NRG Energy (NRG) 10-K risk factor changes: FY2023 vs FY2022

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

Risks Related to the [removed: Proposed] Acquisition of [removed: Vivint][added: Vivint Smart Home]

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

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

Market prices for power, capacity, ancillary services, natural gas, [removed: coal and] [added: coal,] oil [added: and renewable energy credits] are unpredictable and tend to fluctuate substantially.

- [added: changes in law, including judicial decisions,] environmental regulations and [added: environmental] legislation; [added: and]

- [removed: fuel price volatility and] transportation capacity constraints or inefficiencies;

- federal, state and provincial power regulations and legislation, and regulations and actions of the ISO and [removed: RTOs;][added: RTOs.]

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

[removed: Consequently, the] [added: The] Company's earnings and cash flows could be adversely affected in any period in which the wholesale power or gas prices rise at a greater rate than the rates the Company can charge to customers.

The Company's retail operations [removed: specifically] face competition for customers.

The incumbent utility [added: often] has the advantage of long-standing relationships with its customers and strong brand recognition.

[removed: Furthermore, NRG may face competition from other] energy [removed: service providers, other energy] industry participants, or nationally branded providers of consumer products and services, who [added: have, and] may [added: in the future,] develop businesses [added: and offerings] that [removed: will] compete with NRG.

Over time, the Company's plants may be unable to compete with these more efficient plants, which could result in [added: asset] retirements.

NRG's competitors may be able to respond more quickly to new laws or regulations or emerging technologies, or devote greater resources to marketing of retail energy [added: and home services] than NRG can.

NRG also buys [removed: significant quantities of] energy and fuel on a short-term or spot market basis.

The price NRG can obtain for the sale of energy may not rise at the same rate, or may not rise at [removed: all, to match a rise in fuel or delivery costs.]

NRG may engage in trading activities, including the trading of power, [removed: fuel and] [added: natural gas, fuel,] emissions [removed: allowances] [added: allowances, environmental attributes and credits, weather, and other physical and financial commodity related products] that are not directly related to the operation of the Company's generation facilities or the management of related risks.

NRG undertakes [added: to hedge] these market activities through agreements with various counterparties.

The Company's ability to provide natural gas for its present and projected customers will depend upon its suppliers' ability to obtain and deliver supplies of natural gas, as well as NRG's ability to acquire [removed: supplies directly from new sources.][added: supplies.]

Unplanned outages of generating units, including extensions of scheduled outages due to mechanical failures or other problems occur from time to time and are an inherent risk of the [removed: Company's business.]

There is a risk that mistakes, [removed: mis-operations,] [added: mis-operations] or actions taken by these third parties could be attributed to NRG, including the risk of investigation 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.

The failure of any supplier or customer to fulfill its contractual obligations to [added: NRG, the inability of] NRG [added: to source products and services on acceptable terms, if at all, and the failure of third parties to provide services to its customers that are necessary for the Company’s smart home services] could have a material adverse effect on the Company's financial results.

[removed: Consequently,] [added: As a result,] the financial performance of the Company's facilities is dependent on the credit quality of, and continued performance by, suppliers and [removed: customers.][added: customers, which cannot be guaranteed.]

[removed: The Company also cannot predict] whether transmission or distribution facilities will be expanded in specific markets to accommodate competitive access to those markets.

[removed: NRG may have] [added: -] difficulty addressing [added: any] possible differences in corporate cultures and management [removed: philosophies.][added: philosophies; and]

NRG may in the future acquire or dispose of businesses or assets, acquire or sell books of retail customers, or pursue other business activities, directly or [removed: indirectly] [added: indirectly,] through [removed: subsidiaries,] [added: subsidiaries] that involve a number of risks.

The acquisition of companies and [removed: assets] [added: assets, and their integration,] 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 inability to retain customers and the inability to arrange financing for an acquisition as may be required or desired.

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

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, [added: provide smart home services,] maintain [removed: 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.]

Further, the Company's [removed: retail business requires] [added: retail, Home and Services businesses, as well as Vivint Smart Home's smart home platform, require] accessing, collecting, storing and transmitting sensitive customer data in the ordinary course of business.

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

If a material breach of the Company's information technology systems were to occur, the critical operational capabilities and reputation of its business may be adversely affected, customer confidence may be diminished, and NRG may be subject to substantial legal or regulatory scrutiny and claims, any of which may contribute to potential legal or regulatory actions against the Company, loss of [removed: customers] [added: customers, fines, penalties or other sanctions] and otherwise have a material adverse effect.

[added: 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.

The Company has made [removed: investments, and may continue to make investments, in new business initiatives predominantly] [added: investments] focused on consumer products [removed: and in markets] that may not be successful, may not achieve the intended financial results or may result in product liability and reputational risk that could adversely affect the Company.

[removed: As part of these initiatives, the] [added: The] Company may be liable to customers for any damage caused to customers’ homes, facilities, belongings or property during the installation of Company products and systems, such as [added: smart] home [added: systems, home] back-up generators and residential HVAC system repairs, installation and replacements.

Where such work is performed by independent contractors, such as repairs performed under the Company's home [removed: warranty and] protection plan products, the Company may nonetheless face claims and costs for damage.

Although the Company maintains liability [removed: insurance,] [added: insurance and its service contracts limit Company liability,] the Company cannot be certain that its coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to the Company on economically reasonable terms, or at [removed: all.][added: all, or that contractual limitations will be enforced.]

Further, any product liability [removed: claim] [added: claims] or damage caused by the Company could significantly impair the Company’s brand and reputation, which may result in a failure to maintain customers and achieve the Company’s desired growth initiatives in these new businesses.

Advances in these or other [removed: technologies] [added: technologies, including through artificial intelligence,] could reduce the costs of power production to a level below what the Company has currently forecasted, which could adversely affect its cash flows, results of operations or competitive position.

The acquisition of Vivint Smart Home may not achieve its intended results and its integration may disrupt or have a negative impact on the Company’s business.

These risks include, but are not limited to:

- the difficulty of managing and integrating Vivint Smart Home and its operations;

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

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

Many of these factors are outside of the Company’s control.

pricing results in the Company reducing or idling coal-fired generating facilities.

Furthermore, NRG may face competition from other energy service providers, other

The Company's smart home services market faces competition from residential security companies as well as other companies that are able to bundle their existing offerings, such as cable, telecommunications and internet service, with automation and monitored security services, and from do-it-yourself smart home systems, which customers are able to install without subscription services.

NRG’s strategy relies, in part, on its ability to cross-serve and optimize its network of retail and Smart Home services customers, and if it is unable to retain existing customers and expand their use of the Company’s products and services, its expected growth and operating results could be adversely affected.

As part of NRG’s growth strategy, it is important for the Company to cross-sell energy sales and services to smart home services subscribers and smart home services to residential retail customers.

As the Company continues pursuing cross-selling opportunities between these customers, there can be no assurances that its efforts in this regard will be successful.

Additionally, for the Company to be successful in such cross-selling opportunities, it must retain its existing customers.

The length of the terms for which NRG’s retail customers are contracted can be for multi-year periods, but many customers are contracted for a period of one year or less.

Smart home services customers historically have entered into subscriptions that range from three to five years.

These customers are not obligated to, and may not, renew their contracts or subscriptions after the expiration of their original commitments.

If customers terminate their contracts, do not renew their contracts or do not expand their use of NRG’s products and services, the Company’s growth strategy may not be successful and its expected results of operations may be adversely affected.

Disruptions in the Company's fuel supplies or power supply arrangements may therefore require it to supply replacement power either by running its other, higher cost power plants or by obtaining power from third-party sources at market prices that could substantially exceed the contract price, or to pay damages to counterparties for failure to deliver power or sell electricity or natural gas as contracted.

all, to match a rise in fuel or delivery costs.

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.

The services and the networks and information systems utilized by the Company may be at risk for breaches as a result of third-party actions, employee or vendor error, malfeasance or other factors.

Company's business.

Supplier and/or customer concentration, the inability of suppliers to meet their obligations and dependence on third-party service providers may expose the Company to significant financial credit or performance risks and adversely affect NRG's results of operations, cash flows and financial condition.

The Company also relies on a number of sole or limited source suppliers for critical components for its smart home products and services, and those services are dependent on third-party cellular, telecommunications and/or internet providers.

The Company also cannot predict

Negative publicity may damage NRG's reputation or its brands and negatively impact its business, financial condition, results of operations and ability to attract and retain highly qualified employees.

Additionally, the Company is from time to time named in investigations, claims and lawsuits arising in the ordinary course of business, and customers have in the past communicated complaints to consumer protection organizations, regulators or the media.

Negative claims or publicity regarding the Company or its operations, offerings, practices or customer service may damage its brands or reputation, even if such claims are untrue.

The laws of some states limit or prohibit insurance coverage for certain liabilities and actions, and any significant uninsured damages could have a material adverse effect on the Company’s business, financial condition and cash flows.

Changes in technology may impair the value of, and the attractiveness of, its retail products, smart home services and NRG’s generation facilities.

Further, technological innovation and changes could cause the Company’s smart home products and services to become obsolete, or otherwise more expensive and less effective than those of competitors, putting the Company at a competitive disadvantage.

The Company’s smart home services rely on intellectual property and any failure to adequately protect such intellectual property, or claims that the Company has infringed on others’ intellectual property rights, could have an adverse effect on its business and operations and result in a competitive disadvantage.

The Company relies on a combination of patent, trademark, copyright and trade secret laws of the United States and other countries and a combination of confidentiality procedures, contractual provisions and other methods, to protect its intellectual property, all of which offer only limited protection.

If the Company fails to acquire the necessary intellectual property rights or adequately protect or assert its intellectual property rights, competitors may manufacture and market similar products and services or convert customers, which could adversely affect market share and results of operations for smart home services.

In addition, patent rights may not prevent competitors from developing, using or selling products or services that are similar to or address the same market as the Company’s smart home products and services.

Certain of the Company’s smart home solutions contain software modules licensed under “open-source” licenses, which may entail greater risks than the use of third-party commercial software, as open-source licensors generally do not provide warranties or other contractual protections regarding

infringement claims or the quality of the code.

If completed, the acquisition of Vivint may not achieve its intended results.

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.

The Company will be subject to business uncertainties 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 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 until the acquisition is completed and for a period of time thereafter, and could cause customers, suppliers and others to seek to change existing business relationships.

Employee retention and recruitment may be particularly challenging prior to the completion of the acquisition, as employees and prospective employees may experience uncertainty about their future roles with the 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 the combined company, the Company's financial results could be affected.

The pursuit of the acquisition and the preparation for the integration of NRG and Vivint may place a significant burden on management and internal resources.

The diversion of management attention away from ongoing business concerns and any difficulties encountered in the transition and integration process could affect the Company's business, results of operations and financial condition.

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.

- changes in law, including judicial decisions;

- changes in prices related to RECs; and

- changes in capacity prices and capacity markets.

NRG's retail power operations purchase a significant portion of their supply from third parties.

All of the gas sold by the Company in retail and wholesale markets is purchased from third parties.

As a result, financial performance depends on the ability to obtain adequate supplies of power and gas from third parties at prices below the prices NRG charges its customers.

Substantially all of NRG's businesses operates, wholly or partially, without long-term power sale agreements.

Many of NRG’s retail customers are contracted for a period of one year or less, and NRG may or may not hedge its retail power sales exposure, or may hedge in a manner that is not effective at managing quantity or price risk in the retail market.

In addition, many of NRG’s generation facilities are exposed to market risk because they operate as "merchant" facilities without long-term power sales agreements for some or all of their generating capacity and output.

Without the benefit of long-term power sales or purchase agreements, and without long-term load obligations, NRG cannot be sure that it will be able to sell or purchase power at commercially attractive rates or that its generation facilities will be able to operate profitably.

This could lead to future impairments of the Company's property, plants and equipment, the closing of certain of its facilities or the loss of retail customers, which could have a material adverse effect on the Company's results of operations, financial condition or cash flows.

NRG has numerous competitors in all aspects of its business, and additional competitors may enter the industry.

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.

The Company would expect to settle these trades financially rather than through the production of power or the delivery of fuel.

Supplier and/or customer concentration may expose the Company to significant financial credit or performance risks.

The Company may also hedge a portion of its exposure to power and fuel price fluctuations through various physical or financial agreements with counterparties.

Counterparties to these agreements may breach or may be unable to perform their obligations, and in case of renewable generation, such counterparties may be subject to additional risks, such as facility development and transmission risks, unfavorable weather and atmospheric conditions, and mechanical or operational failures.

NRG may not be able to enter into replacement agreements on terms as favorable as its existing agreements, or at all.

If the Company is unable to enter into replacement purchase agreements or other replacement hedging agreements, the Company would be exposed to market price volatility and the risk that fuel and transportation may not be available during certain periods at any price.

NRG and its subsidiaries have guaranteed the performance of third parties, which may result in substantial costs in the event of non-performance.

NRG and its subsidiaries have issued certain guarantees of the performance of others, which obligate NRG and its subsidiaries to perform in the event that the third parties do not perform.

In the event of non-performance by the third parties, NRG could incur substantial cost to fulfill their obligations under these guarantees.

Such performance guarantees could have a material impact on the operating results, financial condition, or cash flows of the Company.

NRG may be unable to integrate the operations of acquired entities in the manner expected.

NRG enters into acquisitions that result in various benefits, including, among other things, cost savings and operating efficiencies.

Achieving the anticipated benefits of these acquisitions depends on whether the businesses can be integrated into NRG in an efficient and effective manner.

The integration process could take longer than anticipated and could result in the loss of valuable employees, the disruption of NRG's businesses, processes and systems or inconsistencies in standards, controls, procedures, practices, policies and compensation arrangements, any of which could divert the attention of management and adversely affect the Company's ability to achieve the anticipated benefits of the acquisitions.

Failure to achieve these anticipated benefits could result in increased costs or decreases in the amount of expected revenues and could adversely affect NRG's future business, financial condition, operating results and prospects.

- Results of operations for the years ended December 31, [removed: 2022] [added: 2023] and December 31, [removed: 2021,] [added: 2022,] including an explanation of significant differences between the periods in the specific line items of NRG's Consolidated Statements of Operations;

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: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and also refer to Item 1 [added: — Business] to this Form 10-K for more detail discussion about the Company's business.

A discussion and analysis of fiscal year [removed: 2020] [added: 2021] may be found in Part II, Item 7 *—* Management's Discussion and Analysis of Financial Condition and Results of Operations of the Annual Report on Form 10-K for the fiscal year ended December 31, [removed: 2021.][added: 2022.]

The Company has a customer base that includes approximately [removed: 5.4] [added: 8] million [removed: Home customers as well as] [added: residential consumers in addition to] commercial, industrial, and wholesale customers, supported by approximately [removed: 16] [added: 13] GW of generation as of December 31, [removed: 2022.][added: 2023.]

The industry dynamics and external influences affecting the Company, its businesses, and the retail energy and power generation industry in [removed: 2022] [added: 2023] and for the future medium term include:

In [removed: 2022,] [added: 2023,] the average natural gas price at Henry Hub was [removed: 73% higher than] [added: $2.74 per MMBtu compared to $6.64 per MMBtu] in [removed: 2021.][added: 2022, representing a decrease of 59%.]

NRG may experience impacts to gross margins due to significant, rapid changes in current natural gas [added: prices, the impact those] prices [added: have on power prices,] and the lag in its ability to make a corresponding adjustment to the retail rates it charges customers on term and month to month contracts.

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

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

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

| Region | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | Change % | | |

| ERCOT - Houston(a) | | | $ | [removed: 90.62] [added: 74.32] | | | | | $ | [removed: 192.17] [added: 90.62] | | | | | [removed: (53)] [added: (18)] | | % |

| ERCOT - North(a) | | | [removed: 78.34] [added: 72.89] | | | | | | [removed: 189.05] [added: 78.34] | | | | | | [removed: (59)] [added: (7)] | | % |

| NY J/NYC(b) | | | [removed: 93.58] [added: 38.95] | | | | | | [removed: 48.71] [added: 93.58] | | | | | | [removed: 92] [added: (58)] | | % |

| NEPOOL(b) | | | [removed: 92.42] [added: 41.36] | | | | | | [removed: 51.81] [added: 92.42] | | | | | | [removed: 78] [added: (55)] | | % |

| COMED (PJM)(b) | | | [removed: 71.86] [added: 32.72] | | | | | | [removed: 41.33] [added: 71.86] | | | | | | [removed: 74] [added: (54)] | | % |

| PJM West Hub(b) | | | [removed: 83.48] [added: 39.34] | | | | | | [removed: 45.67] [added: 83.48] | | | | | | [removed: 83] [added: (53)] | | % |

| CAISO - SP15(b) | | | [removed: 87.67] [added: 60.17] | | | | | | [removed: 53.53] [added: 87.67] | | | | | | [removed: 64] [added: (31)] | | % |

| MISO - Louisiana Hub(b) | | | [removed: 71.12] [added: 33.64] | | | | | | [removed: 43.05] [added: 71.12] | | | | | | [removed: 65] [added: (53)] | | % |

As costs associated with the development of lower carbon infrastructure, such as wind and solar generating facilities, continue to evolve and impact [added: the] development of lower carbon infrastructure in the markets where the Company participates, it may impact the ability of the Company's generating facilities to participate in those markets.

According to ERCOT, 41% of [removed: 2022] [added: 2023] energy consumption in the ERCOT market was generated from carbon emission-free resources, with wind power contributing [removed: 25%.][added: 24%.]

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

Typically, demand for and the price of electricity is higher in the summer and the winter seasons, when temperatures [added: and resultant demand] are more extreme.

The following significant events occurred during [removed: 2022] [added: 2023] and through the filing date, as further described within this Management's Discussion and Analysis and the Consolidated Financial Statements:

*Vivint [added: Smart Home] Acquisition*

The Company [removed: will pay $12 per share, or approximately $2.8 billion in cash, and expects to fund] [added: funded] the acquisition using [removed: proceeds from newly issued debt and] [added: a combination of $740 million in newly-issued secured corporate debt, $650 million in newly-issued] preferred [removed: equity, drawing on] [added: stock, $900 million drawn from] its Revolving Credit Facility and Receivables [removed: Securitization] Facilities, and [removed: through] cash on hand.

[removed: See] [added: NRG describes in detail its acquisitions in] Item 15 [removed: *—*] [added: —] Note 4, *Acquisitions and Dispositions*, to the Consolidated Financial [removed: Statements for further discussion.][added: Statements.]

[removed: *Astoria*][added: *Sale of 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 [removed: 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 [removed: turbines through the planned April 30, 2023 retirement date.][added: turbines.]

[removed: On June 1, 2022, the Company closed on the sale] [added: | Sale] of [removed: its] [added: the Company's] 49% ownership in the Watson natural gas generating facility [removed: for $59 million.][added: | | | — | | | | | | 46 | | |]

NRG recognized a gain on the sale of [removed: $46] [added: $199] million.

The extended forced outage ended in [removed: April of 2022] [added: September 2023] and the unit has returned to service.

As of December 31, [removed: 2022,] [added: 2023,] NRG has entered into Renewable PPAs totaling approximately [removed: 2.4 GW,] [added: 1.9 GW with third-party project developers and other counterparties,] of which approximately [removed: 45%] [added: 1.1 GW] are operational.

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

*Dividend [removed: Increase*][added: Increase on Common Stock*]

In the first quarter of [removed: 2022,] [added: 2023,] NRG increased the annual dividend [added: on its common stock] to [removed: $1.40] [added: $1.51] from [removed: $1.30] [added: $1.40] per share.

In [added: the first quarter of] 2023, NRG [removed: further] increased the annual dividend [added: on its common stock] to $1.51 [added: from $1.40] per share, representing an 8% increase from 2022.

Consolidated Results of Operations for the years ended December 31, [removed: 2022] [added: 2023] and [removed: 2021][added: 2022]

| Retail revenue | | | $ | [removed: 29,722] [added: 27,467] | | | | | $ | [removed: 23,561] [added: 29,722] | | | | | $ | [removed: 6,161] [added: (2,255)] | |

NRG Energy, Inc., or NRG or the Company, sits at the intersection of energy and home services.

NRG is a leading energy and home services company fueled by market-leading brands, proprietary technologies and complementary sales channels.

Across the U.S. and Canada, NRG delivers innovative, sustainable solutions, predominately under the brand names such as NRG, Reliant, Direct Energy, Green Mountain Energy, and Vivint, while also advocating for competitive energy markets and customer choice.

Coal commodity prices decreased slightly in 2023.

For the year ended December 31, 2023, as compared to the same period in 2022, Texas, East and West average on-peak power prices decreased as a result of lower natural gas prices.

| | | | Year Ended December 31, | | | | | | | | | | | | 2023 vs 2022 | | |

Power providers are starting to engage with customers who have transitioned to smart homes with new offerings, including but not limited to behind-the-meter demand

response, or virtual power plant products.

Companies with large customer bases in competitive market places are poised to create further engagement with their customer bases and help their customers further integrate their smart home into their daily lives.

Vivint Smart Home Acquisition and related financings

On March 10, 2023, the Company completed the acquisition of Vivint Smart Home.

The Company paid $12 per share, or $2.6 billion in cash.

On March 9, 2023, the Company issued 650,000 shares of 10.25% Series A Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock.

The proceeds, net of issuance costs, of $635 million were used to partially fund the Vivint Smart Home acquisition.

On March 9, 2023, the Company issued $740 million of aggregate principal amount of 7.000% senior secured first lien notes due 2033.

The net proceeds of $724 million, net of issuance costs, were used to partially fund the Vivint Smart Home acquisition.

Dispositions

On November 1, 2023, the Company closed on the previously announced sale of its 44% equity interest in STP to Constellation.

Proceeds of $1.75 billion were reduced by working capital and other adjustments of $96 million, resulting in net proceeds of $1.654 billion.

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

Decommissioning was completed in December 2023 and the lease agreement has been terminated.

Operations

During the second quarter of 2022, the Company announced the planned retirement of the Joliet generating facility in 2023.

On September 1, 2023, the Joliet generating facility fully retired.

Capital Allocation

In June 2023, NRG revised its long-term capital allocation policy to target allocating approximately 80% of cash available for allocation after debt reduction to be returned to shareholders.

As part of the revised capital allocation framework, the Company announced an increase to its share repurchase authorization to $2.7 billion, to be executed through 2025.

On November 6, 2023, the Company executed Accelerated Share Repurchase agreements to repurchase a total of $950 million of NRG's outstanding common stock.

Under the ASR, the Company paid a total of $950 million and will receive shares of NRG's common stock on specified settlement dates.

During the year ended December 31, 2023, the Company completed $1.2 billion of share repurchases, including the $950 million ASR and $200 million of open market repurchases, under the $2.7 billion authorization.

Beginning in the first quarter of 2024, NRG increased the annual dividend by 8% to $1.63 per share.

During 2023, the Company reduced its debt by $900 million using funds from cash from operations.

Additionally, the Company redeemed $620 million in aggregate principal amount of its 3.875% Senior Notes, due 2032, for $502 million using a portion of the proceeds from the sale of STP.

The Company intends to spend approximately $500 million reducing debt during 2024 to maintain its targeted credit metrics.

The Company intends to fund the debt reduction from cash from operations.

| Revenue | | | | | | | | | | | | | | | | | |

| Total revenue | | | 28,823 | | | | | | 31,543 | | | | | | (2,720) | | |

| Impairment losses on investments | | | (102) | | | | | | — | | | | | | (102) | | |

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

than the GAAP information provided elsewhere in this report.

NRG Energy, Inc., or NRG or the Company, is a consumer services company built on dynamic retail brands.

NRG brings the power of energy to customers by producing and selling energy and related products and services, nation-wide in the U.S. and Canada in a manner that delivers value to all of NRG's stakeholders.

NRG sells power, natural gas, home and power services, and develops innovative, sustainable solutions, predominately under the brand names NRG, Reliant, Direct Energy, Green Mountain Energy, Stream, and XOOM Energy.

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 average on-peak power prices decreased significantly in Texas due to Winter Storm Uri's impact on 2021 pricing.

East and West average on-peak prices increased as a result of higher natural gas prices.

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

These supply chain disruptions are due in part to a number of factors outside the Company's control including geopolitical conflicts, public policy of the 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 retail customers.

The Company expects that supply chain disruptions will continue throughout the remainder of 2023.

NRG is working closely with its suppliers and customers to minimize any potential adverse impacts of these events.

The Company will continue to actively monitor all direct and indirect potential impacts of the supply chain disruptions, and will seek to mitigate and minimize their impact on business.

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.

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.

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

*Sale of Watson*

*Retirement of Joliet*

During the second quarter of 2022, the results of the PJM Base Residual Auction for the 2023/2024 delivery year were released leading the Company to revise its long-term view of certain facilities and announce the planned retirement of the Joliet generating facility on June 1, 2023.

Impairment losses of $20 million and $130 million were recorded on the PJM generating assets and Midwest Generation goodwill, respectively.

*W.A. Parish Extended Outage*

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*

In early July 2021, Limestone Unit 1 came offline as a result of damage to the duct work associated with the FGD system.

*ERCOT 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).

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.

HB 4492 authorized ERCOT to obtain $2.1 billion of financing to distribute to LSEs that were charged and paid to ERCOT those highly priced ancillary service and ORDPA 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.

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.

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

*Share Repurchases*

In December 2021, the Company's board of directors authorized the Company to repurchase $1.0 billion of its common stock, of which $44 million was repurchased in 2021.

During the year ended December 31, 2022, the Company repurchased $601 million of shares at an average price of $40.50 per share, including $6 million of equivalent shares purchased in lieu of tax withholdings on equity compensation issuances.

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.

*Renewable Power Purchase Agreements*

COVID-19

While the pandemic presented risks, as further described in Part II, Item 1A — Risk Factors of this Form 10-K, to the Company’s business, there was not a material adverse impact on the Company’s results of operations for the years ended December 31, 2022, 2021 and 2020.

| (In millions, except otherwise noted) | | | 2022 | | | | | | 2021(a) | | | | | | Change | | |

| Revenues | | | | | | | | | | | | | | | | | |

The types of market risks the Company is exposed to are commodity price risk, [removed: interest rate] [added: credit] risk, liquidity risk, [removed: credit] [added: interest rate] risk and currency exchange risk.

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: 2022] [added: 2023] and [removed: 2021:][added: 2022:]

| (In millions) | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | |

| VaR as of December 31, | | | $ | [removed: 74] [added: 51] | | | | | $ | [removed: 30] [added: 74] | |

| [removed: Average(a)] [added: Average] | | | $ | [removed: 51] [added: 62] | | | | | $ | [removed: 35] [added: 51] | |

| [removed: Maximum(a)] [added: Maximum] | | | [removed: 86] [added: 82] | | | | | | [removed: 53] [added: 86] | | |

| [removed: Minimum(a)] [added: Minimum] | | | [removed: 26] [added: 41] | | | | | | [removed: 23] [added: 26] | | |

[removed: In order to provide additional information, the] [added: The] Company also uses VaR to estimate the potential loss of derivative financial instruments that are subject to mark-to-market accounting.

[added: 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: $413] [added: $185] million as of December 31, [removed: 2022,] [added: 2023,] primarily driven by asset-backed transactions.

[removed: NRG] [added: The Company] manages retail credit risk through the use of established credit [removed: policies that] [added: policies, which] include monitoring of the portfolio and the use of credit mitigation [removed: measures,] [added: measures] such as deposits or prepayment arrangements.

As of December 31, [removed: 2022,] [added: 2023,] the Company's retail customer credit exposure to Home and Business customers was diversified across many customers and various industries, as well as government entities.

The Company's provision for credit losses resulting from credit risk was [removed: $11] [added: $251] million, [removed: $698] [added: $11] million and [removed: $108] [added: $698] million for the years [removed: ending] [added: ended] December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020,] [added: 2021,] respectively.

Based on a sensitivity analysis for power and gas positions under marginable contracts as of December 31, [removed: 2022,] [added: 2023,] a $0.50 per MMBtu decrease in natural gas prices across the term of the marginable contracts would cause an increase in margin collateral posted of approximately [removed: $811 million] [added: $1.5 billion] and a 1.00 MMBtu/MWh decrease in heat rates for heat rate positions would result in an increase in margin collateral posted of approximately [removed: $380] [added: $350] million.

This analysis uses simplified assumptions and is calculated based on portfolio composition and margin-related contract provisions as of December 31, [removed: 2022.][added: 2023.]

As of December 31, [removed: 2022,] [added: 2023,] counterparty credit exposure, excluding credit exposure from RTOs, ISOs, [removed: and] registered commodity exchanges and certain long-term agreements, was [removed: $2.7] [added: $1.6] billion, of which the Company held collateral (cash and letters of credit) against those positions of [removed: $1.0 billion] [added: $426 million] resulting in a net exposure of [removed: $1.7] [added: $1.2] billion.

Approximately [removed: 80%] [added: 63%] of the Company's exposure before collateral is expected to roll off by the end of [removed: 2024.][added: 2025.]

As of December 31, [removed: 2022,] [added: 2023,] 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: 62] [added: 80] | | % |

| Financial institutions | | | [removed: 38] [added: 20] | | |

| Investment grade | | | [removed: 65] [added: 44] | | % |

| Non-Investment grade/Non-Rated | | | [removed: 35] [added: 56] | | |

(a)Counterparty credit exposure excludes [removed: uranium and] coal transportation contracts because of the unavailability of market prices

The Company has [removed: no] exposure to [added: one] wholesale [removed: counterparties] [added: counterparty] in excess of 10% of the total net exposure discussed above as of December 31, [removed: 2022.][added: 2023.]

The Company participates in the organized markets of CAISO, ERCOT, [added: AESO, IESO,] ISO-NE, MISO, NYISO and PJM, known as RTOs or ISOs.

[removed: Trading in these markets is approved by FERC, or in the case of ERCOT, approved by the PUCT and] [added: These ISOs may] include credit policies that, under certain circumstances, require that losses arising from the default of one member on spot market transactions be shared by the remaining participants.

As a result, the counterparty credit risk to these markets is limited to NRG’s [removed: applicable] share of the overall market and are excluded from the above exposures.

Based on these valuation techniques, as of December 31, [removed: 2022,] [added: 2023,] aggregate credit risk exposure managed by NRG to these counterparties was approximately [removed: $1.1 billion] [added: $882 million] for the next five years.

As of December 31, [removed: 2022,] [added: 2023,] the Company's debt fair value was [removed: $7.0] [added: $10.6] billion and carrying value was [removed: $8.1] [added: $10.8] billion.

NRG estimates that a 1% decrease in market interest rates would have increased the fair value of the Company's long-term debt by [removed: $480] [added: $602] million.

Credit [removed: Risk Related Contingent Features][added: Risk]

As of December 31, [removed: 2022,] [added: 2023,] NRG is exposed to changes in foreign currency primarily associated with the purchase of U.S. dollar denominated natural gas for its Canadian business and entered into foreign exchange contracts with [added: a] notional amount of [removed: $569] [added: $548] million.

A hypothetical 10% appreciation in major currencies relative to the U.S. dollar as of December 31, [removed: 2022,] [added: 2023,] would have resulted in [removed: an increase] [added: a decrease] of [removed: $17] [added: $36] million to net income within the Consolidated Statement of Operations.

NRG is exposed to counterparty credit risk through various activities including wholesale sales, fuel purchases and retail supply arrangements, and retail customer credit risk through its retail load activities.

Counterparty credit risk and retail customer credit risk are discussed below.

See Note 6, *Accounting for Derivative Instruments and Hedging Activities*, to this Form 10-K for discussion regarding credit risk contingent features.

Credit risk relates to the risk of loss resulting from non-performance or non-payment by counterparties pursuant to the terms of their contractual obligations.

Trading in the majority of these markets is approved by FERC, whereas in the case of ERCOT, it is approved by the PUCT, and whereas in the case of AESO and IESO, both exist provincially with AESO primarily subject to Alberta Utilities Commission and the IESO subject to the Ontario Energy Board.

NRG is exposed to retail credit risk through the Company's retail electricity and gas providers as well as through Vivint Smart Home.

NRG is exposed to fluctuations in interest rates through its issuance of variable rate debt.

Exposures to interest rate fluctuations may be mitigated by entering into derivative instruments known as interest rate swaps, caps, collars and put or call options.

These contracts reduce exposure to interest rate volatility and result in primarily fixed rate debt obligations when taking into account the combinations of the variable rate debt and the interest rate derivative instrument.

NRG's risk management policies allow the Company to reduce interest rate exposure from variable rate debt obligations.

In the first quarter of 2023, the Company entered into $1.0 billion of interest rate swaps through 2027 to hedge the floating rate on the Term Loan acquired with the Vivint Smart Home acquisition.

Additionally, in the first quarter of 2023, the Company had entered into interest rate swaps to hedge the floating rate on the Revolving Credit Facility extending through 2024, which was fully terminated in conjunction with the pay down of the Revolving Credit Facility.

(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

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

NRG is exposed to retail credit risk related to its Business and Home customers.

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

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

Certain of the Company's hedging and trading agreements contain provisions that entitle the counterparty to demand that the Company post additional collateral if the counterparty determines that there has been deterioration in the Company's credit quality, generally termed “adequate assurance” under the agreements, or require the Company to post additional collateral if there were a downgrade in the Company's credit rating.

The collateral potentially required for contracts with adequate assurance clauses that are in a net liability position as of December 31, 2022, was $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 $195 million as of December 31, 2022.

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

The Company has a customer base that includes approximately [removed: 5.4] [added: 8] million [removed: Home customers as well as] [added: residential consumers in addition to] commercial, industrial, and wholesale customers, supported by approximately [removed: 16] [added: 13] GW of generation as of December 31, [removed: 2022.][added: 2023.]

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

NRG sold [removed: 155] [added: 152] TWhs of electricity and [removed: 1,918] [added: 1,892] MMDth of natural gas in [removed: 2022,] [added: 2023,] making it one of the largest competitive energy retailers in the U.S. As of the end of [removed: 2022,] [added: 2023,] NRG had recurring electricity and/or natural gas sales in [removed: 24] [added: 25] U.S. states, the District of Columbia, and 8 provinces in [removed: Canada.][added: Canada, as well as Vivint served customers in all 50 U.S. states.]

The following chart represents NRG's sales volumes for the year ended December 31, [removed: 2022:][added: 2023:]

[removed: ][added: ]

[removed: NRG's strategy is to maximize stakeholder value through] [added: Through a diversified supply strategy,] the [removed: safe production and sale of] [added: Company sells] reliable electricity and natural gas to its customers in the markets it serves, while [removed: positioning the Company to provide] [added: also providing] innovative [added: home] solutions to [removed: the end-use energy or service customer.][added: customers.]

This strategy is intended to enable the Company to optimize its [added: unique] integrated [removed: model] [added: platform] to [added: delight customers,] generate [removed: stable and predictable] [added: recurring] cash flow, significantly strengthen earnings and cost competitiveness, and lower risk and volatility.

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

The Company’s core [removed: business is] [added: businesses are] the sale of electricity and natural gas to residential, commercial and industrial and wholesale customers, supported by the Company's wholesale [removed: generation.][added: electric generation, as well as the sale of smart home products and services.]

NRG manages its [added: electricity and natural gas] operations based on the combined results of the retail and wholesale generation businesses with a geographical focus.

- West/Services/Other, which primarily includes the following assets and activities: (i) all activity related to customer, plant and market operations in the West and Canada, (ii) the [removed: services] [added: Services] businesses, (iii) activity related to the Cottonwood [removed: facility, (iv) the remaining renewables activity, including the Company’s equity method investment in Ivanpah Master Holdings, LLC, and (v) activity related to the Company’s equity method investment for the Gladstone power plant in Australia;] [added: facility] and [added: other investments;]

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

The [removed: Company’s] integrated model consists of three core [removed: functions:] [added: functions in each geographic segment above:] Customer Operations, Market Operations and Plant [removed: Operations, which directly support each other in each geographic region.][added: Operations.]

This includes acquisition and retention of all of NRG’s residential, small commercial, [removed: government and] commercial [removed: & industrial] [added: and industrial, and government] customers.

[removed: Following the expansion of the customer base with the acquisition of Direct Energy in 2021,] Customer Operations [removed: 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 [removed: services businesses acquired.][added: Services businesses.]

NRG sells a variety of products to residential and small commercial customers, including retail electricity and energy management, natural gas, [removed: home security,] line and surge protection products, HVAC installation, repair and maintenance, home protection products, carbon offsets, back-up power stations, portable power, portable solar and portable lighting.

Through its broad range of service offerings and value propositions, NRG [removed: is able] [added: seeks] to attract, retain, and increase the value of its customer relationships.

[removed: These solutions include system power, distributed generation, renewable products, carbon management] and specialty services, backup generation, storage and distributed solar, demand response, and energy efficiency and advisory services.

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

In addition, because changes in power prices in the markets where NRG operates are generally correlated to changes in natural gas prices, NRG uses hedging strategies that may include power and natural gas forward purchases and sales contracts to manage [removed: the] commodity price risk.

NRG trades [removed: electric] power, natural [removed: gas and related commodities, environmental products,] [added: gas, environmental,] weather [removed: products] and [added: other physical and] financial [added: commodity related] products, including forwards, futures, options and swaps.

NRG enters into these instruments primarily to manage price and delivery risk, optimize physical and contractual assets in the portfolio, manage working capital requirements, reduce the carbon exposure in its business and [added: to] comply with [removed: laws.][added: laws and regulations.]

NRG's fuel requirements consist of various forms of fossil [removed: fuel and nuclear] fuel.

Fuel needs are managed by the natural gas commercial group, [added: generally] on a spot basis, [removed: especially for peaking assets,] as the Company does not believe it is prudent to forward purchase natural gas for these types of units as the dispatch is highly unpredictable.

The Company believes it is adequately hedged, using forward coal supply agreements, for its domestic coal consumption for [removed: 2023.][added: 2024.]

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

For the domestic fleet, NRG purchased approximately [removed: 15.3] [added: 13] million tons of coal in [removed: 2022,] [added: 2023,] 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: tenures that] [added: tenures, which] will provide for [removed: most of] the Company's transportation requirements of Powder River Basin coal for the next two years.

As of December 31, [removed: 2022,] [added: 2023,] NRG has entered into Renewable PPAs totaling approximately [removed: 2.4] [added: 1.9] GW with third-party project developers and other counterparties, of which approximately [removed: 45%] [added: 1.1 GW] are operational.

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

Capacity and Other Contracted Revenue [added: or Supply] Sources

NRG's revenues [removed: and] [added: and/or] cash flows, primarily in the East and West, benefit from capacity/demand payments and other contracted revenue sources, originating from market clearing capacity prices, [removed: resource adequacy contracts,] tolling arrangements and other long-term contractual arrangements.

The natural gas commercial group is responsible for [removed: all] costing, logistics and supply for all of NRG's residential, commercial [removed: & industrial] and [added: industrial, and] wholesale customers.

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

The Company owns and leases a diversified wholesale generation portfolio with approximately [removed: 16] [added: 13] GW of fossil fuel, [removed: nuclear] and renewable generation capacity at [removed: 23] [added: 19] plants as of December 31, [removed: 2022.][added: 2023.]

The following table summarizes NRG's generation portfolio as of December 31, [removed: 2022:][added: 2023:]

| Type | | | | | | Texas | | | | | | East | | | | | | [removed: West/Services/Other] [added: West/Services/Other(b)] | | | | | | | | | | | | Total | | |

| Natural gas | | | | | | [removed: 4,721] [added: 4,353] | | | | | | [removed: 1,881] [added: 80] | | | | | | 1,279 | | | | | | | | | | | | [removed: 7,881] [added: 5,712] | | |

| Utility Scale Solar | | | | | | — | | | | | | — | | | | | | [removed: 219] [added: 216] | | | | | | | | | | | | [removed: 219] [added: 216] | | |

MW figures provided represent nominal summer net MW capacity of power generated as adjusted for the Company's owned [removed: or leased interest.][added: interest]

NRG Energy, Inc., or NRG or the Company, sits at the intersection of energy and home services.

Across the U.S. and Canada, NRG delivers innovative, sustainable solutions, predominately under brand names such as NRG, Reliant, Direct Energy, Green Mountain Energy and Vivint, while also advocating for competitive energy markets and customer choice.

NRG's strategy is to maximize stakeholder value by being a leader in the emerging convergence of energy and smart automation in the home and business.

NRG's unique combination of assets and capabilities enables the Company to develop and sell highly differentiated offerings that bring together every day essential services like powering and securing the home through a seamless and integrated experience.

The following transactions were completed during 2023 in furtherance of the Company’s strategy: (i) the March 10, 2023 acquisition of Vivint Smart Home, a leading smart home platform company; (ii) portfolio optimization, including the sale of the Company’s 44% equity interest in STP for $1.7 billion; and (iii) disciplined capital allocation through the execution of $1.2 billion in share repurchases and $1.4 billion in debt reduction.

Vivint Smart Home operations are reported within the Vivint Smart Home segment.

- Vivint Smart Home; and

These solutions include system power, distributed generation, renewable and low-carbon products, carbon management

Natural gas storage and transportation contracts are utilized to reduce daily volatility.

| Total generation capacity | | | | | | 8,529 | | | | | | 2,483 | | | | | | 2,100 | | | | | | | | | | | | 13,112 | | |

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

(b)Includes proportionate share of equity owned investments

These projects have included gas-fired generation development and

Vivint Smart Home

In March 2023, NRG completed the acquisition of Vivint Smart Home, which is a leading smart home platform that provides subscribers with technology, products and services to create a smarter, greener, safer home.

A smart home has multiple devices integrated into a single expandable platform that incorporates artificial intelligence and machine-learning in its operating system allowing customers to interact with and manage their home from anywhere via the Vivint app on their smart device.

Vivint Smart Home enables a customized solution for the home using integrated smart cameras (indoor, outdoor and doorbell), locks, lights, thermostats, garage door control and a host of other safety and security sensors.

Vivint Smart Home provides a fully integrated solution for consumers, including hardware, software, sales, installation by trained and experienced in-home service professionals, customer service, technical support and professional monitoring.

This seamless integration of high-quality products and services resulted in an average subscriber lifetime of approximately nine years as of December 31, 2023.

The Company believes its ability to offer related or adjacent products and services that leverage the existing smart home platform, as well as energy services, can extend the average subscriber lifetime and increase the lifetime value of subscribers.

Vivint Smart Home's cloud-based home platform currently manages more than 30 million in-home devices as of December 31, 2023.

The average subscriber on Vivint Smart Home's cloud-based home platform engages with the smart home app approximately 16 times per day and has approximately 15 devices in its home.

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

| | | | 2023 | | | | | | 2022 | | | | | | 2021 | | |

| Average - Vivint Smart Home(d) | | | 2,008 | | | | | | — | | | | | | — | | |

| Ending - Vivint Smart Home(d) | | | 2,043 | | | | | | — | | | | | | — | | |

| Total Ending retail and Vivint Smart Home | | | 7,870 | | | | | | 5,406 | | | | | | 5,722 | | |

| (d) Vivint Smart Home subscribers includes customers that also purchase other NRG products | | | | | | | | | | | | | | | | | |

| Texas | | | 8,529 | | | | | | 30,776 | | | | | | 74.2 | | % | | | | 11,175 | | | | | | 35.4 | | % |

| East | | | 2,483 | | | | | | 2,016 | | | | | | 85.5 | | % | | | | 13,007 | | | | | | 6.6 | | % |

| West/Services/Other | | | 1,169 | | | | | | 5,903 | | | | | | 73.5 | | % | | | | 7,449 | | | | | | 56.8 | | % |

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

The Company sold its interest in STP on November 1, 2023

The smart home market is an expanding global opportunity and is in the early stages of broad consumer adoption.

It is highly competitive and fragmented.

Major competitors range from large-cap technology companies seeking to expand their core market opportunity who predominantly offer do-it-yourself ("DIY") devices that put a large burden on homeowners to self-install and support many devices, to security-based providers, as well as industrial and telecommunications companies that offer connected home experiences.

Vivint Smart Home provides the full smart home experience, with an end-to-end solution that includes a wide range of unique capabilities and use cases.

Currently, the vast majority of competitors do not offer comprehensive smart home solutions and accompanying services.

*Vivint Smart Home*

Vivint Smart Home operates in states that regulate in some manner the sale, installation, servicing, monitoring or maintenance of smart home and electronic security systems.

NRG Energy, Inc., or NRG or the Company, is a consumer services company built on dynamic retail brands.

NRG brings the power of energy to customers by producing and selling energy and related products and services, nation-wide in the U.S. and Canada in a manner that delivers value to all of NRG's stakeholders.

NRG sells power, natural gas, and home and power services, and develops innovative, sustainable solutions, predominately under the brand names NRG, Reliant, Direct Energy, Green Mountain Energy, Stream, and XOOM Energy.

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

The Company announced in 2021 a four-year plan, that began in 2022, to 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.

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

*Nuclear Fuel* — STP's owners, including NRG, satisfy their fuel supply requirements by: (i) acquiring uranium concentrates and contracting for conversion of the uranium concentrates into uranium hexafluoride; (ii) contracting for enrichment of uranium hexafluoride; and (iii) contracting for fabrication of nuclear fuel assemblies.

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 of all of STP's requirements through 2025 and 75% for the duration of the original operating license (through 2027/2028).

Similarly, STP has begun the process of covering fuel supply requirements into the extended license period and has secured a fabrication contract with Westinghouse through 2047/2048.

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

Other fuel requirements such as uranium, conversion and enrichment remain open at this time.

The Company's largest sources of continuing capacity revenues are capacity auctions in PJM.

PJM operates a pay-for-performance model where capacity payments are modified based on real-time performance and NRG's actual revenues will be the combination of revenues based on the cleared auction MW plus the net of any over- and under-performance of NRG's respective generation assets.

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

| Nuclear | | | | | | 1,132 | | | | | | — | | | | | | — | | | | | | | | | | | | 1,132 | | |

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

| Texas | | | 10,083 | | | | | | 36,920 | | | | | | 70.6 | | % | | | | 10,717 | | | | | | 42.4 | | % |

| East | | | 5,476 | | | | | | 7,494 | | | | | | 79.8 | | % | | | | 11,877 | | | | | | 8.8 | | % |

| West/Services/Other | | | 2,318 | | | | | | 7,949 | | | | | | 88.0 | | % | | | | 7,337 | | | | | | 47.2 | | % |

prices and market dynamics, such as the price of natural gas, transmission constraints, competitor actions, and changes in market heat rates.

Likewise, certain NRG entities participating in the retail markets are subject to rules and regulations established by the states and provinces in which NRG entities are licensed to sell at retail.

These operations are subject to regulation by the PUCT, as well as to regulation by the NRC with respect to NRG's ownership interest in STP.

Federal Energy Regulation

*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.

State and Provincial Energy Regulation

*Illinois Legislation* — Illinois enacted the Climate and Equitable Jobs Act ("CEJA") on September 15, 2021, which targets 100% clean energy by 2050.

CEJA focuses on (i) decarbonization, (ii) incentives to transition coal plants into clean energy facilities and (iii) nuclear subsidies.

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.

| ☒ | | | | | | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year ended December 31, [removed: 2022.] [added: 2023.] | | |

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: $6,461,030,777] [added: $6,266,747,422] based on the closing sale price of [removed: $38.17] [added: $37.39] as reported on the New York Stock Exchange.

| Class | | | | | | Outstanding at February [removed: 15, 2023] [added: 1, 2024] | | |

| Common Stock, par value $0.01 per share | | | | | | [removed: 229,774,238] [added: 208,021,012] | | |

Portions of the Registrant's definitive Proxy Statement relating to its [removed: 2023] [added: 2024] Annual Meeting of Stockholders

| | | | [GLOSSARY OF [removed: TERMS](#i096cf9fefc2b403e9995cb7de61112a4_10)] [added: TERMS](#i0959bd7373bc4a449d4d275c0ec1dc43_10)] | | | [removed: [3](#i096cf9fefc2b403e9995cb7de61112a4_10)] [added: [3](#i0959bd7373bc4a449d4d275c0ec1dc43_10)] | | |

| | | | [Item 1 — [removed: Business](#i096cf9fefc2b403e9995cb7de61112a4_16)] [added: Business](#i0959bd7373bc4a449d4d275c0ec1dc43_16)] | | | [removed: [7](#i096cf9fefc2b403e9995cb7de61112a4_16)] [added: [7](#i0959bd7373bc4a449d4d275c0ec1dc43_16)] | | |

| | | | [Item 1A — Risk [removed: Factors](#i096cf9fefc2b403e9995cb7de61112a4_19)] [added: Factors](#i0959bd7373bc4a449d4d275c0ec1dc43_19)] | | | [removed: [24](#i096cf9fefc2b403e9995cb7de61112a4_19)] [added: [23](#i0959bd7373bc4a449d4d275c0ec1dc43_19)] | | |

| | | | [Item 1B — Unresolved Staff [removed: Comments](#i096cf9fefc2b403e9995cb7de61112a4_22)] [added: Comments](#i0959bd7373bc4a449d4d275c0ec1dc43_22)] | | | [removed: [39](#i096cf9fefc2b403e9995cb7de61112a4_22)] [added: [38](#i0959bd7373bc4a449d4d275c0ec1dc43_22)] | | |

| | | | [Item 2 — [removed: Properties](#i096cf9fefc2b403e9995cb7de61112a4_25)] [added: Properties](#i0959bd7373bc4a449d4d275c0ec1dc43_25)] | | | [removed: [40](#i096cf9fefc2b403e9995cb7de61112a4_25)] [added: [40](#i0959bd7373bc4a449d4d275c0ec1dc43_25)] | | |

| | | | [Item 3 — Legal [removed: Proceedings](#i096cf9fefc2b403e9995cb7de61112a4_28)] [added: Proceedings](#i0959bd7373bc4a449d4d275c0ec1dc43_28)] | | | [removed: [41](#i096cf9fefc2b403e9995cb7de61112a4_28)] [added: [41](#i0959bd7373bc4a449d4d275c0ec1dc43_28)] | | |

| | | | [Item 4 — Mine Safety [removed: Disclosures](#i096cf9fefc2b403e9995cb7de61112a4_31)] [added: Disclosures](#i0959bd7373bc4a449d4d275c0ec1dc43_31)] | | | [removed: [41](#i096cf9fefc2b403e9995cb7de61112a4_31)] [added: [41](#i0959bd7373bc4a449d4d275c0ec1dc43_31)] | | |

| | | | [Item 5 — Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i096cf9fefc2b403e9995cb7de61112a4_37)] [added: Securities](#i0959bd7373bc4a449d4d275c0ec1dc43_37)] | | | [removed: [42](#i096cf9fefc2b403e9995cb7de61112a4_37)] [added: [42](#i0959bd7373bc4a449d4d275c0ec1dc43_37)] | | |

| | | | [Item 6 — [removed: Reserved](#i096cf9fefc2b403e9995cb7de61112a4_40)] [added: Reserved](#i0959bd7373bc4a449d4d275c0ec1dc43_40)] | | | [removed: [43](#i096cf9fefc2b403e9995cb7de61112a4_40)] [added: [43](#i0959bd7373bc4a449d4d275c0ec1dc43_40)] | | |

| | | | [Item 7 — Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i096cf9fefc2b403e9995cb7de61112a4_49)] [added: Operations](#i0959bd7373bc4a449d4d275c0ec1dc43_49)] | | | [removed: [44](#i096cf9fefc2b403e9995cb7de61112a4_49)] [added: [44](#i0959bd7373bc4a449d4d275c0ec1dc43_49)] | | |

| | | | [Item 7A — Quantitative and Qualitative Disclosures About Market [removed: Risk](#i096cf9fefc2b403e9995cb7de61112a4_121)] [added: Risk](#i0959bd7373bc4a449d4d275c0ec1dc43_121)] | | | [removed: [72](#i096cf9fefc2b403e9995cb7de61112a4_121)] [added: [71](#i0959bd7373bc4a449d4d275c0ec1dc43_121)] | | |

| | | | [Item 8 — Financial Statements and Supplementary [removed: Data](#i096cf9fefc2b403e9995cb7de61112a4_124)] [added: Data](#i0959bd7373bc4a449d4d275c0ec1dc43_124)] | | | [removed: [75](#i096cf9fefc2b403e9995cb7de61112a4_124)] [added: [74](#i0959bd7373bc4a449d4d275c0ec1dc43_124)] | | |

| | | | [Item 9 — Changes in and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#i096cf9fefc2b403e9995cb7de61112a4_127)] [added: Disclosure](#i0959bd7373bc4a449d4d275c0ec1dc43_127)] | | | [removed: [75](#i096cf9fefc2b403e9995cb7de61112a4_127)] [added: [74](#i0959bd7373bc4a449d4d275c0ec1dc43_127)] | | |

| | | | [Item 9A — Controls and [removed: Procedures](#i096cf9fefc2b403e9995cb7de61112a4_130)] [added: Procedures](#i0959bd7373bc4a449d4d275c0ec1dc43_130)] | | | [removed: [75](#i096cf9fefc2b403e9995cb7de61112a4_130)] [added: [75](#i0959bd7373bc4a449d4d275c0ec1dc43_130)] | | |

| | | | [Item 9B — Other [removed: Information](#i096cf9fefc2b403e9995cb7de61112a4_133)] [added: Information](#i0959bd7373bc4a449d4d275c0ec1dc43_133)] | | | [removed: [78](#i096cf9fefc2b403e9995cb7de61112a4_133)] [added: [77](#i0959bd7373bc4a449d4d275c0ec1dc43_133)] | | |

| | | | [Item 9C— Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#i096cf9fefc2b403e9995cb7de61112a4_136)] [added: Inspections](#i0959bd7373bc4a449d4d275c0ec1dc43_136)] | | | [removed: [78](#i096cf9fefc2b403e9995cb7de61112a4_136)] [added: [77](#i0959bd7373bc4a449d4d275c0ec1dc43_136)] | | |

| [PART [removed: III](#i096cf9fefc2b403e9995cb7de61112a4_139)] [added: III](#i0959bd7373bc4a449d4d275c0ec1dc43_139)] | | | | | | [removed: [79](#i096cf9fefc2b403e9995cb7de61112a4_139)] [added: [78](#i0959bd7373bc4a449d4d275c0ec1dc43_139)] | | |

| | | | [Item 10 — Directors, Executive Officers and Corporate [removed: Governance](#i096cf9fefc2b403e9995cb7de61112a4_142)] [added: Governance](#i0959bd7373bc4a449d4d275c0ec1dc43_142)] | | | [removed: [79](#i096cf9fefc2b403e9995cb7de61112a4_142)] [added: [78](#i0959bd7373bc4a449d4d275c0ec1dc43_142)] | | |

| | | | [Item 11 — Executive [removed: Compensation](#i096cf9fefc2b403e9995cb7de61112a4_145)] [added: Compensation](#i0959bd7373bc4a449d4d275c0ec1dc43_145)] | | | [removed: [79](#i096cf9fefc2b403e9995cb7de61112a4_145)] [added: [78](#i0959bd7373bc4a449d4d275c0ec1dc43_145)] | | |

| | | | [Item 12 — Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i096cf9fefc2b403e9995cb7de61112a4_148)] [added: Matters](#i0959bd7373bc4a449d4d275c0ec1dc43_148)] | | | [removed: [79](#i096cf9fefc2b403e9995cb7de61112a4_148)] [added: [78](#i0959bd7373bc4a449d4d275c0ec1dc43_148)] | | |

| | | | [Item 13 — Certain Relationships and Related Transactions, and Director [removed: Independence](#i096cf9fefc2b403e9995cb7de61112a4_151)] [added: Independence](#i0959bd7373bc4a449d4d275c0ec1dc43_151)] | | | [removed: [79](#i096cf9fefc2b403e9995cb7de61112a4_151)] [added: [79](#i0959bd7373bc4a449d4d275c0ec1dc43_151)] | | |

| | | | [Item 14 — Principal Accounting Fees and [removed: Services](#i096cf9fefc2b403e9995cb7de61112a4_154)] [added: Services](#i0959bd7373bc4a449d4d275c0ec1dc43_154)] | | | [removed: [79](#i096cf9fefc2b403e9995cb7de61112a4_154)] [added: [79](#i0959bd7373bc4a449d4d275c0ec1dc43_154)] | | |

| [PART [removed: IV](#i096cf9fefc2b403e9995cb7de61112a4_157)] [added: IV](#i0959bd7373bc4a449d4d275c0ec1dc43_157)] | | | | | | [removed: [80](#i096cf9fefc2b403e9995cb7de61112a4_157)] [added: [80](#i0959bd7373bc4a449d4d275c0ec1dc43_157)] | | |

| | | | [Item 15 — Exhibits, Financial Statement [removed: Schedules](#i096cf9fefc2b403e9995cb7de61112a4_160)] [added: Schedules](#i0959bd7373bc4a449d4d275c0ec1dc43_160)] | | | [removed: [80](#i096cf9fefc2b403e9995cb7de61112a4_160)] [added: [80](#i0959bd7373bc4a449d4d275c0ec1dc43_160)] | | |

| | | | [Item 16 — Form 10-K [removed: Summary](#i096cf9fefc2b403e9995cb7de61112a4_286)] [added: Summary](#i0959bd7373bc4a449d4d275c0ec1dc43_286)] | | | [removed: [157](#i096cf9fefc2b403e9995cb7de61112a4_286)] [added: [167](#i0959bd7373bc4a449d4d275c0ec1dc43_286)] | | |

| [EXHIBIT [removed: INDEX](#i096cf9fefc2b403e9995cb7de61112a4_283)] [added: INDEX](#i0959bd7373bc4a449d4d275c0ec1dc43_283)] | | | | | | [removed: [151](#i096cf9fefc2b403e9995cb7de61112a4_283)] [added: [163](#i0959bd7373bc4a449d4d275c0ec1dc43_283)] | | |

| Convertible Senior Notes | | | | | | As of December 31, [removed: 2022,] [added: 2023,] consists of NRG’s $575 million unsecured 2.75% Convertible Senior Notes due 2048 | | |

| Cottonwood | | | | | | Cottonwood Generating Station, a [removed: 1,177] [added: 1,166] MW natural gas-fueled plant | | |

| Ivanpah | | | | | | Ivanpah Solar Electric Generation Station, a [removed: 393] [added: 391] MW solar thermal power plant located in California's Mojave Desert in which NRG owns 54.5% interest | | |

| Nuclear Decommissioning Trust Fund | | | | | | NRG's nuclear decommissioning trust fund assets, which [removed: are] [added: were] for the Company's portion of the decommissioning of the STP, units 1 & 2 [added: through the sale of STP on November 1, 2023] | | |

| 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 [removed: facility.] [added: facility] | | |

| Renewables | | | | | | Consists of the following projects in which NRG has an ownership interest: [removed: Agua Caliente, Ivanpah,] [added: Ivanpah] and solar generating stations located at various NFL Stadiums | | |

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

| Senior Notes | | | | | | As of December 31, [removed: 2022,] [added: 2023,] NRG's [removed: $4.6] [added: $4.0] billion outstanding unsecured senior notes consisting of $375 million of the 6.625% senior notes due 2027, $821 million of 5.75% senior notes due 2028, $733 million of the 5.25% senior notes due 2029, $500 million of the 3.375% senior notes due 2029, $1.0 billion of the 3.625% senior notes due 2031 and [removed: $1.1 billion] [added: $480 million] of the 3.875% senior notes due 2032 | | |

| Senior Secured [added: First Lien] Notes | | | | | | As of December 31, [removed: 2022,] [added: 2023,] NRG’s [removed: $2.5] [added: $3.2] billion outstanding Senior Secured First Lien Notes consists of $600 million of the 3.75% Senior Secured First Lien Notes due 2024, $500 million of the 2.0% Senior Secured First Lien Notes due 2025, $900 million of the 2.45% Senior Secured First Lien Notes due 2027, [removed: and] $500 million of the 4.45% Senior Secured First Lien Notes due 2029 [added: and $740 million of the 7.000% Senior Secured First Lien Notes due 2033] | | |

| [PART I](#i0959bd7373bc4a449d4d275c0ec1dc43_13) | | | | | | [7](#i0959bd7373bc4a449d4d275c0ec1dc43_16) | | |

| | | | [Item 1C — Cybersecurity](#i0959bd7373bc4a449d4d275c0ec1dc43_2647) | | | [38](#i0959bd7373bc4a449d4d275c0ec1dc43_2647) | | |

| [PART II](#i0959bd7373bc4a449d4d275c0ec1dc43_34) | | | | | | [42](#i0959bd7373bc4a449d4d275c0ec1dc43_34) | | |

| Acquisition | | | | | | The acquisition of Vivint Smart Home, Inc. by NRG completed on March 10, 2023 | | |

| ASR | | | | | | Accelerated Share Repurchases | | |

| CAMT | | | | | | 15% Corporate Alternative Minimum Tax enacted by the IRA on August 16, 2022 | | |

| Dth | | | | | | Dekatherms | | |

| IoT | | | | | | Internet of Things | | |

| LSEs | | | | | | Load Serving Entities | | |

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

| NERC-CIP | | | | | | North American Electric Reliability Corporation Critical Infrastructure Protection | | |

| NIST | | | | | | National Institute of Standards and Technology | | |

| Nodal | | | | | | Nodal Exchange is a derivatives exchange | | |

| PCI DSS | | | | | | Payment Card Industry Data Security Standard | | |

| Receivables Facility | | | | | | NRG Receivables LLC, a bankruptcy remote, special purpose, wholly-owned indirect subsidiary of the Company's $1.4 billion accounts receivables securitization facility due 2024, which was last amended on October 6, 2023 | | |

| Repurchase Facility | | | | | | NRG's $150 million uncommitted repurchase facility related to the Receivables Facility due 2024, which was last amended on October 6, 2023 | | |

| Revolving Credit Facility | | | | | | The Company's $4.3 billion revolving credit facility due 2028, which was last modified on March 13, 2023 | | |

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

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

| SOFR | | | | | | Secured overnight financing rate | | |

| Vivint LTIP | | | | | | Vivint Smart Home, Inc. Long-Term Incentive Plan assumed by NRG pursuant to merger between NRG and Vivint | | |

| | | | | | | | | |

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

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

| Bankruptcy Court | | | | | | United States Bankruptcy Court for the Southern District of Texas, Houston Division | | |

| Brazos | | | | | | Brazos Electric Power Cooperative, Inc. | | |

| CARES Act | | | | | | Coronavirus Aid, Relief, and Economic Security Act | | |

| Centrica | | | | | | Centrica plc | | |

| COVID-19 | | | | | | Coronavirus Disease 2019 | | |

| HLW | | | | | | High-level radioactive waste | | |

| NEIL | | | | | | Nuclear Electric Insurance Limited | | |

| Nuclear Waste Policy Act | | | | | | U.S. Nuclear Waste Policy Act of 1982 | | |

| Rayburn | | | | | | Rayburn Country Electric Cooperative, Inc. | | |

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

| Senior Credit Facility | | | | | | NRG's senior secured credit facility, comprised of the Revolving Credit Facility and the 2023 Term Loan Facility. The 2023 Term Loan Facility was repaid in the second quarter of 2019 | | |

| SNF | | | | | | Spent Nuclear Fuel | | |

| U.S. DOE | | | | | | U.S. Department of Energy | | |

Risk Management and Strategy

The Company leverages a comprehensive, multi-tiered cybersecurity strategy to manage cybersecurity risk based on criteria established by the NIST Cybersecurity Framework.

As part of the cybersecurity strategy the Company utilizes a range of industry and regulatory standards including, but not limited to, NERC-CIP, PCI DSS, and IoT Security Assurance Framework.

Compliance with NERC-CIP standards is mandated for entities involved in power generation, transmission, and distribution by regulatory bodies to which the purpose of is to protect critical infrastructure within the United States.

NRG engages certified external assessors to ensure compliance with standards.

The Company’s strategy seeks to align underlying processes not only with industry standards but also mirror best practices among peer organizations.

The strategy ensures a standardized method across all activities at NRG allowing for consistent recognition, assessment and potential mitigation of significant cybersecurity risks.

To further the strategy, the Company established the NRG Cybersecurity Integration Center ("CIC") which is composed of experienced team members from across cybersecurity disciplines with relevant educational and industry experience.

The CIC provides the following functions to the Company: cyber governance, operations, detection and response, engineering, testing, cyber risk management (including third-party), compliance, training and awareness, and reporting.

The CIC utilizes advanced continuous monitoring systems and investigative techniques for real-time threat detection.

The systematic monitoring approach allows for risk classification and prioritization based on potential impacts, facilitating targeted resource allocation according to risk severity.

The Company conducts regular penetration testing to proactively identify vulnerabilities and enhance its defense measures.

The Company engages third-party assessors to gain comprehensive insights into its cyber risk profile's composition.

The Company relies on third-party service providers in the normal course of business.

The Company has established a comprehensive approach to identify and manage cybersecurity risks associated with providers including, but not limited to, rigorous due diligence and assessments of third-party service providers' cybersecurity protocols before engagement, requirements relating to information handling, incident notification and assessment against the Company's cybersecurity requirements.

Furthermore, the Company has implemented additional control measures and procedures in business processes to enable continuous risk identification, assessment and to support monitoring mechanisms to oversee and manage supplier cybersecurity practices.

Through December 31, 2023, no cybersecurity threats have been identified or are anticipated to have a material adverse effect on NRG’s business strategy, financial standing, or operational performance.

Governance

*Management*

The Chief Information Security Officer ("CISO") is the head of cybersecurity for the Company and leads the NRG Cybersecurity Integration Center.

The CISO has decades of professional experience, education, and certification in security analysis, design, implementation, and management, with a particularly strong background in technical vulnerability assessment and program development.

Within various roles throughout the CISO's career, he has overseen information assurance and cybersecurity efforts, including critical infrastructure protection in government agencies and industry.

At least twice per year, the CISO provides comprehensive updates to the Board on cybersecurity and any recent developments impacting the Company.

These updates include, among other items:

- Incident reports and developments from any cybersecurity events;

- Current cybersecurity landscape and emerging cybersecurity threats, with a particular emphasis on Company and industry-specific threats; and

- Status of ongoing initiatives to strengthen the Company's cybersecurity program.

In addition, the CISO regularly informs other members of senior management, including the Interim President and CEO, of all aspects related to cybersecurity risks and incidents.

This is intended to ensure that the highest levels of management remain

updated on the cybersecurity preparedness and potential risks facing the Company.

Furthermore, significant cybersecurity matters and strategic risk management decisions are escalated to the Board of Directors ensuring that they have comprehensive oversight and can provide guidance on critical cybersecurity issues.

In preparation for a potential cybersecurity incident, the Company has implemented structured processes and procedures aligned with the NIST framework.

This framework provides a foundation for a systematic and consistent approach to preparing for, identifying, containing, eradicating, and recovering from incidents.

The effectiveness of these protocols is routinely verified through tabletop exercises involving relevant teams and Company leadership.

In accordance with the Company’s process and procedures, incidents which may have a material impact on the Company are promptly referred to senior leadership and the Board of Directors for review and appropriate determination.

*Board of Directors*

The Board of Directors is primarily responsible for the risk oversight of the Company, and has delegated oversight of risks related to cybersecurity to the Finance and Risk Management ("FARM") Committee of the Board.

The FARM Committee regularly reports on its activities to the Board after each meeting.

The FARM Committee, as well as the overall Board, is composed of members with diverse expertise, including risk management, incident response and technology.

The Board is aware of the critical nature of managing risks associated with cybersecurity threats and has worked with the Company’s management to establish comprehensive oversight mechanisms to ensure effective cybersecurity governance.

Listed below are descriptions of NRG's interests in facilities, operations and/or projects owned or leased as of December 31, [removed: 2022.][added: 2023.]

Net MW capacity is adjusted for the Company's owned or leased interest as of December 31, [removed: 2022.][added: 2023.]

| Greens Bayou | | | | | | ERCOT | | | | | | Fossil | | | | | | Natural Gas | | | | | | TX | | | | | | [removed: 330] [added: 327] | | | | | | [removed: 330] [added: 327] | | | | | | 100.0 | | | | | |

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

| South Texas Project | | | | | | ERCOT | | | | | | Nuclear | | | | | | Uranium | | | | | | [added: Sold | | | | | |] TX | | | | | | 2,572 | | | | | | 1,132 | | | | | | 44.0 | | [removed: | | |] [added: %] |

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

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

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

| [removed: Powerton] [added: Powerton(e)] | | | | | | PJM | | | | | | Fossil | | | | | | Coal | | | | | | IL | | | | | | 1,538 | | | | | | 1,538 | | | | | | 100.0 | | | | | |

| [removed: Vienna] [added: Vienna(f)] | | | | | | PJM | | | | | | Fossil | | | | | | Oil | | | | | | MD | | | | | | 167 | | | | | | 167 | | | | | | 100.0 | | | | | |

| Total East | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 4,284] [added: 2,483] | | | | | | [removed: 4,284] [added: 2,483] | | | | | | | | | | | |

| Ivanpah | | | | | | CAISO | | | | | | Renewable | | | | | | Solar | | | | | | CA | | | | | | [removed: 393] [added: 391] | | | | | | [removed: 214] [added: 213] | | | | | | 54.5 | | | | | |

| Stadiums and Other | | | | | | | | | | | | Renewable | | | | | | Solar | | | | | | various | | | | | | [removed: 5] [added: 3] | | | | | | [removed: 5] [added: 3] | | | | | | 100.0 | | | | | |

| Total West/Services/Other | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 3,403] [added: 3,399] | | | | | | [removed: 2,103] [added: 2,100] | | | | | | | | | | | |

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

[removed: (e)The] [added: (d)The] Company previously announced the shut down of the Indian River facility.

However, PJM identified reliability impacts resulting from the proposed deactivation and Indian River Unit 4 currently remains active under a RMR agreement [removed: which is expected to end] [added: that ends] December 31, 2026

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

| East | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | |]

NRG leases its operational and corporate headquarters [removed: at 910 Louisiana Street,] [added: in] Houston, Texas, its financial and commercial corporate offices [removed: at 804 Carnegie Center,] [added: in] Princeton, New Jersey, [added: its smart home corporate offices in Provo, Utah,] as well as its retail operations offices, [added: smart home monitoring stations,] call centers, [added: warehouses] and various other office space.

| Total Texas | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 8,781 | | | | | | 8,529 | | | | | | | | | | | |

| Total Fleet | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 14,663 | | | | | | 13,112 | | | | | | | | | | | |

The extended forced outage ended in September 2023 and the unit has returned to service

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

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

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

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

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

| Texas | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | | | | 4,738 | | | | | | 3,298 | | | | | | | | |

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

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

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

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

The following units were deactivated during 2022:

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

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

| Waukegan 7 | | | | | | PJM | | | | | | Fossil | | | | | | Coal | | | | | | IL | | | | | | 682 | | | | | | 682 | | | | | | 100.0 | | % |

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

| Will County 4 | | | | | | PJM | | | | | | Fossil | | | | | | Coal | | | | | | IL | | | | | | 510 | | | | | | 510 | | | | | | 100.0 | | % |

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

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

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.

A total of 25,000,000 shares of the Company's common stock are authorized for issuance under the NRG [added: LTIP, and a total of 17,500,000 shares of common stock are authorized for issuance under the Vivint] LTIP.

For more information about the [removed: NRG LTIP,] [added: LTIPs,] 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 [removed: January 31, 2023,] [added: February 1, 2024,] there were [removed: 15,792] [added: 15,102] common stockholders of record.

[removed: NRG increased the annual dividend to $1.40 from $1.30 per share beginning in the first quarter of 2022 and] [added: The Company] further increased the annual dividend by 8% to [removed: $1.51] [added: $1.63] per share beginning in the first quarter of [removed: 2023.][added: 2024.]

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: 2022.][added: 2023.]

| For the three months ended December 31, [removed: 2022] [added: 2023] | | | | | | Total Number of Shares Purchased | | | | | | Average Price Paid per [removed: Share(b)] [added: Share(a)] | | | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | | | | | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or [removed: Programs(a)(c)] [added: Programs (in millions)(b)] | | |

[removed: (b)The] [added: (a)The] average price paid per share excludes [added: excise taxes and] commissions [removed: of $0.02] per share paid in connection with the open market share repurchases

[removed: (c)Includes] [added: (b)Includes] commissions of [removed: $0.02] [added: $0.015] per share paid in connection with the open market share repurchases

The performance graph below compares the cumulative total stockholder return on NRG's common stock for the period December 31, [removed: 2017] [added: 2018] through December 31, [removed: 2022,] [added: 2023,] with the cumulative total return of the Standard & Poor's 500 Composite Stock Price Index ("S&P 500") and the Philadelphia Utility Sector Index ("UTY").

The performance graph shown below is being furnished and compares each period assuming that $100 was invested on December 31, [removed: 2017,] [added: 2018,] in each of the common stock of NRG, the stocks included in the S&P 500 and the stocks included in the UTY, and that all dividends were reinvested.

[removed: ][added: ]

| | | | [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] | | | | | | [removed: 12/31/2022] [added: 12/31/2023] | | |

On June 22, 2023, the Company updated its capital allocation framework, and plans, after debt reduction, to return approximately 80% of excess cash to shareholders and invest 20% in growth initiatives.

The Company expects to return the capital to shareholders through share repurchases and dividends on its common stock.

Consistent with its capital allocation framework, in 2021, 2022 and 2023, the Company increased the annual dividend on its common stock to $1.30, $1.40 and $1.51 per share, respectively, representing an 8% increase each year.

The long-term capital allocation policy targets an annual dividend growth rate of 7-9% per share.

NRG engages in share repurchase programs with the goal of returning excess cash to shareholders.

The share repurchase plan permits the execution of the plan through open-market purchases, private transactions, accelerated share repurchases and other similar transactions.

The timing, price and volume of repurchases is based on a number of factors, including available capital, market conditions, and compliance with associated laws and regulations.

On June 22, 2023, as part of the updated capital allocation framework, the Company announced that the Board of Directors has increased the share repurchase authorization of its common stock to $2.7 billion to be executed through 2025.

Through December 31, 2023, the Company completed $1.2 billion of share repurchases under the $2.7 billion authorization.

For further information regarding share repurchases, see Item 15 — Note 16, *Capital Structure* in this Form 10-K.

| (October 1, 2023 to October 31, 2023 | | | | | | 3,732,657 | | | | | | $ | 40.17 | | | | | 3,732,657 | | | | | | $ | 2,500 | |

| (November 1, 2023 to November 30, 2023) | | | | | | 4,494,224 | | | | | | (c) | | | | | | 4,494,224 | | | | | | $ | 1,550 | |

| (December 1, 2023 to December 31, 2023) | | | | | | 13,181,918 | | | | | | (c) | | | | | | 13,181,918 | | | | | | $ | 1,550 | |

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

(c)Represents shares delivered under the November 6, 2023 ASR agreements.

The total number of shares delivered and the average price per share under the ASR agreements will be determined at the end of the ASR period which is expected to occur in March of 2024.

See Item 15—Note 16, *Capital Structure* for additional information on the ASR agreements

*Director and Officer Trading Arrangements*

The Company’s officers and directors are required to comply with the Company’s Securities Trading and Non-Disclosure Policy at all times, including during a share repurchase program.

The securities trading and non-disclosure policy, among other things, prohibits trading in the Company’s securities when in possession of material non-public information and restricts the ability of certain officers or directors from transacting in the Company’s securities during specific blackout periods, subject to certain limited exceptions, including transactions pursuant to a Rule 10b5-1 trading plan that complies with the conditions of Securities Exchange Act Rule 10b5-1.

The Company’s policy also requires officers and directors to obtain preclearance in advance of effecting any purchase, sale or other trading of Company stock.

See Item 9B — Other Information, for details of any "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" by any director or officer of the Company during the three months ended December 31, 2023.

| NRG Energy, Inc. | | | $ | 100.00 | | | | | $ | 100.69 | | | | | $ | 98.53 | | | | | $ | 116.81 | | | | | $ | 89.40 | | | | | $ | 151.29 | |

| S&P 500 | | | 100.00 | | | | | | 131.49 | | | | | | 155.68 | | | | | | 200.37 | | | | | | 164.08 | | | | | | 207.21 | | |

| UTY | | | 100.00 | | | | | | 126.82 | | | | | | 130.27 | | | | | | 154.04 | | | | | | 155.04 | | | | | | 140.83 | | |

NRG expects to target an annual dividend growth rate of 7-9% per share in subsequent years.

| (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 | | | | | | | | |

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

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 | | |

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: 2022.][added: 2023.]

[removed: There] [added: Other than the Vivint Smart Home acquisition, there] were no changes in NRG’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that occurred in the fourth quarter of [removed: 2022] [added: 2023] 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: 2022.][added: 2023.]

The effectiveness of the Company's internal control over financial reporting as of December 31, [removed: 2022] [added: 2023] has been audited by KPMG LLP, the Company's independent registered public accounting firm, as stated in its report which is included in this Annual Report on Form 10-K.

We have audited NRG Energy, Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission*.* In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] the related consolidated statements of operations, comprehensive [removed: income,] [added: (loss)/income,] stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, [removed: 2022,] [added: 2023,] and the related notes and financial statement schedule II (collectively, the consolidated financial statements), and our report dated February [removed: 23, 2023] [added: 28, 2024] expressed an unqualified opinion on those consolidated financial statements.

During the year ended December 31, 2023, the Company completed its acquisition of Vivint Smart Home, Inc. As part of integration, the Company designed and implemented a control structure over Vivint Smart Home's operations.

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

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

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Vivint Smart Home, Inc.

February 28, 2024

February 23, 2023

Director and Officer Trading Arrangements

During the three months ended December 31, 2023, the following directors or officers of the Company adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement,' as each term is defined in Item 408(a) of Regulation S-K, as described in the table below:

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

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

| Name | | | Title | | | Date Adopted | | | Character of Trading Arrangement | | | Aggregate Number of Shares of Common Stock to be Purchased or Sold Pursuant to Trading Arrangement(a) | | | Duration | | | Date Terminated | | |

| Elizabeth Killinger | | | Executive Vice President | | | 12/15/2023 | | | Rule 10b5-1 Trading Arrangement | | | 65,583 shares to be Sold(b) | | | 3/15/2024-1/31/2025 | | | N/A | | |

| Rasesh Patel | | | Executive Vice President, Smart Home | | | 12/15/2023 | | | Rule 10b5-1 Trading Arrangement | | | Up to 73,638 shares to be Sold | | | 3/14/2024-11/01/2024 | | | N/A | | |

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

(b)Represents approximate number of shares to be sold based on outstanding awards expected to vest during the period, where any underlying performance share awards are being calculated at target.

Actual number of shares to be sold will depend on actual vesting, the number of shares withheld by NRG to satisfy tax withholding obligations and vesting of dividend equivalent rights

None.

Information required by this Item is incorporated by reference to the similarly named section of NRG's Definitive Proxy Statement for its [removed: 2023] [added: 2024] 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: 2023] [added: 2024] 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: 2023] [added: 2024] Annual Meeting of Stockholders.

| Plan Category | | | [removed: (a) Number] [added: (a) Number] of [removed: Securities to] [added: Securities to] be Issued [removed: Upon Exercise of Outstanding Options, Warrants] [added: Upon Exercise of Outstanding Options, Warrants] and Rights | | | | | | [removed: (b) Weighted-Average Exercise Price] [added: (b) Weighted-Average Exercise Price] of [removed: Outstanding Options,] [added: Outstanding Options,] Warrants [removed: and Rights] [added: and Rights] | | | | | | [removed: (c) Number] [added: (c) Number] of [removed: Securities Remaining Available for] [added: Securities Remaining Available for] Future [removed: Issuance Under] [added: Issuance Under] Equity [removed: Compensation Plans (Excluding Securities Reflected in] [added: Compensation Plans (Excluding Securities Reflected in] Column [removed: (a)] [added: (a))] | | | | | |

| Equity compensation plans approved by security holders | | | [removed: 2,865,336] [added: 2,997,640] | | | (1) | | | $ | — | | | | | [removed: 10,673,145] [added: 14,419,264] | | | [removed: (2)] | | |

As of December 31, [removed: 2022,] [added: 2023,] there were [removed: 2,493,374] [added: 6,702,125] shares reserved from the Company's treasury shares for the ESPP

[removed: (2)Consists] [added: (3)Consists] of [removed: 8,179,771] [added: 7,717,139] shares of common stock under [removed: NRG's] [added: the NRG LTIP, 12,749,736 shares of common stock under the Vivint] LTIP and [removed: 2,493,374] [added: 6,702,125] shares of treasury stock reserved for issuance under the ESPP

[added: The] NRG LTIP currently provides for grants of restricted stock units, relative performance stock units, deferred stock units and dividend equivalent rights.

[removed: NRG's] [added: The Company's] directors, officers and employees, as well as other individuals performing services for, or to whom an offer of employment has been extended by the Company, are eligible to receive grants under the [removed: NRG LTIP.][added: LTIPs.]

The purpose of the [removed: NRG LTIP] [added: LTIPs] is to promote the Company's long-term growth and profitability by providing these individuals with incentives to maximize stockholder value and otherwise contribute to the Company's success and to enable the Company to attract, retain and reward the best available persons for positions of responsibility.

The Compensation Committee of the Board of Directors administers the [removed: NRG LTIP.][added: LTIPs.]

Other information required by this Item is incorporated by reference to the similarly named section of NRG's Definitive Proxy Statement for its [removed: 2023] [added: 2024] Annual Meeting of Stockholders.

| Equity compensation plans not approved by security holders | | | 3,970,872 | | | (2) | | | $ | — | | | | | 12,749,736 | | | | | |

| Total | | | 6,968,512 | | | | | | $ | — | | | | | 27,169,000 | | | (3) | | |

On April 27, 2023, NRG stockholders approved an increase of 4,400,000 shares available for issuance under the ESPP.

(2)Consists of shares issuable under the Vivint LTIP.

On March 10, 2023, in connection with the Acquisition, NRG assumed the Vivint Smart Home, Inc. 2020 Omnibus Incentive Plan.

While the Vivint Smart Home, Inc. 2020 Omnibus Incentive Plan was previously approved by stockholders of Vivint Smart Home, Inc., the plan is listed as "not approved" because it was assumed as part of the Acquisition and not subject to approval by NRG stockholders.

The Company intends to make subsequent grants under the Vivint LTIP.

See Note 21, *Stock-Based Compensation* for a discussion of the Vivint LTIP

The Vivint LTIP currently provides for grants of restricted stock units and performance stock units.

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

The NRG LTIP became effective upon the Company's emergence from bankruptcy.

On April 27, 2017, the NRG LTIP was amended and restated to increase the number of shares available for issuance to 25,000,000.

The ESPP, as amended and restated, was approved by the Company's stockholders on April 27, 2017, and became effective April 28, 2017.

Information required by this Item is incorporated by reference to the similarly named section of NRG's Definitive Proxy Statement for its [removed: 2023] [added: 2024] 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: 2023] [added: 2024] Annual Meeting of Stockholders.

Consolidated Statements of Operations — Years ended December 31, [added: 2023,] 2022, [removed: 2021,] and [removed: 2020][added: 2021]

Consolidated Statements of Comprehensive [removed: Income] [added: (Loss)/Income] — Years ended December 31, [added: 2023,] 2022, [removed: 2021,] and [removed: 2020][added: 2021]

Consolidated Balance Sheets — As of December 31, [removed: 2022] [added: 2023] and [removed: 2021][added: 2022]

Consolidated Statements of Cash Flows — Years ended December 31, [added: 2023,] 2022, [removed: 2021,] and [removed: 2020][added: 2021]

Consolidated Statements of Stockholders' Equity — Years ended December 31, [added: 2023,] 2022, [removed: 2021,] and [removed: 2020][added: 2021]

We have audited the accompanying consolidated balance sheets of NRG Energy, Inc. and subsidiaries (the Company) as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] the related consolidated statements of operations, comprehensive [removed: income,] [added: (loss)/income,] stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, [removed: 2022,] [added: 2023,] and the related notes and financial statement schedule II (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, [removed: 2022,] [added: 2023,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in *Internal Control* – *Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February [removed: 23, 2023] [added: 28, 2024] expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

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

The critical audit [removed: matter] [added: matters] communicated below [removed: is a matter] [added: are matters] arising from the current period audit of the consolidated financial statements that [removed: was] [added: were] communicated or required to be communicated to the audit committee and that: (1) [removed: relates] [added: relate] to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of [removed: a] critical audit [removed: matter] [added: matters] does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit [removed: matter] [added: matters] below, providing [removed: a] separate opinions on the critical audit [removed: matter] [added: matters] or on the accounts or disclosures to which [removed: it relates.][added: they relate.]

As discussed in Note 3 to the consolidated financial statements, the Company had [removed: $31.543 billion] [added: $28,823 million] of revenues.

For [removed: each] [added: certain] revenue [removed: stream] [added: streams] over which procedures were performed, [removed: we]

| (In millions, except per share amounts) | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | |

| Cost of operations (excluding depreciation and amortization shown below) | | | [removed: 27,446] [added: 26,526] | | | | | | [removed: 20,482] [added: 27,446] | | | | | | [removed: 6,540] [added: 20,482] | | |

| Depreciation and amortization | | | [removed: 634] [added: 1,127] | | | | | | [removed: 785] [added: 634] | | | | | | [removed: 435] [added: 785] | | |

| Impairment losses | | | [removed: 206] [added: 26] | | | | | | [removed: 544] [added: 206] | | | | | | [removed: 75] [added: 544] | | |

| Selling, general and administrative costs | | | [removed: 1,228] [added: 1,968] | | | | | | [removed: 1,293] [added: 1,228] | | | | | | [removed: 810] [added: 1,293] | | |

| Provision for credit losses | | | [removed: 11] [added: 251] | | | | | | [removed: 698] [added: 11] | | | | | | [removed: 108] [added: 698] | | |

| Acquisition-related transaction and integration costs | | | [removed: 52] [added: 119] | | | | | | [removed: 93] [added: 52] | | | | | | [removed: 23] [added: 93] | | |

| Total operating costs and expenses | | | [removed: 29,577] [added: 30,017] | | | | | | [removed: 23,895] [added: 29,577] | | | | | | [removed: 7,991] [added: 23,895] | | |

| Gain on sale of assets | | | [removed: 52] [added: 1,578] | | | | | | [removed: 247] [added: 52] | | | | | | [removed: 3] [added: 247] | | |

| Operating Income | | | [removed: 2,018] [added: 384] | | | | | | [removed: 3,341] [added: 2,018] | | | | | | [removed: 1,105] [added: 3,341] | | |

| Equity in earnings of unconsolidated affiliates | | | [removed: 6] [added: 16] | | | | | | [removed: 17] [added: 6] | | | | | | 17 | | |

| Impairment losses on investments | | | [removed: —] [added: (102)] | | | | | | — | | | | | | [removed: (18)] [added: —] | | |

| Other income, net | | | [removed: 56] [added: 47] | | | | | | [removed: 63] [added: 56] | | | | | | [removed: 67] [added: 63] | | |

| [removed: Loss] [added: Gain/(Loss)] on debt extinguishment | | | [removed: —] [added: 109] | | | | | | [removed: (77)] [added: —] | | | | | | [removed: (9)] [added: (77)] | | |

| Interest expense | | | [removed: (417)] [added: (667)] | | | | | | [removed: (485)] [added: (417)] | | | | | | [removed: (401)] [added: (485)] | | |

| Total other expense | | | [removed: (355)] [added: (597)] | | | | | | [removed: (482)] [added: (355)] | | | | | | [removed: (344)] [added: (482)] | | |

| [removed: Income] [added: (Loss)/Income] Before Income Taxes | | | [removed: 1,663] [added: (213)] | | | | | | [removed: 2,859] [added: 1,663] | | | | | | [removed: 761] [added: 2,859] | | |

| Income tax [removed: expense] [added: (benefit)/expense] | | | [removed: 442] [added: (11)] | | | | | | [removed: 672] [added: 442] | | | | | | [removed: 251] [added: 672] | | |

| Net [removed: Income] [added: (Loss)/Income] | | | [removed: $] [added: (202)] | [removed: 1,221] | | | | | [removed: $] [added: 1,221] | [removed: 2,187] | | | | | [removed: $] [added: 2,187] | [removed: 510] | |

| [removed: Income] [added: (Loss)/Income] Per Share | | | | | | | | | | | | | | | | | |

| Weighted average number of common shares outstanding — basic [added: and diluted] | | | [removed: 236] [added: 228] | | | | | | [removed: 245] [added: 236] | | | | | | 245 | | |

| [removed: Income] [added: (Loss)/Income] per Weighted Average Common Share — [removed: Basic] [added: Basic and Diluted] | | | $ | [removed: 5.17] [added: (1.12)] | | | | | $ | [removed: 8.93] [added: 5.17] | | | | | $ | [removed: 2.08] [added: 8.93] | |

| Weighted average number of common shares outstanding [removed: —] [added: - basic and] diluted | | | [removed: 236] [added: 228] | | | | | | [removed: 245] [added: 236] | | | | | | [removed: 246] [added: 245] | | |

| [removed: Income] [added: (Loss)/Income] per [removed: Weighted Average Common Share] [added: weighted average common share] — [removed: Diluted] [added: basic and diluted] | | | $ | [removed: 5.17] [added: (1.12)] | | | | | $ | [removed: 8.93] [added: 5.17] | | | | | $ | [removed: 2.07] [added: 8.93] | |

CONSOLIDATED STATEMENTS OF COMPREHENSIVE [removed: INCOME][added: (LOSS)/INCOME]

| (In millions) | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | |

| Other Comprehensive [removed: (Loss)/Income,] [added: Income/(Loss),] net of tax | | | | | | | | | | | | | | | | | |

we evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s revenue recognition processes.

For certain revenue streams, we involved IT professionals, who assisted in testing certain IT applications used by the Company in its revenue recognition processes.

In addition, we assessed recorded revenue for a selection of transactions by comparing the amounts recognized to underlying documentation, including contracts with customers, and for certain revenue streams, we performed a software-assisted data analysis to assess certain relationships among revenue transactions.

As discussed in Note 4 to the consolidated financial statements, the Company acquired Vivint Smart Home, Inc. on March 10, 2023 for total consideration of $2,623 million.

In connection with the business combination, the Company recorded various intangible assets, which included customer relationships and technology intangible assets with an acquisition-date fair value of $1,740 million and $860 million, respectively.

We identified the evaluation of the acquisition-date fair value of the customer relationships and technology intangible assets as a critical audit matter.

A high degree of subjective and complex auditor judgment was required to evaluate key assumptions used to value these acquired intangible assets.

We performed sensitivity analyses to determine the key assumptions used to value the intangible assets acquired which required challenging auditor judgment.

Specifically, key assumptions included the customer attrition for the customer relationships intangible asset and the discount rate for the customer relationships and technology intangible assets.

Changes to these assumptions could have had a significant impact on the fair value of such assets.

In addition, valuation professionals with specialized skills and knowledge were needed to assist in the evaluation of the discount rate.

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

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s acquisition-date valuation process, including controls related to the selection of the customer attrition used in the customer relationships intangible asset and the discount rate used in the customer relationships and technology intangible assets.

We evaluated the customer attrition used by the Company by comparing it to historical attrition experienced by the acquired company and comparable company attrition.

We involved valuation professionals with specialized skills and knowledge, who assisted in evaluating the discount rate by assessing the relative risk profile of the customer relationships and technology intangible assets compared to the required rate of return of all acquired assets in the business combination.

| Revenue | | | | | | | | | | | | | | | | | |

| Revenue | | | $ | 28,823 | | | | | $ | 31,543 | | | | | $ | 26,989 | |

| Less: Cumulative dividends attributable to Series A Preferred Stock | | | 54 | | | | | | — | | | | | | — | | |

| (In millions) | | | 2023 | | | | | | 2022 | | |

| Customer relationships, net | | | 2,164 | | | | | | 943 | | |

| Other intangible assets, net | | | 1,763 | | | | | | 1,189 | | |

| Current portion of long-term debt and finance leases | | | $ | 620 | | | | | $ | 63 | |

| Deferred revenue current | | | 720 | | | | | | 176 | | |

| Accrued expenses and other current liabilities | | | 1,642 | | | | | | 1,114 | | |

| Deferred revenue non-current | | | 914 | | | | | | 10 | | |

| Other non-current liabilities | | | 947 | | | | | | 973 | | |

| Preferred stock; 10,000,000 shares authorized; 650,000 Series A shares issued and outstanding at December 31, 2023 (aggregate liquidation preference $650); 0 shares issued and outstanding at December 31, 2022 | | | 650 | | | | | | — | | |

| Net (loss)/income | | | $ | (202) | | | | | $ | 1,221 | | | | | $ | 2,187 | |

| Depreciation and amortization | | | 1,127 | | | | | | 634 | | | | | | 785 | | |

| Prepayments and other current assets | | | (233) | | | | | | 17 | | | | | | 31 | | |

| Proceeds from insurance recoveries for property, plant and equipment, net | | | 240 | | | | | | — | | | | | | — | | |

| Proceeds from issuance of preferred stock, net of fees | | | $ | 635 | | | | | $ | — | | | | | $ | — | |

| Proceeds from credit facilities | | | 3,020 | | | | | | — | | | | | | 1,415 | | |

| Repayments to credit facilities | | | (3,020) | | | | | | — | | | | | | (1,415) | | |

(a)Includes $(22) million, $(6) million and $(9) million of equivalent shares purchased in lieu of tax withholdings on equity compensation issuances for the years ended December 31, 2023, 2022 and 2021, respectively

| Net loss | | | | | | | | | | | | | | | | | | | | | (202) | | | | | | | | | | | | | | | | | | (202) | | |

| Issuance of Series A Preferred Stock | | | 650 | | | | | | | | | | | | (15) | | | | | | | | | | | | | | | | | | | | | | | | 635 | | |

| Share repurchases(c) | | | | | | | | | | | | | | | (117) | | | | | | | | | | | | (1,043) | | | | | | | | | | | | (1,160) | | |

| Retirement of treasury stock | | | | | | | | | (1) | | | | | | (5,008) | | | | | | | | | | | | 5,009 | | | | | | | | | | | | — | | |

| Series A Preferred Stock dividends(d) | | | | | | | | | | | | | | | | | | | | | (34) | | | | | | | | | | | | | | | | | | (34) | | |

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.

February 23, 2023

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

| Revenues | | | | | | | | | | | | | | | | | |

| Total revenues | | | $ | 31,543 | | | | | $ | 26,989 | | | | | $ | 9,093 | |

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

| Oil lower of cost or market adjustment | | | — | | | | | | — | | | | | | 29 | | |

| Uplift securitization proceeds received/(receivable) from ERCOT | | | 689 | | | | | | (689) | | | | | | — | | |