NRG Energy (NRG) 10-K risk factor changes: FY2022 vs FY2021

NRG's risk factors are grouped into the following categories: (i) Risks Related to the [added: Proposed] Acquisition of [removed: Direct Energy;] [added: Vivint;] (ii) Risks Related to the Operation of NRG's Business; (iii) Risks Related to Governmental Regulation and Laws; (iv) Risks Related to [removed: Public Health Threats; and (v) Risks Related to] Economic and Financial Market Conditions, and the Company's [removed: Indebtedness.][added: Indebtedness; and (v) Risks Related to Public Health Threats.]

Risks Related to the [added: Proposed] Acquisition of [removed: Direct Energy][added: Vivint]

[removed: The] [added: If completed, the] acquisition of [removed: Direct Energy] [added: Vivint] may not achieve its intended results.

Achieving the anticipated benefits of [removed: cost savings and operating efficiencies of] the acquisition is subject to a number of uncertainties, including whether the businesses of NRG and [removed: Direct Energy] [added: Vivint] are integrated in an efficient and effective manner.

Failure to achieve these anticipated benefits could result in increased costs, lower-than-expected revenues or income generated by the combined company and diversion of management's time and [removed: energy, which] [added: energy and] could have an adverse effect on the Company's business, financial results and prospects.

The Company will be subject to business uncertainties [removed: related to Direct Energy] [added: and contractual restrictions while the acquisition of Vivint is pending] that could adversely affect its financial results.

Uncertainty about the effects of the acquisition of [removed: Direct Energy] [added: Vivint] on employees, customers and suppliers may have an adverse effect on NRG's business.

Although the Company intends to take steps designed to reduce any adverse effects, these uncertainties may impair its ability to attract, retain and motivate key personnel [added: until the acquisition is completed and] for a period of [removed: time,] [added: time thereafter,] and could cause customers, suppliers and others [removed: that deal with it] to seek to change existing business relationships.

Employee retention and recruitment may be particularly [removed: challenging,] [added: challenging prior to the completion of the acquisition,] as employees and prospective employees may experience uncertainty about their future roles with the [removed: Company.][added: combined company.]

If, despite the Company's retention and recruiting efforts, key employees depart or fail to accept employment with NRG because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with [removed: NRG,] the [added: combined company, the] Company's financial results could be affected.

The [added: pursuit of the acquisition and the preparation for the] integration of NRG and [removed: Direct Energy] [added: Vivint] may place a significant burden on management and internal resources.

[removed: Unlike most other commodities, electric] [added: Electric] power [removed: can only be stored on a very limited basis and] generally must be produced concurrently with its use.

The Company enters into guaranteed supply contracts to provide for the amount of coal needed to operate its base load coal-fired generating [removed: facilities, the Company may experience periods where it holds excess amounts of coal if fuel pricing results in the Company reducing or idling coal-fired generating] facilities.

NRG’s competitors may have greater liquidity, greater access to credit and other financial resources, lower cost structures, more effective risk management policies and procedures, greater ability to incur losses, longer-standing relationships with customers, greater [added: brand awareness, greater] potential for profitability from retail sales or greater flexibility in the timing of their sale of generation capacity and ancillary services than NRG does.

[removed: Disruptions in the Company's fuel supplies or power supply arrangements may therefore require it to find alternative fuel] sources at higher costs, to find other sources of power to deliver to retail customers or other counterparties at a higher cost, or to pay damages to counterparties for failure to deliver power or sell electricity or natural gas as contracted.

These derivatives are accounted for in accordance with the FASB ASC 815, *Derivatives and [removed: Hedging,* or ASC 815,] [added: Hedging* ("ASC 815"),] which requires the Company to record all derivatives on the balance sheet at fair value with changes in the fair value resulting from fluctuations in the underlying commodity prices immediately recognized in earnings, unless the derivative qualifies for [added: cash flow hedge accounting treatment or a scope exception.]

In addition, NRG provides plant operations and commercial services to a variety of [removed: third-parties.][added: third parties.]

There is a risk that mistakes, mis-operations, or actions taken by these [removed: third-parties] [added: third parties] could be attributed to NRG, including the risk of investigation [added: or penalties being assessed to NRG in connection with the services it offers, or that regulators could question whether NRG had the appropriate safeguards in place.]

A successful claim for which the Company is not [removed: fully] [added: adequately] insured or protected could hurt its financial results and materially harm NRG's financial condition.

NRG often relies on a single contracted supplier or a small number of suppliers for the provision [removed: of fuel,] [added: and] transportation of fuel, chemicals and other services required for the operation of certain of its facilities.

If these suppliers cannot [removed: perform,] [added: perform these services,] the Company utilizes the [removed: marketplace to provide these services.][added: marketplace.]

NRG cannot be certain of the level of capital expenditures that will be required due to changing environmental and safety laws (including changes in the interpretation or enforcement [removed: thereof)] [added: thereof),] needed facility repairs and unexpected events (such as natural disasters or terrorist attacks).

If transmission or distribution is disrupted, including by force majeure events, or if the transmission or distribution [added: infrastructure is inadequate, NRG's ability to deliver power may be adversely impacted.]

These proceedings typically involve multiple parties, including governmental bodies and officials, consumer advocacy groups and various consumers of energy, who have differing concerns but [removed: who] [added: also] have the common objective of limiting rate increases or even reducing rates.

The acquisition of companies and assets is subject to substantial risks, including the failure to identify material problems during due diligence, the risk of over-paying for assets or customers, the [removed: ability] [added: inability] to retain customers and the inability to arrange financing for an acquisition as may be required or desired.

Further, the integration and consolidation of acquisitions requires substantial human, financial and other [added: resources and, ultimately, the Company's acquisitions may not be successfully integrated.]

In the case of dispositions, such risks may relate to employment matters, counterparties, regulators and other stakeholders in the disposed business, [removed: risks relating to separating] the [added: separation of] disposed assets from NRG’s business, [removed: risks related to] the management of NRG’s ongoing business, [removed: risks unknown to NRG at the time,] and other financial, legal and operational [removed: risks related to such disposition.]

Risks that are beyond NRG's control, including but not limited to acts of terrorism or related acts of war, natural [removed: disaster, hostile cyber intrusions, data breaches] [added: disaster] or other catastrophic events could have a material adverse effect on NRG's financial condition, results of operations and cash flows.

Numerous functions affecting the efficient operation of NRG’s businesses depend on the secure and reliable storage, processing and communication of electronic data and the use of sophisticated computer hardware and software [removed: systems.][added: systems, much of which is connected (directly or indirectly) to the internet.]

In addition, NRG may experience increased capital and operating costs to implement increased security for its [removed: cyber systems and plants.][added: information technology infrastructure.]

[removed: In addition,] [added: Further,] the [removed: Company] [added: Company's retail business] requires [removed: access to] [added: accessing, collecting, storing and transmitting] sensitive [added: customer] data in the ordinary course of business.

[removed: NRG provides] [added: NRG's retail business may need to provide] sensitive [added: customer] data to vendors and service [removed: providers,] [added: providers] who require access to this information in order to provide [removed: services to NRG,] [added: services,] such as call center [removed: operations.][added: operations, to the retail business.]

If a [removed: significant] [added: material] breach [removed: occurs or if sensitive data that was entrusted to] [added: of] the [removed: Company] [added: Company's information technology systems] were [removed: mishandled,] [added: to occur,] the [added: critical operational capabilities and] reputation of [removed: NRG and] its [removed: businesses] [added: business] may be adversely affected, customer confidence may be diminished, [removed: or NRG] and [removed: its retail operations] [added: NRG] may be subject to [added: substantial] legal [added: or regulatory scrutiny and] claims, any of which may contribute to [added: potential legal or regulatory actions against] the [added: Company,] loss of customers and [added: otherwise] have a [removed: negative impact on the business and/or results of operations.][added: material adverse effect.]

In addition, shortages of skilled labor for Company projects could significantly delay a [added: project or otherwise increase its costs.]

As of December 31, [removed: 2021,] [added: 2022,] approximately [removed: 13%] [added: 12%] of NRG's employees were covered by collective bargaining agreements.

Although NRG's ability to procure such labor is uncertain, contingency staffing planning is completed as part of each respective contract [removed: negotiations.][added: negotiation.]

[removed: Strikes, work stoppages or the inability to negotiate future collective] bargaining agreements on favorable terms could have a material adverse effect on the Company's business, financial condition, results of operations and cash flows.

If NRG's generating and power marketing companies were to lose their market-based rate authority, such companies would be required to obtain FERC's acceptance of a cost-of-service rate schedule and could become subject to the accounting, [removed: record-][added: record-keeping, and reporting requirements that are imposed on utilities with cost-based rate schedules.]

The regulatory environment [removed: has undergone] [added: is subject to] significant changes [removed: in the last several years] due to state and federal policies affecting wholesale and retail competition and the creation of incentives for the addition of large amounts of new renewable generation and, in some cases, transmission.

In addition, [removed: since 2010,] there have been a number of reforms to the regulation of the derivatives markets, both in the United States and internationally.

The Company entered into the Purchase Agreement with the expectation that the acquisition would result in various benefits, including, among other things, cost savings and operating efficiencies.

In addition, the Company has agreed not to take any actions that would materially delay the satisfaction of any of the closing conditions to the transaction or prevent any of those conditions from being satisfied.

This restriction on the Company's actions may prevent it from pursuing otherwise attractive business opportunities or making other changes to its business prior to the completion of the acquisition or termination of the merger agreement.

The Company may experience periods where it holds excess amounts of coal if fuel pricing results in the Company reducing or idling coal-fired generating facilities.

Disruptions in the Company's fuel supplies or power supply arrangements may therefore require it to find alternative fuel

matters related to such disposition, which may be unknown to NRG at the time.

The operation of the Company's businesses is subject to advanced persistent cyber-based security threats and integrity risk.

Attacks on NRG's infrastructure that breach cyber/data security measures could expose the Company to significant liabilities, reputational damage, regulatory action, and disrupt business operations, which could have a material adverse effect.

As a result, NRG's information technology systems and infrastructure, and those of its vendors and suppliers, are susceptible to cyber-based security threats which could compromise confidentiality, integrity or availability.

While the Company has controls in place designed to protect its infrastructure, such breaches and threats are becoming increasingly sophisticated and complex, requiring continuing evolution of its program.

Any such breach, disruption or similar event that impairs NRG's information technology infrastructure could disrupt normal business operations and affect the Company's ability to control its generation assets, maintain confidentiality, availability and integrity of restricted data, access retail customer information and limit communication with third parties, which could have a material adverse effect on the Company.

As part of the continuing development of new and modified reliability standards, the FERC has approved changes to its Critical Infrastructure Protection reliability standards and has established standards for assets identified as "critical cyber assets." Under the Energy Policy Act of 2005, the FERC can impose penalties (up to $1 million per day, per violation) for failure to comply with mandatory electric reliability standards, including standards to protect the power system against potential disruptions from cyber/data and physical security breaches.

Concerns about data privacy have led to increased regulation and other actions that could impact NRG's businesses and changes in data privacy and data protection laws and regulations or any failure to comply with such laws and regulations could adversely affect the Company's business and financial results.

Although the Company takes precautions to protect its infrastructure, it has been, and will likely continue to be, subject to attempts at phishing and other cybersecurity intrusions.

International conflict increases the risk of state-sponsored cyber threats and escalated use of cybercriminal and cyber-espionage activities.

In particular, the current geopolitical climate has further escalated cybersecurity risk, with various government agencies, including the U.S. Cybersecurity & Infrastructure Security Agency, issuing warnings of increased cyber threats, particularly for U.S. critical infrastructure.

While the Company has not experienced a cyber/data event causing any material operational, reputational or financial impact, it recognizes the growing threat within the general marketplace and the industry, and there is no assurance that NRG will be able to prevent any such impacts in the future.

Any loss or disruption of critical operational capabilities to support the Company's generation, commercial or retail operations, loss of customers, or loss of confidential or proprietary data through a breach, unauthorized access, disruption, misuse or disclosure could adversely affect NRG's reputation, expose the Company to material legal or regulatory claims and impair the Company's ability to execute its business strategy, which could have a material adverse effect.

NRG cannot provide any assurance that such events and impacts will not be material in the future, and the Company's efforts to deter, identify and mitigate future breaches may require additional significant capital and may not be successful.

Negative publicity may damage NRG's reputation or its brands.

NRG’s reputation and brands could be damaged for numerous reasons, including negative views of the Company’s environmental impact, sustainability goals, supply chain practices, product and service offerings, sponsorship relationships, charitable giving programs and public statements made by Company officials.

The Company may also experience criticism or backlash from media, customers, employees, government entities, advocacy groups and other stakeholders that disagree with positions taken by the Company or its executives.

If the Company’s brands or reputation are damaged, it could negatively

impact the Company’s business, financial condition, results of operations, and ability to attract and retain highly qualified employees.

Strikes, work stoppages or the inability to negotiate future collective

These out-of-market subsidies to existing or new

Additions or changes in tax laws and regulations could potentially affect the Company’s financial results or liquidity.

NRG is subject to various types of tax arising from normal business operations in the jurisdictions in which the Company operates.

Any additions or changes to tax legislation, or their interpretation and application, including those with retroactive effect, could have a material adverse effect on NRG’s financial condition and results of operations, including income tax provision and accruals reflected in the consolidated financial statements.

The Inflation Reduction Act, enacted on August 16, 2022, includes the implementation of a 15% corporate alternative minimum tax (“CAMT”) effective in 2023.

The CAMT may lead to volatility in the Company’s cash tax payment obligations, particularly in periods of significant commodity or currency variability resulting from potential changes in the fair value of derivative instruments.

There remains unanswered questions on how the operative rules for CAMT will be implemented and interpreted.

The Company continuously monitors and assesses proposed tax legislation that could negatively impact its business.

NRG's GHG emissions reduction targets can be found in Item 1, *Business —Environmental Regulatory Matters*.

The Company's ability to achieve these targets depends on many factors, including the ability to retire high emitting assets, ability to reduce emissions based on technological advances and innovation, and ability to source energy from less carbon intense resources.

In addition, any future decarbonization efforts may increase costs, or NRG may otherwise be limited in its ability to apply them.

The cost associated with NRG's GHG emissions reduction goals could be significant.

Failure to achieve the Company's emissions targets could result in a negative impact on access to and cost of capital, changing investor sentiment regarding investment in the Company or reputation harm.

governmental entities or individuals.

regional wholesale power markets; NRG's financial performance and the financial performance of its subsidiaries; NRG's level of indebtedness and compliance with covenants in debt agreements; maintenance of acceptable credit ratings; cash flow; and provisions of tax and securities laws that may impact raising capital.

The integration of NRG and Direct Energy may disrupt or have a negative impact on the Company’s business.

The acquisition of Direct Energy is complex, and the Company will devote significant time and resources to integrating its operations with the operations of NRG.

NRG could have difficulty integrating the acquired assets and personnel of Direct Energy with its own.

Risks that could impact the Company negatively include:

- the difficulty of managing and integrating Direct Energy and its operations;

- the potential disruption of the ongoing businesses and distraction of management;

- changes in our business focus and/or management;

- difficulties in implementing and maintaining uniform processes, systems, standards, controls, procedures, practices, policies and compensation standards;

- unanticipated issues in integrating information technology, communications, and other systems;

- the possibility of faulty assumptions underlying expectations regarding the integration process;

- the potential impairment of relationships with employees and partners;

- unforeseen expenses associated with the acquisition of Direct Energy, including delays to the integration of Direct Energy’s business as a result of the COVID-19 pandemic;

- the potential difficulty in managing an increased number of locations and employees;

- the potential loss of valuable employees;

- difficulty addressing any possible differences in corporate cultures and management philosophies;

- unanticipated changes in federal or state laws or regulations; and

- the effect of any government regulations that relate to the business acquired.

If the Company is not successful in addressing these risks effectively, the business could be impacted.

Many of these factors will be outside of the Company’s control, and any one of them could result in delays, increased costs, decreases in the amount of expected revenues and diversion of management’s time and energy, which could materially affect NRG’s business, results of operations and financial condition.

cash flow hedge accounting treatment or a scope exception.

or penalties being assessed to NRG in connection with the services it offers, or that regulators could question whether NRG had the appropriate safeguards in place.

infrastructure is inadequate, NRG's ability to deliver power may be adversely impacted.

resources and, ultimately, the Company's acquisitions may not be successfully integrated.

Hostile cyber intrusions, including those targeting information systems, as well as electronic control systems used at the generation facilities and for the distribution systems, could severely disrupt business operations and result in loss of service to customers, as well as significant expense to repair security breaches or system damage.

The operation of NRG’s generation plants, including STP, and of NRG's energy and fuel trading businesses rely on cyber-based technologies and, therefore, are subject to the risk that such systems could be the target of disruptive actions, particularly through cyber-attack or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, or otherwise be compromised by unintentional events.

As a result, operations could be interrupted, property could be damaged and sensitive customer information could be lost or stolen, causing NRG to incur significant losses of revenues, other substantial liabilities and damages, costs to replace or repair damaged equipment and damage to NRG's reputation.

Examples of sensitive data are names, addresses, account information, historical electricity usage, expected patterns of use, payment history, credit bureau data, credit and debit card account numbers, driver's license numbers, social security numbers and bank account information.

project or otherwise increase its costs.

keeping, and reporting requirements that are imposed on utilities with cost-based rate schedules.

upgrading and improvement.

NRG's GHG emissions for 2021 can be found in Item 1, *Business —Environmental Regulatory Matters.* GHG regulation, at the state or federal level, could increase the cost of electricity generated by fossil fuels, and such increases could reduce demand for the power NRG generates and markets.

Any increase in costs at a national, regional or state level could adversely affect NRG’s results of operations, financial condition and cash flows

business activities.

In particular, the continued spread of COVID-19 and efforts to contain the virus could:

- adversely impact demand for the Company’s electricity services and other products and services and the ability of customers to pay their bills;

- cause an increase in costs for the Company as a result of emergency measures taken by state and local regulatory authorities in response to the COVID-19 crisis, including regulatory changes prohibiting customer disconnects and late fees;

- impact the ability of the Company's partners or counterparties to perform their obligations under existing arrangements, including development projects, power purchase and sale arrangements, hedging arrangements or other commercial activities; and

- cause other unpredicted events which may have an adverse impact on the Company’s results of operations, financial condition, risk exposure and liquidity.

The situation surrounding COVID-19 remains fluid and the potential for a material impact on the Company’s results of operations, financial condition, risk exposure and liquidity increases the longer the virus, or any variants thereof, impacts the level of economic activity in the United States and abroad.

- Business uncertainties related to the integration of the operations of Direct Energy with its own;

- Results of operations for the years ended December 31, [removed: 2021] [added: 2022] and December 31, [removed: 2020,] [added: 2021,] including an explanation of significant differences between the periods in the specific line items of NRG's Consolidated Statements of Operations;

- [removed: Financial] [added: Liquidity and capital resources including liquidity position, financial] condition addressing credit ratings, [removed: liquidity position, sources and uses of cash, capital resources and requirements, contractual obligations] [added: material cash requirements] and [removed: market] commitments, and [removed: off-balance sheet arrangements;] [added: other obligations;] and

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, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and also refer to Item 1 to this Form 10-K for more detail discussion about the Company's business.

A discussion and analysis of fiscal year [removed: 2019] [added: 2020] 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, [removed: 2020.][added: 2021.]

The Company has a customer base that includes approximately [removed: 6] [added: 5.4] million Home customers as well as commercial, industrial, and wholesale customers, supported by approximately [removed: 18,000 MW] [added: 16 GW] of generation as of December 31, [removed: 2021.][added: 2022.]

The industry dynamics and external influences affecting the Company, its businesses, and the retail energy and power generation industry in [removed: 2021] [added: 2022] and for the future medium term include:

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, [added: global LNG demand, exports of natural gas,] and the financial and hedging profile of natural gas customers and producers.

In [removed: 2021,] [added: 2022,] the average natural gas price at Henry Hub was [removed: 85%] [added: 73%] higher than in [removed: 2020.][added: 2021.]

NRG may experience impacts to gross margins due to significant, rapid changes in current natural gas prices and the lag in [removed: our] [added: its] ability to make a corresponding adjustment to the retail rates [removed: we charge] [added: 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 [removed: we are] [added: it is] able to make the corresponding adjustments to the retail customer rates.

[removed: Natural] [added: The relative price of natural] gas [removed: prices are a] [added: as compared to coal is the] primary driver of coal demand.

The following table summarizes average on-peak power prices for each of the major markets in which NRG operates for the years ended December 31, [removed: 2021] [added: 2022] and [removed: 2020.][added: 2021.]

The average on-peak power prices [removed: increased] [added: decreased] significantly in Texas due to [removed: the impact from] Winter Storm [removed: Uri.][added: Uri's impact on 2021 pricing.]

[removed: The] [added: East and West] average on-peak [removed: power] prices increased [removed: in East and West/Services/Other due to] [added: as a result of] higher natural gas prices.

| | | | Year Ended December 31, | | | | | | | | | | | | [removed: 2021] [added: 2022] vs [removed: 2020] [added: 2021] | | |

| Region | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | Change % | | |

| Texas [removed: (a)] | | | | | | | | | | | | | | | | | |

| ERCOT - Houston(a) | | | $ | [removed: 192.17] [added: 90.62] | | | | | $ | [removed: 27.65] [added: 192.17] | | | | | [removed: 595] [added: (53)] | | % |

| ERCOT - North(a) | | | [removed: 189.05] [added: 78.34] | | | | | | [removed: 25.85] [added: 189.05] | | | | | | [removed: 631] [added: (59)] | | % |

| NY J/NYC(b) | | | [removed: 48.71] [added: 93.58] | | | | | | [removed: 24.55] [added: 48.71] | | | | | | [removed: 98] [added: 92] | | % |

| NEPOOL(b) | | | [removed: 51.81] [added: 92.42] | | | | | | [removed: 26.52] [added: 51.81] | | | | | | [removed: 95] [added: 78] | | % |

| COMED (PJM)(b) | | | [removed: 41.33] [added: 71.86] | | | | | | [removed: 22.48] [added: 41.33] | | | | | | [removed: 84] [added: 74] | | % |

| PJM West Hub(b) | | | [removed: 45.67] [added: 83.48] | | | | | | [removed: 24.49] [added: 45.67] | | | | | | [removed: 86] [added: 83] | | % |

| CAISO - SP15(b) | | | [removed: 53.53] [added: 87.67] | | | | | | [removed: 38.15] [added: 53.53] | | | | | | [removed: 40] [added: 64] | | % |

| MISO - Louisiana Hub(b) | | | [removed: 43.05] [added: 71.12] | | | | | | [removed: 24.43] [added: 43.05] | | | | | | [removed: 76] [added: 65] | | % |

[removed: (a) Average] [added: (a)Average] on-peak power prices based on real time settlement prices as published by the respective ISOs

[removed: (b) Average] [added: (b)Average] on-peak power prices based on day-ahead settlement prices as published by the respective ISOs

| West/Services/Other | | | [removed: 43.63] [added: (23)] | | | | | | [removed: 34.80] [added: —] | | | | | | [removed: 25] [added: (14)] | | [removed: %] | [added: | | | (37) | | |]

*Increased Awareness of, and Action to Combat, Climate Change* [removed: — Diverse] [added: —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 [removed: well below 2] [added: 1.5] degrees Celsius.

As a result, policymakers and regulators at regional, national, sub-national and local levels of government, both in the [removed: United States] [added: U.S.] and other parts of the world, are increasingly focused on actions to combat climate change.

The Company [removed: became] [added: 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.

[removed: In addition, the] [added: As] costs associated with the development of lower carbon infrastructure, such as wind and solar generating facilities, continue to [removed: decline.][added: evolve and impact 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, [removed: 39%] [added: 41%] of [removed: 2021] [added: 2022] energy consumption in the ERCOT market was generated from carbon emission-free resources, with wind power contributing [removed: 24%.][added: 25%.]

In addition, [added: as] subsidies and incentives [removed: have contributed] [added: contribute] to [removed: the increase] [added: increases] in renewable power sources, [removed: and] customer awareness and preferences are shifting toward sustainable solutions.

*Digitization and Customization* — The electric industry is experiencing major technology changes in the way power is distributed and [removed: used] [added: consumed] by end-use customers.

Technologies like smart thermostats, [added: smart] appliances and electric vehicles are giving individuals more choice and control over their electricity usage.

*Global Supply Chain Disruptions —* There are currently global supply chain disruptions impacting natural gas, [removed: coal] [added: coal, solar] and other fuels and materials necessary for the production and sale of electricity to [removed: our] [added: the Company's] retail customers.

These supply chain disruptions are due in part to [removed: increased demand driven by] a number of factors outside the Company's control including [added: geopolitical conflicts, public policy of] the [added: federal government, the] COVID-19 pandemic, labor shortages and extreme weather events in the U.S. These factors are impacting the dispatch of generation facilities, as well as the costs to serve [removed: our] retail customers.

The Company expects [added: that] supply chain disruptions will continue throughout the remainder of [removed: 2022.][added: 2023.]

[removed: We are] [added: NRG is] working closely with [removed: our] [added: its] suppliers and customers to minimize any potential adverse impacts of these events.

Coal commodity prices decreased in 2022 although supply chain disruptions are still affecting coal deliveries, as further discussed below in Global Supply Chain Disruptions.

The U.S. Inflation Reduction Act, signed into law in August 2022, is intended to further support the deployment of lower carbon energy technologies.

- performance of renewable generation;

*Vivint Acquisition*

On December 6, 2022, NRG and Vivint Smart Home, Inc. announced the entry into a definitive agreement under which the Company will acquire Vivint in an all-cash transaction.

The Company will pay $12 per share, or approximately $2.8 billion in cash, and expects to fund the acquisition using proceeds from newly issued debt and preferred equity, drawing on its Revolving Credit Facility and Receivables Securitization Facilities, and through cash on hand.

Additionally, in the first quarter of 2023, NRG increased its Revolving Credit Facility by $600 million to meet the additional liquidity requirements related to the acquisition.

Close of the acquisition is targeted for the first quarter of 2023 and is subject to customary closing conditions.

*Astoria*

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 initial proceeds of $212 million subject to transaction 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 through the planned April 30, 2023 retirement date.

The operating lease agreement is expected to end six months after the facility's actual retirement date.

*Sale of Watson*

On June 1, 2022, the Company closed on the sale of its 49% ownership in the Watson natural gas generating facility for $59 million.

*Retirement of Joliet*

In May 2022, W.A. Parish Unit 8 came offline as a result of damage to the steam turbine/generator.

Based on work completed to date, NRG is targeting to return the unit to service by the end of the second quarter of 2023.

The Company is working with its insurers related to claims surrounding the outage and has received partial settlements in the fourth quarter of 2022.

*Limestone Unit 1 Return to Service*

The extended forced outage ended in April of 2022 and the unit has returned to service.

*ERCOT Securitization Proceeds*

In 2021, the Texas Legislature passed HB 4492 for ERCOT to mitigate exceptionally high price adders and ancillary service costs incurred by LSEs during Winter Storm Uri.

The Company accounted for the proceeds as a reduction to cost of operations within its Consolidated Statements of Operations in the 2021 annual period for which the proceeds were intended to compensate.

The Company received the proceeds of $689 million from ERCOT in June 2022.

The remaining $355 million repurchases under the $1.0 billion authorization are expected to be repurchased in 2023, subject to the availability of excess cash and full visibility of the achievement of the Company's 2023 targeted credit metrics.

As of December 31, 2022, NRG has entered into Renewable PPAs totaling approximately 2.4 GW, of which approximately 45% are operational.

| Total revenues | | | 31,543 | | | | | | 26,989 | | | | | | 4,554 | | |

| Cost of fuel | | | 1,919 | | | | | | 1,840 | | | | | | (79) | | |

| Gain on sale of assets | | | 52 | | | | | | 247 | | | | | | (195) | | |

| Income Before Income Taxes | | | 1,663 | | | | | | 2,859 | | | | | | (1,196) | | |

| Retail revenue | | | $ | 9,617 | | | | | $ | 15,856 | | | | | $ | 4,250 | | | | | | | | | | | $ | (1) | | | | | $ | 29,722 | |

| Energy revenue | | | 111 | | | | | | 641 | | | | | | 466 | | | | | | | | | | | | 32 | | | | | | 1,250 | | |

| Capacity revenue | | | — | | | | | | 232 | | | | | | 40 | | | | | | | | | | | | — | | | | | | 272 | | |

| Other revenue(a) | | | 327 | | | | | | 104 | | | | | | 5 | | | | | | | | | | | | (15) | | | | | | 421 | | |

| Total revenue | | | 10,057 | | | | | | 16,763 | | | | | | 4,706 | | | | | | | | | | | | 17 | | | | | | 31,543 | | |

| Cost of fuel | | | (1,213) | | | | | | (376) | | | | | | (330) | | | | | | | | | | | | — | | | | | | (1,919) | | |

| Gross margin | | | $ | 2,766 | | | | | $ | 1,524 | | | | | $ | 970 | | | | | | | | | | | $ | (34) | | | | | $ | 5,226 | |

| Less: Contract and emission credit amortization, net | | | — | | | | | | (131) | | | | | | (19) | | | | | | | | | | | | — | | | | | | (150) | | |

| Economic gross margin | | | $ | 2,463 | | | | | $ | 1,675 | | | | | $ | 627 | | | | | | | | | | | $ | (3) | | | | | $ | 4,762 | |

| (c)Includes $3,043 million, $120 million and $1,134 million of TDSP expense in Texas, East, and West/Services/Other respectively | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

As further described in Item 15 *—* Note 4, *Acquisitions, Discontinued Operations and Dispositions*, to the Consolidated Financial Statements, the Company determined in prior years that the following businesses were discontinued operations and recast to present their results in the corporate segment:

- South Central Portfolio

- NRG Yield, Inc. and its Renewables Platform

- Carlsbad

Coal commodity prices increased significantly in 2021, which is partly due to supply chain disruptions, as further discussed below in *Global Supply Chain Disruptions*, as well as stressed coal equities, which has led coal suppliers to file for bankruptcy protection, launch debt exchanges, rationalize assets, and cut production.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

The following table summarizes average realized power prices for NRG, including the impact of settled hedges, for the years ended December 31, 2021 and 2020:

| | | | Average Realized Power Price ($/MWh) | | | | | | | | | | | | | | |

| Segment | | | 2021 | | | | | | 2020 | | | | | | Change % | | |

| East(a) | | | $ | 36.33 | | | | | $ | 34.92 | | | | | 4 | | % |

(a) Average Realized Power Price reflects energy sales from the generation fleet, including sales to the retail component of the East Segment.

Intercompany financial transactions hedging generation with the retail operations make up ($8.03)/MWh in the year ended December 31, 2021 and $12.18/MWh in the year ended December 31, 2020

The average realized power prices increased less than average on peak power prices for the year ended December 31, 2021, as compared to the same period in 2020, due to the Company's multi-year hedging program impacting average realized power prices, while on peak power prices increased due to increased natural gas prices and warmer June temperatures in California.

These factors continue to drive increases in the development of lower carbon infrastructure in the markets where the Company participates, which may impact the ability of the Company's generating facilities to participate in those markets.

A significant portion of the Company's business is located within Texas, and extreme weather conditions occurring in Texas may have a material impact on the Company's financial position.

For discussion of the recent weather event in Texas, see *Significant Events - Extreme Weather Event in Texas During February 2021* *and expected Uplift Securitization Proceeds* below.

On August 23, 2021, the Company issued $1.1 billion of aggregate principal amount at par of 3.875% senior notes due 2032 (the "2032 Senior Notes").

The 2032 Senior Notes are senior unsecured obligations of NRG and are guaranteed by certain of its subsidiaries.

The 2032 Senior Notes were issued under NRG's Sustainability-Linked Bond Framework, which sets out certain sustainability targets, including reducing greenhouse gas emissions.

Failure to meet such sustainability targets will result in a 25 basis point increase to the interest rate payable on the 2032 Senior Notes from and including August 15, 2026.

During the year ended December 31, 2021, the Company redeemed $1.9 billion in aggregate principal of its Senior Notes for $1.9 billion using the proceeds of the 2032 Senior Notes and cash on hand.

*Extreme Weather Event in Texas During February 2021 and expected Uplift Securitization proceeds*

Ahead of the event, NRG launched residential customer communications calling for conservation across all of its brands, and initiated residential and commercial and industrial demand response programs to curtail customer load.

The Company maximized available generating capacity and brought in additional resources to supplement in-state staff with technical and operating experts from the rest of its U.S. fleet.

Based on LSE-level detail published by the PUCT on December 7, 2021, NRG will receive $689 million from ERCOT.

The Company continues to pursue additional mitigants including, but not limited to, customer bad debt mitigation, counterparty default recovery, and additional ERCOT default recovery.

*Direct Energy Acquisition*

On January 5, 2021, the Company acquired Direct Energy, which had been a North American subsidiary of Centrica.

Direct Energy is a leading retail provider of electricity, natural gas, and home and business energy related products and services in North America, with operations in all 50 U.S. states and 8 Canadian provinces.

The acquisition increased NRG's retail portfolio by over 3 million customers and complements 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.

Based on management's current assessment of necessary remediation efforts, Limestone Unit 1 is expected to remain on an outage until the second quarter of 2022.

*PJM Base Residual Auction results and Planned Retirement of 1,600 MWs of PJM Coal Capacity*

On July 30, 2021, PJM identified reliability impacts resulting from the proposed deactivation of one of those assets, Indian River Unit 4.

On August 27, 2021 the Company notified PJM that it would continue operations at Indian River Unit 4 until the reliability upgrades identified by PJM were completed, provided that the unit receives a satisfactory and compensatory 'reliability must run' arrangement.

The Company recorded impairment losses of $271 million and $35 million on the PJM generating assets and Midwest Generation goodwill, respectively, in connection with the decline in PJM capacity prices and the near-term retirement dates of certain assets.

The Company is continuing to evaluate the viability of the remaining PJM generating assets.

*Sale of 4.8 GW of Fossil Generation Assets*

On December 1, 2021, the Company sold approximately 4,850 MWs of fossil generating assets from its East and West regions of operations to Generation Bridge, an affiliate of ArcLight Capital Partners.

As part of the transaction, NRG entered into a tolling agreement for the 866 MW Arthur Kill plant in New York City through April 2025.

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 [removed: electricity] [added: power] and fuel.

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, [removed: 2021] [added: 2022] and [removed: 2020:][added: 2021:]

| (In millions) | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | |

| VaR as of December 31, [removed: (a)] | | | $ | [removed: 30] [added: 74] | | | | | $ | 30 | |

| [removed: Average(b)] [added: Average(a)] | | | $ | [removed: 35] [added: 51] | | | | | $ | [removed: 30] [added: 35] | |

| [removed: Maximum(b)] [added: Maximum(a)] | | | [removed: 53] [added: 86] | | | | | | [removed: 47] [added: 53] | | |

| [removed: Minimum(b)] [added: Minimum(a)] | | | [removed: 23] [added: 26] | | | | | | [removed: 22] [added: 23] | | |

[removed: (b)Calculation] [added: (a)Calculation] is based on NRG generation assets and load obligations excluding the acquisition of Direct Energy assets and load obligations in the first quarter of 2021

[removed: 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 [removed: $242] [added: $413] million as of December 31, [removed: 2021,] [added: 2022,] primarily driven by asset-backed transactions.

As of December 31, [removed: 2021,] [added: 2022,] 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.

The Company's provision for credit losses resulting from credit risk was [removed: $698] [added: $11] million, [removed: $108] [added: $698] million and [removed: $95] [added: $108] million for the years ending December 31, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019,] [added: 2020,] respectively.

Based on a sensitivity analysis for power and gas positions under marginable contracts as of December 31, [removed: 2021,] [added: 2022,] 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 [removed: $828] [added: $811] million 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 [removed: $378] [added: $380] million.

This analysis uses simplified assumptions and is calculated based on portfolio composition and margin-related contract provisions as of December 31, [removed: 2021.][added: 2022.]

As of December 31, [removed: 2021,] [added: 2022,] counterparty credit exposure, excluding credit exposure from RTOs, ISOs, and registered commodity exchanges and certain long-term agreements, was [removed: $2.2] [added: $2.7] billion, of which the Company held collateral (cash and letters of credit) against those positions of [removed: $598 million] [added: $1.0 billion] resulting in a net exposure of [removed: $1.6] [added: $1.7] billion.

Approximately [removed: 87%] [added: 80%] of the Company's exposure before collateral is expected to roll off by the end of [removed: 2023.][added: 2024.]

As of December 31, [removed: 2021,] [added: 2022,] the aggregate credit exposure is shown net of collateral held, and includes amounts net of receivables or payables.

| Utilities, energy merchants, marketers and other | | | [removed: 67] [added: 62] | | % |

| Financial institutions | | | [removed: 33] [added: 38] | | |

| Investment grade | | | [removed: 55] [added: 65] | | % |

| Non-Investment grade/Non-Rated | | | [removed: 45] [added: 35] | | |

The Company has no exposure to wholesale counterparties in excess of 10% of the total net exposure discussed above as of December 31, [removed: 2021.][added: 2022.]

During Winter Storm Uri, [added: in February 2021,] the Company experienced nonperformance by a counterparty in one of its bilateral financial hedging transactions, resulting in exposure of $403 million.

Counterparty credit exposure described above excludes credit risk exposure under certain long-term contracts, primarily solar [added: under Renewable] PPAs.

Based on these valuation techniques, as of December 31, [removed: 2021,] [added: 2022,] aggregate credit risk exposure managed by NRG to these counterparties was approximately $1.1 billion for the next five years.

As of December 31, [removed: 2021,] [added: 2022,] the Company's debt fair value was [removed: $8.3] [added: $7.0] billion and carrying value was [removed: $8.0] [added: $8.1] 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 [removed: $690] [added: $480] million.

The collateral potentially required for contracts with adequate assurance clauses that are in a net liability position as of December 31, [removed: 2021,] [added: 2022,] was [removed: $1.0] [added: $1.5] billion.

The Company is also a party to certain marginable agreements under which it has a net liability position, but the counterparty has not called for the collateral due, which was approximately [removed: $70] [added: $195] million as of December 31, [removed: 2021.][added: 2022.]

In the event of a downgrade in the Company's credit rating and if called for by the counterparty, [removed: $1] [added: $30] million of additional collateral would be required for all contracts with credit rating contingent features as of December 31, [removed: 2021.][added: 2022.]

NRG is subject to transactional exchange rate risk from transactions with customers in countries outside of the [removed: United States,] [added: 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 [removed: our] [added: the Company's] functional currency or the functional currency of an applicable subsidiary.

As of December 31, [removed: 2021,] [added: 2022,] 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 notional amount of [removed: $279] [added: $569] million.

Costs incurred and sales recorded by subsidiaries operating outside of the [removed: United States] [added: U.S.] are translated into U.S. dollars using exchange rates effective during the respective period.

A hypothetical 10% appreciation in major currencies relative to the U.S. dollar as of December 31, [removed: 2021] [added: 2022,] would have resulted in an increase of [removed: $10] [added: $17] million to net income within the Consolidated Statement of Operations.

The increase in the range of the daily VaR results was primarily due to increased commodity prices and market volatility during 2022 as compared to 2021.

The VaR for the derivative

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.

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.

During December 2022, the Company received $70 million as part of the Company's loss mitigation efforts related to this exposure.

(a)Calculation includes entire NRG portfolio as of December 31, 2021

The increase in the VaR for derivative financial instruments was primarily due to the acquisition of Direct Energy.

As a result of Winter Storm Uri, the Company incurred additional credit losses from Business customers primarily due to a segment of customers whose contracts included a pass through of wholesale power prices which were significantly escalated during the storm and from customers who failed to meet their obligations in ERCOT load curtailment programs.

The Company is pursuing all means available to enforce its rights under this transaction but, given the size of the exposure, cannot determine with certainty what the amount of its ultimate recovery will be.

The full exposure was recorded as a provision for credit losses during the year ended December 31, 2021.

In addition, as a result of the acquisition of Direct Energy from Centrica, certain of the Company’s agreements as of December 31, 2021, were still supported by credit support posted by Centrica, and as a result could require the Company to post collateral upon a deterioration or downgrade of Centrica.

The Company has a customer base that includes approximately [removed: 6] [added: 5.4] million Home customers as well as commercial, industrial, and wholesale customers, supported by approximately [removed: 18,000 MW] [added: 16 GW] of generation as of December 31, [removed: 2021.][added: 2022.]

NRG sold [removed: 157] [added: 155] TWhs of electricity and [removed: 1,877] [added: 1,918] MMDth of natural gas in [removed: 2021,] [added: 2022,] making it one of the largest competitive energy retailers in the U.S. As of the end of [removed: 2021,] [added: 2022,] NRG had recurring electricity and/or natural gas sales in 24 U.S. states, the District of Columbia, and 8 provinces in Canada.

The following chart represents NRG's sales volumes for the year ended December 31, [removed: 2021:][added: 2022:]

[removed: ][added: ]

Sustainability is a philosophy that underpins and facilitates value creation across [removed: our] [added: NRG's] business for [removed: our] [added: its] stakeholders.

To effectuate the Company’s strategy, NRG is focused on: (i) serving the energy needs of end-use residential, commercial and industrial, and wholesale [removed: customers] [added: counterparties] in competitive markets through multiple brands and channels; (ii) offering a variety of energy products and services, including renewable energy solutions, that are differentiated by innovative features, premium service, sustainability, and loyalty/affinity programs; (iii) excellence in operating performance of its assets; (iv) optimal hedging of its portfolio; and (v) engaging in disciplined and transparent capital allocation.

The Company [removed: implemented] [added: announced in 2021] a four-year [removed: plan beginning] [added: plan, that began] in [removed: 2022 to invest up] [added: 2022,] to [added: spend] $2 billion in order to achieve growth through optimization of the Company's core power and natural gas sales, as well as integrated solution sales within its core network in both power and home services.

On July 30, 2021, PJM [added: responded to the deactivation notice and stated that PJM had] identified reliability [removed: impacts] [added: violations] resulting from the proposed deactivation of [removed: one of those assets, Indian River] Unit 4.

- Texas, which includes all activity related to customer, plant and market operations in [removed: Texas;][added: Texas, other than Cottonwood;]

[removed: As of December 31, 2021, in] [added: In] Texas, the Company’s generation supply is fully integrated with its retail load.

The [removed: Company’s] integrated model [removed: in Texas] provides the advantage of being able to supply a [removed: significant] portion of the Company’s retail customers with electricity from the Company’s assets, which reduces the need to sell electricity to and buy electricity from other institutions and intermediaries, resulting in stable earnings and cash flows, lower transaction costs and less credit exposure.

Following the expansion of the customer base with the acquisition of Direct [removed: Energy,] [added: Energy in 2021,] Customer Operations now comprises three end-use customer facing teams: NRG Home, which serves residential customers, NRG Business, which serves business customers, and NRG Services, which primarily includes the services businesses acquired.

Market Operations has two primary objectives: [removed: (i)] to supply energy to [removed: our] customers in the most cost-efficient [removed: manner;] [added: manner] and [removed: (ii)] to maximize the value of the Company's assets after satisfying its customer load requirements.

To meet the market operations objectives, NRG enters into supply, power and gas [removed: sales and] hedging agreements via a wide range of products and contracts, including (i) physical and financial commodity instruments, (ii) fuel supply and transportation contracts, (iii) [removed: renewable] PPAs and [added: Renewable PPAs and] (iv) capacity and other contracted revenue [added: or supply] sources, as further discussed below.

The Company believes it is adequately hedged, using forward coal supply agreements, for its domestic coal consumption for [removed: 2022.][added: 2023.]

As of December 31, [removed: 2021,] [added: 2022,] NRG had purchased forward contracts to provide fuel for approximately [removed: 88%] [added: 89%] of the Company's expected requirements for [removed: 2022] [added: 2023] and [removed: 2023.][added: 2024.]

For the domestic fleet, NRG purchased approximately [removed: 16.1] [added: 15.3] million tons of coal in [removed: 2021,] [added: 2022,] almost all of which was Powder River Basin coal.

For fuel transport, NRG has entered into various rail transportation and rail car lease agreements with varying [removed: tenors] [added: tenures] that will provide for most of the Company's transportation requirements of Powder River Basin coal for the next [removed: three] [added: two] years.

Through its proportionate participation in STPNOC, which is the NRC-licensed operator of STP that is responsible for all aspects of fuel procurement, NRG is party to a number of long-term forward purchase contracts with many of the world's largest suppliers covering STP's requirements for uranium concentrates [removed: with only approximately 25%] of [added: all of] STP's requirements [removed: outstanding] [added: through 2025 and 75%] for the duration of the original operating license (through 2027/2028).

As of December 31, [removed: 2021,] [added: 2022,] NRG has entered into [added: Renewable] PPAs totaling approximately [removed: 2.6] [added: 2.4] GW with third-party project developers and other [removed: counterparties.][added: counterparties, of which approximately 45% are operational.]

The average [removed: tenor] [added: tenure] of these agreements is twelve years.

The total GW entered into through [added: Renewable] PPAs may be impacted by contract terminations when they occur.

The Company's largest sources of continuing capacity revenues are capacity auctions in [removed: PJM and NYISO.][added: PJM.]

The Direct Energy acquisition, which closed on January 5, 2021, significantly increased [removed: our] [added: the Company's] capabilities and scale across the natural gas value chain.

NRG has [removed: acquired] contractual rights to natural gas transportation and storage assets across its footprint that allow for optimal supply economics in support of [removed: our] [added: its] various businesses.

[removed: Our] [added: NRG's] diversified load coupled with this asset portfolio enables [removed: us] [added: the Company] to deliver supply economically while providing incremental optimization activities when market conditions allow.

The scale of the natural gas operation extends from the wellhead (through [removed: our] [added: its] producer services business) to [removed: our] end use customers (through [removed: our] [added: NRG's] various sales channels).

This scale, coupled with [removed: our] [added: the Company's] associated assets, gas system platform and people, create significant opportunity across North America.

The Company owns and leases a diversified wholesale generation portfolio with approximately [removed: 18,000 MW] [added: 16 GW] of fossil fuel, nuclear and renewable generation capacity at [removed: 25] [added: 23] plants as of December 31, [removed: 2021, including approximately 1,600 MW of its PJM coal fleet with an announced retirement date of June] 2022.

The following table summarizes NRG's generation portfolio as of December 31, [removed: 2021:][added: 2022:]

| Coal | | | | | | 4,174 | | | | | | [removed: 3,140] [added: 1,948] | | | | | | 605 | | | | | | | | | | | | [removed: 7,919] [added: 6,727] | | |

[removed: (a)All Utility] [added: (a)Utility] Scale Solar [removed: are] [added: is] described in MW on an alternating current basis.

NRG operates and maintains its generation portfolio, as well as approximately [removed: 7,377] [added: 7,800] MW of additional [removed: coal and] [added: coal,] natural gas [added: and wind] generation capacity at 12 plants operated on behalf of third [removed: parties] [added: parties,] as of December 31, [removed: 2021] [added: 2022,] using prudent industry practices for the safe, reliable and economic generation of electricity in compliance with all local, state and federal requirements.

In addition, the Company manages its long-term contracts, PPAs, and real estate holdings and provides [removed: third party] [added: third-party] asset management services.

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 [removed: we serve,] [added: it serves,] in accordance with the Company’s strategic goals.

[removed: Projects] [added: 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.

| | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Home - Texas | | | [removed: 42,397] [added: 43,155] | | | | | | [removed: 38,473] [added: 42,397] | | | | | | [removed: 38,958] [added: 38,473] | | |

| Home - East | | | [removed: 14,108] [added: 13,269] | | | | | | [removed: 10,221] [added: 14,108] | | | | | | [removed: 9,918] [added: 10,221] | | |

| Home - West/Services/Other | | | [removed: 2,252] [added: 2,250] | | | | | | [removed: —] [added: 2,252] | | | | | | — | | |

On December 6, 2022, NRG and Vivint Smart Home, Inc. (“Vivint”) announced the entry into a definitive agreement under which the Company will acquire Vivint, a smart home platform company, in an all-cash transaction.

The acquisition will accelerate the realization of NRG’s consumer-focused growth strategy and create a leading essential home services platform fueled by market-leading brands, unparalleled insights, proprietary technologies and complementary sales channels.

The close of the acquisition is targeted for the first quarter of 2023 and is subject to customary closing conditions.

The planned acquisition of Vivint announced in December 2022 will be the primary growth vehicle to achieve this plan.

As of December 31, 2022, STP has secured approximately 25% of uranium hexafluoride through 2029.

| Natural gas | | | | | | 4,721 | | | | | | 1,881 | | | | | | 1,279 | | | | | | | | | | | | 7,881 | | |

| Total generation capacity | | | | | | 10,029 | | | | | | 4,284 | | | | | | 2,103 | | | | | | | | | | | | 16,416 | | |

| Business - East | | | 1,618,946 | | | | | | 1,620,036 | | | | | | — | | |

| | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

| Average retail | | | 2,961 | | | | | | 3,040 | | | | | | 2,431 | | |

| Ending retail | | | 2,859 | | | | | | 3,010 | | | | | | 2,434 | | |

| (c) Includes 135 thousand whole home warranty customers as of December 31, 2021. The whole home warranty business was sold in January 2022 | | | | | | | | | | | | | | | | | |

| Texas | | | 10,027 | | | | | | 37,275 | | | | | | 69.5 | | % | | | | 10,733 | | | | | | 41.8 | | % |

| East | | | 4,285 | | | | | | 7,282 | | | | | | 78.1 | | % | | | | 11,959 | | | | | | 17.3 | | % |

| West/Services/Other | | | 1,172 | | | | | | 6,676 | | | | | | 84.5 | | % | | | | 7,442 | | | | | | 64.9 | | % |

(a)Excludes equity method investments

ERCOT is an energy-only market.

*Inflation Reduction Act* — The IRA allocates $369 billion in spending for energy security and addressing climate change.

Much of these investments come through the tax code in the form of clean energy tax credits.

In the past, investment tax credits and production tax credits have played a vital role in the growth of wind and solar projects around the U.S., but they have had short lifespans, phaseouts and the uncertainty of extensions.

The IRA provides 10-year extensions on these tax credits, which will provide more certainty needed for investment decisions to build out these projects in the long-term.

With new renewable generation coming online, renewable energy supply costs will likely become cheaper and more plentiful.

NRG Home can also benefit from increased residential usage to charge electric vehicles ("EV") and special EV products.

The IRA also introduced new tax provisions including a corporate book minimum tax and an excise tax on net stock repurchases with both taxes effective beginning in fiscal year 2023 for NRG.

The Company will continue to evaluate the impact of the corporate book minimum tax when the U.S. Treasury and the IRS release further guidance.

Additionally, the IRA establishes a tax credit associated with existing nuclear facilities which begins in 2024 and terminates at the end of 2031.

The tax credit will fully apply when gross revenues are at or below $25 per MWh and phases out completely at $43.75 per MWh.

The U.S. Treasury is in the process of defining the methods by which gross revenues may be calculated pursuant to the IRA.

A component of CEJA is the Coal-to-Solar Energy Storage Grant Program.

On June 1, 2022, the Illinois Department of Commerce and Economic Opportunity announced that NRG is eligible to receive almost $160 million over 10 years to develop battery storage at both the Waukegan and Will County power plant sites.

In 2022, the PUCT has focused on the development of a winter firm fuel product.

The PUCT directed ERCOT to issue a Request for Proposal to procure dual fuel capability with on-site fuel storage as part of the initial firm fuel procurement for the winter of 2022 and 2023.

The procurement amount was 2,940MW with a total cost of $53 million.

The PUCT engaged an independent consultant, E3, to evaluate various resource adequacy proposals and recommend a policy direction to increase incentives for investment in dispatchable generation in ERCOT.

On November 10, 2022, the independent consultant provided a report including various market design options such as a Forward Reliability Market, Load Serving Entity Reliability Obligation, and a new concept called a Performance Credit Mechanism ("PCM").

The PCM measures real-time contribution to system reliability and provides compensation for resources to be available.

The PUCT staff filed a summary of comments and their recommendations, which support PCM.

On January 19, 2023, the Commission approved an order adopting the PCM as their policy direction for resource adequacy in ERCOT, however, implementation is delayed until the legislature reviews.

The $2.1 billion Uplift Securitization was disbursed by ERCOT in June 2022, with NRG's LSEs collectively receiving $689 million.

NRG's LSEs that assessed customers certain ancillary-service and ORDPA costs during the period of Winter Storm Uri provided a refund or credit to those customers proportionate to the LSE's total recovery.

The 2021 fiscal year was pivotal for the Company.

NRG completed the acquisition of Direct Energy, doubling the size of its retail portfolio, while further decreasing its physical generation through the sale and planned retirement of certain assets, each as further discussed below.

The completion of these significant activities positioned NRG for the next phase of its strategy focusing on growth.

*Significant Acquisitions, Dispositions and Announced Retirements*

On January 5, 2021, the Company acquired Direct Energy.

Direct Energy is a leading retail provider of electricity, natural gas, and home and business energy-related products and services in North America, with operations in all 50 U.S. states and 8 Canadian provinces.

The acquisition increased NRG's retail portfolio by over 3 million customers and complemented its integrated model.

It also broadened the Company's presence in the Northeast and in states and locales where it did not previously operate, supporting NRG's objective to diversify its business.

NRG realized its planned synergy target of $175 million in 2021 and expects to realize annual synergies of $225 million and $300 million in 2022 and 2023, respectively.

See Item 15 *—* Note 4, *Acquisitions, Discontinued Operations and Dispositions*, to the Consolidated Financial Statements for further discussion of the acquisition of Direct Energy.

On December 1, 2021, the Company sold approximately 4,850 MWs of fossil generating assets from its East and West regions of operations to Generation Bridge, an affiliate of ArcLight Capital Partners.

As part of the transaction, NRG entered into a tolling agreement for the 866 MW Arthur Kill plant in New York City through April 2025.

See Item 15 *—* Note 4, *Acquisitions, Discontinued Operations and Dispositions*, to the Consolidated Financial Statements for further discussion.

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 approximately 1,600 MW of its PJM coal generating assets in June 2022.

On August 27, 2021 the Company notified PJM that it would continue operations at Indian River Unit 4 until the reliability upgrades identified by PJM were completed, provided that the unit receives a satisfactory and compensatory reliability must run arrangement.

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

The Company is continuing to evaluate the viability of the remaining PJM generating assets.

Extreme Weather Event in Texas During February 2021 and expected Uplift Securitization proceeds

During February 2021, Texas experienced unprecedented cold temperatures for a prolonged duration as a result of Winter Storm Uri, resulting in a power emergency, blackouts, and an estimated all-time peak demand of 77 GW (without load shed).

Ahead of the event, NRG launched residential customer communications calling for conservation across all of its brands, and initiated residential and commercial and industrial demand response programs to curtail customer load.

The Company maximized available generating capacity and brought in additional resources to supplement in-state staff with technical and operating experts from the rest of its U.S. fleet.

The Texas Legislature passed House Bill ("HB") 4492, which among other things, authorized ERCOT to obtain $2.1 billion of financing to distribute to LSEs that were charged and paid to ERCOT exceptionally highly priced ORDPA and ancillary service costs during Winter Storm Uri (the "Uplift Securitization").

NRG will receive $689 million from ERCOT based on LSE-level detail published by the PUCT on December 7, 2021.

During the year ended December 31, 2021, Winter Storm Uri's pre-tax financial impact to the Company was a loss of $380 million, which reflects the recovery of $689 million of cost of operations as a result of the proceeds NRG will receive from the Uplift Securitization discussed above, with receipt expected to occur during the second quarter of 2022.

The Company continues to pursue additional mitigants including, but not limited to, customer bad debt mitigation, counterparty default recovery, and additional ERCOT default recovery.

In the East, the Company’s retail load is more dispersed throughout the region and not fully integrated with the Company’s generation supply due to the locations of its power plants in that region.

In the West/Services/Other, the Company’s business is primarily serving retail load and services customers.

In providing on-site energy solutions, the Company often benefits from its ability to supply energy products from its wholesale generation portfolio to Business customers.

The Company primarily sells physical and financial capacity forward through bilateral contracts for our New York state assets.

To the extent NRG is not able to enter into physical bilateral contracts, NRG will sell the remaining capacity into the NYISO six-month strip, monthly or spot auctions.

In California, there is a resource adequacy requirement that is primarily satisfied through bilateral contracts.

Such bilateral contracts are typically short-term resource adequacy contracts.

When bilateral contracting does not satisfy the resource adequacy need, such shortfalls can be addressed through procurement tools administered by the CAISO, including the capacity procurement mechanism or reliability must-run contracts.

| Natural gas | | | | | | 4,775 | | | | | | 1,881 | | | | | | 1,494 | | | | | | | | | | | | 8,150 | | |

| Total generation capacity | | | | | | 10,083 | | | | | | 5,476 | | | | | | 2,318 | | | | | | | | | | | | 17,877 | | |

| Business - East | | | 1,595,533 | | | | | | — | | | | | | — | | |

| Average retail | | | 3,055 | | | | | | 2,449 | | | | | | 2,358 | | |

| Ending retail | | | 3,024 | | | | | | 2,451 | | | | | | 2,450 | | |

| Texas | | | 10,082 | | | | | | 31,385 | | | | | | 76.0 | | % | | | | 10,781 | | | | | | 35.9 | | % |

| East | | | 9,482 | | | | | | 4,102 | | | | | | 81.7 | | % | | | | 12,329 | | | | | | 4.8 | | % |

| ☒ | | | | | | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year ended December 31, [removed: 2021.] [added: 2022.] | | |

Securities registered pursuant to Section 12(g) of the [removed: Act:][added: Act: None]

Indicate by check mark whether the registrant (1) has filed all reports [added: required] to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or [added: an] emerging growth company.

| [removed: Large Accelerated Filer ☒] [added: Non-accelerated filer ☐] | | | | | | [removed: Accelerated filer ☐] | | | | | | [removed: Non-accelerated filer ☐] | | | | | | Smaller reporting company | | | ☐ | | |

As of the last business day of the most recently completed second fiscal quarter, the aggregate market value of the common stock of the registrant held by non-affiliates was approximately [removed: $8,611,281,553] [added: $6,461,030,777] based on the closing sale price of [removed: $40.30] [added: $38.17] as reported on the New York Stock Exchange.

| Class | | | | | | Outstanding at February [removed: 24, 2022] [added: 15, 2023] | | |

| Common Stock, par value $0.01 per share | | | | | | [removed: 242,153,239] [added: 229,774,238] | | |

Portions of the Registrant's definitive Proxy Statement relating to its [removed: 2022] [added: 2023] Annual Meeting of Stockholders

| | | | [GLOSSARY OF [removed: TERMS](#i4e8ca856cd5e4b3f94a56a416e1b771e_10)] [added: TERMS](#i096cf9fefc2b403e9995cb7de61112a4_10)] | | | [removed: [3](#i4e8ca856cd5e4b3f94a56a416e1b771e_10)] [added: [3](#i096cf9fefc2b403e9995cb7de61112a4_10)] | | |

| | | | [Item 1 — [removed: Business](#i4e8ca856cd5e4b3f94a56a416e1b771e_16)] [added: Business](#i096cf9fefc2b403e9995cb7de61112a4_16)] | | | [removed: [7](#i4e8ca856cd5e4b3f94a56a416e1b771e_16)] [added: [7](#i096cf9fefc2b403e9995cb7de61112a4_16)] | | |

| | | | [Item 1A — Risk [removed: Factors](#i4e8ca856cd5e4b3f94a56a416e1b771e_19)] [added: Factors](#i096cf9fefc2b403e9995cb7de61112a4_19)] | | | [removed: [24](#i4e8ca856cd5e4b3f94a56a416e1b771e_19)] [added: [24](#i096cf9fefc2b403e9995cb7de61112a4_19)] | | |

| | | | [Item 1B — Unresolved Staff [removed: Comments](#i4e8ca856cd5e4b3f94a56a416e1b771e_22)] [added: Comments](#i096cf9fefc2b403e9995cb7de61112a4_22)] | | | [removed: [39](#i4e8ca856cd5e4b3f94a56a416e1b771e_22)] [added: [39](#i096cf9fefc2b403e9995cb7de61112a4_22)] | | |

| | | | [Item 2 — [removed: Properties](#i4e8ca856cd5e4b3f94a56a416e1b771e_25)] [added: Properties](#i096cf9fefc2b403e9995cb7de61112a4_25)] | | | [removed: [40](#i4e8ca856cd5e4b3f94a56a416e1b771e_25)] [added: [40](#i096cf9fefc2b403e9995cb7de61112a4_25)] | | |

| | | | [Item 3 — Legal [removed: Proceedings](#i4e8ca856cd5e4b3f94a56a416e1b771e_28)] [added: Proceedings](#i096cf9fefc2b403e9995cb7de61112a4_28)] | | | [removed: [41](#i4e8ca856cd5e4b3f94a56a416e1b771e_28)] [added: [41](#i096cf9fefc2b403e9995cb7de61112a4_28)] | | |

| | | | [Item 4 — Mine Safety [removed: Disclosures](#i4e8ca856cd5e4b3f94a56a416e1b771e_31)] [added: Disclosures](#i096cf9fefc2b403e9995cb7de61112a4_31)] | | | [removed: [41](#i4e8ca856cd5e4b3f94a56a416e1b771e_31)] [added: [41](#i096cf9fefc2b403e9995cb7de61112a4_31)] | | |

| | | | [Item 5 — Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i4e8ca856cd5e4b3f94a56a416e1b771e_37)] [added: Securities](#i096cf9fefc2b403e9995cb7de61112a4_37)] | | | [removed: [42](#i4e8ca856cd5e4b3f94a56a416e1b771e_37)] [added: [42](#i096cf9fefc2b403e9995cb7de61112a4_37)] | | |

| | | | [Item 6 — [removed: Reserved](#i4e8ca856cd5e4b3f94a56a416e1b771e_40)] [added: Reserved](#i096cf9fefc2b403e9995cb7de61112a4_40)] | | | [removed: [43](#i4e8ca856cd5e4b3f94a56a416e1b771e_40)] [added: [43](#i096cf9fefc2b403e9995cb7de61112a4_40)] | | |

| | | | [Item 7 — Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i4e8ca856cd5e4b3f94a56a416e1b771e_49)] [added: Operations](#i096cf9fefc2b403e9995cb7de61112a4_49)] | | | [removed: [44](#i4e8ca856cd5e4b3f94a56a416e1b771e_49)] [added: [44](#i096cf9fefc2b403e9995cb7de61112a4_49)] | | |

| | | | [Item 7A — Quantitative and Qualitative Disclosures About Market [removed: Risk](#i4e8ca856cd5e4b3f94a56a416e1b771e_124)] [added: Risk](#i096cf9fefc2b403e9995cb7de61112a4_121)] | | | [removed: [73](#i4e8ca856cd5e4b3f94a56a416e1b771e_124)] [added: [72](#i096cf9fefc2b403e9995cb7de61112a4_121)] | | |

| | | | [Item 8 — Financial Statements and Supplementary [removed: Data](#i4e8ca856cd5e4b3f94a56a416e1b771e_127)] [added: Data](#i096cf9fefc2b403e9995cb7de61112a4_124)] | | | [removed: [76](#i4e8ca856cd5e4b3f94a56a416e1b771e_127)] [added: [75](#i096cf9fefc2b403e9995cb7de61112a4_124)] | | |

| | | | [Item 9 — Changes in and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#i4e8ca856cd5e4b3f94a56a416e1b771e_130)] [added: Disclosure](#i096cf9fefc2b403e9995cb7de61112a4_127)] | | | [removed: [76](#i4e8ca856cd5e4b3f94a56a416e1b771e_130)] [added: [75](#i096cf9fefc2b403e9995cb7de61112a4_127)] | | |

| | | | [Item 9A — Controls and [removed: Procedures](#i4e8ca856cd5e4b3f94a56a416e1b771e_133)] [added: Procedures](#i096cf9fefc2b403e9995cb7de61112a4_130)] | | | [removed: [76](#i4e8ca856cd5e4b3f94a56a416e1b771e_133)] [added: [75](#i096cf9fefc2b403e9995cb7de61112a4_130)] | | |

| | | | [Item 9B — Other [removed: Information](#i4e8ca856cd5e4b3f94a56a416e1b771e_136)] [added: Information](#i096cf9fefc2b403e9995cb7de61112a4_133)] | | | [removed: [79](#i4e8ca856cd5e4b3f94a56a416e1b771e_136)] [added: [78](#i096cf9fefc2b403e9995cb7de61112a4_133)] | | |

| | | | [Item 9C— Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#i4e8ca856cd5e4b3f94a56a416e1b771e_3059)] [added: Inspections](#i096cf9fefc2b403e9995cb7de61112a4_136)] | | | [removed: [79](#i4e8ca856cd5e4b3f94a56a416e1b771e_3059)] [added: [78](#i096cf9fefc2b403e9995cb7de61112a4_136)] | | |

| [PART [removed: III](#i4e8ca856cd5e4b3f94a56a416e1b771e_139)] [added: III](#i096cf9fefc2b403e9995cb7de61112a4_139)] | | | | | | [removed: [80](#i4e8ca856cd5e4b3f94a56a416e1b771e_139)] [added: [79](#i096cf9fefc2b403e9995cb7de61112a4_139)] | | |

| | | | [Item 10 — Directors, Executive Officers and Corporate [removed: Governance](#i4e8ca856cd5e4b3f94a56a416e1b771e_142)] [added: Governance](#i096cf9fefc2b403e9995cb7de61112a4_142)] | | | [removed: [80](#i4e8ca856cd5e4b3f94a56a416e1b771e_142)] [added: [79](#i096cf9fefc2b403e9995cb7de61112a4_142)] | | |

| | | | [Item 11 — Executive [removed: Compensation](#i4e8ca856cd5e4b3f94a56a416e1b771e_145)] [added: Compensation](#i096cf9fefc2b403e9995cb7de61112a4_145)] | | | [removed: [80](#i4e8ca856cd5e4b3f94a56a416e1b771e_145)] [added: [79](#i096cf9fefc2b403e9995cb7de61112a4_145)] | | |

| | | | [Item 12 — Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i4e8ca856cd5e4b3f94a56a416e1b771e_148)] [added: Matters](#i096cf9fefc2b403e9995cb7de61112a4_148)] | | | [removed: [80](#i4e8ca856cd5e4b3f94a56a416e1b771e_148)] [added: [79](#i096cf9fefc2b403e9995cb7de61112a4_148)] | | |

| | | | [Item 13 — Certain Relationships and Related Transactions, and Director [removed: Independence](#i4e8ca856cd5e4b3f94a56a416e1b771e_151)] [added: Independence](#i096cf9fefc2b403e9995cb7de61112a4_151)] | | | [removed: [81](#i4e8ca856cd5e4b3f94a56a416e1b771e_151)] [added: [79](#i096cf9fefc2b403e9995cb7de61112a4_151)] | | |

| | | | [Item 14 — Principal Accounting Fees and [removed: Services](#i4e8ca856cd5e4b3f94a56a416e1b771e_154)] [added: Services](#i096cf9fefc2b403e9995cb7de61112a4_154)] | | | [removed: [81](#i4e8ca856cd5e4b3f94a56a416e1b771e_154)] [added: [79](#i096cf9fefc2b403e9995cb7de61112a4_154)] | | |

| [PART [removed: IV](#i4e8ca856cd5e4b3f94a56a416e1b771e_157)] [added: IV](#i096cf9fefc2b403e9995cb7de61112a4_157)] | | | | | | [removed: [82](#i4e8ca856cd5e4b3f94a56a416e1b771e_157)] [added: [80](#i096cf9fefc2b403e9995cb7de61112a4_157)] | | |

| | | | [Item 15 — Exhibits, Financial Statement [removed: Schedules](#i4e8ca856cd5e4b3f94a56a416e1b771e_160)] [added: Schedules](#i096cf9fefc2b403e9995cb7de61112a4_160)] | | | [removed: [82](#i4e8ca856cd5e4b3f94a56a416e1b771e_160)] [added: [80](#i096cf9fefc2b403e9995cb7de61112a4_160)] | | |

| Convertible Senior Notes | | | | | | As of December 31, [removed: 2021,] [added: 2022,] consists of NRG’s $575 million unsecured 2.75% Convertible Senior Notes due 2048 | | |

| Economic gross margin | | | | | | Sum of [added: retail revenue,] energy revenue, capacity [removed: revenue, retail] revenue and other revenue, less cost of [removed: fuels] [added: fuels, purchased energy] and other cost of sales | | |

| GAAP | | | | | | Generally accepted accounting principles in the [removed: U.S.] [added: United States] | | |

| Renewables Platform | | | | | | The renewable operating and development platform sold to [removed: GIP] [added: Global Infrastructure Partners] with NRG's interest in NRG Yield. | | |

| Revolving Credit Facility | | | | | | The Company's $3.7 billion revolving credit facility as of December 31, [removed: 2021,] [added: 2022,] a component of the Senior Credit Facility, due 2024 [added: which] was amended on May 28, 2019 and August 20, [removed: 2020] [added: 2020. The revolving credit facility was amended on February 14, 2023, increasing the facility to $4.3 billion] | | |

| Senior Notes | | | | | | As of December 31, [removed: 2021,] [added: 2022,] NRG's $4.6 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 $1.1 billion of the 3.875% senior notes due 2032 | | |

| Senior Secured Notes | | | | | | As of December 31, [removed: 2021,] [added: 2022,] NRG’s $2.5 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, and $500 million of the 4.45% Senior Secured First Lien Notes due 2029 | | |

| Large Accelerated Filer ☒ | | | | | | | | | | | | | | | | | | Accelerated filer | | | ☐ | | |

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

| [PART I](#i096cf9fefc2b403e9995cb7de61112a4_13) | | | | | | [7](#i096cf9fefc2b403e9995cb7de61112a4_16) | | |

| [PART II](#i096cf9fefc2b403e9995cb7de61112a4_34) | | | | | | [42](#i096cf9fefc2b403e9995cb7de61112a4_34) | | |

| | | | [Item 16 — Form 10-K Summary](#i096cf9fefc2b403e9995cb7de61112a4_286) | | | [157](#i096cf9fefc2b403e9995cb7de61112a4_286) | | |

| [EXHIBIT INDEX](#i096cf9fefc2b403e9995cb7de61112a4_283) | | | | | | [151](#i096cf9fefc2b403e9995cb7de61112a4_283) | | |

| AESO | | | | | | Alberta Electric System Operator | | |

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| IRA | | | | | | Inflation Reduction Act | | |

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| 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. | | |

| REP | | | | | | Retail electric provider | | |

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| Winter Storm Elliott | | | | | | A major winter storm that had impacts across the majority of the United States and parts of Canada occurring in December 2022 | | |

None

| [PART I](#i4e8ca856cd5e4b3f94a56a416e1b771e_13) | | | | | | [7](#i4e8ca856cd5e4b3f94a56a416e1b771e_16) | | |

| [PART II](#i4e8ca856cd5e4b3f94a56a416e1b771e_34) | | | | | | [42](#i4e8ca856cd5e4b3f94a56a416e1b771e_34) | | |

| | | | [Item 16 — Form 10-K Summary](#i4e8ca856cd5e4b3f94a56a416e1b771e_328) | | | [166](#i4e8ca856cd5e4b3f94a56a416e1b771e_328) | | |

| [EXHIBIT INDEX](#i4e8ca856cd5e4b3f94a56a416e1b771e_325) | | | | | | [160](#i4e8ca856cd5e4b3f94a56a416e1b771e_325) | | |

| Average realized prices | | | | | | Volume-weighted average power prices, net of average fuel costs and reflecting the impact of settled hedges | | |

| Bankruptcy Code | | | | | | Chapter 11 of Title 11 of the U.S. Bankruptcy Code | | |

| Baseload | | | | | | Units expected to satisfy minimum baseload requirements of the system and produce electricity at an essentially constant rate and run continuously | | |

| Carlsbad | | | | | | Carlsbad Energy Center, a 528 MW natural gas-fired project located in Carlsbad, CA | | |

| CCR | | | | | | Coal Combustion Residuals | | |

| CES | | | | | | Clean Energy Standard | | |

| Cleco | | | | | | Cleco Corporate Holdings LLC | | |

| ComEd | | | | | | Commonwealth Edison | | |

| Distributed Solar | | | | | | Solar power projects that primarily sell power to customers for usage on site, or are interconnected to sell power into a local distribution grid | | |

| ESCO | | | | | | Energy Service Companies | | |

| GenOn | | | | | | GenOn Energy, Inc. | | |

| GenOn Entities | | | | | | GenOn and certain of its wholly owned subsidiaries, including GenOn Americas Generation, LLC, that filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court on June 14, 2017 | | |

| GIP | | | | | | Global Infrastructure Partners | | |

| HLBV | | | | | | Hypothetical Liquidation at Book Value | | |

| LSE | | | | | | Load Serving Entities | | |

| LTIPs | | | | | | Collectively, the NRG LTIP and the NRG GenOn LTIP | | |

| MATS | | | | | | Mercury and Air Toxics Standards promulgated by the EPA | | |

| Merger | | | | | | The merger completed on December 14, 2012 by NRG and GenOn pursuant to the Merger Agreement | | |

| MSU | | | | | | Market Stock Unit | | |

| MWe | | | | | | Megawatt equivalent | | |

| Net Revenue Rate | | | | | | Sum of retail revenues less TDSP transportation charges | | |

| NQSO | | | | | | Non-Qualified Stock Option | | |

| NRG GenOn LTIP | | | | | | NRG 2010 Stock Plan for GenOn Employees (formerly the GenOn Energy, Inc. 2010 Omnibus Incentive Plan, which was assumed by NRG in connection with the Merger) | | |

| NRG Yield, Inc. | | | | | | NRG Yield, Inc., which changed its name to Clearway energy, Inc. following the sale by NRG or NRG Yield and the Renewables Platform to GIP | | |

| NYSDEC | | | | | | New York State Department of Environmental Conservation | | |

| Pipeline | | | | | | Projects that range from identified lead to shortlisted with an offtake, and represents a lower level of execution certainty | | |

| PPM | | | | | | Parts per million | | |

| PSU | | | | | | Performance Stock Unit | | |

| TWCC | | | | | | Texas Westmoreland Coal Co. | | |

Listed below are descriptions of NRG's interests in facilities, operations and/or projects owned or leased as of December 31, [removed: 2021.][added: 2022.]

Net MW capacity is adjusted for the Company's owned or leased interest as of December 31, [removed: 2021.][added: 2022.]

| Gregory | | | | | | ERCOT | | | | | | Fossil | | | | | | Natural Gas | | | | | | TX | | | | | | [removed: 385] [added: 365] | | | | | | [removed: 385] [added: 365] | | | | | | 100.0 | | | | | |

| [removed: Limestone(c)] [added: Limestone] | | | | | | ERCOT | | | | | | Fossil | | | | | | Coal | | | | | | TX | | | | | | 1,660 | | | | | | 1,660 | | | | | | 100.0 | | | | | |

| W.A. [removed: Parish] [added: Parish(c)] | | | | | | ERCOT | | | | | | Fossil | | | | | | Coal | | | | | | TX | | | | | | 2,514 | | | | | | 2,514 | | | | | | 100.0 | | | | | |

| Astoria [removed: Turbines(e)] [added: Turbines(d)] | | | | | | NYISO | | | | | | Fossil | | | | | | Natural Gas | | | | | | NY | | | | | | 420 | | | | | | 420 | | | | | | 100.0 | | | | | |

| Indian [removed: River(f)] [added: River(e)] | | | | | | PJM | | | | | | Fossil | | | | | | Coal | | | | | | DE | | | | | | 410 | | | | | | 410 | | | | | | 100.0 | | | | | |

| [removed: Joliet] [added: Joliet(f)] | | | | | | PJM | | | | | | Fossil | | | | | | Natural Gas | | | | | | IL | | | | | | 1,381 | | | | | | 1,381 | | | | | | 100.0 | | | | | |

| [removed: Waukegan(f)] [added: Waukegan 7] | | | | | | PJM | | | | | | Fossil | | | | | | Coal | | | | | | IL | | | | | | 682 | | | | | | 682 | | | | | | 100.0 | | [removed: | | |] [added: %] |

| Will [removed: County(f)] [added: County 4] | | | | | | PJM | | | | | | Fossil | | | | | | Coal | | | | | | IL | | | | | | 510 | | | | | | 510 | | | | | | 100.0 | | [removed: | | |] [added: %] |

| Total East | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 5,476] [added: 4,284] | | | | | | [removed: 5,476] [added: 4,284] | | | | | | | | | | | |

| [removed: West/Other] [added: West/Services/Other] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Cottonwood | | | | | | MISO | | | | | | Fossil | | | | | | Natural Gas | | | | | | TX | | | | | | [removed: 1,177] [added: 1,166] | | | | | | [removed: 1,177] [added: 1,166] | | | | | | [removed: ___(d)] [added: ___(g)] | | | | | |

Additionally, [removed: ERCOT] [added: ERCOT, NYISO] and PJM require periodic demonstration of capability, and the capacity may vary individually and in the aggregate from time to time

[removed: (d)NRG] [added: (g)NRG] leases 100% interests in the Cottonwood facility through a facility lease agreement expiring in May 2025 and operates the Cottonwood facility

| Name of Facility | | | | | | Power Market | | | | | | [added: Plant Type | | | | | |] Primary Fuel | | | | | | [added: Location | | | | | | Rated MW Capacity | | | | | |] Net MW Capacity | | | | | | [removed: Retirement Date] [added: % Owned] | | |

[removed: * On July 30, 2021,] [added: However,] PJM identified reliability impacts resulting from the proposed deactivation [removed: of one of those assets,] [added: and] Indian River Unit [removed: 4.][added: 4 currently remains active under a RMR agreement which is expected to end December 31, 2026]

| Total Texas | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 11,721 | | | | | | 10,029 | | | | | | | | | | | |

| Total West/Services/Other | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3,403 | | | | | | 2,103 | | | | | | | | | | | |

| Total Fleet | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 19,408 | | | | | | 16,416 | | | | | | | | | | | |

(c)In May 2022, W.A. Parish Unit 8 came offline as a result of damage to the steam turbine/generator.

Based on work completed to date, the Company is targeting to return the unit to service by the end of the second quarter of 2023

(d)On January 6, 2023, the Company closed on the sale of land and related assets at the Astoria site but continues to own and operate the Astoria gas turbines.

The gas turbines' planned retirement date remains April 30, 2023

(e)The Company previously announced the shut down of the Indian River facility.

(f)The Company plans to retire Joliet 7 and 8 on June 1, 2023

The following units were deactivated during 2022:

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| East | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Waukegan 8 | | | | | | PJM | | | | | | Fossil | | | | | | Coal | | | | | | IL | | | | | | 101 | | | | | | 101 | | | | | | 100.0 | | % |

| | | | | | | | | | | | | | | | | | | | | | | | | Total | | | | | | 1,293 | | | | | | 1,293 | | | | | | | | |

| Petra Nova Cogen | | | | | | ERCOT | | | | | | Fossil | | | | | | Natural Gas | | | | | | TX | | | | | | 68 | | | | | | 34 | | | | | | 50.0 | | | | | |

| Total Texas | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 11,809 | | | | | | 10,083 | | | | | | | | | | | |

| Watson | | | | | | CAISO | | | | | | Fossil | | | | | | Natural Gas | | | | | | CA | | | | | | 416 | | | | | | 204 | | | | | | 49.0 | | | | | |

| Total West/Other | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3,830 | | | | | | 2,318 | | | | | | | | | | | |

| Total Fleet | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 21,115 | | | | | | 17,877 | | | | | | | | | | | |

(c)In early July 2021, Limestone Unit 1 came offline as a result of damage to the duct work associated with the flue gas desulfurization system.

Based on management's current assessment of necessary remediation efforts, Unit 1 is expected to remain on an outage until the second quarter of 2022

(e)On February, 22, 2022, NRG submitted deactivation notices to the NYISO for the Astoria facility, with a planned retirement date of 2023

(f)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 as detailed bellow:

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Indian River 4 | | | | | | PJM | | | | | | Coal | | | | | | 410 | | | | | | June 2022* | | |

| Waukegan 7 | | | | | | PJM | | | | | | Coal | | | | | | 328 | | | | | | June 2022 | | |

| Waukegan 8 | | | | | | PJM | | | | | | Coal | | | | | | 354 | | | | | | June 2022 | | |

| Will County | | | | | | PJM | | | | | | Coal | | | | | | 510 | | | | | | June 2022 | | |

| | | | | | | | | | | | | Total | | | | | | 1,602 | | | | | | | | |

On August 27, 2021 the Company notified PJM that it would continue operations at Indian River Unit 4 until the reliability upgrades identified by PJM were completed, provided that the unit receives a satisfactory and compensatory reliability must run arrangement.

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95.1 to this Form 10-K.

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

NRG's [removed: 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.

For more information about the NRG [removed: LTIP and the NRG GenOn] LTIP, refer to Item 12 — S*ecurity 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 January 31, [removed: 2022,] [added: 2023,] there were [removed: 16,501] [added: 15,792] common stockholders of record.

NRG increased the annual dividend to [removed: $1.30] [added: $1.40] from [removed: $1.20] [added: $1.30] per share beginning in the first quarter of [removed: 2021] [added: 2022] and further increased the annual dividend by 8% to [removed: $1.40] [added: $1.51] per share beginning in the first quarter of [removed: 2022 .][added: 2023.]

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, [removed: 2021.][added: 2022.]

| For the three months ended December 31, [removed: 2021] [added: 2022] | | | | | | Total Number of Shares Purchased | | | | | | Average Price Paid per Share(b) | | | | | | 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(a)(c) | | |

(a)On December 6, [removed: 2021] [added: 2021,] the Company announced that the Board of Directors [removed: has] [added: had] authorized $1 billion for share repurchases, as part of NRG’s Capital Allocation [removed: Program.][added: policy.]

The performance graph below compares the cumulative total stockholder return on NRG's common stock for the period December 31, [removed: 2016] [added: 2017] through December 31, [removed: 2021] [added: 2022,] with the cumulative total return of the Standard & Poor's 500 Composite Stock Price [removed: Index, or S&P 500,] [added: Index ("S&P 500")] and the Philadelphia Utility Sector [removed: Index, or UTY.][added: Index ("UTY").]

The performance graph shown below is being furnished and compares each period assuming that $100 was invested on December 31, [removed: 2016,] [added: 2017,] 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.

[removed: ][added: ]

| | | | [removed: 12/31/2016] [added: 12/31/2017] | | | | | | [removed: 12/31/2017] [added: 12/31/2018] | | | | | | [removed: 12/31/2018] [added: 12/31/2019] | | | | | | [removed: 12/31/2019] [added: 12/31/2020] | | | | | | [removed: 12/31/2020] [added: 12/31/2021] | | | | | | [removed: 12/31/2021] [added: 12/31/2022] | | |

NRG's common stock trades on the New York Stock Exchange under the symbol "NRG".

| (October 1, 2022 to October 31, 2022 | | | | | | 1,817,278 | | | | | | $ | 41.71 | | | | | 1,817,278 | | | | | | $ | 390,876,781 | |

| (November 1, 2022 to November 30, 2022, | | | | | | 823,175 | | | | | | $ | 44.25 | | | | | 823,175 | | | | | | $ | 354,437,274 | |

| (December 1, 2022 to December 31, 2022) | | | | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 354,437,274 | |

| Total at December 31, 2022 | | | | | | 2,640,453 | | | | | | $ | 42.50 | | | | | 2,640,453 | | | | | | | | |

The program began in December 2021 and is expected to be completed in 2023, subject to the availability of excess cash and full visibility of the achievement of the Company's 2023 targeted credit metrics

| NRG Energy, Inc. | | | $ | 100.00 | | | | | $ | 139.59 | | | | | $ | 140.55 | | | | | $ | 137.54 | | | | | $ | 163.06 | | | | | $ | 124.79 | |

| S&P 500 | | | 100.00 | | | | | | 95.62 | | | | | | 125.72 | | | | | | 148.85 | | | | | | 191.58 | | | | | | 156.88 | | |

| UTY | | | 100.00 | | | | | | 103.52 | | | | | | 131.28 | | | | | | 134.85 | | | | | | 159.45 | | | | | | 160.49 | | |

| (October 1, 2021 to October 31, 2021 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | $ | — | |

| (November 1, 2021 to November 30, 2021, | | | | | | — | | | | | | $ | — | | | | | — | | | | | | $ | — | |

| (December 1, 2021 to December 31, 2021) | | | | | | 1,084,752 | | | | | | $ | 40.85 | | | | | 1,084,752 | | | | | | $ | 955,665,275 | |

| Total at December 31, 2021 | | | | | | 1,084,752 | | | | | | $ | 40.85 | | | | | 1,084,752 | | | | | | | | |

The program began in December 2021 and will continue throughout 2022

| NRG Energy, Inc. | | | $ | 100.00 | | | | | $ | 233.70 | | | | | $ | 326.22 | | | | | $ | 328.47 | | | | | $ | 321.43 | | | | | $ | 381.07 | |

| S&P 500 | | | 100.00 | | | | | | 121.83 | | | | | | 116.49 | | | | | | 153.17 | | | | | | 181.35 | | | | | | 233.41 | | |

| UTY | | | 100.00 | | | | | | 112.82 | | | | | | 116.79 | | | | | | 148.11 | | | | | | 152.14 | | | | | | 179.90 | | |

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, [removed: 2021.][added: 2022.]

[removed: Other than the Direct Energy acquisition, there] [added: 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 [removed: 2021] [added: 2022] that materially affected, or are reasonably likely to materially affect, NRG’s internal control over financial reporting.

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, [removed: 2021.][added: 2022.]

The effectiveness of the Company's internal control over financial reporting as of December 31, [removed: 2021] [added: 2022] 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.

We have audited NRG Energy, Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, [removed: 2021,] [added: 2022,] 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, [removed: 2021,] [added: 2022,] 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, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, [removed: 2021,] [added: 2022,] and the related notes and financial statement schedule II (collectively, the consolidated financial statements), and our report dated February [removed: 24, 2022] [added: 23, 2023] expressed an unqualified opinion on those consolidated financial statements.

February 23, 2023

During the year ended December 31, 2021, the Company completed its acquisition of Direct Energy.

In the first quarter of 2022, the Company integrated a significant component of Direct Energy's accounting systems into NRG's legacy ERP system.

As part of this integration, the Company has completed the evaluation of our internal controls related to Direct Energy, and designed and implemented a control structure over Direct Energy's operations.

On January 5, 2021, NRG acquired Direct Energy, as further described in Note 4, *Acquisitions, Discontinued Operations and Dispositions.* Direct Energy comprised of approximately 35% of the Company's total assets as of December 31, 2021 and approximately 58% of the Company's total revenues for the year ended December 31, 2021.

As of December 31, 2021, we are in the process of evaluating the internal controls of the acquired business and integrated it into our existing operations.

The acquired business has, therefore, been excluded from management's assessment of internal control over financial reporting for the year ended December 31, 2021.

The Company acquired Direct Energy during 2021 and management excluded from its assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2021.

Direct Energy's internal control over financial reporting are associated with 35% of total assets and 58% of total revenues included in the consolidated financial statements of the Company as of and for the year ended December 31, 2021.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Direct Energy.

February 24, 2022

None.

*Entry into a Material Definitive Agreement.*

On February 22, 2022, the Company entered into a Supplemental Indenture (the “Supplemental Indenture”), by and among the Company, the guarantors named therein (the “Guarantors") and Delaware Trust Company, as trustee and conversion agent (the “Trustee”), to supplement the Indenture, dated as of May 24, 2018 (the “Indenture”), among the Company, the Guarantors and the Trustee, governing the Convertible Senior Notes.

Pursuant to the Supplemental Indenture, the Company has irrevocably (i) eliminated the right of the Company to elect Physical Settlement (as defined in the Indenture) as the Settlement Method (as defined in the Indenture) on any conversion of Convertible Senior Notes that occurs on or after the date of the Supplemental Indenture and (ii) elected that, with respect to any Combination Settlement (as defined in the Indenture), the Specified Dollar Amount (as defined in the Indenture) per $1,000 principal amount of the Convertible Senior Notes shall be no lower than $1,000.

The foregoing description of the Supplemental Indenture does not purport to be complete and is qualified in its entirety by reference to the full text of the Supplemental Indenture, a copy of which is filed as Exhibit 4.52 to this report and is incorporated herein by reference.

*Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.*

Effective February 24, 2022, Emily C.

Picarello, CPA, was named as Principal Accounting Officer of NRG Energy, Inc. Ms. Picarello, age 41, joined the Company in December 2018 and served as Assistant Controller for the Company through November 2021, when she was promoted to Vice President and Corporate Controller.

Ms. Picarello will continue in this role reporting to Alberto Fornaro, NRG's Executive Vice President and Chief Financial Officer.

Prior to her employment with the Company, Ms. Picarello spent over seven years with PVH Corp., one of the largest global apparel companies in the world, first as the Director of Financial Reporting and then as the Vice President, Financial Reporting.

Prior to Ms. Picarello's time with PVH Corp., she was an auditor with KPMG LLP for over eight years, holding various positions including Audit Senior Manager.

Information required by this Item is incorporated by reference to the similarly named section of NRG's Definitive Proxy Statement for its [removed: 2022] [added: 2023] Annual Meeting of Stockholders.

Other information required by this Item is incorporated by reference to the similarly named section of NRG's Definitive Proxy Statement for its [removed: 2022] [added: 2023] Annual Meeting of Stockholders.

Information required by this Item is incorporated by reference to the similarly named section of NRG's Definitive Proxy Statement for its [removed: 2022] [added: 2023] Annual Meeting of Stockholders.

| Equity compensation plans approved by security holders | | | [removed: 2,514,828] [added: 2,865,336] | | | (1) | | | $ | — | | | | | [removed: 11,508,073] [added: 10,673,145] | | | [added: (2)] | | |

As of December 31, [removed: 2021,] [added: 2022,] there were [removed: 2,636,199] [added: 2,493,374] shares reserved from the Company's treasury shares for the ESPP

[removed: (3)Consists] [added: (2)Consists] of [removed: 8,871,874] [added: 8,179,771] shares of common stock under NRG's LTIP and [removed: 2,636,199] [added: 2,493,374] shares of treasury stock reserved for issuance under the [removed: ESPP.][added: ESPP]

Other information required by this Item is incorporated by reference to the similarly named section of NRG's Definitive Proxy Statement for its [removed: 2022] [added: 2023] Annual Meeting of Stockholders.

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| Equity compensation plans not approved by security holders | | | 20,131 | | | (2) | | | 20.07 | | | | | | — | | | (4) | | |

| Total | | | 2,534,959 | | | | | | $ | 20.07 | | | | | 11,508,073 | | | (3) | | |

(2)Consists of shares issuable under the NRG GenOn LTIP.

The plans is listed as “not approved” because it was not subject to separate line item approval by NRG's stockholders when the Merger was approved.

See Item 15 — Note 21, *Stock-Based Compensation*, to Consolidated Financial Statements for a discussion of the NRG GenOn LTIP

(4)Upon adoption of the NRG Amended and Restated LTIP effective April 27, 2017, no securities remain available for future issuance under the NRG GenOn LTIP.

For further discussion, see Note 21, *Stock-Based Compensation*

Information required by this Item is incorporated by reference to the similarly named section of NRG's Definitive Proxy Statement for its [removed: 2022] [added: 2023] Annual Meeting of Stockholders.

Information required by this Item is incorporated by reference to the similarly named section of NRG's Definitive Proxy Statement for its [removed: 2022] [added: 2023] Annual Meeting of Stockholders.

Consolidated Statements of Operations — Years ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019][added: 2020]

Consolidated Statements of Comprehensive Income — Years ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019][added: 2020]

Consolidated Balance Sheets — As of December 31, [removed: 2021] [added: 2022] and [removed: 2020][added: 2021]

Consolidated Statements of Cash Flows — Years ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019][added: 2020]

Consolidated Statements of Stockholders' Equity — Years ended December 31, [added: 2022,] 2021, [removed: 2020,] and [removed: 2019][added: 2020]

We have audited the accompanying consolidated balance sheets of NRG Energy, Inc. and subsidiaries (the Company) as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, [removed: 2021,] [added: 2022,] 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, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, [removed: 2021,] [added: 2022,] 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, [removed: 2021,] [added: 2022,] 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 [removed: 24, 2022] [added: 23, 2023] expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

*Critical Audit [removed: Matters*][added: Matter*]

The critical audit [removed: matters] [added: matter] communicated below [removed: are matters] [added: is a matter] arising from the current period audit of the consolidated financial statements that [removed: were] [added: was] communicated or required to be communicated to the audit committee and that: (1) [removed: relate] [added: relates] 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 [added: a] critical audit [removed: matters] [added: matter] 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 [removed: matters] [added: matter] below, providing [added: a] separate opinions on the critical audit [removed: matters] [added: matter] or on the accounts or disclosures to which [removed: they relate.][added: it relates.]

*Evaluation of the sufficiency of audit evidence over [removed: operating] revenues*

As discussed in Note 3 to the consolidated financial statements, the Company had [removed: $26.989] [added: $31.543] billion of [removed: operating] revenues.

[removed: Operating revenue] [added: 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 [removed: operating] 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 [removed: operating] revenue in the aggregate.

[removed: In addition, we] [added: evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s revenue recognition processes; involved IT professionals, who assisted in testing certain IT applications used by the Company in its revenue recognition processes; and] assessed recorded revenue for a selection of transactions by comparing the amounts recognized to underlying documentation, including contracts with customers.

In addition, we evaluated the sufficiency of audit evidence obtained over [removed: operating] revenues by assessing the results of procedures performed, including the appropriateness of such evidence.

| | | | [added: | | |] For the Year Ended December 31, | | | | | | | | | [removed: | | | | | |]

| (In millions, except per share amounts) | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| [removed: Operating Revenues] [added: Revenues] | | | | | | | | | | | | | | | | | |

| Total [removed: operating] revenues | | | $ | [removed: 26,989] [added: 31,543] | | | | | $ | [removed: 9,093] [added: 26,989] | | | | | $ | [removed: 9,821] [added: 9,093] | |

| Cost of operations (excluding depreciation and amortization shown below) | | | [removed: 20,482] [added: 27,446] | | | | | | [removed: 6,540] [added: 20,482] | | | | | | [removed: 7,303] [added: 6,540] | | |

| Depreciation and amortization | | | [removed: 785] [added: 634] | | | | | | [removed: 435] [added: 785] | | | | | | [removed: 373] [added: 435] | | |

| Impairment losses | | | [removed: 544] [added: 206] | | | | | | [removed: 75] [added: 544] | | | | | | [removed: 5] [added: 75] | | |

| Selling, general and administrative costs | | | [removed: 1,293] [added: 1,228] | | | | | | [removed: 810] [added: 1,293] | | | | | | [removed: 760] [added: 810] | | |

| Provision for credit losses | | | [removed: 698] [added: 11] | | | | | | [removed: 108] [added: 698] | | | | | | [removed: 95] [added: 108] | | |

| Acquisition-related transaction and integration costs | | | [removed: 93] [added: 52] | | | | | | [removed: 23] [added: 93] | | | | | | [removed: 2] [added: 23] | | |

| Total operating costs and expenses | | | [removed: 23,895] [added: 29,577] | | | | | | [removed: 7,991] [added: 23,895] | | | | | | [removed: 8,538] [added: 7,991] | | |

| Gain on sale of assets | | | [removed: 247] [added: 52] | | | | | | [removed: 3] [added: 247] | | | | | | [removed: 7] [added: 3] | | |

| Operating Income | | | [removed: 3,341] [added: 2,018] | | | | | | [removed: 1,105] [added: 3,341] | | | | | | [removed: 1,290] [added: 1,105] | | |

| Equity in earnings of unconsolidated affiliates | | | [removed: 17] [added: 6] | | | | | | 17 | | | | | | [removed: 2] [added: 17] | | |

| Impairment losses on investments | | | — | | | | | | [removed: (18)] [added: —] | | | | | | [removed: (108)] [added: (18)] | | |

| Other income, net | | | [removed: 63] [added: 56] | | | | | | [removed: 67] [added: 63] | | | | | | [removed: 66] [added: 67] | | |

| Loss on debt extinguishment | | | [removed: (77)] [added: —] | | | | | | [removed: (9)] [added: (77)] | | | | | | [removed: (51)] [added: (9)] | | |

| Interest expense | | | [removed: (485)] [added: (417)] | | | | | | [removed: (401)] [added: (485)] | | | | | | [removed: (413)] [added: (401)] | | |

| Total other expense | | | [removed: (482)] [added: (355)] | | | | | | [removed: (344)] [added: (482)] | | | | | | [removed: (504)] [added: (344)] | | |

| Income [removed: from Continuing Operations] Before Income Taxes | | | [removed: 2,859] [added: 1,663] | | | | | | [removed: 761] [added: 2,859] | | | | | | [removed: 786] [added: 761] | | |

| Income tax [removed: expense/(benefit)] [added: expense] | | | [removed: 672] [added: 442] | | | | | | [removed: 251] [added: 672] | | | | | | [removed: (3,334)] [added: 251] | | |

| Net Income | | | [removed: 2,187] [added: $] | [added: 1,221] | | | | | [removed: 510] [added: $] | [added: 2,187] | | | | | [removed: 4,441] [added: $] | [added: 510] | |

For each revenue stream over which procedures were performed, we

| Income Per Share | | | | | | | | | | | | | | | | | |

| Net income | | | | | | | | | | | | | | | | | | | | | 1,221 | | | | | | | | | | | | | | | | | | 1,221 | | |

| Adoption of ASU 2020-06 | | | | | | | | | | | | | | | (100) | | | | | | 57 | | | | | | | | | | | | | | | | | | (43) | | |

| Balance at December 31, 2022 | | | | | | | | | $ | 4 | | | | | $ | 8,457 | | | | | $ | 1,408 | | | | | $ | (5,864) | | | | | $ | (177) | | | | | $ | 3,828 | |

On December 6, 2022, NRG and Vivint Smart Home, Inc. announced the entry into a definitive agreement under which the Company will acquire Vivint, a smart home platform company, in an all-cash transaction.

The acquisition will accelerate the realization of NRG’s consumer-focused growth strategy and create a leading essential home services platform fueled by market-leading brands, unparalleled insights, proprietary technologies and complementary sales channels.

Close of the acquisition is targeted for the first quarter of 2023 and is subject to customary closing conditions.

The Company received proceeds of $689 million from ERCOT in June 2022.

| Provision for credit losses(a) | | | 11 | | | | | | 698 | | | | | | 108 | | |

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 expense due to the impacts of Winter Storm Uri.

The increase in write-offs for the periods ended December 31, 2022 and 2021 were primarily due to the resolution of credit losses that occurred during Winter Storm Uri.

Business Interruption Insurance

The Company carries insurance policies to cover insurable risks including, but not limited to, business interruption.

As a result of damage at the Limestone 1 and W.A. Parish 8 units, the Company recorded business interruption insurance settlements of $81 million during the year ended December 31, 2022.

Business interruption insurance is recorded to cost of operations in the consolidated statements of operations and cash provided by operating activities in the consolidated statement of cash flows.

stockholders' equity until sale or complete or substantially complete liquidation of the net investment in the foreign entity takes place.

For the years ended December 31, 2022, amounts recognized as foreign currency transaction losses were $(7) million.

The Company will evaluate the impacts of the amendments for business combinations occurring after the effective date.

to the customer of NRG’s performance obligation completed to date.

| Home(a) | | | $ | 6,388 | | | | | $ | 2,088 | | | | | $ | 2,286 | | | | | | | | | | | $ | (1) | | | | | $ | 10,761 | |

| Business | | | 3,229 | | | | | | 13,768 | | | | | | 1,964 | | | | | | | | | | | | — | | | | | | 18,961 | | |

| Total retail revenue(b) | | | 9,617 | | | | | | 15,856 | | | | | | 4,250 | | | | | | | | | | | | (1) | | | | | | 29,722 | | |

| Energy revenue(b) | | | 111 | | | | | | 641 | | | | | | 466 | | | | | | | | | | | | 32 | | | | | | 1,250 | | |

| Other revenue(b) | | | 327 | | | | | | 104 | | | | | | 5 | | | | | | | | | | | | (15) | | | | | | 421 | | |

| Total revenue | | | 10,057 | | | | | | 16,763 | | | | | | 4,706 | | | | | | | | | | | | 17 | | | | | | 31,543 | | |

| Less: Revenues accounted for under topics other than ASC 606 and ASC 815 | | | — | | | | | | (7) | | | | | | 41 | | | | | | | | | | | | 1 | | | | | | 35 | | |

| Retail revenue | | | $ | — | | | | | $ | 110 | | | | | $ | — | | | | | | | | | | | $ | — | | | | | $ | 110 | |

| Home(a) | | | $ | 5,659 | | | | | $ | 1,832 | | | | | $ | 2,059 | | | | | | | | | | | $ | (1) | | | | | $ | 9,549 | |

| Total revenue | | | 10,295 | | | | | | 13,025 | | | | | | 3,659 | | | | | | | | | | | | 10 | | | | | | 26,989 | | |

| Less: Revenues accounted for under topics other than ASC 606 and ASC 815 | | | — | | | | | | (25) | | | | | | 3 | | | | | | | | | | | | — | | | | | | (22) | | |

| Contract amortization | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | — | | |

| Total revenue | | | 6,312 | | | | | | 2,249 | | | | | | 536 | | | | | | | | | | | | (4) | | | | | | 9,093 | | |

| Less: Revenues accounted for under topics other than ASC 606 and ASC 815 | | | — | | | | | | 1 | | | | | | 17 | | | | | | | | | | | | — | | | | | | 18 | | |

| Accounts receivable, net - Accounted for under topics other than ASC 606 | | | | | | 64 | | | | | | 182 | | |

The change in deferred revenue balances during the years ended December 31, 2022 and 2021 was primarily due to the usage of customer bill credits by certain C&I customers, which were as a result of power pricing during Winter Storm Uri.

2023 Anticipated Acquisition

*Vivint Smart Home Acquisition*

On December 6, 2022, the NRG and Vivint Smart Home, Inc. announced the entry into a definitive merger agreement under which the Company will acquire Vivint, a smart home platform company, in an all-cash transaction.

The following are the primary procedures we performed to address this critical audit matter.

For certain revenue streams, 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.

*Fair value of customer relationship intangible assets*

As discussed in Note 4 to the consolidated financial statements, the Company acquired Direct Energy on January 5, 2021 for consideration of $3.724 billion.

The Company recorded the identifiable assets acquired and liabilities assumed at fair value at the acquisition date, including $1.277 billion of customer relationship intangible assets which represent the generation of future income reflective of Direct Energy's customer base.

Customer relationship intangible assets were valued using the excess earnings method of the income approach.

We identified the evaluation of the fair value of customer relationship intangible assets acquired in the Direct Energy transaction as a critical audit matter.

A higher degree of auditor judgment was required to evaluate the customer attrition used in the excess earnings method.

Changes in the customer attrition could have a significant impact on the forecasted future cash flows used in the excess earnings method and the resulting fair value of the customer relationship intangible assets.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company's acquisition-date valuation process, including controls over the development of the customer attrition.

We performed sensitivity analyses over the Company's customer attrition used to determine the estimated fair value of the customer relationship intangible assets to assess the effect of changes in that assumption on the Company's determination of fair value.

We evaluated the customer attrition by comparing it to the Company's actual customer attrition.

February 24, 2022

| Income from Continuing Operations | | | 2,187 | | | | | | 510 | | | | | | 4,120 | | |

| Income from discontinued operations, net of income tax | | | — | | | | | | — | | | | | | 321 | | |

| Less: Net income attributable to redeemable noncontrolling interest | | | — | | | | | | — | | | | | | 3 | | |

| Income from discontinued operations per weighted average common share — diluted | | | $ | — | | | | | $ | — | | | | | $ | 1.22 | |

| Net Income per Weighted Average Common Share — Diluted | | | $ | 8.93 | | | | | $ | 2.07 | | | | | $ | 16.81 | |

See notes to Consolidated Financial Statements

| Available-for-sale securities, net of income tax | | | — | | | | | | — | | | | | | (19) | | |

| Comprehensive Income Attributable to NRG Energy, Inc. | | | $ | 2,267 | | | | | $ | 496 | | | | | $ | 4,340 | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Income from continuing operations | | | 2,187 | | | | | | 510 | | | | | | 4,120 | | |

| Cash provided by discontinued operations | | | — | | | | | | — | | | | | | 8 | | |

| Net Cash Provided by Operating Activities | | | $ | 493 | | | | | $ | 1,837 | | | | | $ | 1,413 | |

| Net contributions to discontinued operations | | | — | | | | | | — | | | | | | (44) | | |

| Cash (used)/provided by continuing operations | | | (3,039) | | | | | | (494) | | | | | | 558 | | |

| Cash used by discontinued operations | | | — | | | | | | — | | | | | | (2) | | |

| Cash provided by discontinued operations | | | — | | | | | | — | | | | | | 43 | | |

| Net Cash (Used)/Provided by Financing Activities | | | $ | (272) | | | | | $ | 2,204 | | | | | $ | (2,148) | |

| Change in Cash from discontinued operations | | | — | | | | | | — | | | | | | 49 | | |

| Balances at December 31, 2018 | | | | | | | | | $ | 4 | | | | | $ | 8,510 | | | | | $ | (6,022) | | | | | $ | (3,632) | | | | | $ | (94) | | | | | $ | (1,234) | |

| Net income attributable to NRG Energy, Inc. | | | | | | | | | | | | | | | | | | | | | 4,438 | | | | | | | | | | | | | | | | | | 4,438 | | |

| Issuance of common stock | | | | | | | | | | | | | | | 6 | | | | | | | | | | | | | | | | | | | | | | | | 6 | | |

Direct Energy is a leading retail provider of electricity, natural gas, and home and business energy related products and services in North America, with operations in all 50 U.S. states and 8 Canadian provinces.

On December 1, 2021, the Company sold approximately 4,850 MWs of fossil generating assets from its East and West regions to Generation Bridge, an affiliate of ArcLight Capital Partners.

NRG received $623 million of net proceeds, after purchase price adjustments pursuant to the terms of the Purchase and Sale Agreement entered into on February 28, 2021.

As part of the transaction, NRG entered into a tolling agreement for the 866 MW Arthur Kill plant in New York City through April 2025.

On July 30, 2021, PJM identified reliability impacts resulting from the proposed deactivation of one of those assets, Indian River Unit 4.

Date: February [removed: 24, 2022][added: 23, 2023]

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 [removed: 24, 2022.][added: 23, 2023.]

| /s/ MAURICIO GUTIERREZ | | | | | | President, Chief Executive Officer and | | | | | | February [removed: 24, 2022] [added: 23, 2023] | | |

| /s/ ALBERTO FORNARO | | | | | | Chief Financial Officer | | | | | | February [removed: 24, 2022] [added: 23, 2023] | | |

| /s/ EMILY PICARELLO | | | | | | Corporate Controller | | | | | | February [removed: 24, 2022] [added: 23, 2023] | | |

| /s/ LAWRENCE S. COBEN | | | | | | Chair of the Board | | | | | | February [removed: 24, 2022] [added: 23, 2023] | | |

| /s/ E. SPENCER ABRAHAM | | | | | | Director | | | | | | February [removed: 24, 2022] [added: 23, 2023] | | |

| /s/ ANTONIO CARRILLO | | | | | | Director | | | | | | February [removed: 24, 2022] [added: 23, 2023] | | |

| /s/ MATTHEW CARTER, JR. | | | | | | Director | | | | | | February [removed: 24, 2022] [added: 23, 2023] | | |

| /s/ HEATHER COX | | | | | | Director | | | | | | February [removed: 24, 2022] [added: 23, 2023] | | |

| /s/ ELISABETH B. DONOHUE | | | | | | Director | | | | | | February [removed: 24, 2022] [added: 23, 2023] | | |

| /s/ PAUL W. HOBBY | | | | | | Director | | | | | | February [removed: 24, 2022] [added: 23, 2023] | | |

| /s/ ALEXANDRA PRUNER | | | | | | Director | | | | | | February [removed: 24, 2022] [added: 23, 2023] | | |

| /s/ ANNE C. SCHAUMBURG | | | | | | Director | | | | | | February [removed: 24, 2022] [added: 23, 2023] | | |

| /s/ THOMAS H. WEIDEMEYER | | | | | | Director | | | | | | February [removed: 24, 2022] [added: 23, 2023] | | |