NRG Energy, Inc. Reports Full Year 2017 Results, Reaffirms 2018 Financial Guidance

March 1, 2018

Significant progress on Asset Sales:
- Announcing sale of Boston Energy Trading and Marketing LLC
  (BETM)
- Announced sale of NRG's interest in NRG Yield, Renewables
  platform, ROFO assets and South Central business for $2.8 billion1
  on February 7, 2018
Exceeded Transformation Plan targets for cost reductions and
working capital improvement in 2017
Reduced corporate debt by $604 million in 2017 and refinanced
senior notes, resulting in approximately $55 million of recurring
interest savings
Authorized $1 billion in share repurchases; first $500 million
program to be launched immediately
Recorded $1.8 billion non-cash asset and goodwill impairment charge

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

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

Consolidated Financial Results

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

Segment Results

Table 1: Income/(Loss) from Continuing Operations

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

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

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

Table 2: Adjusted EBITDA

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

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

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

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

Gulf Coast: $276 million decrease due to lower realized energy prices
despite slightly higher generation, partially offset by lower
operating expenses, net of outages due to flooding
East/West2: $58 million decrease due to lower dispatch,
realized energy prices and capacity revenues, partially offset by
lower operating costs, property tax and overhead expenses

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

Gulf Coast: $51 million decrease due to lower realized energy prices,
partially offset by lower operating expenses
East/West2: $38 million increase due to higher capacity
revenues, higher trading results at BETM and lower operating expenses

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

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

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

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

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

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

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

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

Liquidity and Capital Resources

Table 3: Corporate Liquidity

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

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

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

NRG Transformation Plan Update

Cost Reductions

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

Asset Sales Program

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

Sale of BETM

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

Sale of NRG Yield and Renewables Platform

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

Sale of South Central Business

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

Accelerated Drop Down Agreements

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

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

2018 Guidance

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

Table 4: 2018 Adjusted EBITDA and FCF before Growth Guidance

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

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

Capital Allocation Update

In 2017, NRG reduced corporate debt by $604 million3 and
refinanced and extended its 2023 senior notes realizing annual interest
savings of approximately $55 million. Following the announced sale of
NRG Yield and Renewables and the South Central businesses, NRG is also
announcing corporate debt reduction of $640 million in 2018 and is
temporarily reserving $1,200 million of additional cash to achieve it's
3.0x corporate net debt to Adjusted EBITDA ratio as part of the
previously announced capital allocation guidance under the
Transformation Plan.

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

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

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

Earnings Conference Call

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

About NRG

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

Safe Harbor Disclosure

In addition to historical information, the information presented in this
communication includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the
Exchange Act. These statements involve estimates, expectations,
projections, goals, assumptions, known and unknown risks and
uncertainties and can typically be identified by terminology such as
“may,” “should,” “could,” “objective,” “projection,” “forecast,” “goal,”
“guidance,” “outlook,” “expect,” “intend,” “seek,” “plan,” “think,”
“anticipate,” “estimate,” “predict,” “target,” “potential” or
“continue,” or the negative of these terms or other comparable
terminology. Such forward-looking statements include, but are not
limited to, statements about the Company’s future revenues, income,
indebtedness, capital structure, plans, expectations, objectives,
projected financial performance and/or business results and other future
events, and views of economic and market conditions.

Although NRG believes that its expectations are reasonable, it can give
no assurance that these expectations will prove to be correct, and
actual results may vary materially. Factors that could cause actual
results to differ materially from those contemplated herein include,
among others, general economic conditions, hazards customary in the
power industry, weather conditions, competition in wholesale power
markets, the volatility of energy and fuel prices, failure of customers
to perform under contracts, changes in the wholesale power markets,
changes in government regulations, the condition of capital markets
generally, our ability to access capital markets, unanticipated outages
at our generation facilities, adverse results in current and future
litigation, failure to identify, execute or successfully implement
acquisitions, repowerings or asset sales, our ability to implement value
enhancing improvements to plant operations and companywide processes,
our ability to implement and execute on our publicly announced
transformation plan, including any cost savings, margin enhancement,
asset sale, and net debt targets, our ability to proceed with projects
under development or the inability to complete the construction of such
projects on schedule or within budget, risks related to project siting,
financing, construction, permitting, government approvals and the
negotiation of project development agreements, our ability to progress
development pipeline projects, the timing or completion of GenOn's
emergence from bankruptcy, the inability to maintain or create
successful partnering relationships, our ability to operate our
businesses efficiently, our ability to retain retail customers, our
ability to realize value through our commercial operations strategy, the
ability to successfully integrate businesses of acquired companies, our
ability to realize anticipated benefits of transactions (including
expected cost savings and other synergies) or the risk that anticipated
benefits may take longer to realize than expected, our ability to close
the Drop Down transactions with NRG Yield, and our ability to execute
our Capital Allocation Plan. Debt and share repurchases may be made from
time to time subject to market conditions and other factors, including
as permitted by United States securities laws. Furthermore, any common
stock dividend is subject to available capital and market conditions.

NRG undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise, except as required by law. The adjusted EBITDA and free cash
flow guidance are estimates as of March 1, 2018. These estimates are
based on assumptions the company believed to be reasonable as of that
date. NRG disclaims any current intention to update such guidance,
except as required by law. The foregoing review of factors that could
cause NRG’s actual results to differ materially from those contemplated
in the forward-looking statements included in this Earnings press
release should be considered in connection with information regarding
risks and uncertainties that may affect NRG’s future results included in
NRG’s filings with the Securities and Exchange Commission at www.sec.gov.

NRG ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS

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

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

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

NRG ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS

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

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

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