is secured on a pari passu basis with certain interest rate, foreign currency and commodity hedging obligations of NRG, the Senior Secured First Lien Notes and certain other indebtedness. The collateral securing the Revolving Credit Facility will be released at the Company's request if both the senior unsecured long-term debt securities of the Company and the revolving loans under the Revolving Credit Facility are rated investment grade by any two of the three rating agencies and the satisfaction of certain other conditions, subject to reversion if such rating agencies withdraw such investment grade rating or downgrade such rating below investment grade (or, with respect to the revolving loans, crease to publish a rating).

The Revolving Credit Facility contains customary covenants, which, among other things, require NRG to maintain a maximum first lien leverage ratio on a consolidated basis when amounts outstanding under the Revolving Credit Facility (subject to certain exceptions) exceed a certain threshold and limit, subject to certain exceptions, NRG’s ability to:

•incur indebtedness and liens and enter into sale and lease-back transactions;

•make investments, loans and advances;

•return capital to shareholders;

•repay material subordinated indebtedness;

•consummate mergers, consolidations and asset sales;

129

outstanding borrowings and there were $ million in letters of credit issued under the Revolving Credit Facility.

Senior Notes

Issuance of 2033 Senior Secured First Lien Notes

On March 9, 2023, the Company issued $ million of aggregate principal amount of % senior secured first lien notes due 2033 (the "2033 Senior Secured First Lien Notes"). The 2033 Senior Secured First Lien Notes are senior secured obligations of NRG and are guaranteed by certain of its subsidiaries that guarantee indebtedness under the Revolving Credit Facility. The 2033 Senior Secured First Lien Notes are secured by a first priority security interest in the same collateral that is pledged for the benefit of the lenders under the Revolving Credit Facility, which collateral consists of a substantial portion of the property and assets owned by the Company and the guarantors. The collateral securing the 2033 Senior Secured First Lien Notes will be released at the Company’s request if the senior unsecured long-term debt securities of the Company are rated investment grade by any two of the three rating agencies and the satisfaction of certain other conditions, subject to reversion if such rating agencies withdraw such investment grade rating or downgrade such rating below investment grade. Interest is paid semi-annually beginning on September 15, 2023 until the maturity date of March 15, 2033. The proceeds of the 2033 Senior Secured First Lien Notes, along with cash on hand and proceeds from certain other financings, were used to fund the acquisition of Vivint Smart Home.

Senior Note Redemptions

During the year ended December 31, 2023, the Company redeemed $ million in aggregate principal amount of its % Senior Notes, due 2032, for $ million, which included the payment of $ million of accrued interest, using cash on hand at an average early redemption percentage of %. In connection with the redemption, a $ million gain on debt extinguishment was recorded, which included the write-off of previously deferred financing costs and other fees of $ million.

During the year ended December 31, 2021, the Company redeemed approximately $ billion in aggregate principal amount of its Senior Notes for $ billion using the proceeds of the 2032 Senior Notes and cash on hand, as detailed in the table below. In connection with the redemptions, a $ million loss on debt extinguishment was recorded, which included the write-off of previously deferred financing costs of $ million.

% Senior Notes, due 2026$ $ %

% Senior Notes, due 2027

%Total$ $

(a)Includes accrued interest of $ million for redemptions for the year ended December 31, 2021

2048 Convertible Senior Notes

Accounting for Convertible Senior Notes — Upon issuance in 2018, the Convertible Senior Notes were separated into liability and equity components for accounting purposes. The carrying amount of the liability component was initially calculated by measuring the fair value of similar liabilities that do not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the Convertible Senior Notes. This difference represented the debt discount that was amortized to interest expense over , which was determined to be the expected life of the Convertible Senior Notes, using the effective interest rate method. The equity component was recorded in additional paid-in capital and was not remeasured as it continued to meet the conditions for equity classification.

Following the adoption of ASU 2020-06 as of January 1, 2022, the Company no longer records the conversion feature of its convertible senior notes in equity. Instead, the Company combined the previously separated equity component with the liability component, which together is now classified as debt, thereby eliminating the subsequent amortization of the debt discount as interest expense. As a result of the provisions of the amended guidance, the Company recorded a $ million decrease to additional paid-in capital, a $ million decrease to debt discount, a $ million increase to retained earnings, and a $ million decrease to long-term deferred tax liabilities.

Modification to Convertible Senior Notes — On February 22, 2022, the Company irrevocably elected to eliminate the right to settle conversions only in shares of the Company's common stock, such that any conversion after such date, the Company will pay cash per $1,000 principal amount and will settle in cash or a combination of cash and the Company's common stock for the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount.

130

per common share, which is equivalent to a conversion rate of approximately 23.9079 shares of common stock per $1,000 principal amount of Convertible Senior Notes. As of December 31, 2022, the Convertible Senior Notes were convertible at a price of $ per common share, which is equivalent to a conversion rate of approximately 23.0116 shares of common stock per $1,000 principal amount of Convertible Senior Notes. The net carrying amounts of the Convertible Senior Notes as of December 31, 2023 and December 31, 2022 were $ million and $ million, respectively. The Convertible Senior Notes mature on June 1, 2048, unless earlier repurchased, redeemed or converted in accordance with their terms. The Convertible Senior Notes are convertible at the option of the holders under certain circumstances. Prior to the close of business on the business day immediately preceding December 1, 2024, the Convertible Senior Notes will be convertible only upon the occurrence of certain events and during certain periods, including, among others, during any calendar quarter (and only during such calendar quarter) if the last reported sales price per share of the Company's common stock exceeds % of the conversion price for each of at least trading days, whether or not consecutive, during the consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter. Thereafter during specified periods as follows:

•from December 1, 2024 until the close of business on the second scheduled trading day immediately before June 1, 2025; and

•from December 1, 2047 until the close of business on the second scheduled trading day immediately before the maturity date

All conversions with a conversion date that occurs within the specific periods above will be settled after such period pursuant to the terms of the indenture.

$ $

Amortization of discount and deferred finance costs(a)

Total$ $ $ Effective Interest Rate % % %

(a)Upon adoption of ASU 2020-06 on January 1, 2022, which resulted in the removal of the debt discount, no further debt discount amortization is being recorded

Senior Notes Early Redemption

As of December 31, 2023, NRG had the following outstanding issuances of senior notes with an early redemption feature, or Senior Notes:

i.% senior notes, issued August 2, 2016 and due January 15, 2027, or the 2027 Senior Notes;

ii.% senior notes, issued December 7, 2017 and due January 15, 2028, or the 2028 Senior Notes;

iii.% senior notes, issued May 24, 2019 and due June 15, 2029, or the 2029 Senior Notes;

iv.% senior notes, issued December 2, 2020 and due February 15, 2029, or the % 2029 Senior Notes;

v.% senior notes, issued December 2, 2020 and due February 15, 2031, or the 2031 Senior Notes; and

vi.% senior notes, issued August 23, 2021 and due February 15, 2032, or the 2032 Senior Notes.

The indentures and the forms of notes provide, among other things, that the Senior Notes will be senior unsecured obligations of the Company. The indentures also provide for customary events of default, which include, among others: nonpayment of principal or interest; breach of other agreements in the indentures; defaults in failure to pay certain other indebtedness; the rendering of judgments to pay certain amounts of money against the Company and its subsidiaries; the failure of certain guarantees to be enforceable; and certain events of bankruptcy or insolvency. Generally, if an event of default occurs, the trustee or the holders of at least % or % (depending on the series of Senior Notes) in principal amount of the then outstanding series of Senior Notes may declare all of the Senior Notes of such series to be due and payable immediately. The terms of the indentures, among other things, limit the Company's ability and certain of its subsidiaries' ability to return capital to stockholders, grant liens on assets to lenders and incur additional debt. Interest is payable semi-annually on the Senior Notes until their maturity dates.

131

%July 15, 2024 and thereafter %

2028 Senior Notes

%January 15, 2025 to January 14, 2026 %January 15, 2026 and thereafter %

% 2029 Senior Notes

At any time prior to June 15, 2024, the Company may redeem all or a part of the % 2029 Senior Notes, at a redemption price equal to % of the principal amount of the notes redeemed, plus accrued and unpaid interest to the redemption date, plus a premium. The premium is the greater of: (i) % of the principal amount of the notes; or (ii) the excess of the principal amount of the note over the following: the present value of % of the note, plus interest payments due on the note through June 15, 2024 (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus % over the principal amount of the note.

%June 15, 2025 to June 14, 2026 %June 15, 2026 to June 14, 2027 %June 15, 2027 and thereafter %

% 2029 Senior Notes

%February 15, 2025 to February 14, 2026 %February 15, 2026 and thereafter %

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% of the principal amount of the notes redeemed, plus accrued and unpaid interest to the redemption date, plus a premium. The premium is the greater of: (i) % of the principal amount of the note; or (ii) the excess of the present value of % of the note, plus interest payments due on the note through February 15, 2026 (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus % over the principal amount of the note. %February 15, 2027 to February 14, 2028 %February 15, 2028 to February 14, 2029 %February 15, 2029 and thereafter %

2032 Senior Notes

At any time prior to August 15, 2024, the Company may redeem up to % of the aggregate principal amount of the 2032 Senior Notes, at a redemption price equal to % of the principal amount of the notes redeemed, plus accrued and unpaid interest, with an amount equal to the net cash proceeds of certain equity offerings, provided that at least % of the aggregate principal amount remains outstanding immediately after the occurrence of such redemption. At any time prior to February 15, 2027, the Company may redeem all or a part of the 2032 Senior Notes, at a redemption price equal to % of the principal amount of the notes redeemed, plus accrued and unpaid interest to the redemption date, plus a premium. The premium is the greater of: (i) % of the principal amount of the notes; or (ii) the excess of (A) the present value of (1) the redemption price of the note at February 15, 2027 (such redemption price being set forth in the table appearing below in the column “Redemption Percentage (If Sustainability Performance Target has not been satisfied and/or confirmed by External Verifier)” unless the Sustainability Performance Target has been satisfied in respect of the year ended December 31, 2025 and the Company has provided confirmation thereof to the trustee together with a related confirmation by the External Verifier by the date that is at least 15 days prior to August 15, 2026 in which case the redemption price shall be as set forth in the column “Redemption Percentage (If Sustainability Performance Target has been satisfied and confirmed by External Verifier)”) plus (2) interest payments due on the note through February 15, 2027 (excluding accrued but unpaid interest to the redemption date) computed using a discount rate equal to the Treasury Rate as of such redemption date plus %, over (B) the principal amount of the note.

% %2028 % %2029 % %2030 and thereafter % %

Receivables Facility

In 2020, NRG Receivables LLC, a bankruptcy remote, special purpose, indirect wholly owned subsidiary, ("NRG Receivables") entered into the Receivables Facility, subject to adjustments on a seasonal basis, with issuers of asset-backed commercial paper and commercial banks (the "Lenders"). The assets of NRG Receivables are first available to satisfy the claims of the Lenders before making payments on the subordinated note and equity issued by NRG Receivables. The assets of NRG Receivables are not available to the Company and its subsidiaries or creditors unless and until distributed by NRG Receivables. Under the Receivables Facility, certain indirect subsidiaries of the Company sell their accounts receivables to NRG Receivables, subject to certain terms and conditions. In turn, NRG Receivables grants a security interest in the purchased receivables to the Lenders as collateral for cash borrowings and issuances of letters of credit. Pursuant to the Performance Guaranty, the Company has guaranteed, for the benefit of NRG Receivables and the Lenders, the payment and performance by each indirect subsidiary of its respective obligations under the Receivables Facility. The accounts receivables remain on the

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billion to $ billion (adjusted seasonally) and (iii) add a new originator. On October 6, 2023, the Receivables Facility was further amended to replace the benchmark interest rate of the Receivable Facility's subordinated note from LIBOR to SOFR. The weighted average interest rate related to usage under the Receivables Facility as of December 31, 2023 was %. As of December 31, 2023, there were outstanding borrowings and there were $ billion in letters of credit issued under the Receivables Facility.

Repurchase Facility

In 2020, the Company entered into the Repurchase Facility related to the Receivables Facility. Under the Repurchase Facility, the Company can currently borrow up to $ million, collateralized by a subordinated note issued by NRG Receivables to NRG Retail LLC in favor of the originating entities representing a portion of the balance of receivables sold to NRG Receivables under the Receivables Facility.

In addition, in connection with the amendments to the Receivables Facility, on June 22, 2023, the Company and the originators thereunder renewed the existing uncommitted Repurchase Facility. Such renewal, among other things, extended the maturity date to June 21, 2024 and joined an additional originator to the Repurchase Facility. On October 6, 2023, the Repurchase Facility was further amended to reflect the concurrent amendment to the Receivables Facility's subordinated note. The Repurchase Facility has commitment fee and borrowings will be drawn at SOFR + %. As of December 31, 2023, there were outstanding borrowings under the Repurchase Facility.

Bilateral Letter of Credit Facilities

On May 19, 2023, May 30, 2023 and October 17, 2023 the Company increased the size of its bilateral letter of credit facilities by $ million, $ million and $ million, respectively, to provide additional liquidity and to allow for the issuance of up to $ million of letters of credit. These facilities are uncommitted. As of December 31, 2023, $ million was issued under these facilities.

$ NRG Indian River Power 2020, tax exempt bonds, due 2045 NRG Dunkirk 2020, tax exempt bonds, due 2042 City of Texas City, tax exempt bonds, due 2045 Fort Bend County, tax exempt bonds, due 2038 Fort Bend County, tax exempt bonds, due 2042 Total$ $

Dunkirk Bonds

On April 3, 2023, NRG remarketed $ million in aggregate principal amount of % tax-exempt refinancing bonds of the Chautauqua County Capital Resource Corporation (the "Dunkirk Bonds"). The Dunkirk Bonds are guaranteed on a first-priority basis by each of NRG's current and future subsidiaries that guarantee indebtedness under the Revolving Credit Facility. The Dunkirk Bonds are secured by a first priority security interest in the same collateral that is pledged for the benefit of the lenders under the Revolving Credit Facility, which consists of a substantial portion of the property and assets owned by NRG and the guarantors. The collateral securing the Dunkirk Bonds will, at the request of NRG, be released if NRG satisfies certain conditions, including receipt of an investment grade rating on its senior, unsecured debt securities from two out of the three rating agencies, subject to reversion if those rating agencies withdraw their investment grade rating of the Dunkirk Bonds or any of NRG's senior, unsecured debt securities or downgrade such ratings below investment grade. The Dunkirk Bonds are subject to mandatory tender and purchase on April 3, 2028 and have a final maturity date of April 1, 2042.

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million pre-capitalized trust securities redeemable July 31, 2028 (the “P-Caps”). The Trust invested the proceeds from the sale of the P-Caps in a portfolio of principal and interest strips of U.S. Treasury securities (the “Eligible Treasury Assets”). The P-Caps replaced the Company’s existing pre-capitalized trust securities redeemable 2023 issued by Alexander Funding Trust, which matured on November 15, 2023.

In connection with the sale of the P-Caps, the Company and the guarantors named therein entered into a facility agreement, dated August 29, 2023 (the “Facility Agreement”), with the Trust and Deutsche Bank Trust Company Americas, as notes trustee (the “Notes Trustee”). Under the Facility Agreement, the Company has the right, from time to time, to issue to the Trust, and to require the Trust to purchase from the Company, on one or more occasions (the “Issuance Right”), up to $ million aggregate principal amount of the Company’s % Senior Secured First Lien Notes due 2028 (the “P-Caps Secured Notes”) in exchange for all or a portion of the Eligible Treasury Assets corresponding to the portion of the Issuance Right under the Facility Agreement being exercised at such time. The Company pays to the Trust a facility fee equal to % applied to the unexercised portion of the Issuance Right on a semi-annual basis.

The P-Caps are to be redeemed by the Trust on July 31, 2028 or earlier upon an early redemption of the P-Caps Secured Notes. Following any distribution of P-Caps Secured Notes to the holders of the P-Caps, the Company may similarly redeem such P-Caps Secured Notes, in whole or in part, at the redemption price described in the P-Caps Indenture (as defined below), plus accrued but unpaid interest to, but excluding, the date of redemption. Any P-Caps Secured Notes outstanding and held by the Trust as a result of the exercise of the Issuance Right that remain outstanding will also mature on July 31, 2028.

The Issuance Right will be exercised automatically in full if (i) the Company fails to pay the facility fee when due or any amount due and owing under the trust expense reimbursement agreement or fails to purchase and pay for any Eligible Treasury Assets that are due and not paid on their payment date and such failure is not cured within days or (ii) upon certain bankruptcy events of the Company. The Company will be required to mandatorily exercise the Issuance Right if certain mandatory exercise events occur upon the terms and conditions set forth in the Facility Agreement.

The P-Caps Secured Notes that may be sold to the Trust from time to time will be governed by the base indenture, dated August 29, 2023 (the “Base Indenture”), between the Company and the Notes Trustee, as supplemented by the supplemental indenture, dated August 29, 2023 (the “Supplemental Indenture” and, together with the Base Indenture, the “P-Caps Indenture”), among the Company, the guarantors named therein and the Notes Trustee.

The P-Caps Secured Notes will, if sold to the Trust, be guaranteed on a first-priority basis by each of the Company’s subsidiaries that guarantee indebtedness under the Revolving Credit Facility. The P-Caps Secured Notes will, if sold to the Trust, be secured by a first priority security interest in the same collateral that is pledged for the benefit of the lenders under the Revolving Credit Facility, which consists of a substantial portion of the property and assets owned by the Company and the guarantors. The collateral securing the P-Caps Secured Notes will be released at the Company’s request if the senior unsecured long-term debt securities of the Company are rated investment grade by any two of the three rating agencies, subject to reversion if such rating agencies downgrade such rating below investment grade or withdraw such investment grade rating.

In connection with the issuance of the P-Caps, on August 29, 2023, the Company entered into a letter of credit facility agreement (the “LC Agreement”) with Deutsche Bank Trust Company Americas, as collateral agent (the “Collateral Agent”) and administrative agent, and certain financial institutions (the “LC Issuers”) for the issuance of letters of credit in an aggregate amount not to exceed $ million. The LC Agreement replaced the Company’s existing letter of credit facility agreement, effective August 29, 2023. In addition, on August 29, 2023, the Trust entered into a pledge and control agreement (the “Pledge Agreement”), among the Company, the Trust and the Collateral Agent, under which the Company and the Trust agreed to grant a security interest over the Eligible Treasury Assets in favor of the Collateral Agent for the benefit of the LC Issuers. Pursuant to the LC Agreement and the Pledge Agreement, the Collateral Agent is entitled to withdraw Eligible Treasury Assets in the amount of any drawn letters of credit issued pursuant to the LC Agreement from the Company's and the Trust’s pledged accounts, following notice to the Company, in the event the Company has failed to reimburse such drawn amounts and the LC Issuers have the right to instruct the Collateral Agent to enforce the pledge over the Eligible Treasury Assets upon the occurrence of any event of default under the LC Agreement.

Non-recourse Debt

The following are descriptions of certain indebtedness of NRG's subsidiaries. All of NRG's non-recourse debt is secured by the assets in the subsidiaries as further described below.

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% senior secured notes due 2027, % senior notes due 2029, senior secured term loan credit agreement and senior secured revolving credit facility.

Vivint Smart Home 2027 Senior Secured Notes

Vivint Smart Home has outstanding $ million aggregate principal amount of % senior secured notes due 2027 (the "Vivint Smart Home 2027 Senior Secured Notes"). The Vivint Smart Home 2027 Senior Secured Notes are senior secured obligations of APX and are guaranteed by APX Group Holdings, Inc., each of APX's existing and future wholly owned U.S. restricted subsidiaries (subject to customary exclusions and qualifications) and Vivint Smart Home. Interest on the Vivint Smart Home 2027 Senior Secured Notes is paid semi-annually in arrears on February 15 and August 15 until the maturity date of February 15, 2027.

Vivint Smart Home 2029 Senior Notes

Vivint Smart Home has outstanding $ million aggregate principal amount of % senior notes due 2029 (the "Vivint Smart Home 2029 Senior Notes"). The Vivint Smart Home 2029 Senior Notes are senior unsecured obligations of APX and are guaranteed by APX Group Holdings, Inc., each of APX's existing and future wholly owned U.S. restricted subsidiaries (subject to customary exclusions and qualifications) and Vivint Smart Home. Interest on the Vivint Smart Home 2029 Senior Notes is paid semi-annually in arrears on January 15 and July 15 until the maturity date of July 15, 2029.

Vivint Smart Home Senior Secured Credit Facilities

The Vivint Smart Home senior secured credit agreement (the “Vivint Smart Home Credit Agreement”) provides for (i) a term loan facility in an initial aggregate principal amount of $ billion (the “Vivint Smart Home Term Loan Facility”, and the loans thereunder, the “Vivint Smart Home Term Loans”) and (ii) a revolving credit facility in an initial aggregate principal amount of $ million (the “Vivint Smart Home Revolving Credit Facility,” and the loans thereunder, the “Vivint Smart Home Revolving Loans”).

All of APX’s obligations under the Vivint Smart Home Credit Agreement are guaranteed by APX Group Holdings, Inc. and each of APX’s existing and future wholly-owned U.S. restricted subsidiaries (subject to customary exclusions and qualifications). The obligations under the Vivint Smart Home Credit Agreement are secured by a first priority (subject to certain customary permitted liens) perfected security interest in (i) substantially all of the present and future tangible and intangible assets of APX, and the guarantors, including without limitation equipment, subscriber contracts and communication paths, intellectual property, general intangibles, investment property, material intercompany notes and proceeds of the foregoing, subject to permitted liens and other customary exceptions, (ii) substantially all personal property of APX and the guarantors consisting of accounts receivable arising from the sale of inventory and other goods and services (including related contracts and contract rights, inventory, cash, deposit accounts, other bank accounts and securities accounts), inventory and intangible assets to the extent attached to the foregoing books and records of APX and the guarantors, and the proceeds thereof, subject to permitted liens and other customary exceptions, in each case held by APX and the guarantors and (iii) a pledge of all of the capital stock of APX, each of its subsidiary guarantors and each restricted subsidiary of APX and its subsidiary guarantors (subject to customary exclusions and qualifications), in each case other than certain excluded assets and subject to the limitations and exclusions provided in the applicable collateral documents.

The Vivint Smart Home Credit Agreement contains customary covenants, which, among other things, require APX to maintain a maximum first lien net leverage ratio when amounts outstanding under the Vivint Smart Home Revolving Facility exceed a certain threshold and restrict, subject to certain exceptions, APX and its restricted subsidiaries’ ability to:

•incur or guarantee additional debt or issue disqualified stock or preferred stock;

•pay dividends and make other distributions on, or redeem or repurchase, capital stock;

•make certain investments;

•incur certain liens;

•enter into transactions with affiliates;

•merge or consolidate;

•materially change the nature of their business;

•enter into agreements that restrict the ability of restricted subsidiaries to make dividends or other payments to APX or grant liens on their assets;

•designate restricted subsidiaries as unrestricted subsidiaries;

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billion. As of December 31, 2023, Vivint Smart Home had outstanding borrowings under the Vivint Smart Home Revolving Credit Facility.

Vivint Smart Home Notes Early Redemption

2027 Senior Secured Notes

%February 15, 2025 and thereafter %

2029 Senior Notes

At any time prior to July 15, 2024 and from time to time, APX may redeem the notes in whole or in part, at a redemption price equal to % of the principal amount of the notes redeemed, plus accrued and unpaid interest to the redemption date, plus a premium. The premium is the greater of: (i) % of the principal amount of the note; and (ii) the excess , if any, of (a) the present value at such redemption date of (i) the redemption price of such note at July 15, 2024, plus (ii) interest payments due on the note through July 15, 2024 (excluding accrued but unpaid interest to the redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus % over the then outstanding principal amount of such note.

%July 15, 2025 to July 14, 2026 %July 15, 2026 and thereafter %

Note 14 —

% equity interest in STP on November 1, 2023, the Company no longer has asset retirement obligations related to nuclear decommissioning. Prior to the sale, accretion for the nuclear decommissioning ARO and amortization of the related ARO asset were recorded to the Nuclear Decommissioning Trust Liability and were not included in net income, consistent with regulatory treatment per ASC 980, Regulated Operations.

137

$ $ Revisions in estimates for current obligations() ()Additions Spending for current obligations ()()Accretion Dispositions()()()Balance as of December 31, 2023$ $ $

(a)Total accretion expense related to asset retirement obligations included in the consolidated statement of cash flows includes accretion and revisions in estimates for asset retirement liabilities on non-operating plants

Note 15 —

separate qualified pension plans, the NRG Pension Plan for Bargained Employees, the NRG Pension Plan and the Pension Plan for Employees of Direct Energy Marketing Limited ("DEML"). Participation in the NRG Pension Plan for Bargained Employees depends upon whether an employee is covered by a bargaining agreement. The NRG Pension plan was frozen for non-union employees on December 31, 2018. The Pension Plan for Employees of DEML is closed to new participants.

NRG expects to contribute $ million to the Company's pension plans in 2024, of which $ million relates to the GenOn plan.

NRG Defined Benefit Plans

$ $ Interest cost on benefit obligation Expected return on plan assets()()()Amortization of unrecognized net loss Curtailment and special termination benefits (income)/expense() Net periodic benefit cost/(credit)$ $ $()


	Year Ended December 31,
	Other Postretirement Benefits
(In millions)	2023		2022		2021

Interest cost on benefit obligation	$		$		$
Amortization of unrecognized prior service cost	()		()		()
Amortization of unrecognized net loss
Curtailment expense
Net periodic benefit credit	$	()	$	()	$	()

138

$ $ $ Service cost Interest cost Actuarial loss/(gain) ()()()Employee and retiree contributions Curtailment and special termination benefit loss() () Benefit payments()()()()Foreign exchange translation () Benefit obligation at December 31 Fair value of plan assets at January 1 Actual return on plan assets () Employee and retiree contributions Employer contributions Benefit payments()()()()Foreign exchange translation () Fair value of plan assets at December 31

Funded status at December 31 — excess of obligation over assets

$()$()$()$()

During the year ended December 31, 2023, the actuarial loss of $ million on pension benefits was primarily driven by decreasing discount rates.

During the year ended December 31, 2022, the actuarial gain of $ million on pension benefits was primarily driven by increasing discount rates.

$ $ $ Other non-current liabilities

$ $()$()Prior service cost/(credit) ()()Total accumulated OCI$ $ $()$()

139

)$ $()$()Amortization of net actuarial loss()()()() ))

Defined Contribution Plans

NRG's employees are also eligible to participate in defined contribution 401(k) plans.

$ $

The Company's costs, which are primarily related to employer matching of a portion of employee contributions to defined contribution plans, increased during 2023 primarily due to an increase in retirement saving plan match and the Vivint acquisition.

143

Note 16 —

shares of preferred stock authorized and shares of common stock authorized. () Shares issued under ESPP— — Shares issued under LTIPs— Share repurchases— — ()()Balance as of December 31, 2021— () Shares issued under ESPP— — Shares issued under LTIPs— Share repurchases— — ()()Balance as of December 31, 2022— () Issuance of Series A Preferred Stock — — — Shares issued under ESPP— — Shares issued under LTIPs— Share repurchases— — ()()Retirement of treasury stock— () Balance as of December 31, 2023 () Shares issued under LTIPs— Share repurchases— — ()()Retirement of treasury stock— () — Balance as of February 1, 2024 ()

Common Stock

As of December 31, 2023, NRG had shares of common stock reserved for the maximum number of shares potentially issuable based on the conversion and redemption features of the long-term incentive plans.

Common Stock Dividends

The Company declared and paid $, $ and $ quarterly dividend per common share, or $, $ and $ per share on an annualized basis for 2023, 2022 and 2021 respectively.

In 2021, 2022 and 2023, NRG increased the annual dividend on its common stock to $, $ and $ per share, respectively, representing an % increase each year. The long-term capital allocation policy targets an annual dividend growth rate of %-% per share in subsequent years. Beginning in the first quarter of 2024, NRG will increase the annual dividend by % to $ per share.

The Company's common stock dividends are subject to available capital, market conditions, and compliance with associated laws, regulations and other contractual obligations.

On January 19, 2024, NRG declared a quarterly dividend on the Company's common stock of $ per share, or $ per share on an annualized basis, payable on February 15, 2024, to stockholders of record as of February 1, 2024.

Employee Stock Purchase Plan

The Company offers participation in the ESPP which allows eligible employees to elect to withhold between % and % of their eligible compensation to purchase shares of NRG common stock at the lesser of % of its market value on the offering date or % of the fair market value on the exercise date. An offering date occurs each April 1 and October 1. An exercise date occurs each September 30 and March 31. On April 27, 2023, NRG stockholders approved the adoption of the Amended and Restated Employee Stock Purchase Plan, effective April 1, 2023, which included a reduction in the price at which eligible employees may purchase shares of NRG common stock from % to % of the fair market value of the shares on the applicable date. NRG stockholders also approved an increase of shares available for the issuance under the ESPP. As of December 31, 2023, there remained shares of treasury stock reserved for issuance under the ESPP.

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billion authorization, as part of NRG’s capital allocation policy. On June 22, 2023, following the acquisition of Vivint Smart Home, NRG revised its long-term capital allocation policy to target allocating approximately % of cash available for allocation, after debt reduction, to be returned to shareholders. As part of the revised capital allocation framework, the Company announced an increase to its share repurchase authorization to $ billion, to be executed through 2025.

On November 6, 2023, the Company executed Accelerated Share Repurchase agreements to repurchase a total of $ million of NRG's outstanding common stock. Under the ASR agreements, the Company paid a total of $ million and will receive shares of NRG's common stock on specified settlement dates. The total number of shares purchased pursuant to the ASR agreements will generally be based on the volume-weighted average prices of NRG's common stock during the term of each ASR agreement, less a discount. The Company received initial shares of on November 8, 2023 and an additional shares on December 27, 2023, which were recorded in treasury stock at fair value based on the volume-weighted average closing prices of $ million, with the remaining $ million recorded in additional paid in capital, representing the value of the forward contracts to purchase additional shares. On January 30, 2024, an additional shares were delivered. The ASR period will end in March of 2024 and additional shares may be delivered upon final settlement of the remaining agreements. The total number of shares delivered and the average price paid for all of the shares delivered under the ASR agreements will be determined at the end of the ASR period.

During the year ended December 31, 2023, the Company completed $ billion of share repurchases under the $ billion authorization, including $ million through the ASR and $ million through open market repurchases at an average price of $. As of February 1, 2024, $ billion is remaining under the $ billion authorization.

$ $ 2022 Repurchases:

Open market repurchases

2023 Repurchases:

Open market repurchases

Repurchases made under the accelerated share repurchase agreements(b)

Total Share Repurchases during 2023 (e)$

(c)

Repurchases made subsequent to December 31, 2023 under the accelerated share repurchase agreements(d)

Total Share Repurchases January 1, 2023 through February 1, 2024 (e)$

(a)Includes $ million accrued as of December 31, 2021

(b)Initial and interim shares delivered under the November 6, 2023 accelerated share repurchase agreements

(c)Excludes $ million accrued for excise tax owed as of December 31, 2023

(d)Additional shares delivered under the November 6, 2023 accelerated share repurchase agreements

(e)The total number of shares delivered and the average price per share under the ASR agreements will be determined at the end of the ASR period

Retirement of Treasury Stock

In the fourth quarter of 2023, the Company retired shares of treasury stock. These retired shares are now included in NRG's pool of authorized but unissued shares. The retired stock had a carrying value of approximately $ billion. The Company's accounting policy upon the formal retirement of treasury stock is to deduct its par value from common stock and to reflect any excess of cost over par value as a deduction from additional paid-in capital.

Preferred Stock

Series A Preferred Stock

On March 9, 2023 ("Series A Issuance Date"), the Company issued shares of % Series A Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock. The net proceeds of $ million, net of issuance costs, were used to partially fund the Vivint Smart Home acquisition.

The Series A Preferred Stock is not convertible into or exchangeable for any other securities or property and has limited voting rights. The Series A Preferred Stock may be redeemed, in whole or in part, on one or more occasions, at the option of the

145

per share, plus accumulated but unpaid dividends.

Series A Preferred Stock Dividends

The annual dividend rate on each share of Series A Preferred Stock is % from the Series A Issuance Date to, but excluding the Series A First Reset Date. On and after the Series A First Reset Date, the dividend rate on each share of Series A Preferred Stock shall equal the five-year U.S. Treasury rate as of the most recent reset dividend determination date (subject to a floor of %), plus a spread of % per annum. Cumulative cash dividends on the Series A Preferred Stock are payable semiannually, in arrears, on each March 15 and September 15, when, as and if declared by the Board of Directors. In September 2023, the Company declared and paid a semi-annual dividend of $ per share on its outstanding Series A Preferred Stock, totaling $ million.

Note 17 —

%$ Midway-Sunset Cogeneration Company % Total equity investments in affiliates$ $

Other Equity Investments

Gladstone — Through a joint venture, NRG owns a % interest in Gladstone, a MW coal-fueled power generation facility in Queensland, Australia. The power generation facility is managed by the joint venture participants and the facility is operated by NRG. Operating expenses incurred in connection with the operation of the facility are funded by each of the participants in proportion to their ownership interests. Coal is sourced from local mines in Queensland. NRG and the joint venture participants receive their respective share of revenues directly from the off takers in proportion to the ownership interests in the joint venture. Power generated by the facility is primarily sold to an adjacent aluminum smelter, with excess power sold to the Queensland Government-owned utility under long-term supply contracts. NRG's investment in Gladstone was $ million as of December 31, 2023.

Entities that are Consolidated

The Company has a controlling financial interest that has been identified as a VIE under ASC 810 in NRG Receivables LLC, which has entered into financing transactions related to the Receivables Facility as further described in Note 13, Long-term Debt and Finance Leases.

$ Current liabilities Net assets$ $

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Note 18 —

)$ $ Less: Cumulative dividends attributable to Series A Preferred Stock

(Loss)/Income Available to Common Stockholders

$()$ $ Weighted average number of common shares outstanding - basic and diluted (Loss)/Income per weighted average common share — basic and diluted$()$ $

As of December 31, 2023, the Company had million of outstanding equity instruments that are anti-dilutive and were not included in the computation of the Company's diluted loss per share. As of December 31, 2022 and 2021, the Company had an insignificant number of outstanding equity instruments that are anti-dilutive and were not included in the computation of the Company’s diluted income per share.

Note 19 —

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$ $ $ $ $()$ Operating expenses () Depreciation and amortization Impairment losses Total operating cost and expenses () Gain on sale of assets Operating income/(loss) ()() () Equity in earnings of unconsolidated affiliates Impairment losses on investments () ()Other income, net () () Gain on debt extinguishment Interest expense()()()()() ()Income/(loss) before income taxes ()()()() ()

Income tax (benefit)/expense(c)

()() ()Net income/(loss) $ $()$()$()$()$ $()Balance sheetEquity investments in affiliates$ $ $ $ $ $ $ Capital expenditures Goodwill Total assets$ $ $ $ $ $()$

(a) Includes results of operations following the acquisition date of March 10, 2023

(b) Inter-segment sales and inter-segment net derivative gains and losses included in revenues

—

(c) Consolidated domestic federal and state income taxes are recorded to the Corporate segment, except for Vivint Smart Home which is recorded directly to the Vivint Smart Home segment. West/Services/Other amounts represent foreign income taxes

148

$ $ $ $ $ Operating expenses Depreciation and amortization Impairment losses Total operating cost and expenses Gain/(loss) on sale of assets () Operating income/(loss) () Equity in (losses)/earnings of unconsolidated affiliates() Other income, net () Interest expense ()()() ()Income/(loss) before income taxes ()

Income tax expense(b)

Net income/(loss) $ $ $ $()$ $ Balance sheetEquity investments in affiliates$ $ $ $ $ $ Capital expenditures Goodwill Total assets$ $ $ $ $()$

(a) Inter-segment sales and inter-segment net derivative gains and losses included in revenues

()

—

()

(b) Consolidated domestic federal and state income taxes are recorded to the Corporate segment. West/Services/Other amounts represent foreign income taxes

For the Year Ended December 31, 2021

(In millions)

Texas

East

West/Services/Other

Corporate(a)

Eliminations

Total

Revenue(a)

Operating expenses

Depreciation and amortization

Impairment losses

Total operating cost and expenses

Gain on sale of assets

Operating income

Equity in (losses)/earnings of unconsolidated affiliates

()

Other income, net

()

Loss on debt extinguishment

()

Interest expense

()

Income/(loss) before income taxes

()

Income tax expense(b)

Net income/(loss)

()

(a) Inter-segment sales and inter-segment net derivative gains and losses included in revenues

()

—

()

(b) Consolidated domestic federal and state income taxes are recorded to the Corporate segment. West/Services/Other amounts represent foreign income taxes

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Note 20 —

$ $ State Foreign() Total — current Deferred U.S. Federal State() Foreign() Total — deferred() Total income tax (benefit)/expense$()$ $ Effective income tax rate % % %

The IRA enacted on August 16, 2022, introduced new provisions including a 15% corporate alternative minimum tax and a 1% excise tax on net share repurchases with both taxes effective beginning in fiscal year 2023 for NRG. There is no impact on the Company's provision for income taxes from the CAMT for the year ended December 31, 2023. The Company will reevaluate the impact of the corporate alternative minimum tax upon the potential release of guidance by the U.S. Treasury and the IRS regarding the treatment of unrealized gains and losses on derivative instruments.

$ $ Foreign() Total$()$ $ )$ $ Tax at federal statutory tax rate() State taxes() Foreign rate differential () ()Changes in state valuation allowances ()()Permanent differences Recognition of uncertain tax benefits ()Deferred impact of state tax rate changes ()Foreign tax refunds() Return to provision adjustments() Carbon capture tax credits () Income tax (benefit)/expense$()$ $ Effective income tax rate % % %

For the year ended December 31, 2023, NRG's effective income tax rate was lower than the federal statutory tax rate of 21%, primarily due to permanent differences and changes in state valuation allowances.

For the year ended December 31, 2022, NRG's effective income tax rate was higher than the federal statutory tax rate of 21% primarily due to state tax expense partially offset by the recognition of carbon capture tax credits.

150

$ State net operating loss carryforwards Foreign net operating loss carryforwards Deferred revenues Difference between book and tax basis of property Federal and state tax credit carryforwards Deferred compensation, accrued vacation and other reserves Interest disallowance carryforward per §163(j) of the Tax Act Pension and other postretirement benefits Allowance for credit losses Equity compensation Federal benefit on state uncertain tax positions Inventory obsolescence U.S. capital loss Other Total deferred tax assets Deferred tax liabilities:Intangibles amortization (excluding goodwill) Derivatives Capitalized contract costs Equity method investments Goodwill Debt discount amortization Emissions allowances Total deferred tax liabilities Total deferred tax assets less deferred tax liabilities Valuation allowance()()Total net deferred tax assets, net of valuation allowance$ $ $ Deferred tax liability()()Net deferred tax asset$ $

The primary drivers for the increase in the net deferred tax asset from $ billion as of December 31, 2022 to $ billion as of December 31, 2023 is due to unrealized mark-to-market book losses and deferred revenues, partially offset by capitalized contract costs and a step-up in basis of book intangibles associated with the acquisition of Vivint Smart Home.

151

billion and $ billion, respectively. The Company believes certain state net operating losses may not be realizable under the more-likely-than-not measurement and as such, a valuation allowance was recorded as of December 31, 2023 as discussed below.

NOL carryforwards — As of December 31, 2023, the Company had tax-effected cumulative U.S. NOLs consisting of carryforwards for federal and state income tax purposes of $ billion and $ million, respectively. In addition, NRG has tax-effected cumulative foreign NOL carryforwards of $ million. The majority of NRG's NOL carryforwards have no expiration date.

Valuation allowance — As of December 31, 2023, the Company's tax-effected valuation allowance was $ million, consisting of state NOL carryforwards and foreign NOL carryforwards. The valuation allowance was recorded based on the assessment of cumulative and forecasted pre-tax book earnings and the future reversal of existing taxable temporary differences.

Taxes Receivable and Payable

As of December 31, 2023, NRG recorded a current federal payable of $ million, a current net state payable of $ million and a current net foreign receivable of $ million.

Uncertain tax benefits

NRG has identified uncertain tax benefits with after-tax value of $ million and $ million as of December 31, 2023 and 2022, for which NRG has recorded a non-current tax liability of $ million and $ million, respectively. The Company recognizes interest and penalties related to uncertain tax benefits in income tax expense. The Company recognized $ million of interest expense for the year ended December 31, 2023, $ million for the year ended 2022 and an immaterial amount for the year ended 2021. As of December 31, 2023 and 2022, NRG had cumulative interest and penalties related to these uncertain tax benefits of $ million and $ million, respectively.

Tax jurisdictions — NRG is subject to examination by taxing authorities for income tax returns filed in the U.S. federal jurisdiction and various state and foreign jurisdictions including operations located in Australia and Canada.

$ Increase due to current year positions Increase due to acquired balance from Vivint Smart Home Uncertain tax benefits as of December 31$ $

Note 21 —

shares of NRG common stock were authorized for issuance under the NRG LTIP. There were and shares of common stock remaining available for grants under the NRG LTIP as of December 31, 2023 and 2022, respectively. The NRG LTIP is subject to adjustments in the event of reorganization, recapitalization, stock split, reverse stock split, stock dividend, and a combination of shares, merger or similar change in NRG's structure or outstanding shares of common stock. As of December 31, 2023, the outstanding awards under the NRG LTIP include restricted stock units, deferred stock units and relative performance stock units.

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$ Granted Forfeited() Vested() Non-vested at December 31, 2023

The total fair value of RSUs vested during the years ended December 31, 2023, 2022 and 2021 was $ million, $ million and $ million, respectively. The weighted average grant date fair value of RSUs granted during the years ended December 31, 2023, 2022 and 2021 was $, $ and $, respectively.

Deferred Stock Units

DSUs represent the right of a participant to be paid share of NRG common stock at the end of a deferral period established under the terms of the award. DSUs granted under the NRG LTIP are fully vested at the date of issuance. Fair value of the DSUs, which is based on the closing price of NRG common stock on the date of grant, is recorded as compensation expense in the period of grant.

$ Granted Converted to Common Stock() Outstanding at December 31, 2023

The aggregate intrinsic values for DSUs outstanding as of December 31, 2023, 2022 and 2021 were approximately $ million, $ million and $ million, respectively. The aggregate intrinsic values for DSUs converted to common stock for the years ended December 31, 2023, 2022 and 2021 were $ million, $ million and $ million, respectively. The weighted average grant date fair value of DSUs granted during the years ended December 31, 2023, 2022 and 2021 was $, $ and $, respectively.

Relative Performance Stock Units

RPSUs entitle the recipient to stock upon vesting. The amount of the award is subject to the Company's achievement of certain performance measures over the vesting period. RPSUs are restricted grants where the quantity of shares increases and decreases alongside the Company's Total Shareholder Return ("TSR"), relative to the TSR of the Company's current proxy peer group and the total returns of select indexes, or Peer Group. For RPSU's granted in 2022 and forward, the peer group consists of the companies that comprise the Standard & Poor’s 500 Index on the first day of the performance period. Each RPSU represents the potential to receive NRG common stock after the completion of the performance period, typically three years of service from the date of grant. The number of shares of NRG common stock to be paid (if any) as of the vesting date for each RPSU will depend on the Company’s percentile rank within the Peer Group. The number of shares of common stock to be paid as of the vesting date for each RPSU is linearly interpolated for TSR performance between the following points: (i) % if ranked below the 25th percentile; (ii) % if ranked at the 25th percentile; (iii) % if ranked at the 55th percentile (or the 65th percentile if the Company's absolute TSR is less than negative %); and (iv) % if ranked at the 75th percentile or above.

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$ Granted

Forfeited(a)

() Vested() Non-vested at December 31, 2023

(a)Includes January 2023 vestings that occurred at a % payout as well as forfeitures due to the departure of certain officers

The weighted average grant date fair value of RPSUs granted during the years ended December 31, 2023, 2022 and 2021, was $, $ and $, respectively.

The fair value of RPSUs is estimated on the date of grant using a Monte Carlo simulation model and expensed over the service period, which equals the vesting period.

% % %Expected term (in years)Risk free rate % % %

(a)Assumptions pertain to the main award granted in January 2021. Additional RPSUs were granted in September 2021 with a risk free rate of % and expected volatility of %

The expected volatility is calculated based on NRG's historical stock price volatility data over the period commensurate with the expected term of the RPSU, which equals the vesting period.

Vivint Smart Home Long-Term Incentive Plan

Effective March 10, 2023, in connection with the Vivint Smart Home Acquisition, as discussed in Note 4, Acquisitions and Dispositions, NRG assumed the Vivint Smart Home, Inc. Long-Term Incentive Plan, or Vivint LTIP. In addition to the rollover awards converted as part of the Acquisition, the Vivint LTIP provides for issuances of time-based restricted stock units and performance-based restricted stock units. As of December 31, 2023, shares of NRG common stock were authorized for issuance under the Vivint LTIP, and there were shares of common stock remaining available for grants.

Restricted Stock Units

As of December 31, 2023, RSUs under the Vivint LTIP include RSUs which were granted prior to the Acquisition and were converted into awards that will vest as NRG common stock ("Rollover RSUs"). These awards typically had graded vesting schedules beginning on the grant date. The fair value of the Rollover RSUs is based on the fair value of NRG common stock on the Acquisition date after applying the conversion ratio as per the Merger Agreement. The RSUs that were granted following the Acquisition date are typically subject to the same terms as the RSUs under the NRG LTIP.

$ — $— Rollover RSUs at the Acquisition date — — Granted following the Acquisition date Forfeited() () Vested() ()

Note 22 —

$ $

Ivanpah(a)

Midway-Sunset

Total

$ $ $

(a)Includes fees under project management agreements with each project company

155

Note 23 —

2025 2026 2027 2028 Thereafter

Total(a)

(a)The year 2024 does not include an additional $ million of short-term commitments

The Company's actual costs may be significantly higher than these estimated minimum unconditional long-term firm commitments with remaining term in excess of one year. For the years ended December 31, 2023, 2022 and 2021, the costs of fuel and purchased energy were $ billion, $ billion and $ billion, respectively.

First Lien Structure

NRG has granted first liens to certain counterparties on a substantial portion of property and assets owned by NRG and the guarantors of its senior debt. NRG uses the first lien structure to reduce the amount of cash collateral and letters of credit that it would otherwise be required to post from time to time to support its obligations under out-of-the-money hedges. To the extent that the underlying hedge positions for a counterparty are out-of-the-money to NRG, the counterparty would have a claim under the first lien program. As of December 31, 2023, all hedges under the first liens were in-the-money on a counterparty aggregate basis.

Contingencies

The Company's material legal proceedings are described below. The Company believes that it has valid defenses to these legal proceedings and intends to defend them vigorously. NRG records accruals for estimated losses from contingencies when information available indicates that a loss is probable and the amount of the loss, or range of loss, can be reasonably estimated. As applicable, the Company has established an adequate accrual for the applicable legal matters, including regulatory and environmental matters as further discussed in Note 24, Regulatory Matters, and Note 25, Environmental Matters. In addition, legal costs are expensed as incurred. Management has assessed each of the following matters based on current information and made a judgment concerning its potential outcome, considering the nature of the claim, the amount and nature of damages sought, and the probability of success. Unless specified below, the Company is unable to predict the outcome of these legal proceedings or reasonably estimate the scope or amount of any associated costs and potential liabilities. As additional information becomes available, management adjusts its assessment and estimates of such contingencies accordingly. Because litigation is subject to inherent uncertainties and unfavorable rulings or developments, it is possible that the ultimate resolution of the Company's liabilities and contingencies could be at amounts that are different from its currently recorded accruals and that such difference could be material.

In addition to the legal proceedings noted below, NRG and its subsidiaries are party to other litigation or legal proceedings arising in the ordinary course of business. In management's opinion, the disposition of these ordinary course matters will not materially adversely affect NRG's consolidated financial position, results of operations, or cash flows.

Environmental Lawsuits

Sierra club et al. v. Midwest Generation LLC — In 2012, several environmental groups filed a complaint against Midwest Generation with the Illinois Pollution Control Board ("IPCB") alleging violations of environmental law resulting in groundwater contamination. In June 2019, the IPCB found in an interim order that Midwest Generation violated the law because it had improperly handled coal ash at facilities in Illinois and caused or allowed coal ash constituents to impact groundwater. On September 9, 2019, Midwest Generation filed a Motion to Reconsider numerous issues, which the court granted in part and denied in part on February 6, 2020. In 2023, the IPCB held hearings to determine the appropriate relief. Midwest Generation has been working with the Illinois EPA to address the groundwater issues since 2010.

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putative class action pending against Direct Energy: Richard Schafer v. Direct Energy (W.D.N.Y. Dec. 2019; on appeal 2nd Cir. N.Y.) - The Second Circuit sent the matter back to the trial court in December 2021. After discovery, Direct Energy filed summary judgment. Direct Energy won summary judgment and Schafer appealed. The appeal is fully briefed. Oral argument occurred on October 25, 2023. The Second Circuit upheld the trial court's grant of summary judgment in favor of Direct Energy.

Telephone Consumer Protection Act ("TCPA") Cases — In the cases set forth below, referred to as the TCPA Cases, such actions involve consumers alleging violations of the Telephone Consumer Protection Act of 1991, as amended, by receiving calls, texts or voicemails without consent in violation of the federal Telemarketing Sales Rule, and/or state counterpart legislation. The underlying claims of each case are similar. The Company denies the allegations asserted by plaintiffs and intends to vigorously defend these matters. These matters were known and accrued for at the time of the acquisition.

There are putative class actions pending against Direct Energy: (1) Holly Newman v. Direct Energy, LP (D. Md Sept 2021) - Direct Energy filed its Motion to Dismiss asserting the ruling in the Brittany Burk v. Direct Energy (S.D. Tex. Feb 2019) preempts the Plaintiff's ability to file suit based on the same facts. The Court denied Direct Energy's motion stating the Court does not have the benefit of all of the facts that were in front of the Burk court to issue a similar ruling. On October 19, 2022, Direct Energy filed a Motion to Transfer Venue asking the Court to transfer the case to the Southern District where the Burk case was filed. On April 12, 2023, the Court granted Direct Energy’s Motion to Transfer Venue, moving to the case to the Southern District of Texas; and (2) Matthew Dickson v. Direct Energy (N.D. Ohio Jan. 2018) - The case was stayed pending the outcome of an appeal to the Sixth Circuit based on the unconstitutionality of the TCPA during the period from 2015-2020. The Sixth Circuit found the TCPA was in effect during that period and remanded the case back to the trial court. Direct Energy refiled its motions along with supplements. On March 25, 2022, the Court granted summary judgment in favor of Direct Energy and dismissed the case. Dickson appealed. The Sixth Circuit found that Dickson has standing and reversed the trial court's dismissal of the case. The matter is back at the trial court. The parties will conduct further fact discovery and expert discovery and are likely to resubmit motions for further review by the Court.

Sales Practice Lawsuits

There are litigation matters relating to claims made by Vivint Smart Home competitors against Vivint Smart Home alleging, among other things, that Vivint Smart Home's sales representatives used deceptive sales practices. These matters were known and accrued for at the time of the acquisition. The matters are: (1) CPI Security Systems, Inc. ("CPI") v. Vivint Smart Home, Inc. (W.D.N.C. Sept. 2020). The CPI matter that was filed in 2020 went to trial, and in February 2023, the jury issued a verdict against Vivint Smart Home, in favor of CPI for $ million of compensatory damages and an additional $ million of punitive damages. Vivint Smart Home has filed its notice of appeal and is awaiting a briefing schedule. While Vivint Smart Home believes the CPI jury verdict is not legally or factually supported and intends to pursue post judgment remedies and file an appeal, there can be no assurance that such defense efforts will be successful; (2) ADT LLC, et al. ("ADT") v. Vivint Smart Home, Inc. f/k/a Mosaic Acquisition Corporation, et al.(S.D.Fl. Aug. 2020). The parties mediated in May 2023 and agreed on a settlement. In June 2023, the Court granted final approval of the settlement, which was paid in June 2023; and (3) Alert 360 Opco, Inc, et al. ("Alert 360") v. Vivint Smart Home, Inc., et al (N.D.Ok. March 2023). On March 1, 2023, Alert 360 filed a complaint against Vivint Smart Home alleging, among other things, deceptive sales practices. The parties settled the dispute in October 2023 and the case was dismissed.

157

million in damages for patent infringement. The patents that were the basis for the claims made by Skybell were ruled invalid by the U.S. International Trade Commission in November 2021. In accordance with advice by legal counsel, the Company does not believe the verdict is legally supported and will pursue post-judgment and appellate remedies along with any other legal options available.

Contract Disputes

Alarm.com — In September 2022, Vivint Smart Home sent Alarm.com a notice asserting that it was no longer obligated to pay certain license fees under the Patent Cross License Agreement between the parties on the basis that Vivint Smart Home no longer practices any claim under any valid Alarm.com patent and, therefore, no license fees are due. Alarm.com filed an arbitration demand against Vivint Smart Home alleging, among other things, breach of the agreement due to continued use of the patents in question. The parties have resolved all outstanding litigation and entered into a long-term intellectual property licensing agreement.

STP — In July 2023, the partners in STP, CPS and Austin Energy, initiated a lawsuit and filed to intervene in the license transfer application with the NRC, claiming a right of first refusal exists in relation to the proposed sale of NRG South Texas' % interest in STP to Constellation. NRG believes the claims set forth by CPS and Austin Energy in the lawsuit and the NRC proceedings are without merit and intends to vigorously defend against them. For further discussion of the transaction, see Note 4, Acquisitions and Dispositions.

Winter Storm Uri Lawsuits

The Company has been named in certain property damage and wrongful death claims that have been filed in connection with Winter Storm Uri in its capacity as a generator and a REP. Most of the lawsuits related to Winter Storm Uri are consolidated into a single multi-district litigation matter in Harris County District Court. NRG's REPs have since been severed from the multi-district litigation and will be seeking dismissal in any remaining cases. As a power generator, the Company is named in various cases with claims ranging from: wrongful death; personal injury only; property damage and personal injury; property damage only; and subrogation. The First Court of Appeals conditionally granted the generators' mundamus relief, ordering the trial court to grant the generator defendents' Motions to Dismiss. The Company expected the Plaintiffs to challenge this ruling. The Company intends to vigorously defend these matters.

Indemnifications and Other Contractual Arrangements

Note 24 —

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million and agreed to implement various additional compliance related measures ("Stipulated Order"). The Company is currently in the process of administering the terms of the Stipulated Order, which includes multiple undertakings by the Company. The Company is engaged in ongoing discussions with the staff of the FTC regarding the Company’s compliance with the terms of the Stipulated Order. Under the terms of the Stipulated Order, Vivint Smart Home is required to undertake biennial assessments by an independent third-party assessor (the "Assessor"), which reviews Vivint Smart Home’s compliance program and provides a report on Vivint Smart Home’s ongoing compliance with the Stipulated Order. Since its inception until December 31, 2023, Vivint Smart Home has completed its initial assessment and its first biennial assessment as required by the Stipulated Order. In addition, Vivint Smart Home has voluntarily undertaken six quarterly audits by the appointed Assessor. In all the assessments, Vivint Smart Home received a report from the Assessor with no findings of non-compliance of any kind.

New York State Public Service Commission ("NYSPSC") - Notice of Apparent Violation — The NYSPSC issued an order referred to as the Retail Reset Order in December 2019 that limited ESCO's offers for electric and natural gas to three compliant products: guaranteed savings from the utility default rate, a fixed term capped at 5% of the rolling 12-month average utility default rate, or NY-sourced renewable energy that is at least 50% greater than the prevailing NY Renewable Energy Standard for load serving entities. The order effectively limited ESCO offers to natural gas customers to only the guaranteed savings and capped fixed term compliant products because no equivalent renewable energy product exists for natural gas. NRG took action to comply with the order when it became effective April 16, 2021. On January 8, 2024, the NYSPSC notified of NRG's retail energy suppliers (serving both electricity and natural gas) of alleged non-compliance with New York regulatory requirements. Among other items, the notices allege that the NRG suppliers did not transition existing residential customers to of the compliant products authorized by the NYSPSC following the effective date of the order. NRG responded to the notices in February 2024. The outcome of this process has the potential to negatively impact the retail business in New York.

Note 25 —

million disclosure threshold, as permitted, for environmental proceedings to which the government is a party.

Air

CPP/ACE Rules — In 2019, the EPA promulgated the ACE rule, which rescinded the CPP, which had sought to broadly regulate CO2 emissions from the power sector. The ACE rule required states that have coal-fired EGUs to develop plans to seek heat rate improvements from coal-fired EGUs. On January 19, 2021, the D.C. Circuit vacated the ACE rule (but on February 22, 2021, at the EPA's request, stayed the issuance of the portion of the mandate that would vacate the repeal of the CPP). On June 30, 2022, the U.S. Supreme Court held that the "generation shifting" approach in the CPP exceeded the powers granted to the EPA by Congress. The Court did not address the related issues of whether the EPA may adopt only measures applied at each source. On May 23, 2023, the EPA proposed significantly revising the manner in which new and existing EGU's GHG emissions should be regulated including using hydrogen as a fuel, capturing and storing/sequestering CO2 and requiring new units to be more efficient. The EPA has stated that it intends to finalize these revisions in 2024. The Company expects that the final rule will be challenged in the courts and accordingly uncertain over the next several years.

Cross-State Air Pollution Rule ("CSAPR") — On March 15, 2023, the EPA signed and released a prepublication of a final rule that sought to significantly revise the CSAPR to address the good-neighbor obligations of the 2015 ozone NAAQS for 23 states after earlier having disapproved numerous state plans to address the issue. Several states, including Texas, challenged the EPA's disapproval of their state plans. On May 1, 2023, the United States Court of Appeals for the Fifth Circuit stayed the EPA's disapproval of Texas' and Louisiana's state plans, which disapprovals are a condition precedent to the EPA imposing its plan on Texas and Louisiana. Several other states are also similarly situated because of similar stays. Nonetheless, on June 5, 2023, the EPA published this rule in the Federal Register. On July 31, 2023, the EPA promulgated an interim final rule that addresses the various judicial orders that have stayed several State-Implementation-Plan disapprovals by limiting the effectiveness of certain requirements of the final rule promulgated on June 5, 2023 in Texas and five other states. The final rule decreases, over time, the ozone-season NOx allowances allocated to generators in the states not affected by the judicial stays

159

of the Company's coal-fired units in Texas. The Company cannot predict the outcome of this proposal.

Water

Effluent Limitations Guidelines — In 2015, the EPA revised the ELG for Steam Electric Generating Facilities, which imposed more stringent requirements (as individual permits were renewed) for wastewater streams from FGD, fly ash, bottom ash, and flue gas mercury control. On September 18, 2017, the EPA promulgated a final rule that, among other things, postponed the compliance dates to preserve the status quo for FGD wastewater and bottom ash transport water by two years to November 2020 until the EPA amended the rule. On October 13, 2020, the EPA amended the 2015 ELG rule by: (i) altering the stringency of certain limits for FGD wastewater; (ii) relaxing the zero-discharge requirement for bottom ash transport water; and (iii) changing several deadlines. In October 2021, NRG informed its regulators that the Company intends to comply with the ELG by ceasing combustion of coal by the end of 2028 at its domestic coal units outside of Texas, and installing appropriate controls by the end of 2025 at its plants that have coal-fired units in Texas. On March 29, 2023, the EPA proposed revisions to the ELG and sought comments, which the EPA is analyzing.

Byproducts

In 2015, the EPA finalized a rule regulating byproducts of coal combustion (e.g., ash and gypsum) as solid wastes under the RCRA. On August 21, 2018, the D.C. Circuit found, among other things, that the EPA had not adequately regulated unlined ponds and legacy surface impoundments. On August 28, 2020, the EPA finalized "A Holistic Approach to Close Part A: Deadline to Initiate Closure," which amended the April 2015 Rule to address the August 2018 D.C. Circuit decision and extend some of the deadlines. On November 12, 2020, the EPA finalized "A Holistic Approach to Closure Part B: Alternative Demonstration for Unlined Surface Impoundments," which further amended the April 2015 Rule to, among other things, provide procedures for requesting approval to operate existing ash impoundments with an alternative liner. On May 23, 2023, the EPA proposed establishing requirements for: (i) inactive (or legacy) surface impoundments at inactive facilities and (ii) all CCR management units (regardless of how or when the CCR was placed) at regulated facilities. NRG anticipates further rulemaking related to legacy surface impoundments and the Federal Permit Program.

Note 26 —

$ $ Income taxes paid, net of refunds Non-cash investing activities:Decreases to fixed assets for accrued capital expenditures ()()

Note 27 —

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$ $ $ $ $ Asset sales guarantee obligations Other guarantees Total guarantees$ $ $ $ $ $

Letters of credit and surety bonds — As of December 31, 2023, NRG and its consolidated subsidiaries were contingently obligated for a total of $ billion under letters of credit and surety bonds. Most of these letters of credit and surety bonds are issued in support of the Company's obligations to perform under commodity agreements and obligations associated with future closure and maintenance of ash sites, as well as for financing or other arrangements. A majority of these letters of credit and surety bonds expire within one year of issuance, and it is typical for the Company to renew them on similar terms.

The material indemnities, within the scope of ASC 460, are as follows:

Asset sales — The purchase and sale agreements which govern NRG's asset or share investments and divestitures customarily contain guarantees and indemnifications of the transaction to third parties. The contracts indemnify the parties for liabilities incurred as a result of a breach of a representation or warranty by the indemnifying party, changes in tax laws or for pre-existing environmental matters. These obligations generally have a discrete term and are intended to protect the parties against risks that are difficult to predict or estimate at the time of the transaction. In several cases, the contract limits the liability of the indemnifier. NRG has no reason to believe that the Company currently has any material liability relating to such routine indemnification obligations included in the table above, except for the California property tax indemnity for estimated increases in California property taxes of certain solar properties that the Company agreed to indemnify, as part of the agreement to sell NRG Yield and the Renewables Platform. The California property tax indemnity is estimated to be $ million as of December 31, 2023 and is included in the above table under asset sales guarantee obligations.

Other guarantees — NRG has issued other guarantees of obligations including payments under certain agreements with respect to certain of its unconsolidated subsidiaries, payment or performance by fuel providers and payment or reimbursement of credit support and deposits. The Company does not believe that it will be required to perform under these guarantees.

Other indemnities — Other indemnifications NRG has provided cover operational, tax, litigation and breaches of representations, warranties and covenants. NRG has also indemnified, on a routine basis in the ordinary course of business, consultants or other vendors who have provided services to the Company. NRG's maximum potential exposure under these indemnifications can range from a specified dollar amount to an indeterminate amount, depending on the nature of the transaction. Total maximum potential exposure under these indemnifications is not estimable due to uncertainty as to whether claims will be made or how they will be resolved. NRG does not have any reason to believe that the Company will be required to make any material payments under these indemnity provisions.

Because many of the guarantees and indemnities NRG issues to third parties and affiliates do not limit the amount or duration of its obligations to perform under them, there exists a risk that the Company may have obligations in excess of the amounts described above. For those guarantees and indemnities that do not limit the Company's liability exposure, it may not be able to estimate what the Company's liability would be, until a claim is made for payment or performance, due to the contingent nature of these contracts.

Note 28 —

%$ $()$

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$ $ $()

(a)

$ Year Ended December 31, 2022 ()

(a)

Year Ended December 31, 2021 ()

(a)

Income tax valuation allowance, deducted from deferred tax assets

Year Ended December 31, 2023$ $ $ $ $ Year Ended December 31, 2022 ()() Year Ended December 31, 2021 ()

(a) Represents principally net amounts charged as uncollectible

162

EXHIBIT INDEX

Number

Description

Method of Filing

2.1

Third Amended Joint Plan of Reorganization of GenOn Energy, Inc. and its Debtor Affiliates.

Incorporated herein by reference to Exhibit 2.1 to the Registrant's current report on Form 8-K filed on December 18, 2017.

2.2†^

Purchase and Sale Agreement, dated as of February 6, 2018, by and among NRG Energy, Inc. and NRG Repowering Holdings LLC, and GIP III Zephyr Acquisition Partners, L.P.

Incorporated herein by reference to Exhibit 2.9 to the Registrant's annual report on Form 10-K filed on March 1, 2018.

2.3^

Purchase and Sale Agreement, dated as of February 6, 2018, by and between NRG Energy, Inc., NRG South Central Generating LLC, and Cleco Energy LLC.

Incorporated herein by reference to Exhibit 2.10 to the Registrant's annual report on Form 10-K filed on March 1, 2018.

2.4‡

Purchase and Sale Agreement dated as of February 28, 2021 by and between NRG Energy, Inc., and Generation Bridge Acquisition, LLC, as a Purchaser

Incorporated herein by reference to Exhibit 2.1 to the Registrant's quarterly report on Form 10-Q filed on May 6, 2021.

2.5^

Agreement and Plan of Merger dated as of December 6, 2022, by and among the Company, Merger Sub and Vivint.

Incorporated herein by reference to Exhibit 2.1 to the Registrant's Current Report on Form 8-K, filed on December 6, 2022.

2.6

Equity Purchase Agreement, dated May 31, 2023 by and among Constellation Energy Generation, LLC, as Buyer and Texas Genco GP, LLC, Texas Genco LP, LLC, together, Seller.

Incorporated herein by reference to Exhibit 2.1 to the Registrant's current report on Form 8-K filed on June 1, 2023.

2.7

Amendment No.1 to Equity Purchase Agreement dated September 29, 2023 by and among Constellation Energy Generation, LLC. as Buyer and Texas Genco GP, LLC, together, Seller

Filed herewith.

2.8

Amendment No. 2 to Equity Purchase Agreement dated November 1, 2023 by and among Constellation Energy Generation, LLC. as Buyer and Texas Genco GP, LLC, together, Seller

Filed herewith.

2.9

Amendment No. 3 to Equity Purchase Agreement dated November 1, 2023 by and among Constellation Energy Generation, LLC. as Buyer and Texas Genco GP, LLC, together, Seller

Filed herewith.

3.1

Amended and Restated Certificate of Incorporation.

Incorporated herein by reference to Exhibit 3.1 to the Registrant's quarterly report on Form 10-Q filed on May 3, 2012.

3.2

Certificate of Amendment to Amended and Restated Certificate of Incorporation.

Incorporated herein by reference to Exhibit 3.1 to the Registrant's current report on Form 8-K filed on December 14, 2012.

3.3

Sixth Amended and Restated By-Laws.

Incorporated herein by reference to Exhibit 3.2 to the Registrant's current report on Form 8-K filed on December 2, 2022.

3.4

Series A Preferred Stock Certificate of Designation filed with the Secretary of the State of Delaware on March 9, 2023.

Incorporated herein by reference to Exhibit 3.1 to the Registrant's current report on Form 8-K filed on March 10, 2023.

4.1

Specimen of Certificate representing common stock of NRG Energy, Inc.

Incorporated herein by reference to Exhibit 4.3 to the Registrant's quarterly report on Form 10-Q filed on August 4, 2006.

4.2

Base Indenture, dated May 28, 2019, between NRG Energy, Inc. and Delaware Trust Company, as trustee

Incorporated herein by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed on May 30, 2019.

4.3

Supplemental Indenture, dated May 28, 2019, among NRG Energy, Inc., the guarantors named therein and Delaware Trust Company, as trustee, containing Form 3.750% Senior Secured First Lien Notes due 2024 and Form of 4.440% Senior Secured First Lien Notes due 2029

Incorporated herein by reference to Exhibit 4.2 to the Registrant's Current Report on Form 8-K filed on May 30, 2019.

4.4

Base Indenture, dated December 2, 2020, between NRG Energy, Inc. and Deutsche Bank Trust Company Americas, as trustee, pertaining to the Secured Notes.

Incorporated herein by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K, filed on December 4, 2020.

4.5

Supplemental Indenture, dated December 2, 2020, among NRG Energy, Inc., the guarantors named therein and Deutsche Bank Trust Company Americas, as trustee, containing Form of 2.000% Senior Secured First Lien Notes due 2025 and Form of 2.450% Senior Secured First Lien Notes due 2027

Incorporated herein by reference to Exhibit 4.2 to the Registrant's Current Report on Form 8-K, filed on December 4, 2020.

163

4.6

Supplemental Indenture, dated March 9, 2023, among NRG Energy, Inc., the guarantors named therein and Deutsche Bank Trust Company Americas, as trustee, containing Form of 7.000% Senior Secured First Lien Notes Due 2033

Incorporated herein by reference to Exhibit 4.2 to the Registrant's current report on Form 8-K filed on March 10, 2023.

4.7

Base Indenture, dated May 23, 2016, between NRG Energy, Inc. and Delaware Trust Company (as successor in interest to Law Debenture Trust Company of New York), as trustee.

Incorporated herein by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed on May 23, 2016.

4.8

Third Supplemental Indenture, dated August 2, 2016, among NRG Energy, Inc., the guarantors named therein and Law Debenture Trust Company of New York containing Form of 6.625% Senior Notes due 2027.

Incorporated herein by reference to Exhibit 4.2 to the Registrant's Current Report on Form 8-K, filed on August 3, 2016.

4.9

Fourth Supplemental Indenture, dated December 7, 2017, among NRG Energy, Inc., the guarantors named therein and Delaware Trust Company, as trustee, containing Form of 5.750% Senior Notes due 2028.

Incorporated herein by reference to Exhibit 4.2 to the Registrant's Current Report on Form 8-K, filed on December 8, 2017.

4.10

Fifth Supplemental Indenture, dated May 14, 2019, among NRG Energy, Inc., the guarantors named therein and Delaware Trust Company, as trustee, containing Form of 5.250% Senior Notes due 2029.

Incorporated herein by reference to Exhibit 4.2 to the Registrant's Current Report on Form 8-K filed on May 16, 2019.

4.11

Base Indenture, dated December 2, 2020, between NRG Energy, Inc. and Deutsche Bank Trust Company Americas, as trustee, pertaining to the Unsecured notes.

Incorporated herein by reference to Exhibit 4.5 to the Registrant's Current Report on Form 8-K, filed on December 4, 2020.

4.12

Supplemental Indenture, dated December 2, 2020, among NRG Energy, Inc., the guarantors named therein and Deutsche Bank Trust Company Americas, as trustee, containing Form of 3.375% Senior Notes due 2029 and Form of 3.625% Senior Notes due 2031.

Incorporated herein by reference to Exhibit 4.6 to the Registrant's Current Report on Form 8-K, filed on December 4, 2020.

4.13

Second Supplemental Indenture, dated August 23, 2021, among NRG Energy, Inc., the guarantors named therein and Deutsche Bank Trust Company Americas, as trustee, containing Form of 3.875% Senior Notes due 2032.

Incorporated herein by reference to Exhibit 4.2 to the Registrant's Current Report on Form 8-K, filed on August 23, 2021.

4.14

Indenture, dated May 24, 2018, among NRG Energy, Inc., the guarantors named therein and Delaware Trust Company, as trustee, containing Form of 2.750% Convertible Senior Notes due 2048.

Incorporated herein by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K, filed on May 25, 2018.

4.15

Supplemental Indenture (Additional Subsidiary Guarantees-2.750% Convertible Senior Notes due 2048) dated January 5, 2021, among NRG Energy, Inc., each of its guarantor subsidiaries, and Delaware Trust Company as trustee.

Incorporated herein by reference to Exhibit 4.1 to the Registrant's quarterly report on Form 10-Q filed on May 6, 2021.

4.16

Supplemental Indenture (Additional Subsidiary Guarantees-2.750% Convertible Senior Notes due 2048) dated February 17, 2022, among NRG Energy, Inc., each of its guarantor subsidiaries, and Delaware Trust Company as trustee.

Incorporated herein by reference to Exhibit 4.53 to the Registrant's annual report on Form 10-K filed on February 24, 2022.

4.17

Supplemental Indenture (Settlement Elections - 2.750% Convertible Senior Notes due 2048) dated February 22, 2022, among NRG Energy, Inc., each of its guarantor subsidiaries, and Delaware Trust Company as trustee.

Incorporated herein by reference to Exhibit 4.52 to the Registrant's annual report on Form 10-K filed on February 24, 2022.

4.18

Base Indenture, dated August 29, 2023, between NRG Energy, Inc. and Deutsche Bank Trust Company Americas, as trustee, pertaining to the Alexander Funding Trust II Pre-Capitalized Trust Securities.

Incorporated herein by reference to Exhibit 4.4 to the Registrant's current report on Form 8-K filed on August 29, 2023.

4.19

Supplemental Indenture, dated August 29, 2023, among NRG Energy, Inc., the guarantors named therein and Deutsche Bank Trust Company Americas, as trustee, containing Form 7.467% Senior Secured First Lien Notes due 2028.

Incorporated herein by reference to Exhibit 4.5 to the Registrant's current report on Form 8-K filed on August 29, 2023.

4.20

Indenture, dated as of February 14, 2020, among APX Group, Inc., the guarantors party thereto and Wilmington Trust, National Association as trustee and collateral agent relating to APX Group, Inc.’s 6.75% Senior Secured Notes due 2027.

Incorporated herein by reference to Exhibit 10.1 to Vivint Smart Home, Inc.'s Current Report on Form 8-K filed on February 19, 2020).

4.21

Indenture, dated as of July 9, 2021, between APX Group, Inc., as the Issuer, the guarantors party hereto, and Wilmington Trust, National Association, as trustee, payment agent and registrar, relating to the Company's 5.75% Senior Notes due 2029.

Incorporated herein by reference to Exhibit 10.1 to Vivint Smart Home, Inc.'s Current Report on Form 8-K filed on July 12, 2021.

164

4.22

Description of NRG Energy, Inc. securities registered pursuant to section 12 of the Securities Exchange Act of 1934

Incorporated herein by reference to Exhibit 4.15 to the Registrant's Annual Report on Form 10-K, filed on February 27, 2020.

10.1*

Form of NRG Energy, Inc. Long-Term Incentive Plan Deferred Stock Unit Agreement for Directors.

Incorporated herein by reference to Exhibit 10.15 to the Registrant's annual report on Form 10-K filed on March 30, 2005.

10.2*

Form of NRG Energy, Inc. Long-Term Incentive Plan Restricted Stock Unit Agreement for Officers.

Incorporated herein by reference to Exhibit 10.6 to the Registrant's annual report on Form 10-K filed on March 1, 2018.

10.3*

Form of NRG Energy, Inc. Long-Term Incentive Plan Restricted Stock Unit Agreement for Non-Officers.

Incorporated herein by reference to Exhibit 10.7 to the Registrant's annual report on Form 10-K filed on March 1, 2018.

10.4*

Second Amended and Restated Annual Incentive Plan for Designated Corporate Officers.

Incorporated herein by reference to Exhibit 10.1 to the Registrant's current report on Form 8-K filed on May 7, 2015.

10.5*

The NRG Energy, Inc. Amended and Restated Long-Term Incentive Plan.

Incorporated herein by reference to Exhibit 10.1 to the Registrant's current report on Form 8-K filed on April 28, 2017.

10.6*

NRG 2010 Stock Plan for GenOn Employees.

Incorporated herein by reference to Exhibit 10.49 to the Registrant’s annual report on Form 10-K filed on February 27, 2013.

10.7*

Form of NRG Energy, Inc. Long-Term Incentive Plan Relative Performance Stock Unit Agreement for Officers.

Incorporated herein by reference to Exhibit 10.73 to the Registrant's annual report on Form 10-K filed on March 1, 2018.

10.8*

Form of NRG Energy, Inc. Long-Term Incentive Plan Relative Performance Stock Unit Agreement for Senior Vice Presidents.

Incorporated herein by reference to Exhibit 10.74 to the Registrant's annual report on Form 10-K filed on March 1, 2018.

10.9†

Consent and Indemnity Agreement, dated as of February 6, 2018, by and among NRG Energy, Inc., NRG Repowering Holdings LLC, NRG Yield, Inc., and GIP III Zephyr Acquisition Partners, L.P., and NRG Yield Operating LLC (solely with respect to Sections E.5, E.6 and G.12).

Incorporated herein by reference to Exhibit 10.34 to NRG Yield, Inc.'s Annual Report on Form 10-K filed on March 1, 2018.

10.10*

NRG Energy, Inc. Amended and Restated Executive Change-in-Control and General Severance Plan for Tier IA and Tier IIA Executives (Amended and Restated Effective January 1, 2024).

Filed herewith

10.11

Sixth Amendment to Second Amended and Restated Credit Agreement, dated as of February 14, 2023, by and among NRG Energy, Inc., its subsidiaries party thereto, the lenders and issuing banks party thereto, Citicorp North America, Inc., as administrative agent and collateral agent, and Deutsche Bank Trust Company Americas, as collateral trustee, and included as Exhibit A-2 thereto a clean conformed copy of the Second Amended and Restated Credit Agreement

Incorporated herein by reference to Exhibit 10.1 to the Registrant's current report on Form 8-K filed on February 15, 2023.

10.12

Seventh Amendment to Second Amended and Restated Credit Agreement, dated as of March 13, 2023, by and among NRG Energy, Inc., its subsidiaries party thereto, the lenders and issuing banks party thereto, Citicorp North America, Inc., as administrative agent and collateral agent, and Deutsche Bank Trust Company Americas, as collateral trustee.

Incorporated herein by reference to Exhibit 4.2 to the Registrant's quarterly report on Form 10-Q filed on May 4, 2023.

10.13

Second Amended and Restated Credit Agreement, dated as of July 9, 2021, among APX Group Holdings, Inc., as Holdings, APX Group, Inc., as the borrower, the guarantors party hereto from time to time, Bank of America, N.A., as administrative agent, swing line lender and an L/C issuer.

Incorporated herein by reference to Exhibit 10.2 to Vivint Smart Home, Inc.'s Current Report on Form 8-K filed on July 12, 2021.

10.14

Amendment No.1 to the Second Amended and Restated Credit Agreement, dated as of June 9, 2023, by and between AXP Group, Inc. as borrower and the Bank of America, N.A., as administrative agent.

Incorporated herein by reference to Exhibit 4.1 to the Registrant's quarterly report on Form 10-Q filed on August 8, 2023.

165

10.15

Facility Agreement, dated August 29, 2023, among NRG Energy, Inc., the guarantors party thereto, Alexander Funding Trust II and Deutsche Bank Trust Company Americas, as the notes trustee

Incorporated herein by reference to Exhibit 4.1 to the Registrant's current report on Form 8-K filed on August 29, 2023.

10.16

Letter of Credit Facility Agreement, dated August 29, 2023, among NRG Energy, Inc., the financial institutions from time to time party thereto as letter of credit issuers, and Deutsche Bank Trust Company Americas, as administrative agent and as collateral agent

Incorporated herein by reference to Exhibit 4.2 to the Registrant's current report on Form 8-K filed on August 29, 2023.

10.17

Amended and Restated Declaration of Trust of Alexander Funding Trust II, dated August 29, 2023, among NRG Energy, Inc. as depositor and in its own capacity, Deutsche Bank Trust Company Americas, as trustee, and Deutsche Bank Trust Company Delaware, as Delaware trustee

Incorporated herein by reference to Exhibit 4.3 to the Registrant's current report on Form 8-K filed on August 29, 2023.

10.18

Receivables Sale Agreement, dated as of September 22, 2020, among the Originators from time to time parties thereto, NRG Retail LLC, as Servicer, and NRG Receivables LLC.

Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on September 22, 2020.

10.19

Amendment No. 3 to Receivables Loan and Servicing Agreement, dated as of June 22, 2023, among NRG Retail LLC, as Servicer, NRG Receivables LLC, as Borrower, NRG Energy, Inc., as Performance Guarantor, the Conduit Lenders, Committed Lenders, Facility Agents and LC Issuers party thereto, and Royal Bank of Canada, as administrative Agent, and included as Exhibit A-2 thereto a clean, conformed copy of the Receivables Loan and Servicing Agreement.

Incorporated herein by reference to Exhibit 10.1 to the Registrant's current report on Form 8-K filed on June 27, 2023.

10.20*

Form of NRG Energy, Inc. Long-Term Incentive Plan Relative Performance Stock Unit Agreement for Chief Executive Officer

Incorporated herein by reference to Exhibit 10.21 to the Registrant's annual report on Form 10-K filed on February 24, 2022.

10.21*

Form of NRG Energy, Inc. Long-Term Incentive Plan Relative Performance Stock Unit Agreement for Executive Vice Presidents

Incorporated herein by reference to Exhibit 10.22 to the Registrant's annual report on Form 10-K filed on February 24, 2022.

10.22*

Form of NRG Energy, Inc. Long-Term Incentive Plan Relative Performance Stock Unit Agreement for Senior Vice Presidents.

Incorporated herein by reference to Exhibit 10.23 to the Registrant's annual report on Form 10-K filed on February 24, 2022.

10.23*

Form of NRG Energy, Inc. Long-Term Incentive Plan Relative Performance Stock Unit Agreement for Senior Vice Presidents.

Filed herewith

10.24*

Form of NRG Energy, Inc. Long-Term Incentive Plan Restricted Stock Unit Agreement.

Filed herewith

10.25*

Restricted Stock Unit Agreement, dated December 15 , 2023, between NRG Energy, Inc. and Lawrence S. Coben

Filed herewith

10.26*

Vivint Smart Home, Inc. 2020 Omnibus Incentive Plan

Incorporated herein by reference to Exhibit 4.4 to Vivint Smart Home's Post-Effective Amendment on Form S-8 to Registration Statement on Form S-4 filed with the Securities and Exchange Commission on March 24, 2020

10.27*

Vivint Smart Home, Inc. Long-Term Incentive Plan Relative Performance Stock Unit Agreement and Notice of Grant under the Vivint Smart Home, Inc. Omnibus Incentive Plan.

Incorporated herein by reference to Exhibit 10.2 to the Registrant's quarterly report on Form 10-Q filed on May 4, 2023.

10.28*

Vivint Smart Home, Inc. Long-Term Incentive Plan Restricted Stock Unit Agreement and Notice of Grant under the Vivint Smart Home, Inc. Omnibus Incentive Plan.

Incorporated herein by reference to Exhibit 10.3 to the Registrant's quarterly report on Form 10-Q filed on May 4, 2023.

10.29*

Vivint Smart Home, Inc. Long-Term Incentive Plan Relative Performance Stock Unit Agreement and Notice of Grant under the Vivint Smart Home, Inc. Omnibus Incentive Plan for Executive Vice President

Filed herewith

10.30*

Vivint Smart Home, Inc. Long-Term Incentive Plan Restricted Stock Unit Agreement and Notice of Grant under the Vivint Smart Home, Inc. Omnibus Incentive Plan for Executive Vice Presidents.

Filed herewith

166

10.31*

Amended and Restated Employee Stock Purchase Plan

Incorporated herein by reference to Exhibit 10.1 to the Registrant's current report on Form 8-K filed on May 2, 2023.

10.32*

Retention letter, dated December 6, 2022, between Vivint Smart Home, Inc. and Rasesh Patel.

Incorporated herein by reference to Exhibit 10.45 to Vivint Smart Home, Inc.'s Annual Report on Form 10-K for the annual period ended December 31, 2022.

10.33*

Amended and Restated Employment Agreement, dated June 20, 2022, between Vivint Smart Home, Inc. and Rasesh Patel

Incorporated by reference to Exhibit 10.5 to Vivint Smart Home, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022

10.34*

Amendment to the Vivint Smart Home, Inc. 2020 Omnibus Incentive Plan

Incorporated herein by reference to Exhibit 10.1 to the Registrant's quarterly report on Form 10-Q filed on August 8, 2023.

10.35

Cooperation Agreement, dated as of November 20, 2023, by and among NRG Energy, Inc., Elliott Investment Management L.P., Elliott Associates, L.P., and Elliott International, L.P.

Incorporated herein by reference to Exhibit 10.1 to the Registrant’s current report on Form 8-K filed on November 20, 2023

21.1

Subsidiaries of NRG Energy, Inc.

Filed herewith.

22.1

List of Guarantor Subsidiaries

Filed herewith.

23.1

Consent of KPMG LLP.

Filed herewith.

24.1

Power of Attorney

Included on signature page

31.1

Rule 13a-14(a)/15d-14(a) certification of Lawrence Coben

Filed herewith.

31.2

Rule 13a-14(a)/15d-14(a) certification of Woo-Sung Chung

Filed herewith.

31.3

Rule 13a-14(a)/15d-14(a) certification of G . Alfred Spencer

Filed herewith.

Section 1350 Certification.

Furnished herewith.

NRG Energy, Inc. Clawback Policy

Filed herewith.

101 INS

Inline XBRL Instance Document.

The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.

101 SCH

Inline XBRL Taxonomy Extension Schema.

Filed herewith.

101 CAL

Inline XBRL Taxonomy Extension Calculation Linkbase.

Filed herewith.

101 DEF

Inline XBRL Taxonomy Extension Definition Linkbase.

Filed herewith.

101 LAB

Inline XBRL Taxonomy Extension Label Linkbase.

Filed herewith.

101 PRE

Inline XBRL Taxonomy Extension Presentation Linkbase.

Filed herewith.

104

Cover Page Interactive Data File (the cover page interactive data file does not appear in Exhibit 104 because it's Inline XBRL tags are embedded within the Inline XBRL document).

Filed herewith.


*						Exhibit relates to compensation arrangements.
†						Portions of this exhibit have been redacted and are subject to a confidential treatment request filed with the Secretary of the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
^						This filing excludes schedules pursuant to Item 601(b)(2) of Regulation S-K, which the registrant agrees to furnish supplementary to the Securities and Exchange Commission upon request by the Commission.
‡						Portions of this exhibit have been excluded because they are both not material and would likely cause competitive harm to the registrant if publicly disclosed. Information that has been omitted has been noted in this document with a placeholder identified by the mark “[***]”.

Item 16. Form 10-K Summary

None.

167

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			NRG ENERGY, INC. (Registrant)

			By:			/s/ LAWRENCE S. COBEN

						Lawrence S. Coben Interim President and Chief Executive Officer

Date: February 28, 2024

168

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Brian E. Curci and Christine A. Zoino, each or any of them, such person's true and lawful attorney-in-fact and agent with full power of substitution and resubstitution for such person and in such person's name, place and stead, in any and all capacities, to sign any and all amendments to this report on Form 10-K, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary or desirable to be done in and about the premises, as fully to all intents and purposes as such person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them or his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

In accordance with the Exchange Act, this report has been signed by the following persons on behalf of the registrant in the capacities indicated on February 28, 2024.

Signature

Title

Date

/s/ LAWRENCE S. COBEN

Interim President and Chief Executive Officer and

February 28, 2024

Lawrence S. Coben

Director (Principal Executive Officer, Chair of the Board)

/s/ WOO-SUNG CHUNG

Chief Financial Officer

February 28, 2024

Woo-Sung Chung

(Principal Financial Officer)

/s/ G. ALFRED SPENCER

Chief Accounting Officer

February 28, 2024

G. Alfred Spencer

(Principal Accounting Officer)

/s/ E. SPENCER ABRAHAM

Director

February 28, 2024

E. Spencer Abraham

/s/ ANTONIO CARRILLO

Director

February 28, 2024

Antonio Carrillo

/s/ MATTHEW CARTER, JR.

Director

February 28, 2024

Matthew Carter, Jr.

/s/ HEATHER COX

Director

February 28, 2024

Heather Cox

/s/ ELISABETH B. DONOHUE

Director

February 28, 2024

Elisabeth B. Donohue

/s/ MARWAN FAWAZ

Director

February 28, 2024

Marwan Fawaz

/s/ PAUL W. HOBBY

Director

February 28, 2024

Paul W. Hobby

/s/ ALEX POURBAIX

Director

February 28, 2024

Alex Pourbaix

/s/ ALEXANDRA PRUNER

Director

February 28, 2024

Alexandra Pruner

/s/ ANNE C. SCHAUMBURG

Director

February 28, 2024

Anne C. Schaumburg

/s/ MARCIE C. ZLOTNIK

Director

February 28, 2024

Marcie C. Zlotnik

169

NRG ENERGY, INC. - Annual Report: 2023 (Form 10-K)

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